Is H2O the next CO2?
A case for water on the blockchain
Take a look at the blockchain-enabled market for carbon offsets. Without this market, would we see such massive investment in carbon capture utilization and storage? What if a similar approach were taken for water, and why should it be? To start, water resources are under stress. A surging population and pressure on our natural resources have encouraged water conservation, and exploration of new sources of usable water.
Many altruistic founders have felt this urgent call to action and moved to transform the tantalizing $300 billion+ water market. And, nearly as many have run up against barriers. First, water technology is often lumped into huge infrastructure projects with multi-year sales cycles that can push founders quickly to the end of their runway. Second, drinking and wastewater treatment facilities are often locally controlled and operated, which means a successful demo at one plant does not necessarily lead to repeat purchasing power. While frustrating, these challenges could be overcome if it weren’t for the third barrier, the low valuation of water.
Cost of Water vs Cost of Disposal
Throughout the developed world, water is relatively cheap, by design. When you’re thinking about washing your clothes or taking a shower — this is a good thing. But, when you’re trying to convince someone to invest in technology to produce more water, the long water-cost-savings-based payback proposition could prove fatal to a fledgling organization. Mounting pressure from sustainability groups to conserve resources, especially in water scarce areas, may begin to impact both policy and corporate action. However, as it stands, the long winding road of customer discovery often leads to industrial wastewater where operators pay astronomical sums to dispose of high volumes of wastewater. In the most extreme cases, hundreds of thousands of gallons are removed from some facilities every year via tanker truck and delivered to dewatering and disposal facilities where the contaminants, which often contain harmful toxins, end up in a landfill. For these operators, every gallon of wastewater they do not have to remove from their site amounts to dollars saved, generating both a willingness and ability to invest in water recycling technology. Membrion, for example, has seized these opportunities deploying its flexible ceramic membrane technology in these tough-to-treat wastewater scenarios. By recovering water from the effluent for on-site reuse, the overall disposal volume plummets leading to lower OpEx and happy customers, while decreasing the external water consumption of their operations. Compared to the current costs to purchase water, slashing disposal costs is motivating!
Wacomet approaches the market with a different technology, ditching the membrane in favor of switchable solvents suitable for municipal, industrial, and agricultural applications. Take cooling tower water for data centers or power generation in water stressed sites like California, Arizona, or Hawaii as another example. The status quo of buying water from the local municipality, running it through cooling towers which gradually increases salt concentration, then dumping it down the drain just before it exceeds municipal discharge limits may come up against some resistance as data and energy demands grow and water resources shrink. The team at NoNa+ has developed an Ion Concentration Polarization (ICP) desalination technology, which is well suited to tackle this market at ¼ the energy consumption of traditional reverse osmosis.
Industrial use cases, the regulatory environment, and internal sustainability champions may create more market opportunities as water stress awareness increases, But is it enough? Can we wait for technology build-out in the industrial sector to reach the economies of scale needed to drive down the Levelized Cost of Water (LCOW) for use in drinking water systems? Will the technology that grows out of industrial markets be what we need to serve the most vulnerable, water-stressed parts of the world?
Water Markets
Maybe not — which explains the emerging interest in “water on the blockchain”, a buzzy phrase which has sent the heads of some non-software folks spinning. Nonetheless, water markets like waterDAO and others are being developed to drive water innovation. Similar to voluntary carbon credits, consumers concerned about their water footprint can purchase a “water credit” to offset their water use with verified water production or new technology development. Like with carbon credits, blockchain technology can similarly be used to bring greater transparency and trust to these transactions. Carbon offsets and the voluntary carbon market have driven substantial advancement of nature-based and technological carbon capture and sequestration. It is worth noting that, unlike carbon in the atmosphere, water resources and water stress are localized, so spatial constraints would be critical. Still, this type of supplemental market force could help drive down the LCOW for emerging technologies and offer a solution to water consumers for whom it is operationally impossible to reach net zero water.
Is there enough willingness and ability to pay for sustainable water innovation? Will existing market pressure be enough to tackle the global, existential challenge of water insecurity? Will the biggest water users be able to reach net zero water on their own?
If you ask me, we’ll be seeing more water on the blockchain.
Prime Movers Lab invests in breakthrough scientific startups founded by Prime Movers, the inventors who transform billions of lives. We invest in seed-stage companies reinventing energy, transportation, infrastructure, manufacturing, human augmentation, and agriculture.
