Guest blog: What about water?

By Gregg Semler
President and CEO, Lucid Energy

Nine months ago I joined Lucid Energy, a renewable energy company with a new in-pipe hydropower system that enables municipal, industrial and agricultural facilities to produce low-cost electricity from their gravity-fed water pipelines and effluent streams.  Having spent the past 12 years as an entrepreneur and venture capitalist commercializing clean energy technology, I’m fascinated by the parallels and intersections I’m seeing between the global need for clean energy and growing global issues around water, and I want to share some of the insights I’ve learned.

Over the past 10 years, awareness about the importance of energy has become pervasive.  Billions of dollars in investment have been made in energy supply (fossil fuels, and renewables), better management of our existing resources (smart grid, energy efficiency) and energy security.   Whether the motivation is growing global demand for limited resources, impact on climate change, global politics or economics, a day doesn't go by where the impact of energy doesn't show up in conversation or in our media.  

What about water? 

Like energy, clean water supply is an issue of growing importance as world population rises.  Only 3% of the world’s water is fresh water, which needs to be distributed to our cities, towns and agricultural areas and purified in order to be used for safe drinking water. Yet, while investment in energy continues to grow, our water infrastructure is aging and desperately requires updating. The EPA estimates that a trillion dollars in investment is needed to modernize US water infrastructure.  This is a huge number and sheds a harsh light on the urgent need to increase awareness about water. It signals that we must begin to invest in smart water technology, water conservation and water security, because without water, no economy in the world will be able to sustain itself.

Another important insight I’ve learned is the interdependency between water and energy: it takes a lot of energy to deliver clean, safe drinking water and it takes a lot of water to produce energy.  Pumping, purification and distribution of water are all energy-intensive tasks. In fact, energy is the number one cost center for municipal water utilities. Today, on average, 6% of energy in the US is being used to purify and deliver water. In California, that energy expenditure on water is more than 20%.  At the same time, revenues for water utilities are down, leaving many municipalities strapped for cash at a time when they need to be investing in water infrastructure upgrades. 

Unlike energy, the importance and value of water is not well understood or appreciated by citizens.  Most of us can go 60 days without energy, but it is unimaginable to go 60 days without water. Municipal governments in the US, Israel, China, Brazil and India understand this dynamic very well. But US citizens, in particular, take accessibility to clean water for granted, as if we all have the right to it.  Yet water worldwide is either not priced or, as is the case in the US, not priced appropriately to cover expenses. This inhibits investment in the most important resource on the planet.

So what can be done to ensure that we have continuing sources of clean, affordable water and a secure water supply? 

This is an area where I see an expanding window of opportunity for public-private partnerships that bring together expertise and capital from the private sector to support the combined build-out of smart, integrated and secure energy and water infrastructure.  Many of the trusted, best-known names in energy and water infrastructure Siemens, CH2M Hill, Honeywell and Johnson Controls are motivated and organized to bring innovation, expertise and large balance sheets to customers who want to upgrade infrastructure and improve energy and water security. 

We have experienced this movement first hand at Lucid Energy, where we see an opportunity to work closely with leading energy and water companies to use our renewable energy technology to finance much-needed water infrastructure improvements, thus accelerating the convergence of energy and water for their customers.

I see a future where water resources are integrated as part of the smart grid, where smart water technology is distributed throughout the world and where more rational models are imposed by managers of large water assets to improve the economics of water. 

The water-energy nexus is a critically important area of investment.  I strongly believe, for those brave investors who participate now – just ahead of the curve – long term, outsized investment returns will be achieved. Along with compelling financial rewards comes the knowledge that those who engage now are part of the building of a more secure future for humankind.