Water Technology Market Trends for 2015

image-coming-soon

Areas to watch in the year ahead:

Three water technology markets trends to watch in 2015 are Anaerobic MBR, struvite recovery and sludge pre-treatment. Based on our analysis of cumulative plant installs, struvite recovery and sludge pre-treatment looks to be in the early majority section of the market adoption curve, while anaerobic MBR is at the early adopter stage.

Strong opportunities for systems integrators in the industrial wastewater treatment market
The margins will be better for those that have their own technologies. This strategy appears to be working for GE Water, and is also by players such as Aquarion, Nijhuis and SCINOR. The Chinese industrial wastewater market is set for strong growth, as is the market for Biosolids management solutions. We will visit this latter topic in our January webinar: China Biosolids -The good the bad and the ugly.

Emerging Contaminants – heating up
We will have a webinar focused on this topic which will look at what is happening around treatment at source at hospitals and healthcare facilities as well as how new regulations in Europe may pave the way for advanced treatment.

We created the interactive map below, of micro pollutant reference plants at drinking water and wastewater plants to illustrate that this is not just something which is talked about, but is actually being implemented, one plant at a time. We will continue to update this Map with reference facilities to track the growth of this market area.

View Micropollutant Treatment Reference Sites in a full screen map

 

Fusing of machinery, sensors and big data in water
There is much talk of the internet of things. What does this mean for water? There may be an innovation renaissance for pump manufacturers, who have been relatively isolated from disruptive innovation. There are opportunities in integrating sensors and control systems into pumping systems. Companies such as Grundfos and Xylem are well positioned to take advantage.

As we move into 2015 it is worth taking quick look back at some trends of 2014:

Lines being blurred between Water and Waste
Wastewater is largely a dilute organic waste, and organic wastes, are in many cases, 70% water. There are opportunities to combine the treatment of both, particularly in the industrial sector such as Food and Beverage applications. Companies well positioned to take advantage of this include of course Veolia, and Suez, and also technology companies such as Nijhuis and Anaergia.

Low energy wastewater treatment goes mainstream

This was the year in which low energy wastewater treatment went mainstream, and we have just completed an Insight Report on this topic. While there was much talk about the 100-year anniversary of the activated sludge process, ‘reports of its death were greatly exaggerated’. There are no near-term silver bullets that can replace aerobic biological treatment, in the municipal sector at least.

Passive aeration methods, such as Membrane Aerated Biofilm Reactors (MABR) have the potential to provide a disruptive offering at smaller treatment plants. There are fixed film anaerobic technologies under development that look promising, but it will be a few years before they are ready to be rolled out. Microbial Fuel Cells technologies, such as ARB and Cambrian, are focused mainly on industrial wastewater markets.

Was 2014 the year of the BlueTech Crash?
It certainly was a year where the bloom went off the rose, in terms of VC investments in water. A number of companies simply ran out of runway and filed for bankruptcy. These included Ultura (the grouping of APT Water, Rochem and Sepro), sludge treatment companies Maxwest and Paradigm.

These companies had been in existence for a decade or so. The trouble with water technology start-ups is that they need too much capital. While in many cases they can reach exit velocity, and become profitable, often the size of the booster rocket needed to get them into orbit is disproportionate to where they ultimately end up.

The jury is still out on two other high profile companies, Ostara Nutrient Recovery Technologies and Voltea. From the perspective of introduction of new technology to market, Ostara has been very successful. Now it’s just a question of scaling that success.

There have been success stories as well, with the exit of NanoH2O to LG for $200M, though with $85M invested, this may equate to a blended rate of return across all the investors and various funding rounds, varying between 1X to 2X. CAMBI is going from strength to strength.

There are opportunities to grow scalable profitable business and also for exits. One of the projects we are undertaking is to carry out analysis on the companies that made it, and those that didn’t, to identify common success factors to help inform placement of capital and investment strategy. I believe this analysis will also inform internal technology development with the larger companies.