by Garrett Miller, Director of Sustainability Solution Management, SAPMany of us have heard pundits claiming, “water is the new gold.” If that were the case, my home state, Washington, would be emerging as the next global super power—without the support of Bill or Boeing. While it may not be the next gold, water’s emergence as a focal point for business should not come as a surprise. It should also not come as a surprise that SAP is well positioned to help you manage this critical resource regardless of whether you sell it in a bottle or just flush it in a toilet.Typically businesses think about water for three primary reasons: quality, quantity, and location. Increasingly, a fourth driver is emerging: efficiency. Just as businesses have used carbon and energy as bellwethers to identify inefficiencies in business processes, so too can certain industries use water as a similar type of efficiency barometer.Water quality surfaces in two areas of a business’s operations—with very different degrees of importance depending on your industry—either as an input or an output. Water used during the manufacturing process is very important to companies like Intel whose water purity requirements make bottled drinking water look like something siphoned out of a mud puddle. Chip manufacturers, such as Intel, use vast amounts of extremely pure water during very controlled, sterile, and precise chip manufacturing processes. These requirements on purity take a considerable amount of energy, and cost, to achieve—making water quality a paramount issue to these types of companies. Intel and their competitors are certainly not the only ones with water quality concerns. Take Disney as another example. Consider the millions of small children exposed to various water sources during visits to Disney theme parks—from Splash Mountain to drinking fountains. Pretty serious stuff.On the other hand, are the industries that care more about water quality when it leaves the plant. Chemical manufacturers and pulp mills are two great examples of industries that have strict requirements placed on the water quality as a discharge, whether to a sewage treatment plant or body of water.Water quantity sometimes surfaces as a mission-critical for businesses that do not use much water in their direct operations. Clothing companies like Patagonia have an extremely high water footprint when one considers the amount of water used to grow the organic cotton and produce the leather used to manufacturer Patagonia apparel. Clothing manufacturers’ extended water footprint found in their supply chain dwarfs the amount of water used elsewhere in their business operations.Where water is located really makes an impact on the viability of certain businesses. Consider solar power generation that uses concentrating solar power technologies. These technologies require a not insignificant amount of water during their operations, but are often located in some of the most water scarce locations—deserts.While your particular industry may not have been mentioned above, chances are that if you are a manufacturer (or not as we saw with Disney) you have water in your production process. An emerging area of water management treats water as an indicator of waste (read inefficient). Taking this lens to your operations can result in significant cost savings identification.So, how can a company go about managing their specific water-related concerns? A lot of it depends on where you find yourself within the water supply chain. Working at a company like SAP means that I have a unique vantage point to view water across our different Line of Business and Industry segmentations. We literally help customers along every step of the process. We help customers manage the infrastructure of water delivery while working with Utilities who use our Enterprise Asset Management solution. Our footprint in the Utility space means that we not only help with delivering that water but also profitably managing that distribution process. From gate to gate, we also provide our customers with visibility and insight into how they use water in their own operations via solutions like Carbon Impact—which can also help companies evaluate the financial return of different abatement projects across your entire company. Once it has run its course (pun!), water leaves a business as wastewater discharge and we help our customers there too through our Environmental Compliance solution. Overlying all of this is the general risk associated with water quality, quantity, and location requirements. We as SAP have many different risk management tools that help our customers proactively manage all types of risks.While water may not be the new gold (at current prices, a gallon of water would cost north of $165k), it is certainly a resource to be managed carefully.
When water is cheap and abundant, why should corporations be planning their water management strategy for a thirsty future?”The Corporate View of Water Strategy” webinar will bring together leaders from SAP, Intel and IBM to discuss why water management is important, how to implement a water management plan, and the practical application of water management in a large and successful corporation.Speakers are:
- Peter Williams, CTO, “Big Green” Innovations at IBM
- Carrie Freeman, Director, Sustainable Business Innovation, Intel
- Garrett Miller, Director of Sustainability at SAP Labs
Register for this webinar by Monday, November 8, and receive a complimentary copy of “Water 101: a primer for the corporate executive” by Laura Shenkar, Principal at The Artemis Project.“The Corporate View of Water Strategy” takes place on Thursday, November 11 from 8-9:00 AM PST. Early registration price of $149 is valid through Monday, November 8. Space is limited.Register here.
Everywhere you look people are trying to do more with less. Reduce costs, increase efficiency, reduce energy use, recover resources. There are strong economic drivers to do all of these things, which also happen to be sustainable.
On July 22nd, 2010 I moderated the first in the BlueTech Tracker(TM) Webinar series: Mineral & Resource Recovery from Wastewater. We featured four companies with innovative technologies, and perhaps even more importantly, innovative business models. The companies were Ostara Nutrient Recovery Technologies, Calera, CASTion and Oberon.
Ostara produces a slow release fertilizer product, Crystal Green(TM) from wastewater. Calera, a Khosla Ventures backed company whose technology is part of a new infrastructure designed to view carbon, not as a pollutant, but as a resource. Calera might be accused of having a Superman complex in the cleantech sector, in that their technology simultaneously contributes to solving two of the most pressing environmental issues of our time: climate change and water scarcity. Calera sequesters carbon from power plants, produces a low carbon cement and helps to desalinate water.
The CASTion Corporation has an Ammonia Recovery Process (ARP) which can produce an ammonia fertilizer product from wastewater and recently won a $27.1M contract with the City of New York to provide a cost effective method for the City to achieve compliance at its 26th Ward Wastewater Treatment plant.Oberon FMR concluded the quartet. Oberon takes wastewater from the food processing industry, and through the application of some clever biotechnology (single cell protein synthesis), produces a value added, high protein, fish meal replacement for use in the aquaculture industry.
A few key take-aways:
1. This is about Costs
To get out of the starting gate with wastewater technologies in this area, you have to have a compelling value proposition. Resource recovery can enable a technology provider to off-set operational and capital costs and thereby provide a cost effective solution to their clients.
Ahren Britton, CTO with Ostara put it very succinctly with the observation, “as a standalone wastewater treatment technology, we won’t always be the cheapest way to remove phosphorus; as a fertilizer production company, we might not compete with current ore prices, but put the two together, and that’s what makes for the winning proposition.”
David Delasanta, President of CASTion noted that the decision by the City of New York to go with their ARP system on a new project was driven by economics. The City had a regulatory requirement to remove ammonia and the ARP system represented the lowest cost option occupying the smallest footprint. The City in fact sole-sourced this option from CASTion.
The Sustainability and political angle can help to push these projects over the line, as the person who finally signs off on expenditure is likely to be a political animal. However, to get this far in the process, you first have to convince the people on the ground that this is a good idea, and their concerns tend to be less politically motivated and more related to, ‘Will this work and how much will it cost?‘.
Seth Terry, Oberon VP of Operations said they have found that the Corporate Sustainability angle of their approach to turn food processing wastewater into a feedstock for fish meal replacement production, has piqued the interest of a number of major Corporations and was one of the factors which helped them to secure a contract with Miller Coors to construct a full-scale demonstration facility at their site.
There is a monetary value to a company in terms of brand value to be able to show its shareholders that instead of generating a waste product which required disposal, they were able to ‘up-cycle’ the resources in their wastewater and in doing so, off-set the unsustainable harvesting of biomass from oceans to produce fish-meal for fish farms.
2. Resource Recovery is becoming a geo-political and security issue
Certain resources such as phosphorus are becoming a geo-political issue. China has recently put an export tax on phosphorus to discourage the export of this valuable commodity, to preserve it and keep it at home to enable food production. China is known for its ability to take a long-term view on things and this is an early indicator of how important this resource may become. It is worth noting that like oil, phosphorus resources are found in a number of unstable regions of the world.
3. Companies which succeed in this area need to know two markets
The flip side of producing a product while treating a waste, is that you need to simultaneously build an outlet and channels to market for your product, at the same time as you are developing the infrastructure to produce it. This is challenging when working with a variable feedstock (wastewater) and when the quantities you produce, initially, do not make a dent in the larger market for that commodity.
To succeed, companies need to understand the wastewater treatment market and also understand the market for the commodity they are producing.
In the case of Calera, this means they have to know the concrete and aggregate business. In the case of Oberon, they have to know the fish-meal business. Ostara and CASTion both have to understand the dynamics of the fertilizer industry. When you hear Calera CEO Brent Constanz speak about the nuances of the concrete and aggregate market, and then switch back to the importance of piloting on different wastewater streams, you get a feel for the level and depth of understanding required to succeed in straddling these divergent worlds.
At least a part of the sustainable business advantage these companies have, is their ability to understand and create a business model which meets customers needs on both sides of the fence. Companies that can do this are pulling away from the herd. When you combine this with technical know-how, continued innovation and a strong IP position, you have a sustainable first mover advantage which will be difficult for a ‘me-too’ to catch up with in the short term.
The next Webinar in our BlueTech Tracker(TM) Series is on Thursday July 29th at 12 noon PST and will put the spotlight on Microbial Fuel Cells and Bioelectrochemical systems. This group of technologies has the potential to generate electricity from wastewater and produce fuels and chemicals which can be sold.Again the approach is the same, how to squeeze some value out of that wastewater.Paul O’Callaghan is Principal of O2 Environmental, a consultancy group providing water technology market expertise, founder of the BlueTech Innovation Forum and co-author of ‘Water Technology Markets 2010′.