30 October 2017 / Reese Tisdale
Water Reuse and Recycling: Market Opportunities and Challenges
In August 2017, asset management firm Equilibrium, released An Equilibrium Point of View, Water Reuse and Recycling // Market Opportunities and Challenges. This perspective provides a valuable overview of market fundamentals, capital needs, and outlook for treating municipal and industrial wastewater. Further, it highlights the financial services sector’s need for reliable market intelligence and transparent forecasting for the burgeoning sector.
Equilibrium draws heavily from Bluefield Research’s ongoing and in-depth analysis of reclaimed water markets, trends, and bottom-up forecasts. After all, this is why companies rely on Bluefield’s team of water experts. As discussed in the perspective, Bluefield is tracking more than 600 of planned municipal projects– which has actually increased since time of the report– let alone the hundreds of industrial projects in power, upstream and downstream oil & gas, and other industries.
“Bluefield Research has forecasted investment in water reuse to total $22 billion through 2027.”
Alternative water supplies are taking on greater significance for the investment and financial service communities, as they are position for demand growth in everything from pipes and pumps for network distribution to advanced treatment technologies for potable usage. Across the value chain, the opportunities are immense with growing concerns about supply disruption (e.g. drought, hurricane, fires) and environmental impacts are stressing our most precious commodity.
Some excerpts from Equilibrium’s report include:
- Bluefield Research currently has 607 municipal projects in its database, representing a 58% increase from 2016. Domestically, California, Texas, Arizona, Florida, Georgia, Washington, D.C., and Pennsylvania are the most attractive geographies. California and Florida account for 36% and 26% of these, respectively. Total additions, at the time of report, was 7.9 million m3/d.
- The industrial sector represents 6% of total U.S. water withdrawals. Nearly all comes from freshwater. In the U.S., the industrial segment comprises an estimated 41% of the total reuse & recycling market, with 2016 capital expenditures of $7.9B. Water volume, forecasted sector growth, reuse opportunities, and liability risks also impact market attractiveness, further challenging sectors such as petroleum refining and mining.
- Irrigated agriculture accounts for 36% of U.S. freshwater withdrawals and 80% to 90% of consumptive water use. As seen on page 12, 37% of the total recycled water available in California is used by the agriculture sector, with urban irrigation accounting for 23%. In Florida, agricultural use is significantly lower, at 10%; however, residential and golf course irrigation comprise 42% of recycled water use.
- Power plants are the largest industrial users of water. The power sector is increasingly looking to on-site zero liquid discharge (ZLD) systems to meet these and to reduce water use in stressed areas. Most thermal power capacity additions are planned for the Mid-Atlantic and Midwest states, reflecting an ongoing shift from coal to natural gas. This market is extremely saturated with large company salesforces in search of on- and off-market deals. GE (now SUEZ), Veolia, and Aquatech have deployed 99% of ZLD systems in the U.S.; however, an increasing number of providers are providing greater competition.
- The food & beverage and power industries emerge as having the highest potential for reuse & recycling investment. Many firms want to retain ownership of on-site projects and related infrastructure. They will either hire large DBO firms to design and build proprietary systems or do it themselves. The market for externally-owned, on-site facilities is limited as evidenced by the few companies in this space. Only two – Cambrian Innovation and BioFiltro – are targeting this market.
Do you have a plan for how your municipality or company can capture a piece of this growing market opportunity? Bluefield Research will present its findings on an upcoming webcast sponsored by the WateReuse Association on 8 November 2017. The topic, $22 Billion for Water Reuse: Where are the Opportunities for Municipalities and Business?. All you need to do is register at WateReuse.
For the webcast, Bluefield’s experts will draw from the recently released report, U.S. Municipal Water Reuse: Opportunities, Outlook, & Competitive Landscape 2017-2027that provides, in data-backed detail, the outlook for reclaimed water in the U.S. over the next decade. As always, we are looking ahead, so…
What’s your bluefield strategy?