Many drivers will accelerate growth in water reuse, experts say
Population growth and water scarcity traditionally have spurred development in the water reuse industry. Although these factors will continue to prompt demand for the sector, a host of new forces, environmental as well as economic in nature, are expected to generate additional investment in reuse applications. This was the conclusion of various experts discussing the outlook for reuse during the 2022 WateReuse Symposium, held March 6 to 9 in San Antonio.
Optimistic future
“We feel optimistic about the future of reuse,” said Greg Goodwin, applied research consultant for the analytical firm Bluefield Research, during a panel discussion held as part of the March 7 luncheon plenary. Currently, the U.S. reuse market, including municipal and industrial applications, is valued at $3.4 billion, he said. “We expect that to grow to about $4.7 billion by the end of the decade,” Goodwin said.
This growth in municipal reuse, in part, will occur in geographic locations that previously have had little need for the technology. For example, saltwater intrusion is “becoming a larger concern for the entire East coast,” Goodwin said. “That’s a major driver that we see moving forward to the future.” Similarly, nutrient pollution in the Chesapeake Bay and the Great Lakes can be expected to spur greater reuse efforts in those regions, he said.
On the industrial side, growth in reuse will be driven by multiple factors, Goodwin said. The proliferation of water-intensive data centers, combined with a desire by their corporate owners to appear environmentally sustainable, will spur greater interest in reuse, he said. Similarly, providers of renewable energy and electric vehicles are “looking more heavily into reuse opportunities,” Goodwin said.
Meanwhile, reuse is experiencing an “uptick” in the food and beverage industry, Goodwin said. Microbreweries, in particular, are taking an interest in reuse, largely driven by “economic concerns,” he said. Faced with rising commercial discharge rates, some brewers are turning to containerized onsite reuse. In some cases, breweries are purchasing long-term energy and water management agreements with reuse providers, essentially outsourcing their wastewater treatment and locking in long-term treatment costs while receiving reuse water for cleaning or cooling purposes.
The spread of scarcity
Although climate change and water scarcity continue to drive growth in the reuse sector, an increasing number of U.S. locations are prone to these drivers, said Heather Polinsky, global president for resilience at the consulting firm Arcadis. (Polinsky spoke as part of the Water Reuse Leaders Panel held on March 8.)
“When we started talking about water reuse, we really looked at the Southwest,” Polinsky said. “We really focused in that area. Now we’re seeing that Oregon, Idaho, [and] Montana are also having challenges that we wouldn’t have anticipated.”
Shifting patterns of water availability across the country will continue to affect prospects for reuse, Polinsky noted. “It’s really important for us to have that foresight, that areas today where we see water scarcity are not necessarily going to be the only areas that have it in the future,” she said. “So it’s really important for us to get ahead of that.”
The emergence of ESG
Another factor that is set to spur growth in the reuse sector is the recent explosion in the use by investors of environmental, social, and governance (ESG) metrics, said David Ross, a partner at the law firm Troutman Pepper Hamilton Sanders LLP, during the March 8 panel discussion. “We have an extremely powerful force happening in the last couple of years with the ESG movement. Right now the focus is dominated by carbon. And companies in the private sector are mainly focused on their carbon footprint.”
However, “we’re starting to see a significant uptick” in interest regarding how companies use and manage water, Ross said. In the face of growing questions about their water use practices, companies increasingly will emphasize the steps they are taking to improve the sustainability of such practices. “To be good corporate citizens, they’re going to be much more vocal about it,” he said. “I think that’s a fundamental driver in the next decade.”
In fact, the sheer size and scope of the ESG movement will force publicly traded companies to pursue reuse or other sustainable water management practices simply to maintain investor interest, said Joseph Vesey, senior vice president and chief marketing officer for the water technology company Xylem, during the March 8 panel discussion. “Companies are listening to their stakeholders,” he said. In so doing, companies “project the transfer of trillions of dollars” of investments on the basis of ESG metrics. “I think those companies are trying to get ahead of that to understand and serve their future investors.”
Meanwhile, a growing number of companies are making claims regarding their environmental commitments, including sustainable water management practices. (For example, Facebook, Google, and Pepsi all pledged in 2021 to become “water positive” by 2030.) In the future, Vesey said, some companies likely will need to invest in water projects beyond their own operations in order to fulfill such claims. “If that emerges, that could be a big accelerant to our industry,” he said.
As for other funding sources, private capital likely will play a larger role in the water sector in the future, Ross said. “I think we’re already seeing that,” he said. “There’s a lot of capital flowing in. Right now people are just buying water companies.” In time, however, private investment in the industry “will be more purposeful” and “driven by major banks [and] lenders,” Ross said. “It’s a safe return on investment if you do it right.”
Cautionary tale
Though the outlook for the sector is optimistic, the road to reuse is not always a smooth one, as illustrated by Brian Perkovich, the executive director of the Metropolitan Water Reclamation District of Greater Chicago (MWRD), during the March 7 panel.
Perkovich recounted an obstacle encountered by the MWRD as it attempted to facilitate water reuse. Currently, the district, which treats about 1.4 billion gal/d of wastewater at its seven water reclamation plants, reuses approximately 15 mgd onsite at its facilities for such purposes as backwashing filters and cleaning tanks.
The problem ensued after the MWRD was contacted by a local company seeking to use treated effluent from the district as part of its operations, Perkovich said. After making arrangements with the company, MWRD contacted the mayor of the village in which the company was located to alert them to the reuse plan.
All was going well until a new mayor took office and grew concerned about the potential loss of revenue to the village that would result from the reuse project. “In the area, water can be a source of revenue for billings,” Perkovich noted. The village subsequently adopted an ordinance banning the sale of treated effluent, nixing MWRD’s reuse scheme. “Sometimes you take two steps back,” Perkovich said.