Tackling water stress helps people, planet and business
The global water industry is under pressure to get water flowing to everyone in the world by 2030. Investment in the right technology – or “watertech” – will drive it
The global water and wastewater market is predicted to reach $135.2b by 2025, according to US market researchers Frost & Sullivan.
Much of this growth – up from $116.7bn now – will come from technology-enabled services, or watertech.
At a time of growing scarcity caused by the dual forces of population growth and climate change, watertech is helping purify, conserve and manage water. It promises to bolster efforts to meet UN targets for water services, and ensure there is enough water for global domestic and industrial use.
The first and most urgent priority of watertech is revitalising crumbling water infrastructure.
In North America, for example, there is a water main break every two minutes. This leads to 22.7bn litres of water loss each day.
Europe’s infrastructure and that of the Asia-Pacific region’s also suffer from historic underinvestment and lack of innovation, meaning systems are wasteful.
To conserve water, smart sensors and meters are being adopted in systems across the globe. Data analytics are helping to transform utilities by showing us exact usage and, more importantly, wastage. In the UK, for example, smart meters are helping households reduce consumption by around 13%.
As the demand for holistic water management grows, data analytics providers are broadening the functions of smart sensors and meters to include pressure, temperature and acoustic sensors. This will enhance leak visibility in the water networks and boost customer confidence.
In the short term, smart water meters will use AI to automate shut-off in the case of leaks.
New water sources
By 2025, half of the world’s population could face water scarcity. In this context, water production is key.
Atmospheric water generation (AWG) extracts water from dew and fog. Condensation technologies such as hydropanels extract water from humid air.
A single hydropanel can produce three to six litres of drinking water a day – 80-150 litres per month – depending on the sunlight available.
1,000 panels across an acre of land would generate more than two million litres of drinking water per year. Panels can store up to 30 litres of water and maintain quality for up to seven days.
Desalination of seawater is the least energy-intensive process for creation of fresh water to add to the system. Yet some of the world’s most water stressed areas do not have access to sea water. This is why investment in a variety of technologies is vital.
Before it becomes safe even for industrial use, 90% of the world's water supply needs treatment. Water-purification technologies are vital to combat falling supplies of fresh water globally.
Water purification R&D investment will come largely from governments and should be focused in two areas: filtration and catalysis.
Treatment of wastewater is another option to boost global water supplies. But as with delivery pipes and monitoring, centralised infrastructure has failed to keep up with changing water demands.
Decentralised solutions are filling the gap. These are typically modular or prefabricated filters. Overall, the market for decentralised solutions, which was estimated at $5.9bn in 2022, is growing at 7.6% a year.
Water pumps for extracting, treating, distributing and discharging water and wastewater, although well established, should not be overlooked. With global revenues of $8.3bn, they remain the workhorses of the market. Incremental improvement in pumps will come through digitisation, seen for example in solar-powered pumps, that can serve remote areas and those with poor infrastructure.
The value of our water system
The UN has set a target of universal water and wastewater service provision by 2030.
This is a humanitarian effort with a strong business case. The benefits of meeting this target could exceed hundreds of billions of dollars annually – in stark contrast with the global economic losses currently related to water insecurity, which are estimated at almost $500bn per year.
Analysis of the S&P Global Water Index shows that, over the past 10 years, 50 of the largest publicly listed companies involved in water have increasingly provided higher risk-adjusted returns than broader global equity markets.
This macro context aligns strongly with the need for investment in watertech – to provide a broad and rewarding opportunity for investors.