Wednesday, December 25, 2013
I heard an oblique mention of the water-energy nexus at one of the many public events I attend. These two resources are indispensable to civilization and we can't obtain one without using the other. There's money to be made in the green infrastructure that countries must build to get access to both.
The IEA incorporates the water-energy nexus into its World Energy Outlook. One simple lesson is the effect of climate change on energy availability. Delayed monsoons and droughts decrease the amount of runoff available to hydropower production. Other energy sources must then substitute for lost hydropower, including fossil fuel power plants.
Sandia National Labs studies this nexus. Their multi-lab committee published a final report in early 2007 but I'm not clear on whether the US has made progress developing the technologies the report says we need. The NSTC's CENRS Subcommittee on Water Availability and Quality (SWAQ) was supposed to pick up where this report left off. Those of us familiar with Uncle Sam's interagency process know how hard it is to make progress with something this broad. State government coordination isn't much better; the NCSL hasn't updated its water-energy nexus legislation tracker since 2009. America can't wait for a government-directed solution. I see pain points that entrepreneurs can disrupt.
Pain Point 1: Advanced cooling systems in power plants. The report is clear on the tradeoff between wet cooling and other systems. Wet cooling uses more water but is more efficient for energy production. Dry cooling is less efficient but saves water. There is obviously room for disruption with hybrid systems that improve the efficiency of water management in power plants. I believe energy utilities would pay for tech that reduces water consumption while maintaining a plan't efficiency.
Pain Point 2: Water use in shale and biofuel energy production. I've blogged before about how water wars over shale oil and gas formations will probably crowd out the concerns of agribusiness and environmentalists. Energy companies have the money to win any water war but legal delays will be costly. Alternatives to the high water requirement in shale injection would be very lucrative if energy companies can avoid the legal and regulatory delays of fighting water wars. The US government subsidizes biofuel at extremely high cost. Ethanol production on land that is irrigated and fertilized exacerbates the waste of water and energy but this is politically popular in Corn Belt states. Water innovation will thus need to start somewhere other than the Midwest. The GAO has prepared several reports on water management in both shale and biofuel production.
Pain Point 3: Urban development. New technologies can alleviate waste of energy and water in urban areas. I do not know whether the ARRA stimulus building program took this into account before it dumped billions of dollars into shovel-ready projects. Building materials for roads and sidewalks can now return more rainwater to soil, thus capturing more freshwater locally and reducing stress on urban wastewater systems. Federal and state governments aren't expected to vet the materials in every infrastructure project but they can specify energy and water impacts in the environmental impact statements (EIS) they must approve. It follows that builders using green materials will fulfill EIS criteria and stand a better chance of winning those project bids.
I do not know the market opportunities for these pain points because they each intersect more than one vertical. Multiple technologies can apply to solutions and projects will differ in size, capability, and geography within the US. I'm optimistic that the convergence of Big Data with utilities' smart grids will reveal inefficiencies in water and energy use that demand optimization. Black and Veatch's 2013 Water Utility Report shows huge demand among water utilities for energy efficient solutions. The US EPA knows that green infrastructure is a big opportunity and it will not disappear. California's CPUC has a very detailed approach to the nexus that utilities can use. Like I said up at the top, there's money to be made.