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Water Shortages: Opportunities for Entrepreneurs (Part 1)

Posted on Sunday, Mar 8th 2009

By Guest Author Dominique Trempont

While people focus on carbon footprints and potential ways to reduce the impact man-made CO2 emissions, the world is running out of another of its key elements: fresh water.

We use fresh water much faster than it can replenish: it is increasingly scarce and has no alternative.

Water is a strategic resource for countries and governments. According to United Nations, drinkable water only serves 4 and, by 2050, 6 billion people on earth, up from less than 2+ billion a decade ago, and is still not safe or readily available for an additional 2 billion people.

Providing enough fresh water for the world to function is not a “nice to have”. It is a “must have”. We cannot survive without water: 60-65% of our body and 77% of our brain is water. Water is also essential to creating food (agriculture) and economic development. Whoever controls water controls food, social and economic well-being. This may be the most important priority for this planet.

And, yet, water is widely considered as limitless and is taken for granted. This perception is about to radically change given the water shortages we are facing.

A sense of urgency is starting to build. Last week, California Governor Arnold Schwarzenegger declared a state of water emergency and announced water rationing in the state. Regions like Florida, upstate New York, the Midwest and the South are under the same pressure. Over the next 10 years, 36 out of the 50 states in the US forecast severe water shortages.

Let’s put this in perspective: since the 1900s, the world’s population has doubled every 40 years and fresh water demand has doubled every 20 years, while the supply of safe drinkable water has dwindled. The World Bank predicts that by 2025, demand will exceed supply by 50%, possibly more if one factors in increasing pollution, contamination and decaying water infrastructure.

Even though the water market tends to be on a national scale and has been largely regulated, there is a tremendous opportunity to innovate in this $32 billion worldwide water infrastructure industry to expand the $400 billion global water needs of the world.

I have been interested in the water space for about three years now. I classify innovation opportunities in five categories to track who is doing what and getting funded, and I am looking for feedback from the industry and entrepreneurs.

1. Collect storm water and rainfall more comprehensively

Economically recovering storm water and rainfall is a simple way to increase water supply by as much as 5-7% worldwide. This is a low-hanging fruit for most rainy season countries. In the US, the Orange County Water District has done extensive work since 1978 to recharge the aquifer (the underground layer of water-soaked sand and rock that acts as a water source for a well) by damming desert washes and creating large sand filters. On a smaller scale, households could recycle water for domestic uses other than drinking; cities, towns and villages could collect rain more effectively. I came across AbTech and its SmartSponges, which collect and filter water run-off and storm rain. This could be an interesting play if the company has strong material science patents that can become a platform in other applications (see storage opportunity below) and has a way to leverage itself by selling globally.

2. Store and transport water in a sustainable and safe way

There is an enormous need for more reliable solutions to store, transport and deliver already filtered water that is currently wasted or re-contaminated over time.

Stored fresh water is prone to contamination. A company that is focused on this market segment is Pax Water Technologies, a subsidiary of Pax Scientific Inc. Quoting their website: “When drinking water becomes stagnant and stratifies—especially in storage tanks exposed to the strong summer sun—water in the upper layers can completely lose its disinfectant residual. This residual is needed to control bacterial re-growth and protect the health of consumers from waterborne illness. For many storage tanks, the solution to maintaining residual is simple: keep the water moving.” This constant remixing system can reduce the need to add more chemical agents and can become solar-powered. This is an interesting niche and OEM opportunity if the patents are solid.

Transporting drinkable water is also a challenge. In the United States, the water infrastructure is such that a staggering 30% of water is lost during transportation, before it reaches the field, factory or household. This loss is higher in countries like India and China. Fixing the infrastructure and regaining that thirty-some percent loss requires higher maintenance and hence more public funding.

This is probably not a big space for entrepreneurs. To fix transportation and storage issues, governments would need to put a price tag on this 30-40% water waste, calculate a ROI and fund the maintenance, possibly with price increases.

This segment is part 1 in the series : Water Shortages: Opportunities for Entrepreneurs
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I will like to bring to your notice most successful case of water management in India carried out by Narendra modi in Gujarat. Gujarat was facing tremendous problem of fresh water since last century, Sardar patel launched Narmada dam project (which was later renamed Sardar sarovar dam) after independence. The work got delayed and struggled for 50 year till congress was dominant. Once Narendra modi took over, he started huge water management project that brought abundant water to every nook and corner of gujarat. Even great rann of katch is becoming green this days. If you are really interested in reading about how fresh water shortage problem was solved, Gujarat is golden case.

niraj Sunday, March 8, 2009 at 9:38 AM PT

What are the other three? The reason I ask, is I’m extremely interested in the topic of water shortages.

Abendigo Reebs Sunday, March 8, 2009 at 9:58 AM PT

[…] (Original Post Here) Bookmark Me! […]

Solving the Water Shortage Crisis: Water Innovation Opportunities for Water Entrepreneurs (SramanaMitra) - LeakBird Sunday, March 8, 2009 at 9:59 AM PT

Niraj, your point is well taken. There is a tremendous opportunity for safe fresh water in India, that, one way or another could be lead by entrepreneurs, as I pointed out at IIT Kharagpur in our keynote speech at the Entrepreneur Summit.
http://www.crazyengineers.com/forum/ce-events/11345-ecell-iit-kgp-guest-lecture-dominique-trempont-sramana-mitra.html

Abendigo, please see other parts of the article.

Dominique Trempont Monday, March 9, 2009 at 10:17 AM PT

Here is Canada, there is a portable system costing C$ 800, which condenses water from air. With a solar power attachment, it will be self sustaining in any part of India, which has solar and high humidity to make it viable, especially during floods.

Sanjay Friday, March 13, 2009 at 11:10 AM PT

Sanjay, thank you for pointing this out. How is this individual portable system distributed and what market are they targeting? I am concerned that the people who really need this, as a matter of life and death, are hard to reach and cannot afford, by themselves, an individual system of that price.

Dominique

Dominique Trempont Monday, March 16, 2009 at 9:58 PM PT

[…] both macro and micro demand and supply that include infrastructure, technology and policy. Read more. Posted in Uncategorized. Tags: demand management, drought, policy, technology, wildfire. No […]

Dominique get’s it.. « Stormsustainability’s Blog Saturday, May 16, 2009 at 10:15 PM PT

Keeping the problem of acute water scarcity on a side for a moment, I would like to grab your attention towards lame “water management” scenario around us. Talking of India, its climate is not particularly dry, nor is it lacking in rivers and groundwater. Its just the lack of proper management, ambiguity in laws, corruption and water pollution that has crunched the available resources into a mere dump of sewage. Just to quote a figure, New Delhi requires about 36 million cubic meters of clean water per day and the govt. supplies 30 million cubic meters, but only 17 million cubic meters reach the consumers and rest is wasted due to the leaking pipes and canals. This accounts for 40% wastage of water everyday. Also, India receives an average of 4,000 billion cubic meters of rainfall every year. Unfortunately, only 48 per cent of rainfall ends up in the rivers and due to lack of storage, only 18 per cent can be utilized. Therefore its not just the shortage of water that is leading us into a dark future, but there is an imperative need to start managing the available water resources as efficiently as possible. It would be very kind if someone could shed some light on how this management is done in other countries which are in a better position than India as far as this topic is concerned.

Rohit P. Singh Saturday, May 30, 2009 at 2:17 AM PT

Rohit,

Indeed. You need to start your research at the Worldbank’s site: http://www.worldbank.org/water

GE has also done a lot of work in this area, which you should look into.

This is a very important issue.

Sramana

Sramana Mitra Saturday, May 30, 2009 at 9:38 AM PT

Thanks, Sramana for your valuable suggestion. I browsed through the work done by many firms towards providing solutions to water crisis. General Electric (GE) has imposingly taken over the market in water desalination in India with its $6.5m desalination plant in Gujrat for a unit of Tata chemicals. It also signed a joint venture with Eureka Forbes, the largest direct sales network in Asia providing water solutions. This venture under the name Infinite Water solutions, manufactures GE’s reverse osmosis membranes in India and sells it through the extensive network of Eureka Forbes. Dow also has contributed significantly by collaborating with a NGO which now provides clean water to more than 30 villages in the state of Andhra Pradesh and also by establishing a plant in Gujrat which will provide clean water to almost 3000 people.

In the context of water transportation, we see that MNC’s are quite enthusiastic in investing money in water related projects,. but Dominique pointed above that this is probably not a big space for entrepreneurs. Isn’t it possible for some of the companies to invade into the area of transportation and if not completely take over, at least help the govt. in correcting the flaws that exist.

Rohit P. Singh Thursday, June 4, 2009 at 11:54 AM PT

Well, the most likely deal structure for these sorts of issues is BOT (Build Operate Transfer) in a Public-Private Partnership (PPP) mode.

Entrepreneurs CAN get into these areas, but the capital requirements are very high, and the game is quite different from inventing technology and bringing new products to market.

Sramana Mitra Thursday, June 4, 2009 at 2:41 PM PT

The notion “Water Wars” has gained significant popularity in the past few years.The United Nations in its World Water Development Report of March 2009 has warned that climate change harbors the potential for serious conflicts over water.

Today over 90% of the world’s population lives in countries that share 263 transboundary lake and river basins. In addition 2 billion people depend on ground water which includes approx. 300 aquifer systems. All these transboundary water bodies create hydrological, social and economic interdependencies between societies. Although they have a potential for severe discourse and conflicts. they can be solved by cooperation, adequate legal and institutional frameworks, joint approaches to planning and sharing of benefits and related costs.

An assessment of past water-related conflicts shows that water scarcity, dam construction, water
abstraction, and chronic and accidental water
pollution by industry, as well as neglect or
nonacceptance of existing treaty provisions, often lie at the root of water tensions. But history shows that water more often unites than divides. Since 1948, only 37 acute cases of conflict over water have been recorded and in contrast 295 international water agreements were negotiated and signed. Members of UN-Water have been taking consistent initiatives to support countries in their efforts to improve the management of transboundary water resources, but there are still numerous water courses without adequate legal framework for cooperation. Notably, 158 out of 263 international river basins lack any type of cooperative management framework.

For effective transboundary water management, coordination and cooperation between different ministries and water related institutions, sufficient financing and political commitment is needed. Apart from States, a variety of actors – local stakeholders, non-governmental organizations (NGOs), research institutions, private sector participants and donors, must all be involved.

Rohit P. Singh Wednesday, June 10, 2009 at 3:05 AM PT

Rohit, What are the 37 acute cases of conflict, and under what circumstances did they take place? I would also love to see some color on the water agreements (where, between which countries, what types of agreements) and the lack thereof (which river basins need treaties and of what kind).

I am also curious about the water treaty between Bangladesh and India. It seems that Bangladesh is quite dependent on the water from the Ganges, and yet, there are water shortage problems in the Hoogly river, further downstream from Farakka, where the water gets distributed.

Can you please investigate?

Sramana Mitra Wednesday, June 10, 2009 at 9:18 AM PT

The Farakka barrage which was conceptualized back in 1951 in order to divert water from the Ganges to the Hooghly river (in India), by a 42-kilometer long feeder canal has been a key source of controversies between India and Bangladesh. Two treaties and two MOUs have been signed to find out a long term solution but still floods and droughts during monsoon and dry season resp. cause illegal migration to India which has prompted India to build an immense border fence in attempt to block the immigrants. The migrants disperse to West Bengal and slums of Mumbai and Delhi which has caused ethnic conflicts. A negotiation is going on to reach a deal on the sharing of water of river Teesta which is crucial for Bangladesh for fighting droughts in its north-eastern region. India’s river-linking mega project and construction of a dam on the river Tipaimukh in its north-eastern state of Manipur, diverting the natural flow of waters of the two lower riparian rivers of Meghna and Kushiara in Bangladesh are the major concerns for Bangladesh at the moment.

Pakistan on the other hand, has approached World Bank to appoint an impartial expert to resolve the Kishanganga power project dispute with India. Pakistan claims that this 330 megawatt hydro-power project violates the 1960 Indus water treaty under which, India has rights to the waters of the eastern rivers namely Ravi, Sutlej and Beas while Pakistan has rights to the waters of the western rivers namely Indus, Chenab and Jhelum. The Kishanganga project involves the diversion of water from one tributary of the Jhelum river to another, which according to India is permissible under the treaty but Pakistan says its’ not. This will cause a 27% water deficiency in Pakistan. Nazria Pakistan Trust Chairman Majid Nizam recently stated that the water dispute between India and Pakistan could trigger a nuclear war between both countries.

India also signed the Mahakali Treaty with Nepal in 1996, but remains stalled. The two countries have signed five agreements and eight bilateral mechanisms exit but the progress has been tardy.

Rohit P. Singh Friday, June 12, 2009 at 6:14 AM PT

Rohit,

It seems there are a number of inter state disputes as well, around water from the Ravi-Beas system.

What would be your suggested policy recommendation to address these national and international disputes?

For example? What is the right course of action for the Teesta river dispute with Bangladesh?

What is the right strategy vis-a-vis Pakistan over the Chenab water?

And what is the right strategy vis-a-vis the Ravi-Beas system?

Sramana Mitra Saturday, June 13, 2009 at 1:35 PM PT

Since the mid 1990s when India started the construction of Baglihar dam on the Chenab river, India and Pakistan have been in a consistent debate to solve the issue. Starting in May 1999, Pakistan has been asking India to suspend the construction of the dam and claims that this construction violates the 1960 Indus water treaty.
I believe this dispute is more than just a interstate dispute involving water. As the scenario here involves Kashmir and the Indus river basin its’ more of a matter of pride for both the nations to win this conflict in their favor. The only solution to this is a third neutral party which, after overlooking the past rancor between the two nations, can make a decision in favor of the people who are affected by this dam.

Rohit P. Singh Friday, June 26, 2009 at 11:06 AM PT

Right since the enactment of Punjab Reorganization Act, 1966, which resulted in the formation of the state of Haryana, Punjab has been protesting against the unconstitutional provisions of the act and claiming that Haryana has no rights on Punjab’s river waters. The Sutlej Yamuna Link canal (SYL) which was supposed to bring Beas, Ravi and Sutlej river waters from Punjab to Haryana and Rajasthan, has been a serious bone of dispute between Punjab and Haryana.
The decision to solve this conflict can be made either through judicial verdict binding on the parties or through a intentional agreement between Punjab and seekers of its river waters. I think the best way is to settle the matter through unprejudiced negotiations among the leaders of the states who must show sound commitment to craft a settlement that will be accepted by all concerned. In most of the countries the conflicts on river water have been solved through mutual understanding and cool headed negotiations. The courts always have to work within certain judicial parameters and their decisions might not always satisfy the disputants.
The people of Punjab and Haryana are one people having harmonious social relations and their leaders are competent enough to settle the matter in a friendly way.

Rohit P. Singh Saturday, June 27, 2009 at 4:47 AM PT

Rohit,

I see 2 separate issues in terms of the interstate conflicts within the states of India, versus the India-Pakistan issues.

Note, that Gujarat has one of the longest coastlines of any Indian state. What if a private company in Gujarat creates desalination plants all along the coast and becomes a feeder to the states and well as to Pakistan?

What, in your opinion, would be the repurcussions of such a strategy?

Sramana Mitra Tuesday, July 7, 2009 at 2:44 PM PT

With Gujrat sharing its border both with Pakistan and the Arabian Sea, this can turn out to be a very fruitful strategy and may also help in solving the senescent disputes that both the countries have been facing for ages now. Companies like General Electric have been leading from the front in using India’s 7000 km long coastline to cater to the clean water needs of millions.
Bhabha Atomic Research Center (BARC) has also signed up for a N-powered desalination plant and it will also generate cheap electricity along with desalination. But talking of reducing the tension across the border, India and Pakistan have always faced issues in making agreements. I think that if such a plant is ready which can feed the Indian states as well as Pakistan and if its’ situated in India then controversies will arise regarding the percentage of water produced that should be supplied to Pakistan. But this certainly will alleviate the stress on the river water disputes and Indus water treaty. The ministries will have to be competent enough to make a decision for a common good.

Rohit P. Singh Tuesday, July 21, 2009 at 4:32 AM PT

Hi Rohit,

Yes, agreed. Here’s a question that has come to my mind: how many desalination projects are active in India right now, and what are their locations and capacities? What are their water grid plans – canals? aqueducts? connections to rivers? And to what extent do you think they can address these myriad disputes that plague India, and even South Asia?

Sramana Mitra Tuesday, July 21, 2009 at 8:47 AM PT

There are no reliable statistics available on number of plants and their capacities in India right now, but according to a rough estimate by Indian Desalination Association (IDA) there are more than 1000 membrane based desalination plants of various capacities ranging from 20 m3/day to 10,000 m3/day and few thermal based desalination plants as well. These plants are located all along the coastline of India but are majorly present in the states of Gujrat and Tamil Nadu.
Among the leading players in this field are General Electric, Essar Oil, Chennai Petroleum Corporation Ltd., Indian Oil and Aquatech International Corporation.
A recently installed Kudankulam Nuclear Power Project (KKNPP) in Tirunelveli district, Tamil Nadu has a tremendous capacity of producing desalinated water at a rate of 3 lac liters per hour. Taking sea water from the Gulf of Mannar, it uses a mechanical vapor compression technology and has two 1000 MWe Russian reactors.
So we see that use of desalination technology is on the roll and India is beginning to become a downtown for industries across the globe. But when it comes solving disputes with neighboring countries, an element of uncertainty always exists. These disputes on water between countries of South Asia have their roots in the bitterness that has prevailed for ages between these countries and it will always be hard to find solutions to this issue as long as these countries don’t start looking for answers.

Rohit P. Singh Thursday, July 23, 2009 at 10:23 AM PT

With India ushering in its National Action Plan for Climate Change (NAPCC) on June 30, 2008, eight national missions have been established including the National Water Mission. This mission functions at a ministry level with inter-sectoral groups that combine resources from other ministries, industries, academia and civil society.
Each mission is assigned to evolve specific objectives covering the remaining years of the 11th five year plan and the 12th plan period from 2012-2013 to 2016-2017. In a nutshell, the objectives of the plan are to ensure an integrated management of water resources, minimization of wastage of clean water and an equitable distribution of water both across and within the states. The mission follows the provisions of National Water Policy and a framework is established to optimize water use and increase efficiency by 20% through regulatory mechanisms. It will also try to ensure that most of the water needs of the urban areas are met through recycling of waste water and those of coastal areas through adoption of appropriate desalination technologies. The mission in consultation with the states will revisit the National Water Policy to deal with variability in rainfall through improved basin level management strategies. There will be advancements in water storage both above and below the ground, rainwater harvesting and optimization of existing irrigation systems.
So it appears to be a very promising and essential step by the Indian government towards pulling the country out of the looming disaster but we’ll have to wait and see how many of the promises made will be executed.

Rohit P. Singh Saturday, July 25, 2009 at 2:25 AM PT

The 100 million liters a day capacity plant at Kattupalli village near Minjur, north of Chennai is expected to start water supply to the city by Oct. 2009. The construction of the plant began in 2007 under a public private partnership and is expected to meet chiefly the needs of north Chennai industrial belt and areas near Minjur aquifer. A Hyderabad-based organization, IVRCL Infrastructures and Projects Limited, and its technical partner Befesa Construccion y Tecnologia Ambiental, Spain, have been involved in the construction of the treatment plant on a DBOOT (Design, Build, Own, Operate and Transfer) basis.
The plant was supposed to be completed in 15 months but the plant is still not ready to operate. These delays in the plant’s construction has placed Chennai Water Desalination Ltd’s (CWDL) long-term project bank loans on “Rating Watch Negative”. CWDL was set up to design, construct, operate and maintain the seawater reverse-osmosis plant by IVRCL Infrastructures & Projects and Befesa Construccion y Tecnologia Ambiental, which hold 75% and 25% equity, respectively. CWDL has attributed the delays to unanticipated technical constrictions which, according to it, were caused by a storm in Nov. 2008. Now the deputy chief minister MK Stalin has assured that “the works for the desalination plant at Minjur are under way. All the works will be completed and the plant will be put into use during the current year”.
This plant is one of two desalination plants (the second is Nemmeli) which are being constructed to ease Chennai’s water problems. The project at Nemmeli is being set up at an estimated cost of US$ 189 million and tenders have been invited for this project following an international competitive bidding process. It is expected to be completed within 24 months of commencement.

Rohit P. Singh Friday, July 31, 2009 at 7:20 AM PT
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