with Antoine Walter, Podcaster in Chief at GF Piping Systems

Anaergia’s Rialto Bioenergy Facility is in Trouble

Anaergia’s Rialto Bioenergy Facility in 5 Key Information:

• Anaergia’s Rialto Bioenergy Facility is a Zero-Waste, renewable energy production plant in California.
• The facility uses organic waste to produce renewable energy and high-value products such as biochar, compost, soil amendment and animal feed supplements.
• The facility is able to recover over 90% of the incoming organic waste and convert it into renewable energy, helping reduce greenhouse gas emissions.
• Anaergia’s Rialto Bioenergy Facility is expected to generate 6 megawatts of renewable power and annually process more than 250,000 tons of organic waste materials.
• It filed out Chapter 11 Bankruptcy on May 27 and is now awaiting for SB 1383 to get enforced to hopefully recover from there

Chapter 11 Bankruptcy for Anaergia’s Rialto Plant

Anaergia just announced that one of its subsidiaries, Rialto Bioenergy Facility initiated voluntary Chapter 11 restructuring proceedings in the U.S. Bankruptcy Court for the Southern District of California.

Now that’s big news, as Rialto is not only Anaergia’s flagship asset but also North America’s largest organic waste-to-energy facility. And quite ironically, that’s also the reason why they’re in trouble.

Anaergia’s Rialto hardly ramps up its intake

Indeed, the plant can process 700 tons of food waste and 300 tons of biosolids per day. And if it slowly ramps up its feedstock sourcing, it’s still far from its full capacity, which severely impacts its income. 

But how can Anaergia, an acclaimed company, praised by everyone in the water and sustainable World, recently awarded “Net Zero Carbon Champion” and “Wastewater Project of the Year” at the Global Water Awards, be in so much trouble?

Well, because of one clear weakness it shares with most of the Water Industry: strong dependence on regulations. 

Who is Anaergia?

If you don’t know Anaergia, well, shame on you because that means you missed my interview with the legendary Andrew Benedek, their CEO, and my in-depth exploration with Kunal Shah, their Chief Growth Officer.

Anaergia leverages anaerobic digestion to turn wastes (with an “S”) into energy through its technology suite and a differentiated approach.

Anaergia blends Solid Municipal Waste, Agricultural Waste and Wastewater to turn it into Energy and Biosolids

I say “wastes with an S” because that’s actually a clear USP of the company; they can blend solid municipal waste, agricultural waste, and of course, wastewater and its by-products. 

Now they could “just” sell those technologies, and to a certain extent, they do. But they rather go for the differentiated approach of DBFOM, standing for Design, Build, Finance, Operate, and Maintain.

The Rialto Bioenergy Facility has 3 Problems

How did Anaergia’s Rialto turn from a flagship to a struggling asset? Well, it looks like an alignment of all the wrong planets.

The enforcement of SB 1383 got delayed

First, the plant was designed to leverage a Californian-State law, SB 1383, that targets a 75% cut in organic waste disposal by 2025. Would the law be enforced, organic waste disposal in a landfill would be fined, creating a strong incentive to divert the waste flux and find a way to valorize it. And so, the Rialto Bioenergy Facility would get its feedstock, ramp up to capacity, and California would transform an environmental burden into a sustainability asset. Win-win-win! 

The law was signed in 2016, but its enforcement got delayed by the pandemic, and further so this May when an independent state oversight agency recommended pausing it and accepting California wouldn’t reach its 2025 target. In between, the city of Los Angeles waited until late 2022 to take an implementation ordinance that shall enable law enforcement in January 2024.

So regulation, that’s the first of our wrong planets aligned in… let’s call it a perfect storm of problems.

Rialto, California, is not doomed with Europe’s Energy Prices

Ok so the second planet in our perfect storm of problems is location. Natural Gas is a relatively cheap commodity in the US, currently trading at $2.24 per million British thermal units. 

Wait. What’s that with all these numbers?

I had no clue either what a British Thermal Unit is, so I googled it. It is the quantity of heat required to raise the temperature of one pound of liquid water from 39 to 40 degrees Fahrenheit. Great, I’m even more confused now, so let me just convert that to what I understand: Natural Gas in the US trades at $7.72 per MWh.

Right now in Europe, Natural Gas trades at $25.43 for that same MWh, so roughly 3.3 times more.

Hence, would the Rialto bioenergy facility be in Europe, its renewable natural gas would not only be a sustainability asset but probably also a cost-competitive energy source.

But hey, the US has shale gas! (and screw the environment, I guess?)

Anaergia is in a relatively uncomfortable position

Third and last planet in this alignment, we have to address Anaergia’s general shape. In February, the company’s stock traded at $4.5 per share. Today, it’s been divided by 8, at $0.57 per share.

If Anaergia was printing cash overall, it could afford to cover Rialto’s losses in waiting for better days and regulation enforcement. But that wrongly aligned planet in California is unfortunately not so much of an exception.

The dichotomy and delay between political announcements and actual action

That’s where I want to highlight a huge dichotomy. On the one hand, there’s what we hear and read in the press. Big political announcements, like the REpowerEU plan announced by Ursula Von Der Leyen in May 2022, they even made a thrilling video with epic music to show how we’re acting now.

And in the same time, you find that Anaergia’s assets in Italy experience delayed electrical utility connections and other permitting issues.

There’s what’s announced, and there’s what’s done. And unfortunately, there’s a delay between those two, and the delay’s length is almost unpredictable. 

These delays in market take-offs are pretty common in the Water Sector

And that’s a trouble we’re well aware of in the Water Industry; let me take an example.

Example 1: Ballast Water Treatment

At the beginning of the 2010s, the International Maritime Organization and the US Coast Guards adopted new regulations that pushed for the adoption of ballast water treatment on ships, because that was the right thing to do to protect the ocean’s biosphere!

As a result, market research companies were blooming with reports like this one, expecting a 118 Billion dollar market for water technology companies by 2022 at a nice 37% compound annual growth rate, instead of what the Ballast Water Treatment market weights today, 5.8 billion dollars, which is about 20 times less.

What happened? Well, the enforcement of regulations got delayed and watered down; it never got extended from new builds to existing ships, and so on and so on.

Do you think that’s a one off? All right, let’s look at another example

Example 2: European Water Framework Directive

In the year 2000, the European Commission adopted the Water Framework Directive. It was supposed to achieve good qualitative and quantitative status for all water bodies by 2015.

Wastewater specialists hence interpreted this as a clear sign tertiary and quaternary treatment would be installed at scale in Europe to better treat phosphorus and nitrogen, but also micropollutants. And I can tell you that, as a young water professional about ten years ago, working on the first wastewater treatment plant to eliminate micropollutants in France, the first in Switzerland, and later the first in Sweden, I was absolutely sure I was contributing to a wave that would take Europe by storm by the end of the decade! 

But again, the regulation got watered down when adopted by the various european countries, and its enforcement date was made negotiable and possible to push back, so that one decade later, there’s barely a hand full more good pupils outside of Switzerland and Germany. 

Do you see a pattern emerging?

It’s harder to take off a market on the wastewater side (aka the Dark Side)

Indeed, I’m discussing regulation. But do you notice one more red threat between Anaergia’s story and my two Ballast Water and Advanced Sewage Treatment examples? They are all on the wastewater side.

And I would hypothesize it’s not a coincidence. 

Paul O’Callaghan has theorized how crisis-driven innovation gets adopted twice faster in the Water Sector. 

We saw that very clearly with the adoption of ultrafiltration membranes in the early 1990s, the outbreak of cryptosporidium in places like Milwaukee and the UK drove rapid regulation of the need to deal with cryptosporidium. And that drove rapid adoption of ultrafiltration membranes and drinking water treatment. If you hadn’t had that cryptosporidium outbreak in 1987 in Milwaukee, you would not have seen that level of uptake. And we see similar things with, for example, PFAS at the moment. 

Crisis being here pretty one-to-one understood as there’s a problem that’s serious enough to trigger a regulation that also promptly gets enforced. 

Zenon used to be a great example of that theory applied

Andrew Benedek, the CEO of Anaergia, is a key stakeholder in Paul’s thesis. Indeed, his involvement in the take-off and adoption of Membrane Bioreactors through his previous company, Zenon, is another example of Crisis-Driven market adoption, as the take-off happened when water scarcity urged water reuse, MBRs being the best vehicle for exactly that. 

So what’s different this time with Wastewater in general and Renewable Natural Gas in particular? 

All these extreme events are arguably part of the same story: Climate Change. This should be a Crisis big enough for us to overcome, and it should drive the adoption of virtuous approaches such as turning agricultural, municipal, and water waste into renewable net-zero energy. Yet the reason it’s difficult to take off without the right regulatory nudge is well summarized by George McGraw:

The reason that has continued is because we have a wrong pockets problem. What economists would call this wrong pockets problem. You know, the societal benefits don’t accrue to the same folks that would necessarily make the investment to solve the problem.

Anaergia’s Rialto Subsidiary needs the Regulator to step in

In the Rialto case, if the waste producers were to take their waste streams to Anaergia’s facility instead of a landfill, it would for sure be the right move from a sustainability perspective. But the windfalls of acting right wouldn’t end in the right pocket, from a purely financial perspective, so it doesn’t happen as long as government fines don’t bring a balance in the force. 

Gonzalo: Unless you understand this reason why we make those bad decisions, unless you change the incentive. Nothing’s going to change. If you don’t create three markets, one for water to be reused, another one for nutrients and another one for biogas. This never delivers, no matter how smart you are in terms of technology, so you can have the best technology in class and still being unable to deliver on circular economy grounds. 

What’s next for Anaergia?

If Anaergia was playing Monopoly, their move in Rialto would be a kind of Mortgage. 

As their press release states: The Company expects it to have a positive impact on its 2023 cash flows, as Anaergia would cease supporting the plant with further loans or equity contributions.

And if SB 1383 finally gets enforced by early 2024, their other statement will probably hold true:

Anaergia anticipates that with future adequate feedstock to allow ramp up, the asset will retain long-term value for all stakeholders.

In the meantime, the company will slightly pivot its strategy to reduce its risk exposure by only developing assets with equity partners or providing more CAPEX sales like their recent project in South Africa.

Will they succeed in bringing their growth back on track and turning profitable? Well, let me reframe that one.

I personally hope they recover and return on their rocket-track!

Look me in the eye and answer that question. Is it the right move to turn waste into recovered resources and zero-carbon energy? 

So you see, I guess we all somewhat root for Anaergia on this one. And you know what, I’ll even leave the final words to Andrew Benedek. Just before that, if you like this kind of content, you can at the same time support me and ensure you won’t miss future releases by subscribing to this channel. So I’ll see you next time, and Andrew, the scene is yours:

Andrew Benedek, Anaergia’s CEO conclusion:

I just want you to know Antoine, that it is really your future and I’m working for your future. Because if you don’t solve this, you won’t have one! What I’m going to tell you is that the older I get, the more ambitious I get, because the problem is so big.

I really want to find a solution. I’m not doubting that I have the right solution.

I am very nervous about speed, whether or not it can be done in time to avoid major catastrophe if you’re having to get the answers every day. But I’m worried about billions of people dying.

Nothing ever happens the way you think it should. If you have any doubts whatsoever, you won’t make it.

One, you have to absolutely believe that whatever it is that you want to do, you can do. Two, you have to be persistent. But if you are a believer and you’re persistent you’re willing to work at it miracles happen!

Other Episodes:

FREDsense: Revolutionizing Water Quality Monitoring with Biosensor Innovation

By Antoine Walter | 7 May 2025

Swirltex: Revolutionizing Wastewater Treatment with Bubbly Innovation

By Antoine Walter | 30 April 2025

Blue Foot Membranes: The Next Evolution in Water Filtration

By Antoine Walter | 16 April 2025

Echo River Capital: Pioneering the Future of Water Innovation

By Antoine Walter | 3 April 2025

1001 Fontaines: Engineering Sustainable Water Access Through Social Entrepreneurship

By Antoine Walter | 22 March 2025

Amazon’s Water Footprint: Tech Giant’s Quest for Water Sustainability

By Antoine Walter | 19 March 2025

Turing: The AI Revolution Quenching the Water Industry’s Thirst for Innovation

By Antoine Walter | 26 February 2025

Altillion: Pioneering Digital Intelligence for Water Asset Management

By Antoine Walter | 6 February 2025

Flocean: Pioneering Ocean-Based Water Solutions

By Antoine Walter | 15 January 2025

Botanical Water Technologies: Harvesting Liquid Gold from Plants

By Antoine Walter | 4 December 2024

The post The Rise and Fall of North America’s Largest Organic Waste to Energy Facility appeared first on (don't) Waste Water.

with Antoine Walter, Podcaster in Chief at GF Piping Systems

Video – Water Wars in France?

War Scenes in Peaceful Western France

Police cars burning in a field next to an artificial reservoir, dozens of injured people both on the police and protester sides, politicians on all ends of the spectrum exchanging insults, journalists attacked, and policemen charging protesters riding quads and armed with batons.

Is it Karabagh and a new episode of high tensions between Azerbaijan and Armenia? Is it Palestina and a conflict peak with Israel? Or any other transboundary water tension we’ve heard of at the latest UN Water Conference?

Not at all. We’re in Sainte Soline, in the Western part of France. It is a simple example of the type of tensions we will experience around Water in the future, and it tells a lot about how unprepared we are to tackle it.

France doesn’t know enough yet about Water Scarcity

Unlike California or Australia, France for long didn’t have a sound knowledge of what Water Scarcity really means. So when it started hitting harder and repeatedly some years ago, it raised questions nobody really was ready to answer.

But farmers in the western region of the country we discuss today noticed a pattern: they had Water in the winter and much less so in the summer. Hence it didn’t take them too long to come up with an idea! What if they could store Water when they have plenty to have it at hand in case of drought?

In a nutshell, they’re reinventing a concept called snow.

Origins of a War: the Build up of Water Reservoirs

This is how, in 2019, they launched the project of a series of water reservoirs – 16 are to be built. Water shall be pumped from underground aquifers during winter, brought in these large above-ground basins, and wait calmly there until it gets used during summer.

But while the first one got erected and filled, protests became louder and louder.

Indeed, if the region doesn’t suffer from water scarcity in winter, it isn’t overabundant either. So, seeing a full water reservoir next to quite dry agricultural land irritated a lot of smaller farmers.

Isn’t it stupid to let Water evaporate in a Basin?

There’s also a debate between supporters and opponents on the evaporation of Water in the basins. A maximum of 10% of the Water shall disappear for the ones. For the others, it may be up to 60%, and the remaining stagnant Water might see tremendous quality drops.

A vivid debate also arose around the use made of that Water. Indeed, the region cultivates quite a lot of corn, which for the ones is a stupidly highly Water demanding thing to grow in a water-scarce region – quite true – for the others is a needed feedstock for their herds of goats and cows – quite true as well.

Last nail in the coffin: the entire project is subsidized at 70% by the french taxpayers. Mix it with a quite tense social context in France right now, an unpopular government, and a tradition of rioting ongoing for at least 250 years, and you have all the ingredients for the explosive situation we’ve seen over the past few days.

4 Riddles our World needs to Solve to combat Water Wars

Now, if we zoom out, that entire story reveals four fundamental riddles that no-one solved to date.

Let’s start with the broadest one: we have an open challenge as to how we will keep feeding the World.

1. How do we keep feeding the World?

Let’s picture the World as a village 25 years ago. There are 610 residents and a farmer. Doing his best, our farmer almost supplies food for the village, yet 10% of the people sometimes don’t get enough to eat.

Twenty-five years later, the village’s population has grown to 700. That doesn’t sound as much of a change, but the overall size of the village hasn’t grown, so that our farmer does not have more arable land either. And he’s got consistently less Water.

But that’s not the end: in 25 more years, the same village will reach 970 residents, which will eat up the arable land and further pressurize our farmer. He needs to increase its output by 50% with, at best, the same surface. It makes your organic food dream a bit less realistic, right?

Let me not insult your intelligence: you’ve recognized that my village’s analogy is Earth and its evolution from the beginning to the middle of this century. And there are much more parameters to bring into the equation.

Reducing food waste and increasing crop efficiency

For instance, we’re wasting 25% of the food that’s produced. We produce it, we ship it around the World, we distribute it, and we throw it away.

Then, we’re also not producing the most optimized crops in the most adapted place. In a theoretical reallocation of crops, Paolo d’Odorico and his team, for instance, showed how it was possible to multiply irrigation water’s value by at least four – and up to 8 in Asia.

So it’s safe to say that the riddle of food production is still wide open and unaddressed, and our little Sainte Soline example is only one of the thousands of symptoms of the problem we have started to observe.

2. How to predict the consequences of Water Reallocation?

Second riddle: what happens when you artificially reallocate Water? The proponents of the Water Reservoir project explain that the quantity of Water they’ve diverted into the first and only basin built so far is equivalent to what the neighbor river rejects to the ocean every hour in winter.

That doesn’t sound much – so we shouldn’t be concerned, right? Yet, the World has a history of projects in which diverting some water resulted in a butterfly effect with catastrophic consequences. You might remember the one I discussed with Scott Hamilton about the Murray River water trading in Australia. But there’s an even more infamous one, with the Aral Sea in Kazakhstan.

Between 1989 and 2014, so over the course of just 25 years, this Sea almost entirely disappeared. Not so much because of climate change or water scarcity. Rather because of Soviet irrigation projects that started in the 1960s and that diverted the Syr Darya river.

So, proponents of the Sainte Soline project might well be right – and the project might be harmless – but we might as well not know for sure.

3. How to avoid failing forward?

Third riddle: aren’t we somehow failing forward? The 40% gap between water availability and water use that we keep digging on the road to 2030 isn’t a myth; it’s a fact that might even be scarier than we think if we compound what we’ve learned about climate disruption since that calculation was made almost ten years ago.

I find it sadly funny to see people fighting around water use with such ferocity in a country like France that only reuses 0.6% of its wastewater. The already built water reservoir in Sainte Soline has a capacity of 400’000 cubic meters, or as journalists like to call it – the equivalent of 160 Olympic swimming pools.

Well, let me propose a maybe slightly more meaningful comparison. 400’000 cubic meters, that’s equivalent to the yearly output of a 7300 population equivalent wastewater treatment plant. So, take Sainte Soline’s neighboring city of Niort, divert 10% of the treated effluent to polish it for irrigation purposes, and you’ve solved a portion of your riddle with Water of originally much lower environmental value than quality groundwater!

4. How to better communicate around water?

Last open riddle – and let me warn you, one where I’m without answers – why can’t we treat Water topics with the right level of attention?

I’ve explained on this channel how somewhat disappointing the UN Water Conference was. Yet, it was a historical event, with high-end and high-value conversations outside of UN plenaries.

Well, there was no single mention in mainstream media in France. Not one.

The French environment minister gave a 5-minute statement at the United Nations, and no one noticed. Then, on Monday, he had one clumsy sentence on french radio when asked about the riots around the Water Reservoirs in Sainte Soline, and it got debated for hours on news channels.

Don’t get me wrong, his UN statement was pretty bad, but I would have found it more meaningful to criticize him for that than for an awkward answer to an awkward question on policing policies.

Conclusion – Information to fight Water Wars

More broadly speaking, when I see the ferocity and the poorness of the debate on a topic that’s anecdotal on a bigger scale of things, I’m concerned about our capacity to tackle the ongoing and forthcoming water crisis.

So more than ever, this channel’s motto stands true: understand Water, solve the World. Wanna join the movement? Consider subscribing.

Other Episodes:

FREDsense: Revolutionizing Water Quality Monitoring with Biosensor Innovation

By Antoine Walter | 7 May 2025

Swirltex: Revolutionizing Wastewater Treatment with Bubbly Innovation

By Antoine Walter | 30 April 2025

Blue Foot Membranes: The Next Evolution in Water Filtration

By Antoine Walter | 16 April 2025

Echo River Capital: Pioneering the Future of Water Innovation

By Antoine Walter | 3 April 2025

1001 Fontaines: Engineering Sustainable Water Access Through Social Entrepreneurship

By Antoine Walter | 22 March 2025

Amazon’s Water Footprint: Tech Giant’s Quest for Water Sustainability

By Antoine Walter | 19 March 2025

Turing: The AI Revolution Quenching the Water Industry’s Thirst for Innovation

By Antoine Walter | 26 February 2025

Altillion: Pioneering Digital Intelligence for Water Asset Management

By Antoine Walter | 6 February 2025

Flocean: Pioneering Ocean-Based Water Solutions

By Antoine Walter | 15 January 2025

Botanical Water Technologies: Harvesting Liquid Gold from Plants

By Antoine Walter | 4 December 2024

The post Water Wars in France? The 4 Riddles it Raises. appeared first on (don't) Waste Water.

19 guests shared 1’114 minutes of Wisdom in this Season 4. I dived a bit deeper into 17 of these learnings to add my pinch of salt!

Infographic: 17 Decisive Water Industry Insights

17 Decisive Truths that could change the Water Industry’s Path

These are computer-generated, so expect some typos

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Let’s jump straight into it, with a first element which was actually shared twice on that microphone by Aaron Tartakovsky and Ramzi Bouzerda.

#1 – We are building New York every month between now and 2050

I guess you get the Idea: the World is urbanizing fast, and when I say fast, we have this impressive pace, of Manhattan or New York being built every month from now to 2050 or 2060.

So we get the image, and I’ll fact-check it in a minute; to get a very clear idea of what we’re discussing here.

Why does that insight matter for the Water Industry?

You might be wondering: why shall we care, as the Water Industry, about this urbanization pace? Well, in the end, it’s an infrastructure question.

Our water infrastructure is designed for a certain amount of people living in certain places. The water network is designed that way, and the water and wastewater treatment plants are designed that way.

So, if suddenly we have new skyscrapers and a denser settlement in those exact same cities, or if we start to have large amounts of urban dwellers like that’s often the case in the developing world, it creates a new burden on that infrastructure.

This leaves us with roughly two choices:

Solution 1: Rebuild our Water Infrastructure

We could dig out that said existing infrastructure and rebuild it larger. That would work, but it would also be very expensive.

Solution 2: Supplement our Water Infrastructure

We could supplement and augment that infrastructure with decentralized solutions across the cities, in industrial parks, and in all new build areas.

And we could also use process intensification to turn our treatment infrastructure into stronger powerhouses within the same surface and often the same concrete tanks.

What is the best solution for the Water Sector?

You might have guessed from the way I just explained that, but there’s one option that sounds more appealing than the other, both in terms of costs and efficiency. So, we’ll probably see an increased distributed (slash) decentralized approach on the road towards 2050 or 2060, so the horizon Ramzi and Aaron were giving us.

Are we building Manhattan or New York?

So, that’s why we shall matter as water professionals, but now, beyond the strong image both shared, what’s the exact fact-checked figure you shall use to shine during your next dinner in town?

The united nations project a growth in urban population, which shall reach 68% of the World’s population by 2050. One century before, in 1950, about 750 million people were living in cities, while currently, there are about 4.2 billion people in those cities. So six times more, and 55% of humanity.

Most of the projected growth to go from 55 to 68% over the next 30 years will be concentrated in three countries: India, China, and Nigeria.

And maybe even more important when it comes to infrastructure, the fastest-growing agglomerations are cities with fewer than 1 million inhabitants. Why does that matter? Well, simply because while the design margin on urban networks in big cities might be able to absorb a little increase, that’s clearly not possible if you’re doubling the dimension of a mid-sized agglomeration.

But you might be wondering: are we talking of one Manhattan a month, or rather one New York City? Well, the united nations don’t go to that figurative analogy, so I had to dig a bit further.

Every mention I found online always linked back to Aaron and Epic Cleantec, one way or the other. Kudos, Aaron; it’s good to see the Water Industry figuring its communication right!

The back-of-the-envelope calculation to estimate the rate at which the World is Building

So I tried to do the maths myself, and if we take the UN figure of 2.5 billion more people living in cities by 2050, divide it by the roughly 350 months between now and 2050, that makes for monthly growth of 7 million urban inhabitants.

Manhattan is about 1.6 million habitants, and New York, 8.5. So, I’d say that Ramzi’s analogy sounds a bit closer to the actual number. Yet there would be a lot to factor in, such as the decrease in population in places like eastern Europe or Japan, and the impossibility to take a building in Tokyo or Warsaw and transfer it to Lagos or Delhi.

So if anyone has a better study than my back-of-the-envelope calculation, I’d be very curious; please reach out to me!

That leads me to my learning number two, shared by Luke Butler on that microphone.

#2 – The Water Industry underuses one of its most powerful tools: Hydraulic Modeling

Let’s face it: while almost everyone has a hydraulic model of the water network we were discussing with this urbanization element, almost no-one uses it to its real potential today.

Actually, we’ve just assumed that we’ll need to revamp our infrastructure if more people live in cities. But what if that was simply wrong? What if there was untapped potential just because we don’t use the right tool to look for more, inside what’s existing?

We discussed on this microphone a while ago, how digitization could find up to 80% untapped potential in water and wastewater treatment plants. That was back in season 1, and is still as accurate as it was by then.

But this presence of untapped potential is also very true on networks, as we’ve covered with Olivier Narbey from the notorious GF Piping System on that microphone by Season 3.

Simple actions at decisive stages can ignite tremendous benefits for our Water Networks

I was discussing with Olivier a couple of days ago, and he shared with me a figure that showed how you could reduce burst rates by as much as 75% on your water network by just better-balancing pressure.

If you bear in mind that the world loses an estimated 136 trillion liters of water every year in non-revenue Water, aka, most of the time, leaks, you get why this is particularly interesting.

You can act on it today, and reach out to Luke or Olivier to hear their solutions, or you can have a look at the Webcast, Olivier has been putting together with his team.

Now if you like numbers, let’s continue with my next learning, and we’re leaving water networks to now explore water and wastewater treatments to discuss the hot topic of PFAS.

#3 – PFAS are a 110€/Year Health Cost for each Human on Earth

You maybe remember that number, that Henrik Hagemann shared with us:

Actually, further studies in the US tended to similar results, with an estimated impact on health costs of about 37 to 59 billion dollars.

This is very interesting because that’s a bit what Alice Schmidt explained on that microphone a while ago: we’re no longer talking of the cost of remediation, but rather of avoided cost if we correct the problem.

PFAS Removal is cheaper than the cost of inaction

We all know that most PFAS removal technologies nowadays are still quite young and that the limited places around the World that actually decided to tackle the problem, offer so far a limited path to scale.

So, to be blunt, removing PFAS today is expensive. But what these studies show is that not removing those forever chemicals is even more costly. Is it about time to act?

Well, even more, if you consider that the studies I just cited all add two points to that reflection.

The PFAS Challenge will keep increasing

First, the benefits of PFAS use are quite concentrated in a few hands. But, the societal cost of their impact is nicely diluted and externalized among individuals, communities, and governments. Which is quite unfair, to use an understatement.

The second point, is that all of this is the estimated cost today. But we’re talking of long-term consequences, and we’re probably still underestimating this long-term effect.

So, with regulations starting to pop up left and right, like the recent move in California, I’d say, that’s for sure a topic to closely monitor as water professionals in the months and years to come.

And honestly, you can count on me for exactly that – if you’re reading this by coincidence, consider subscribing to the podcast, so you won’t miss the next releases (remember, it’s free).

#4 – There’s a 4th phase of Water, and the Water Industry could leverage it

For my fourth learning, I’ll take the most outside-of-the-box discussion I had on that microphone in this Season four, and it’s all about four, with the Fourth Phase of Water, Gerald Pollack introduced to us.

How can I synthesize all of this in a few words? Well, there’s a list of behaviors of Water, which are hardly explained with what we all commonly know of H2O.

Why is ice slippery? Why do waves persist over long distances? How do diaper hold 50 times their weight in Water? Why does warm Water freeze faster than cold Water? And why can you build a tiny water bridge between two glasses? Why do droplets of Water exist in Water?

And actually, all of that may have a simple explanation which, according to Ockham’s razor’s principle, tends to indicate, that’s the right one. And that explanation is, that there is a fourth phase of Water, somehow between liquid and solid, a semi-crystalline one, which could be named H3O2.

What shall you know about this Fourth Phase of Water?

That fourth phase would form at the interfaces of liquid Water, in what Gerald calls exclusion zones.

I won’t redo you the deep dive of how Gerald and his team came to the observation and explanation of that fourth phase, I’ll just give you two hot prospects for us, water professionals, to maybe leverage this EZ Water’s properties.

Two properties that could be appealing for the Water Industry

The first one, is everything around a water battery, and the potential low-tech application it could represent, with only Water, sunlight and simple apparatus around it.

But probably even more sexy, if you allow me that term, the property of exclusion zones to actually exclude everything that’s not Water from them, could be leveraged for desalination purposes. Gerald’s team works on it within Fourth Phase incorporated and triggered several additional start-ups around the World that actually look at it.

And at least from an intellectual exercise point of view, exploring that rabbit hole was pretty fascinating – and I’m still on the edge of it, as next steps would involve exploring the likes of Schauberger, Derjagin, or Steiner.

I’m not saying everything those people have written is right – and there’s a good proportion that’s a bit esoteric. But I think it’s always good to stay open-minded in such a field as Water.

That was learning number four and involved the fourth phase of Water. So guess what learning number five will be all about? Exactly, the fifth phase of Water.

Ok, nobody calls it like that, so let’s use the name you probably already heard: supercritical Water.

#5 – SuperCritical Water Oxidation: the Future of Wastewater Treatment?

Water reaches its critical point at 374 degrees celsius, and 221 bar. And whenever it crosses that point, it starts to behave weirdly, as Kobe Nagar shared on that microphone

Supercritical water oxidation is indeed a very promising prospect to remove hard-to-treat pollutants from Water.

But if you ask me, there’s something much more interesting about the technology: it allows to tap into the chemical energy trapped in wastewater.

Unleashing Wastewater’s Energy

There’s actually a direct correlation between the chemical oxygen demand of wastewater, and the energy it contains. Theoretically, there’s 16.1 kilo Joule per gram of COD.

Now so far, it’s been a riddle for us, water professionals, to unleash this energy. And instead of turning wastewater treatment into an energy positive process, we’re wasting energy on it, to destroy that trapped energy which we call pollution.

Don’t get me wrong; it is pollution. But, it is pollution with potential!

A potential supercritical oxidation would allow tackling into, a bit like microbial fuel cells and microbial electrolysis cells we’ve discussed in Season 1 and 2.

SuperCritical Water Oxidation 101 (made even easier)

How does that translate into concrete steps? Well, when you pass wastewater through the supercritical oxidation reactor, the reaction it triggers is exothermic.

So, you capture a portion of the chemical energy of wastewater as heat, which you can turn into electricity by operating your supercritical oxidation plant as a thermic power plant.

Of course, there are technical limits today. Treating wastewater at nearly 400 degrees Celsius and over 221 bars is a challenge, which involves a bit more complications than stating the physical principle in a podcast.

But as Kobe reminded us in our deep dive on the technology, that’s still lower values than what you would find in diesel engines that equip a good portion of the cars you cross in the streets.

SCWO is still in its early steps

Another limit is that today, like with the microbial fuel cells and electrolysis cells I mentioned before, we would first aim at being energy neutral. So, the power plant element of it is still theoretical, and the seven times more energy inside wastewater than the energy needed to depollute that wastewater only exists on paper and chemical calculations so far.

Yet, that’s a common trait of all technologies in their early steps. Go compare an iPhone before it had numbers, fresh out of the hands of Steve Jobs in 2007 with the no-name cheap smartphone we all have in our pockets today, that’s more powerful than NASA’s computers that brought men on the moon, and it’s night and day.

And beyond the energetical aspect of it, Supercritical Water Oxidation comes with another incredible feature: the entire treatment involves a residence time of… four seconds. So, there’s a CAPEX benefit as well, as it involves much much much smaller facilities.

In a nutshell, yes, Supercritical Water Oxidation or SCWO is still in baby pants. But there’s a reason why 374Water has a half a billion market capitalization, with only a few references.

#6 – There are 6 Strong Drivers for Water Sector Growth in Sub-Saharan Africa

That leads us already to learning number six, and I’ll keep the trend of having corresponding insights with Walid Khoury’s six strong drivers for growth in Sub-Saharan Africa.

That is really a potent take-home message he shared: whatever preconceived idea you have of Africa, it’s probably wrong. Not fully wrong because, yes, it is scattered and politically challenging.

But still, Africa is an interesting market to look at as water professionals.

Indeed, it is starting from a quite low infrastructure level.

• Only 42% of the population is served with safely managed Water,
• 23% with safely managed sanitation,
• and only 7% with at least secondary wastewater treatment.

If we forget the consequences of this low infrastructure level, this shows in marketing terms a broad business opportunity. It is not sustainable to deprive populations of their right to affordable and safe Water. And – that’s a spoiler for Season 5 – as Christopher Gasson will share on that microphone, it is not profitable either.

Depriving people from Safe Drinking Water is an economical non-sense

Let me make it even more blunt and direct. Regardless of how much of a shame it is, that by 2022 we still have such a low level of access to safe drinking water, it is an economic non-sense. So:

1. There’s a Win-Win in ramping up the Water Infrastructure

The benefit is clear, and hence so is the win-win to find there as the Water Industry.

You already know the second driver, Walid shared, which is the urbanization rate in the region.

2. Urbanization is galloping in the region

Remember what I said minutes ago: this New York we’re building every month between now and 2050 will mostly happen in three countries, China, India, and Nigeria. And as much as I recall, Nigeria is in Sub-Saharan Africa.

3. Industrialization creates new Water needs

First, for good and bad reasons, sub-Saharan Africa was ahead of the World regarding relative industrial independence. The World somehow refused to play with Africa as a full-blown player in the global value chain, and as a consequence, its industry is less specialized and more generalist.

Now, when you couple that with a localization drive, that means that a full ecosystem is feeding the growth of the area, with also very specific needs. And it’s really not only multinationals playing there, it’s a local foodchain with a lot of young companies. And you would have guessed, they need Water to operate, which is where it connects with our Industry.

That also leads us to the fourth driver:

4. Water regulations are strengthening

Increasing and strengthening water discharge, water treatment, and water management regulations are being rolled out. Because industrials are not that different in sub-Saharan Africa compared with the rest of the World! If you don’t push them a bit, well, treating Water sustainably is a cost to be in business, at least in the short term. Hence the importance of the incentive.

5. Demographics (more people need more water and better treatments)

That’s at the same time a driver and a challenge, but sub-Saharan Africa’s population will double in the next 30 years. And it will triple before the end of this century. And unless we find a way for people to live without Water, directly and indirectly, that’s an obvious driver.

6. Rising GDP means more money to invest in Water Management

Sub-Saharan Africa is rising in terms of GDP by about 4% a year, which as Walid shared, means higher prosperity and disposable income. Again, probably against our western preconceptions.

What shall we do with these six drivers? Well, for Walid it’s straightforward. Multinationals are reluctant to enter that market for the reasons which are on the other side of the same coin, meaning, the political instability and the scattered nature of the market.

But that should not prevent more agile players, like start-ups and SMEs, from striving in that region.

#7 – Water can belong to strange market players

Let’s switch to learning number seven, and I promise you I’ll go a bit faster on the next ones – remember, if you want the long-form of it, there are 19 other episodes in this Season 4 which are full of gems; just jump into it.

So number seven: Water doesn’t always belong to the ones you’d expect, as Scott Hamilton revealed

A Canadian pension fund owns 200 billion water liters in Australia

Indeed, Canada’s Public Sector Pension Investment Board (PSP Investments), which is the pension fund for the country’s armed forces, public servants, police, and firefighters, now owns roughly 2% of all the Murray-Darling Basin’s available water rights.

To put that into perspective, we’re talking here of over 200 billion liters of Water, on a market that’s quite special: it is an awesome playground for water trading and arbitrage, with ever-increasing valuations.

But don’t worry, you can leverage that trend even if you don’t sit in Australia – and don’t take me wrong, I’m not implying you should.

Why can you? Well first, because everybody can play on the Australian market, as you’ve seen with that Canadian pension fund. Then also, because Australia is not alone on that path.

Harvard’s endowment fund massively invests in Water

Ever heard of the tiny little university of Harvard? Well, like most of the universities, it features an endowment fund. You can donate to the foundation, deduct it from your taxes, and that money will, for instance, fund scholarships. But not only.

Harvard’s endowment fund has a nice 39 billion dollars to play with and uses at least a portion of it to invest… in Water! That’s how the university’s fund has been buying vineyards in California, maybe for their grape and wine production, but also, if not above all, for the water rights they feature.

Will that end up fully turning Water into a commodity? That’s the golden ticket question. But there might be interesting new ways to explore there, and you’ll see by Season 5 with Katrina Donaghy, that those new ways don’t only exist on paper but are currently rolled out.

#8 – Are UV Disinfection Systems at Regulatory Risk?

A 2.6 billion dollars a year water industry segment might well quite soon be in trouble. UV Disinfection is indeed the second largest disinfection technology after Chlorine, it’s nicely spread across Water and wastewater treatment, and it’s a dominant solution in market verticals like ballast water treatment or water reuse.

But, UV disinfection system have a problem, and it’s their lamps.

The mercury of mercury-vapor UV Lamps could soon be banned

Here’s the problem, as Wayne Byrne highlights, UV disinfection features Mercury Vapor lamps. That use of mercury in light sources, which is a hazardous substance, is restrained by multiple regulations Wayne just cited, such as the EU RoHS directive for electrical and electronic equipment, as well as similar regulations in a growing number of countries and regions like for instance the UN Minamata Convention.

In simple words, mercury is only allowed in special applications under special exemptions. So far, the Water Industry is one of these exemptions because it struggled to find an efficient alternative to mercury vapor lamps.

But that might be history, with UV LED and its continuous improvement, following Haitz’s law. So for sure, that’s an area to watch in the next months and years!

Let’s switch to the rapid-fire learnings for the next six ones.

#9 – There are billions of Water Assets that could reveal much about our Water Behavior

There are at least 36 billion water assets beyond the Water Meter, which can deliver meaningful data that are not captured today. If you combine this with the fact Ramzi Bouzerda shared on that microphone, that Water takes suddenly much more value around its point of use; that opens interesting avenues for optimization and new business approaches.

#10 – Green Algae could disrupt Activated Sludge Wastewater Treatment (for the better)

You might have fought green algae in your wastewater plant for a while, yet Cesar Narvaez shared how it could improve the energetical balance of sewage treatment by one to one replacing activated sludge. One step further, if you turn these green algae into biogas, you can make your entire process carbon negative and potentially energy neutral.

By the way, green algae is a hot topic that may lead to bioplastic and large scale applications in brine treatments – I’m looking for a speaker to address that point on my microphone, if you’re that person or if you know someone, just reach out to me: I’d be pleased to feature you!

#11 – You can Cut Water Treatment Costs with Expensive Materials

The intuitive approach to reducing the overall cost of a water system is quite logically to cut the material expenses. Well, Sebastian Andreassen shared with us how he did the exact opposite, by leveraging a very expensive material – silicon carbide – to replace polymeric membranes for the better.

Beyond just the case of membrane treatments, it’s an interesting tip from an innovation perspective. That’s a bit of a mix of two strategies Fridolin Beisert shares in his “Creative Strategies” book: shifting perspectives and pattern breaking. And if you want a refresher on Design Thinking, go back to Season 3 and listen to my discussion with Lea Im Obersteg.

#12 – Groundwater Trading could preserve the resource and increase its Yield

Groundwater was the theme of this year’s World Water Day. It is a sadly depleting resource, which is often seen as something free you can just pump out of the soil, and screw your neighbors and future generations. Well, to try to solve this, California adopted the Sustainable Groundwater Management Act in 2014 – don’t worry, it’s still not enforced.

But that regulation could finally see a roll-out of groundwater tariffs and prices. That would be a first best practice. But Ellen Bruno and her team went the extra mile and studied how to even improve it. They found out that groundwater trading may result in increased prices by 70% in those areas that would already feature a tariff.

And yet, as it would incentivize Water to flow to its best use, it could still save water-scarce areas like California half a billion dollars per year.

#13 – Green Hydrogen is not a game-changing opportunity for the Water Industry

Green Hydrogen won’t be the tailwind in our water sails that we sometimes dream of. It will be an interesting side-business for the water industry, but not a tidal wave. The biggest impact will probably reside in desertic countries with an ocean to the west and will be an opportunity for the desalination players, that could see their installed base jump by a 25% factor.

I’m not going too deep in this recap on that topic, because with the full trilogy we just concluded, you have plenty of materials to explore – including a massive 19 pages infographic.

#14 – Industrial Wastewater gets (astoundingly too often) still incinerated!

Despite technological advances and sustainability concerns, there’s still an alarmingly high amount of industrial wastewater that gets incinerated. It’s the kind of thing one can rationalize and understand, as industrials hence control their liabilities. But, on-site treatments often cost a fraction of incineration, and under new business model approaches, they offer similar control of those liabilities to these industrial actors.

So it might be about time to stop seeing these trucks on the roads, just conveying something that doesn’t burn easily to places sufficiently far away to not be in an industrial’s backyard anymore.

And that leads us to number fifteen:

#15 – New Business Models open New Water Opportunities

Do you remember how the Water Industry likes acronyms? Well, we’ve lived for a while in a world of DB – Design, Build, DBO – Design, Build, Operate, and BOT – Build, Operate, Transfer.

And if you remember Season 3, we’ve seen how Design, Build approaches offer a 39% average capital saving over the traditional three-step approach of someone designs, someone bids, and hopefully then only builds.

When you add operation into the pot, so you turn DB into DBO, you add an additional 26% saving on the overall plant’s life cycle cost.

Now, what we see more and more is a growing share of PPPs in the Water Industry. That’s Private-Public Partnerships. This deal structure enables faster roll out of infrastructure by leveraging private capital, and is extensively used these days in countries like Brazil or Saudi Arabia.

If you’re afraid of acronyms, you should take a paracetamol tab, because there are new kids on the block.

After DB, DBO, BOT, or PPP, here come DBFOM and WaaS!

Software has SaaS, you know, Software as a Service. Well, the Water Industry has WaaS! Water as a Service – which also works with Wastewater treatment as a Service.

Along the same lines, we have DBFOM, Design, Build, Finance, Operate & Maintain, and many, many shades of grey in between.

But in concrete terms, what does that change for the Water Industry? Well, it might be a path to faster innovation, as we heard from Jonathan Rhone or Steven De Laet in this Season, and from Matthew Silver for instance in Season 2. Indeed, a company can assume the risk of rolling out its technology. And at the same time, the end-user controls its liability to reuse the point I made a minute ago on industrial wastewater management.

For suppliers, it brings back arguments of total lifetime cost or total cost of ownership. Because now, the integrator bringing a process to life is also responsible for its operation and directly benefits from a first-time-right or quality approach.

Digitization is an enabler for new Business Models

And overall, it uses digitization as an enabler, something we’ve seen with Jacob Bossaer in Season 2 and with Jonathan and Steven in this Season 4. Remote operation, preventive maintenance, all these buzzwords now become realities under the new realm of a new buzzword: Water as a Service.

#16 – Specialized Water SaaS can outperform horizontal behemoths (here’s why)

We have two learnings left, and for this number sixteen, we’ll stay on this WaaS or SaaS trend to underline how against all the odds, there is a tremendous win-win business opportunity for specialized vertical SaaS in industries like the Water Sector.

That’s an insight David Lynch shared with us this season and that I wanted to dig a bit further. David builds with Klir, something he calls the operating system for Water.

Honestly, Klir is very successful with that approach. But why? Why does the Water Industry prefer Klir over ASANA, Rippling or Monday.com. Is it an exception?

How do vertical SaaS companies specialized in an Industry compete with very powerful giants?

Well first, no. Vertical SaaS companies, so software as a service companies that address one specific industry, are quite successful these days. Think of Doctolib for healthcare, Toast for restaurants, or Procore for construction. All of those became multi-billion companies.

And that’s the path Klir, and the other digital water companies I had the pleasure to host on that microphone are following to gain a share of the expected 20 billion dollars digital water market by 2030.

So, if this is not an exception, it leaves us with three questions. Question number one:

1. Why are vertical water industry SaaS superior?

How do they compare to horizontal ones that could go across many sectors and leverage scale effects?

Well first, for a simple reason. They have the potential to deliver a superior product, with features really catered to the water industry. It also offers them a higher market penetration potential – what David just underlined with his aim at becoming the Water Operating System.

And a higher penetration opens doors for further expansion of the business model, as a SaaS-enabled marketplace.

That’s important because the limit of the vertical approach is the market size. The path to scale for ASANA when they roll out a feature is much easier than for Klir, Kando, or Qatium. But if now, our water specialists can enlarge the deal size, it compensates for that disadvantage.

Water SaaS companies also have the edge over generalists in terms of sales. Your acquisition team can develop catered content and approaches in a Water World that’s arguably a unique beast.

So, on the product and go-to-market side of things, it sounds like our vertical Water SaaS stands a chance against the horizontal behemoths.

2. Why is “Now” the best moment to be in the Water Business?

But question number two: why now, why would they be successful today, and start making a dent in the Water Industry when they kind of struggled in the past years to do so?

There as well, the answer is straightforward. CoVid just leap-frogged our path towards digital transformation. And the “why now” question rather transforms into a “why didn’t we do it before” one!

The other aspect is that money also starts to flow into those companies. Klir, for instance, just raised 16 million dollars. In the past, investors were a bit reluctant because of the limited total addressable market, but that’s history now that the “Operating System” argument beats that concern.

So that leads us to the golden third question:

3. What does it take to be successful in building a Water Industry vertical SaaS?

Ok, let’s be humble here; I’m no one to have the golden recipe. But I’ll still try to nail it down to what I’ve observed working among my previous guests.

First, you still need to think of your Total Addressable Market. So your long-term game must be to offer more than just a piece of software. You must embed yourself on the critical path of your users and build upon that once you’re installed.

Therefore, think of your positioning as well. To start with, you must build upon a brick that’s just too good to be ignored. For Qatium, that’s the modeling of a water network in a couple of clicks. For Transcend, it’s the design of a full plant in a matter of seconds. And flor Klir, it’s breaking down any stupidly annoying process in simple, actionable tasks.

As cool as those are, they’re not sufficient to build a long-term successful company; that’s why all of these companies have roadmaps. But these features are solid foundation stones to build upon.

The next asset you need is a strong “why now.” For Qatium again, that could be like urbanization is galloping, and your investment sheet goes through the roof. Right now, you have an opportunity to better the picture thanks to digitization, but you have to act now.

Who makes for the best water entrepreneurs?

And then honestly, there’s the part where I’m not sure. Some of the panel companies I looked at are built by people that come from another industry, so is that a criterion to challenge everything? But at the same time, we also have examples of water professionals scratching their own itches and hence building an appealing Water SaaS.

So I’d say the critical trait here is rather open-mindedness and willingness to challenge the status quo.

I told you, I’m no one to have the best recipe, so let’s say we’ll have to keep on improving the algorithm in the next seasons!

What’s in it for you: why shall you subscribe to the podcast right now?

Just before we move to our learning number seventeen, which will close this summary, let me remind you of some housekeeping.

If you like what you’ve been reading so far, please share that episode around you, grab the phone of your friends and subscribe them to the podcast.

Why should you? Well, because the growth of this show enables me to keep attracting incredible guests. That’s how we’ll kick-off Season 5 next week with Reinhard Hübner, the CEO of the Water Company of the Year, aka SKion Water. That’s also how we’ll continue the week after with the Water Industry’s Godfather, namely Christopher Gasson, the Owner of Global Water Intelligence.

There will be many more incredible guests in that Season 5, and hopefully the next ones as well. And that’s how I can extract for you valuable insights and learnings from all these fantastic speakers.

So you see that as a team effort, and please again, share this episode around you. (and that being said, let’s swiftly conclude with learning number seventeen!)

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#17 – 2023 will be a Crucial Year for Water

… And this for a simple reason: it will be the year of the UN Water Decade Conference.

Why so? And why does something happening in 2023 matter right now? Well, Mina Gulli makes it crystal clear:

We have an opportunity at that time to say: “enough talk,now act!”. And the only way that that will happen is if we spend the next 18 months moving together in a unified way to deliver on these three solutions. And to say by the time we hit the steps of that United nations, where that conference is going to happen with world leaders and corporate leaders from across the world, by the time we get there, there must be no option, but to take meaningful, serious, bold action forward.

Mina Gulli

I think she said it all, so enough talk, now act.

And I’ll see you next week for the first episode of Season 5.

Other Episodes:

FREDsense: Revolutionizing Water Quality Monitoring with Biosensor Innovation

By Antoine Walter | 7 May 2025

Swirltex: Revolutionizing Wastewater Treatment with Bubbly Innovation

By Antoine Walter | 30 April 2025

Blue Foot Membranes: The Next Evolution in Water Filtration

By Antoine Walter | 16 April 2025

Echo River Capital: Pioneering the Future of Water Innovation

By Antoine Walter | 3 April 2025

1001 Fontaines: Engineering Sustainable Water Access Through Social Entrepreneurship

By Antoine Walter | 22 March 2025

Amazon’s Water Footprint: Tech Giant’s Quest for Water Sustainability

By Antoine Walter | 19 March 2025

Turing: The AI Revolution Quenching the Water Industry’s Thirst for Innovation

By Antoine Walter | 26 February 2025

Altillion: Pioneering Digital Intelligence for Water Asset Management

By Antoine Walter | 6 February 2025

Flocean: Pioneering Ocean-Based Water Solutions

By Antoine Walter | 15 January 2025

Botanical Water Technologies: Harvesting Liquid Gold from Plants

By Antoine Walter | 4 December 2024

The post 17 Decisive Insights that could Actually Impact the Water Industry appeared first on (don't) Waste Water.

Hazer Group Limited is a pioneering company undertaking the commercialization of a low-emission hydrogen and graphite production process.

This episode is part of a trilogy on the Hydrogen Economy (and its link with the Water Industry). Go check it out!

What we covered:

How Hazer currently builds a large-scale demonstration plant of its technology that produces low emission clean hydrogen

How tackling the CH4 bond instead of the H2O one to produce hydrogen returns better energetical yields 

How next to the valuable hydrogen output, Turquoise Hydrogen production actually also generates a worthy by-product made of almost pure graphite

How capturing carbon in a handy way opens new perspectives of carbon-negative hydrogen production

How leveraging a wastewater treatment plant’s biogas production to generate hydrogen is a perfect example of circular economy done right

How the water industry will have to cope with its carbon emissions, and how capturing its process carbon could be a perfect solution for that 

How Turquoise Hydrogen could help decarbonize transportation, but also – and foremost – help make the industrial uses of Hydrogen more sustainable

Which kind of carbon Hazer is actually producing, and where it can be used and valorized

How big Hazer’s demonstration facility will be, and how the company intends to scale up beyond just wastewater treatment plants

How integrating hydrogen production with further processes offers plenty of welcome side-effects and win-wins

How Turquoise Hydrogen production and ecosystem could be compared to LNG

How the placement of wastewater treatment plants in industrial areas is a great asset to turn them into a clean energy source

How Hydrogen’s competition is not electricity and batteries, but diesel and fossil fuels

… and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨  

Teaser: Wastewater Treatment Plants turned Carbon Negative through Hydrogen

Resources:

Have a look at Hazer Group Limited’s website

Come say hi to Geoff on Linkedin

is on Linkedin

Antoine Walter on LinkedIn

Infographic: Turquoise Hydrogen as a way to make a wastewater treatment plant carbon negative

Quotes: Can Hydrogen turn Wastewater Treatment Plants carbon negative?

Full Transcript:

These are computer-generated, so expect some typos

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Antoine Walter: Hi Geoff, welcome to the show.

Geoff Ward: Thanks Antoine.

Antoine Walter: I’m very, very happy to have you on the show because we will be discussing about something which is almost mysterious to me at this stage, and which will be so clear and absolutely crystal clear by the end of this discussion. So I’m really looking forward, but without spoiling, The hurt of, or a deep dive it’s opened with the postcards and you’re sending today your postcard from birth.

What can you tell me about Perth, which I would ignore by.

Geoff Ward: So I’m actually, obviously I’m speaking to you from Brisbane. I’m on the east coast of Australia. It’s summer and it’s hot and humid, but our main project at the Woodman point water recovery facility, our hydrogen production project, our hydrogen demonstration project is in the city of Perth.

It’s a beautiful site. Perth is a sort of a spread out city with a lot of space it’s on the. And so from my project site, I’m looking west across the, uh, the very blue ocean. It’s been very hot this summer, multiple consecutive days, over 40 degrees C the site is on a gently sloping hill above the coast, and I’m looking out across garden island and towards Rottnest.

So it’s an industrial site with a million dollar view. And just underneath me on the construction site, the team are hard at work. Installing piping, installing valving, connecting equipment has we’re working on construction across piping mechanical electrical and instrumentation trade school. I

Antoine Walter: think you spoiled us a bit, the deep dive, which would be about this, I would say original and innovative, where you have to create and produce hydrogen out of a different feed stock compared to what most of the people do today.

But before going into the depth of that, and you’re going to correct me on the terminology, I’d like to understand where the story is coming from today. You are the CEO of the Hazel group. I’ve seen that you’ve joined the company in 2018. I think the company was started in 2010 and I was just wondering, what’s the story of that company?

What’s the story of behavior.

Geoff Ward: Certainly. So hazer is a clean technology development company. We’re listed on the ASX, the Australian securities exchange. So as a public company, people can go to our website. People can go to the ASX platform and, and sort of read our regular reports. Hazor is actually an acronym.

It stood for hydrogen and zero emissions research. And it’s actually the name of a university research program at the university of Western Australia located in. The company history was that our one of our founders and our current chief technology officer, Dr. Andrew Collegio, uh, he was, uh, along with professors that UWA, uh, invented the hazer process, a way of making hydrogen and a synthetic prophetic carbon bike.

From a methane feedstock. And so, you know, the company originated out of a research program at UWA. One of Australia’s sort of leading their technical and engineering, uh, universities, uh, like many of the universities, it seeks to commercialize its research. And so the, the research and the IP was spun out into a company owned by the university.

And then there was desktop research undertaken after a sort of venture capital C capital raising provided the funding for that pre-commercial research. So that’s where the, the company started from. Uh, we then proceeded to actually float on the Australian stock exchange and raise further money, which allowed us to go through a pilot.

And that takes us in quick steps. I’m sure we’ll go back in more detail on it, but it takes us to where we are now, which is building the first year larger, fully integrated continuously 24 7 operational facility utilizing our hazer technology to make low emission clean hydrogen.

Antoine Walter: So we have the beginning and we have the end of the story or the end by no of the story.

But if the process was about producing hydrogen from methane, somehow agnostic, methane, why did you decide to go for this true cause hydrogen and to go for this myth and produced out of bio gas and in your case, even wastewater treatment plants by. Okay,

Geoff Ward: well me saying, or, you know, I love the way that European pronunciation is methane may saying is me fate.

So chemically, whether it’s been produced by anaerobic bacteria in a digester, whether that’s a landfill or a wise way to the treatment plant or. Agricultural facility or whether it’s been produced through, you know, the decomposition of organic matter over millions of years and trapped in a reservoir chemically, it’s all the same.

So where our process is, is heavily agnostic to process methane that either comes from renewable sources or from fossil fuel. Y we focused initially on, on biogas is that we actually saw it offered this unique opportunity to really highlight, you know, the sustainable circular economy and the, uh, the green principles of our process.

So probably the best way to explain it or think about it is that our technology is me saying paralysis. And it’s a low emission way of making hydrogen, but using guests as a starting point using. What does that mean to the person coming new to hydrogen? Yeah. So often in the headlines these days, I think if you say that typically historically for all of the heavy industry today, which uses a lot of hydrogen, even though you don’t see it on the market and things like all refineries, petrochemicals, making ammonia and urea to make fertilizer, we typically make hydrogen by splitting me saying gas in a process that’s called SMR, sting me saying.

And in that process, you take hydrogen, you mix it together with steam, you heated in the presence of some exotic metal catalysts and you produce hydrogen, but you produce far more CO2. So you produce somewhere around about eight kilograms of CO2 for every kilogram of hydrogen you produce. And then when you put in the emissions needed for heating up pressuring, moving the gas, you produce somewhere around about, you know, 10 to 15 kilograms of CO2 for every kilogram of.

’cause all of the carbon that’s in that me thing, and me saying is about 25% hydrogen by mass and about 75% carbon. And we can never change that. That’s just chemistry, all of that carbon associates with the steam and gets released to CO2. Now at the other end, where the water industries might be more familiar, you can split water to release hydrogen and oxygen.

In that case, you’ve got hydrogen bonded with oxygen. You disassociated again, you slip that bond through a process called electrolysis by passing electric, current through purified water, and you get very clean products, hydrogen and oxygen there, no deleterious emissions to the environment, but that hydrogen oxygen, double bond, not the single bond or the me saying the double bond or the water and incredibly strong attraction takes a lot more energy to break.

So it’s less energy efficient. Her role assists sort of sits in. So we take a methane molecule, like say CMR. So we’re starting with that really efficient carrier of hydrogen. You know, it’s got, you know, 4 hydrogens for one carbon. That’s about 25%, carbon by mass. And we split it. But this time, rather than the carbon, having the ability to bond with oxygen and come out as CO2, the carbon sublimate, it goes directly from a gas to a solid state and we’ve produced a dry black graphitic carbon powder.

So that way we come out with a primary product, hydrogen, a by-product carbon. And that comes now in a solid state so we can bag it. We can truck it, we can manufacture things with it. If in the end we make enough of it. Perhaps we can just store it back in quarries and mines where carbon originally came from.

So you’ve now captured your, your carbon in a way that is much easier to handle than. Gives you value added manufacturing opportunities and whether that’s low value options, like using it to make road pay for building material or whether it’s high value options, like using it to make battery anode materials for, for energy storage and electric.

Or whether it’s even in some quite innovative things that we’re looking at for our carbon is ways that we can reuse it in the water treatment industry itself, as ways of using its unique properties so that it can substitute for activated carbons or other forms of carbon. The water treatment is for users.

So let’s sort of where paralysis fits.

Antoine Walter: There’s a lot to unpack in which you just explained. So we’ll just cut the elephant and slice it in some pieces. So let me come back to what you said at very beginning. So you explained the electrolysis, which is this green hydrogen, and you explained your steam midterm reforming, which is what is done today for the gray hydrogen.

And you will approach, which is this paralyzes, which is this true. Cause hydrogen, it was referring to when it comes to. Clean hydrogen, which is a bit your opening point as hazard with this zero emission element in your acronym, you could have chosen to go for the green hydrogen. You could have chosen to go for, I guess, the blue it’s, it’s really a colorful word, the word of hydrogen.

So c-MET and reforming with carbon capture, but form fossil fuel. But you decided from the turquoise, if I got it right it’s because the energy balance was better compared to the green hydrogen. So your thoughts. A better chance there to convert the instead of the H2O,

Geoff Ward: correct? Our process needs me thing, gas or.

We are completely happy to work on either natural guests or by, I guess we’re building the first demonstration project using biogas because that is the lowest emission, most sustainable and most circular economy aligned way of making the application we could. And we are considering building much larger facilities in the future based on natural guests, where they are much larger than the availability of biogas would allow.

And we could actually run in mixtures of the. I think you used the word technique, uh, gas agnostic in your, your introduction. Yes. We’re very agnostic to the source of the bio gas. What we did see in particularly looking at things like waste water treatment and landfill was that we saw that there was, we thought a, a very good opportunity for both the wastewater industry and the clean energy industry to collaborate.

So as your listeners who know the water industry will, will know, is that the tertiary treatment of the solids anaerobic digestion to produce gas, you know, is a core part of modern water treatment. It maximizes the recovery of water and minimize the amount of solids that have to go to the landfill or be otherwise be disposed of.

And it creates a valuable product. And up till now that product has been typically burnt, either fled just to get rid of it or burn it in an engine to produce. Now we say that with the push to reduce emissions for infrastructure such as water treatment plants, that burning that gas will have a limited lifetime.

It’s becoming economically unattractive as wind and solar get cheaper. Um, it’s quite an inefficient way to make electricity because the guests is dirty with the, you know, the CO2 component of it. So it makes your equipment difficult to mind time, uh, to, to keep online. And so we sort of see the, turning it into hydrogen as zero mission fuel and turning into graphite, a product which has the potential for high modern manufacturing value add is going to be a much better use in the longterm for this valuable bio gas resource.

I think we’re going to have to view it as being too valuable, simply to burn. And so we thought that was a great way of demonstrating, know the attractiveness of our technology in that niche, but we’re certainly not choosing bio gas, not natural gas. Our development takes us down both paths.

Antoine Walter: Very clear.

Nevertheless, if you go with biomethane, as opposed to natural gas, you’re not only at zero emission, but on the overall chain, you’re negative in emissions.

Geoff Ward: Absolutely. And that’s the great attraction to us that, you know, we’re capturing the carbon that’s in that biomethane. And that carbon itself was obviously in a plant or a food stuff.

If you have not that many years before. So we’re actually taking carbon that’s part of the modern cycle. That doesn’t mean. Carbon emission footprint and capturing it in a solid form where we can either use it for manufacturing. So they put it to a higher value use, or we can store it for future use or future store.

Antoine Walter: So there’s a second side to that same coin, which you somehow alluded to when you were saying that’s this bio myth is, I mean, spiral gas, which contains some bio biomethane. So with a high content, maybe 60 or 70%, but nevertheless, there’s just 30% of something else. Most of the time CO2 some H two S I mean, how do you deal with that feedstock being not so clean and pure than what you can have with natural gas.

Geoff Ward: We cleaned the feedstock before we reacted. If we put CO2 through our reactor, the reactor would still work, but it would be less efficient. You’d have to hate that guests and the guests would just come in and go out. It would probably not stop the process working, but it would make it higher energy requirement, you know, larger process, pumps, sizes, et cetera.

So in our project, we will. Clean up the biogas, we will remove the CO2. We will remove the sulfur components. That is really important to make sure that we end up with a clean graffiti carbon at the back end. And we’ll remove other contaminants such as any sort of small ammonia or, or, or others. That would be a trace elements that are created through the anaerobic digestion process.

So we don’t actually deal with, we don’t destroy the CO2 that’s part of biogas. The CO2 that’s created by the anaerobic digestion. We’ll continue to exist and we’ll end up in the atmosphere the way that it currently

Antoine Walter: we’ll come back a bit on your process in a minute when we discuss your current developments at Woodman point.

But right before I’m still unpacking what you explained just before. And you explained the two outputs of your system, which is on one end clean aggregate truck was hydrogen. It was referring to, and the graphite on hydrogen. What is your roots? Or you go to market, what you expect to do with this.

Geoff Ward: Uh, so in a way we’re fortunate that we’re still in the technology development stage.

So for our first project, we will be using the hydrogen onsite ourselves as a fuel source. We’re actually going to put it through a fuel cell so that we can learn more about the integration as a fuel cell in our project, and also in the local power grid, the hydrogen itself could be used. Any of the market applications, which you really see emerging, so heavy vehicle transport, whether that’s, you’re using it to supply to a refueler to supply a truck or local bus fleet, it could be used in local industry.

Um, so somewhere like the city of Perth that has, uh, metals processing and other industries, a number of them use hydrogen. They use very, very large volumes of hydrogen. So currently we’re only a small demonstration project, but the hazer type process could supply hydrogen into heavy industrial applications.

Whether it was refining by diesel production, metals, manufacturing, petrochemicals, ammonia manufacturing, or the hydrogen could also go into pipeline and utility blending. That’s an area that’s starting to emerge with people investigating the ability to blend hydrogen into networks as a way of achieving gradual de-carbonization and reuse of guests networks.

Now, all of those applications have been flagged to us by customers in Europe, in particular in Asia, north America. And we’re very much what we’re seeing at the moment, I think is the hydrogen markets are slowly emerging. There’s a very much a focus on demonstration projects on technology proving where a good example of that.

And we have sort of probably haven’t seen the full emergence of hydrogen markets yet. It’s a treasury commodity. That’s something that we’re going to watch with interest over the next couple of years.

Antoine Walter: On the other end of your process, there’s this graphite which we’re producing and you mentioned batteries, water treatment, which is of course, very appealing.

If you talk with me, because I see that if you say you can replace activated carbon, then it’s a win-win and the seal even synergies, because you’re already on the waist with the frequent bend, which might use that activated carbon to trap emerging contaminants. So there’s like a real virtuous story there.

How is it today? Produce graphite or is your graphite agglomerated rated with a catalyst what’s this material and what’s your long-term vision.

Geoff Ward: And this is a good way of describing it. So we produce a graffiti carbon. Byproduct is crystalline. Um, it’s highly structured, so it has some of the characteristics of a graphite, but it’s also quite a unique morphology.

I use sort of physical chemical shape. It would be why I’m describing morphology because of the unique way that we create it through the decomposition of methane in the presence of an iron or catalyst. And so we’re actually producing quite a unique new graffiti carbon. We have a strong R and D program that’s investigating what we can do with that.

And that covers things like investigating applications in the water treatment. Our carbon will be about 90% pure carbon and the remaining residual impurity will primarily be the catalyst that we add to the reactor. Exit the reactor embedded within our graffiti carbon. Now that means that for some applications, such as batteries or conductive films, or some of the very high value anode type materials, then we’ll need to purify that graph out to the levels that it’s required for those industries.

There’s other industries where we hope we can use it as. And it’s as produced rule form and they may be more in applications such as building materials or material blending. And there may be some applications where. The presence of that unique impurity one person’s impurities, someone else’s dope. And so in most carbon products you have carbon, but then you might dope the matrix with that specific type of metal cat on in order to achieve that unique properties.

Well, we’re certainly investigating the potential for the unique carbon and iron combination to actually be beneficial in some applications. And that’s where we wonder whether in some applications around water, it may have some, you know, some positive applications and we may be able to develop new ways of using this carbon to help with various water treatment challenges.

Now it’s not a direct replacement for activated carbon. It has different surface area. It has different properties. But where our vision is to sort of identify a range of niche, specialized high value, low volume markets through to valuable applications for 10. Use it as it as is through to finding just large volume ways of disposing with the carbon.

When we get to building projects at much larger scale, we hope that we’ll be able to develop off our research base, quite innovative. And far reaching suite of different products based on this unique carbon material.

Antoine Walter: We’ve touched a bit on your demonstration project. You’re currently building at Woodman points, but I’d like, know to go a bit to the bone of it.

So can you describe what you’re doing at woodwind point? What is, would have been points and what do intends to demonstrate with.

Geoff Ward: The Hazer technology today, I think has gone through a very rigorous, but fairly what I described as standard scientific process. It started off with primary research funded by the Australian university system.

We then did some pre-commercial research funded by a C capital, and then we’ve been doing pilot plant testing, various reactors over the last two and a house or rent about three years. Right. About two years ago. And after I joined the company and we were looking at the quality of the pilot results, we felt confident that it was time to accelerate the development of the technology.

And so we look to build a demonstration plot and that’s the Woodman point commercial demonstration project you’ve referred to. So Woodman point will be a 100 ton per annum, hydrogen production facility, and will co-produce about 375 tons of graphite. And it’ll be the first, fully integrated, continuously operating 24 7, you know, example of our technology, the pilot work we’ve done today has been testing different reactor, configurations and operational parameters.

And it’s been batch. So it’s been small, it’s been sort of manual. And that gave us a whole lot of really good data about the chemical equilibrium, the committees, the reaction, yeah. How the chemistry works, the performance of the catalyst, the consistency of the quality of the products we produce. But now we need to step it up and show that we can continuously add capital.

Remove carbon that we can split the carbon and guest streams that we can purify the guests to feel so great. So we can purify hydrogen fuel cell guide that we can recycle and reacted methane back to the reactor and that we can clean up a feedstock. And then more importantly, we can like all of that work together in an industrial.

So the CDP will demonstrate that continuous operation of the hazer process. It will, we hope, and we trust and we, we believe in our engineering, it will show that we can continuously produce fuel cell. Great. But it also it’ll give us the first large volumes of graphite, which will allow us to build on our sort of business development and market will give us larger samples to deal with potential customers and will allow us to take our sort of graphite marketing and product development activities in the solids area forward to the next step.

Antoine Walter: The fact to be located on a wastewater treatment plants, like you’ll be in Woodman points. Does it come with. Additional challenges with additional benefits or is it absolutely neutral and doesn’t change anything. I’m thinking, for instance, you know, cooling water is available in, in towns, you have some heat, you have some streams of some new outputs, but maybe all of that isn’t really of interest for your.

Geoff Ward: I think long-term integration with other processes will be really valuable for both so that we can sell excess heat and we can use cooling for instance, for the first project, doing it with the biogas, had both some advantages and some challenges. Obviously we have to clean up the buyer, I guess, but I think that that’s fairly well-proven.

We understand as an industry, as a sort of industry. Society, we can clean up by our guests to make biomethane. And that’s been demonstrated in very many commercial sites. The collaboration was the water corporation for us was wonderful because it gave us access to a fully renewable feedstock that did help us open up green funding, which is important as a startup.

The integration with the water corporation gave us security of feedstock now because they’re already producing biogas. They about use about half for, for power generation. And about half is fled. Where are you going to process guests? That’s currently being flared. So we’re able to make a really good commercial arrangement to buy guests that wasn’t going to a high value.

Yes. So it was a win for them and it’s a win for us and they get to have a look at the technology, which might be really important to modern warfare by sort of trading plans for the future. The other great thing about, I guess, working with the water corporation and one that we really appreciate is there was significant excess land in a buffer zone and industrial zone land land surrounding a wastewater treatment plant.

So. Yeah, certainly in Australia, wastewater treatment plants have a large buffer zone around them. No one really wants to live cheek by jail with what in the past would have been called the syringe works, but now is the water recovery facility. And so we were able to build our plan by borrowing land from the water corporation.

So they agreed to not only. Guests as a feedstock, they’ll only act as sort of a project collaborators so that we could make these applications with government support, but they’ve also provided this land so that that’s one risk of the project didn’t have to deal with whose land access. So there’s both some additional challenges and a more complex feed, stock, enormous number of benefits, having a strong collaboration partner, having access to land and having access to guests, you know, underwrite collaborative.

Antoine Walter: And what about the scale? Because of course, on a wastewater treatment plants, your output in biogas is going to be limited to some extent, to what you can produce with the Cod that enters the plant. And with the biomass that enters the plants, Woodman points is let’s say a middle sized wastewater treatment plants.

I guess if you stay in Australia and you go to Melbourne or to Sydney, maybe there are larger facilities. But still, I don’t know how that compares to a direct feed from natural gas, from the current sources of natural gas as a fossil fuel. How important is scale within your process? Do you have big potential wins if you multiply everything by 100 or is it any ways modular?

So it wouldn’t change much because it’s just putting reactions next to.

Geoff Ward: No, we have enormous benefits from scale. And that suggests that at least part of the company’s future will certainly be based on, on natural gas as a way of decarbonizing gas based industries. So you’re, we sort of see a couple of different possible ways that the hazer company could operate in.

We could focus on smaller scale plants that supplied hydrogen to local markets, but really focused on graphite, upgrading and making highest value green graphite products. And in each case, the ability to make high value graffiti products from a waste, you know, from bio gas is incredibly valuable as a way of marketing and distinguishing those products.

And in that case, we may be limited on large wastewater treatment plants to a few thousand tons per annum. And in fact, the next plant we’re looking to build after the hazy CDP will be around about two to 3000 tons per annum. Just the next step up stage we’re looking at. If you look at the kind of demand that large industry.

Manufacturing industry utilities need, then they need hydrogen, not in the thousands of tons, but in the hundreds of thousands of tons. And that obviously takes you well beyond the scope of the water industry or the landfill industry. So yeah, we see that our process can actually find applications in both 10 years down the track.

We hope to be operating in very large scale, like the LNG industry and in which case would be operating. Natural gas and we’d be trapping very large quantities, millions of tons of carbon as a solid. And so we’d be a fall. Solid state carbon capture and storage and use. So tapping into this theme of carbon capture and utilization, being so important at the small scale, you know, we offer an opportunity for bio gas producers to access a suite of products that are a lot more value than turning it into electrons or burning it for.

So telling him into hydrogen for local transport, know where you’re competing against products, such as diesel, which is a lot more expensive than electricity or L or, and not all because of course, for every molecule of methane you produce, you produce both products. You can’t choose between them. They’re chemically in there.

They chemically come out and, you know, you have the ability to create. The sort of the kind of amount of graphite, let’s say if we were doing one to 2000 tons on bio gas, you’d produced sort of four to 8,000 tons of graphite, that’s the sort of a good amount to produce an efficient world scale plant for sort of high value conductive materials or, or similar.

Now we have a whole lot of research and development to do to show that our graphite can be both purified and qualified for those markets, but that’s the kind of opportunity to create really high value circular economy. Advanced manufacturing opportunities embedded with a water treatment plant or synergistic with a water treatment plant.

I guess the great thing about large water treatment plants is they typically exist in industrial zones. They’re not in residential zones, they’re sort of on the fringes of cities, which makes them well-placed to supply hydrogen, to transport floats because transport hubs are typically in the same areas and it also positions them well for manufacturing that they’re often in heavy manufacturing areas.

And so we sort of see those two paths, the smaller Peyser more focused on high value, graphite as an equal partner to hydrogen and the very large hazer, which is focused purely on achieving very cheap hydrogen by capturing the carbon at enormous scale and producing hydrogen for those large yeah.

Utility scale application.

Antoine Walter: In terms of the future or midterm commercial balance in what you will be producing of these two streams, the hydrogen and the graphite. If you have to compete with the gray hydrogen, I think what’s this going to make the difference for you? Yes. How much you can valorize the graphite.

So that is one, one option. How much can you extract value of the graphite? The other option is to have strong taxes and carbon taxes, which would of course, push for greener alternatives and for emission free alternatives or even emission negative alternative like yours. How would you value those two options?

I mean, you you’ve. All the possible outputs of graphites. But now the question is, how can you, can you sell it? And depending on the quality of the graphite you produce, it’s not going to have the same value. And on the other hand, all the governments of these words could give you a hand by finally walking the talk and saying we have strong carbon taxes, and that makes the process just a normal.

Geoff Ward: Well, you know, the world’s sort of three main carbon prices are rapidly converging over a hundred dollars a ton know, even though the globally traded average is somewhere around about $23 a ton. There was quite an interesting piece of research put out by credit Swiss, the, or the investment bank on that this morning.

So the short answer is that you need both, you know, it’s small scale. We may need to add value through. And that’s sort of consistent with the size of the graphite market and our ability to do so with continued success in our science and our engineering at the very large scale in broad terms, there’s a methane molecule is twenty-five percent hydrogen, 75% carbon.

And when you add in some catalyst impurities and some losses in processing, you know, you’re going to produce a roundabout three and a half tons of carbon for each ton of hydrogen you produce in pyrolysis. And that broadly holds true whether it’s our process or whether it’s one of the other two or three credible processes that are also trying to develop in this area.

So when you get to this sort of. The million, tons of hydrogen a year, you’re producing such a large volume of car, but that it’s really primarily, you’re going to be a low cost hydrogen producer through economies of scale, not through the value of your byproducts. That’s what we believe will evolve. And if you look at our technology, it has similar components to other gas processing technologies.

We have turbines and compressors. We have reactors, we have heaters, we have cooling water circuits. You know, we have a control system. So. If you were to walk through with me, you know, the hazer plan in the future, it would look similar to walking through a steam Mesa and or a petrochemical plant. You know, we would have similar structures and handrails and control valves.

And, and so, yeah, we are very confident and believes that our technology will follow the same path. Process technologies. It will benefit from economies of learning and economies of scale. And so if we look at the unit costs of all of those processes that I mentioned, whether it’s Mesa and reforming, whether it’s petrochemicals, whether it’s refining or whether it’s LNG that over, you know, 10, 20, and 30 years the plants get like.

And the costs get lower. And so we anticipate that as our technology develops, and as this is deployed, more that we will become competitive through economies of scale. The other one is carbon pricing. You know, carbon pricing is essential for this transition steam leaf and you’re forming is a. Very efficient, very well-proven method of making hydrogen.

We’ve been using it at an enormous scale for 50 years in oil refineries, in pneumonia plants all around the world. And so the whole transition to a hydrogen economy is predicated on. The reduction of carbon emissions. And so that will be a key component that carbon pricing and emissions reduction by regulation, you know, either a combination or one or the other, depending on what path different countries take is going to be absolutely necessary to drive this transition.

Because otherwise it’s very hard to make the argument to be the first person to move away from the states. You

Antoine Walter: mentioned two main possible outputs for hydrogen, which is the using industry, which is using really hydrogen. And for them, it’s a one-to-one replacement of the black, the gray, all the fossil fuel based hydrogens, which is also the case for the Haber-Bosch process.

But those are processes which actually use hydrogen. So you’re really decontaminating those processes. The other use you mentioned is the heavy transport to heavy vehicles there. You’re competing. Against electricity and batteries. Do you see that as a competition or is it’s really two paths that can co-exist on.

Geoff Ward: I think, first of all, you’re not competing against electricity and batteries. Right. You’re competing with electricity and batteries to replace diesel, to replace bunker fuel, to replace gasoline. Right. So, first of all, I think we’ve, we’ve got to get the structure of the competition, right. And I think w we are cheering like crazy for electric vehicles.

We’re cheering like crazy for sort of Nissan leaf and Tesla and all of the new brands emerging from China. You know, we watch with interest and I watch with. NV the progress of electric vehicles in Northern France compared to Australia. And what I sort of think the way, the good way to think about it is, is to actually think about it a little bit like unleaded and diesel.

There are certain applications where I think battery vehicles will be the dominant technology, small vehicles, relatively low usage rates, lots of downtime, fairly light duty. So if you live in a European city and you don’t drive particularly long distances, you mostly stay relatively close to home. Your car has a fair amount of time of not being used.

And that’s the pattern of city. Then I don’t think there’s really any serious argument to that, that useful you’re best served by a battery electric vehicle, a small vehicle, efficient battery, lots of ability to charge and personally. What we’ll find is that as more and more vehicles are on our grid, then our grid problems gradually decrease or change rather than increase.

We’ll see a lot more, more two way storage. And so, yeah, renewable energy into battery vehicles is a no brainer that that has to happen if we’re going to do. On the other hand, there’s a whole lot of applications and the ones where we’ve typically ended up with diesel engines, not unleaded, petrol engines, which have very long distance requirements have very high time usage.

So they don’t have, they can’t easily spend time recharging and they, they need to have, yeah, absolutely. Certainly insecurity about range. And so pod origin in training. Yeah, heavy lorries, heavy trucks. So the freight transport, possibly fairies, uh, ways of saying, uh, ways of actually keeping that usage pattern, the site, you know, you can pull up and refuel, you can guarantee, you know, your range and your, and your fuel through filling your tank.

And so. I think that the applications like heavy mining affiliates, like bus fleets, like long distance road, transport and rail are more likely to fit fuel cells more and more in the future. So there will be some degree of competition between fuel cells and batteries, but actually what we’re really talking about is different forms of electrification and the real competition is electric mobility.

Versus internal combustion engines. Now I think that that is being overwhelmingly won the first Battlefront where the victories are happening are in small vehicles. And then, you know, as infrastructure evolves, as, you know, manufacturing evolves as customer patterns involve, we’ll move on to the next. And yeah, I think hydrogen for transport will be a role.

I think there’s a third part we didn’t mention. So there’s the direct replacement in the industry. There’s the direct replacement and transport, but hydrogen also plays a critical role in balancing in the power network, because option is a way of consuming, renewable. On a regional or international scale when you have excess renewables and giving back power when you have a shortage.

So hydrogen’s ability to play that role in allowing the penetration of renewables in the broader energy system grid, industrial heating and cooling, as well as manufacturing, feedstock, as well as transport feedstock, as well as the direct use should not be overlooked. And I think it will be a key, you know, all of the long-term technology forecasting indicates that that hydrogen is going to be a key.

In allowing us to get to sort of 80 and 90% penetration of renewables in a modern, heavy energy of society from sort of this 30 or 40% that we’re getting now.

Antoine Walter: It’s not the one you’re following right now because that’s more the green hydrogen. So this electrolyzers right. Well, no,

Geoff Ward: not at all. I disagree with that.

Yeah. That hydrogen is hydrogen. What matters is how much carbon is emitted in its production. And so yeah, we can play a role in that alongside electrolysis. Yeah. Another way to think about it. It is, of course, is that. Renewables are abundant, but not limitless in certain areas. So if you look at the countries such as Australia, where we have a small population, abundant, wind, and solar, we can meet our needs many times over.

And we also have relatively low energy requirements. So while air conditioning is now considered an essential in modern Australia, it wasn’t 20 years ago and you certainly won’t die of cold in Australia. I’m just trying to winter does a good impersonation of a European summer and last thoughts about company, about country.

But then if you look at sort of countries such as Northern Europe, parts of Northern Europe parts, even parts of Canada, despite its hydro resource, then because they have a much higher energy requirement, particularly because of winter heating, they can’t meet their energy requirements through their own renewable endowment.

And so if you look at something like hydrogen, We can make green hydrogen from renewables, but it’s a relatively less efficient way of using that renewable energy to make hydrogen, because it has such a high energy requirement. Then if we do it through ways like paralysis. And so we very much see that those massive energy needs of the future will be met by a combination of your own production.

And that might be pyrolysis. Rather than electrolysis, depending on what the attributes of the country is, it will be met by a combination of important export. And then one of the questions is, is it better to actually import and export hydrogen? Or should we actually continue to export gas and make longterm hydrogen at destination?

Or is that a transition pathway? So we think that there’s going to be a much more complex hydrogen system in the future. Then we can see now that every time we look at. The implementation. And I think we sort of, as an industry, we find different ways of configuring the infrastructure, the energy source, the production technology, to find different ways of meeting the market needs.

Antoine Walter: How important to that extent is it for you to be based out of Australia? Because you mentioned some of the. Peculiarities of Australia. There’s even more, I would say. I mean, you’re probably country, which has the most exposure to solar energy. You have a notion to the west of the country, which means that you have a lot of, of wind coming at night, which means you have really this potential in terms of renewable and strategically, you have the LNG capabilities because you have all this LNG portraiture already equipped within the country.

To the north, you have countries like Japan, I mean, far north, but Japan or South Korea, which will have, because of, let’s say political or geopolitical reasons to invest heavily into the hydrogen economy. So that makes you a real hotspot for all of that to happen. Does that help you by any means in the development of.

Geoff Ward: I think we have a very global perspective on our technology. So if we were focusing only on Australian market, it would be a very challenging place for us, because like you said, Australia is probably one of the best places in the world to do green hydrogen from electrolysis, but we don’t see our, yeah.

We don’t see ourselves being anchored in Australia from a market perspective. Yeah. The technology was developed here at the university of Western Australia. Australia is fortunate in having a really strong. Publicly funded university system and given our history in gas mining now, an industry, you know, it has a strong engineering and sort of yoga and, and industrial backgrounds.

So it’s a good place to do technology development that you can access engineers and researchers. And there’s a lot of people with skills in the gas industry and construction, et cetera. On the other hand, it’s quite an expensive place to operate because we have Mahoning and LNG industries, which soak up many of those resources.

So where the technology is developed and where it’s used really aren’t connected necessarily at all. We’re talking to upwards of I’d have to count, but sort of let’s say 15 to 20 potential international collaboration partners, and they span. Europe, north Asia and north America, as well as in Australia.

And it’s very probable that a lot of the future development of our technology and deployment will be. In other jurisdictions that have a really high need for low emission fuels for things like hating. And so, uh, working really strongly to invent that incentivize their early uptake, but at the same time, have access to gas and access to low carbon power.

Because when we, we use electricity to fire our process to further reduce the emissions rather than burning gas in our process. And so there’s countries that meet those criteria very, very well. In addition to. Which

Antoine Walter: makes for a very smooth transition to my crystal ball question. Thanks at all for that.

Where do you see Hazor in five to 10 years?

Geoff Ward: Well, uh, I hope that within 12 months, we’re now producing hydrogen and graphite from our first demonstration pro. And I hope that we’re, we’re coming up to making a, you know, an investment decision on a next project that we’ve found a partnership and collaboration and supportive your addiction to build the first larger scale a project.

And I hope in five years, you know, that that project is, is up and running and. Second. And third has your projects are in development. And then in 10 years time, you know, we have, uh, a number of Hazor projects operating commercially we’ve established strong markets for specialty graphite products, and then we’re continuing to improve the technology, increase the scale of the projects and decrease the cost with every implementation.

We do

Antoine Walter: sounds like a very promising path forward. So. Thanks a lot for all this wisdom you’ve shared in that deep dive, unless I’ve missed an elephant in the room. I propose her to switch to the rapid fire questions.

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Rapid fire questions:

Antoine Walter: In that last section, I’m asking you short questions, which aim for short answers, but you will see that I’m the one which is sidetracking the conversation all the time. So don’t worry. My first question is what is the most exciting project you’ve been working on and why?

Geoff Ward: Oh, certainly building the hazer commercial demonstration plan because it’s the first application of a new technology. It’s where it jumps out of the lab and the pilot plant into.

Antoine Walter: Can you name one thing that you’ve learned the hard way?

Geoff Ward: I think the developing new technology is hard that you can lay out a plan, you can set your strategy, but then you’ve got to get the mess, the physics, the engineering, and the operations, right.

We’re learning, you know, as we’ve gone through this project, we’ve learned so much in our design phase and fabrication phase before we’ve even got into country.

Antoine Walter: All this parameters you mentioned are technical parameters. Don’t you have also something else coming in the way like regulation, background or acceptance by your potential customers in the future to go down that

Geoff Ward: route.

Absolutely. Yeah. I mean, you’re developing a new technology in an emerging market is incredibly hard. So convincing people to be the first to try something that’s hard.

Antoine Walter: I won’t sidetrack you’re here, but at Coby Nygaard on that microphone saying that’s in the water industry, which we’re now somehow in everyone wants to be first to be second.

So that’s a bit the same.

Geoff Ward: Uh, I would say that that does that. That’s universal and it’s rational for many companies. The only, it’s a much more rational response occasionally to wait and see, and be a fast follower there. Of course, if everyone waits, we get what we’ve had for the last 30 years, which is a lot of intent, but for as little action on hard to abide to.

Antoine Walter: Is there something you’re doing today in your job that you won’t be doing in 10 years?

Geoff Ward: I’m actually sure there is, but I don’t know what it is.

Antoine Walter: What is the trend to watch out for in the water sector?

Geoff Ward: Well, yeah, I came to the, to your podcast, I guess maybe with some expertise, some little expertise in hydrogen and not in water.

So I certainly wouldn’t be arrogant enough to sort of try and talk about the water industry. Do your expert audience, I guess, in dealing with the water. I’ve been really. Impressed by their commitment to improve to decarbonize and to improve the, the quality and reduce the impact of their operations. And I think that that’s part of it.

It seems to be part of a long-term trend. And I think also the water industry appreciates how scarce water is, and that might sound like a really obvious thing to say and how valuable water is. But when you’re not in industry, when you’re like me, you’re just a consumer, it was a real IO. Dealing with the water utility and understanding exactly the level of skill and focus and, and excellence.

It provided every day to making sure that every single day my tap turned on and the water tasted nice. So I see there’s a really sort of solid foundation for that trend towards excellence. Reducing your hearing.

Antoine Walter: I can tell you I’ve met some calculations, very humble calculations in my very humble points.

Based on research I found from various water researchers. And if you take only municipal wastewater, there is about 1,600 Terra. What power of editing? Chemical energy, which is trapped insights and which currently is not really leveraged. And if you make like easy comparisons, it’s about 300, 2 20 nuclear reactors of energy, which is in the wastewater.

And on the other end today, wastewater treatments is about three persons of the words, carbon emissions. So we have at some point to do something about it, because if we go to a zero emission word in which we want to thrive by 2050, Also the water industry has to do something about that. So having companies like curious, which say.

There is energy in what you’re producing, which we can dig carbonate and even go to this negative emissions level is probably a very important brick in the wall. So you may not yet be in the middle of the water sector, but I would imagine that despite what you explained during this conversation, how it’s not limited to biomethane, you can go to.

More classical sources of basing the steam methane reforming through your paralyzes. But I think you really have a point if you can help the water industry to de carbonate. So that’s just my humble 2 cents to conclude the discussion. Jeff. It’s been a real pleasure. Thanks a lot for your openness and for everything you’ve shared today.

I hope I didn’t bother you too much with my muggle questions about hydrogen and energy. I’m a lot of mistakes between steam meeting, reforming, paralyzes, and all the colors and shades of hydrogen. But I hope people will still be able to get everything through your very clear explanations. If people want to follow on with you after this podcast, where shall they reach out to.

Geoff Ward: It’s like reach out to us through the, our website, which is www.hazergroup.com.edu. Then they can certainly make contact with us through the web.

Antoine Walter: Perfect. And like every time all the links are in the description of this episode. Thanks a lot. And I’ll be watching the evolution of that vision you had for the next 10 years of the Hazer group with great interest!

Geoff Ward: Thanks very much.

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The post How to Make your Wastewater Treatment Plant Remarkably Carbon Negative appeared first on (don't) Waste Water.

SWEN Capital Partners, a benchmark player in sustainable investments in private equity, just announced the first closing of its second SWEN Impact Fund for Transition (SWIFT 2). It will be a direct contribution to decarbonizing the economy and creating jobs in France.

This episode is part of a trilogy on the Hydrogen Economy (and its link with the Water Industry). Go check it out!

What we covered:

How Hydrogen is around for a while and how it already is quite a big market

How Hydrogen may still be perceived as quite risky by the traditional investment space, and how SWEN Capital intends to move the needle by being the first mover 

How there is plenty of capital on the markets today, and how the challenge is to redirect it to its highest impact

How the first investment wave in the Hydrogen Economy will unleash further development of the Hydrogen market and players

How exactly like for renewable energies, scale effects will make Green Hydrogen profitable in the long run

How SWEN Capital’s SWIFT 1 and SWIFT 2 closed and delivered much faster than expected 

How impact investing is not a charity and how you can be doing good and moving the needle while seeking profitability

How the challenge lies in building and developing suitable business models

How government incentives shall bring a strong tailwind to kick off the Hydrogen Economy, and what may be the best approach 

How Hydrogen markets start from a carbon-intensive addiction to grey hydrogen and how this may change with blue hydrogen (carbon capture) and green hydrogen (electrolysis from renewables)

How Hydrogen is fit for many purposes and how it could swiftly become a tool to decarbonize our economy 

How at the end of the day, Hydrogen is an energy carrier, and how we always strived in a world featuring multiple energies

Mixing batteries and fuel cells, reducing the stress on natural resources, building an energy portfolio… and much more!

… and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨  

Teaser: the Hydrogen Economy, an Investment Opportunity?

Resources:

Have a look at SWEN Capital’s website

Come say hi to Alena on Linkedin

is on Linkedin

Antoine Walter on LinkedIn

Infographic: the Hydrogen Economy, an Investment Opportunity?

Quotes: the Hydrogen Economy, an Investment Opportunity

Full Transcript:

These are computer-generated, so expect some typos

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Antoine Walter: Hi, Alena, Welcome to the show.

Alena Fargere: Thank you for having me.

Antoine Walter:Well, I’m very happy to have you because we have an exciting topic for today and exciting topic for many reasons. Exciting, because I’m a muggle. So you’ll see, I have weird questions and I need your knowledge to bring me on track and exciting because we will be diving into this topic of hydrogen and all the implications.

It may have. I think this is a hot topic right now. What are some reasons for different stakeholders, but that little teasing aside, let’s start with the Google traditions, which starts with the postcard. And you’re sending me a postcard from Paris today. So what can you tell me about Paris, which I would ignore?

Alena Fargere: from various look, if we stick to our hydrogen agenda and please feel free to ask any questions that are not weird questions, I will be more than happy to discuss that with you. I’ve just been fighting a hydrogen taxi recently. So very nice experience. If you have a chance to come, please, I encourage you to have a ride across the hotel in these car.

So yeah.

Antoine Walter: Let’s jump a bit into you before going into the heart of our topic. I was wondering when I was looking at your description, what is a renewable gas investor? How would you define that? What’s your definition to that?

Alena Fargere: Uh, renewable gas investors invested in investing in renewable gas. You could prefer that to be more serious.

We investing in bio gas and hydrogen actually. All across Europe and the funds have been created two years and a half ago was the first one in Europe to be this specific niche, investment funds and myself and my team, while very convinced of crucial role of NorCal gases to support the electrification of the success of the younger condition.

Because while electrification only won’t be enough to dizzy the covenant Bateman. At scale and speed at the cost. So the niece, I see a very strong parity between renewable electrons, which are, I feel being more covered during past years and newer molecules, which we are focusing on with my investments.

Antoine Walter: So just to be clear, when you say you’re investing in the gas or not investing in the guest itself in the facility, which will be carrying the gas or producing that gas or, and so forth and so on, right. You mentioned spin capital partners, which you said is two and a half year old, that’s it?

Alena Fargere: So then it’s more than that.

And the front, which is when the professor position I’m looking for is exactly two years in.

Antoine Walter: Okay. So just before going into the investment part of it, you have a history with hydrogen. I could be listing all the prestigious skills you’ve been doing is quite impressive, is like, You name it, it’s like a who’s who, and you’ve done all of them.

And on top of that, you’ve done a PhD in hydrogen. Why hydrogen? What got you interested into that?

Alena Fargere: Well, I’m, I’m nervous. Um, and why hydrogen? Look, I’ve been studying engineering at first and then getting to see any mobile allergies at some point, because I really see. It is next big challenge for all of us.

And we have no right not to succeed in this talent. And by that time, It was an emerging space. And as if the case for now for some new clean tech, it’s more expensive and you need to have some adopted policy to support at the very beginning to launch the uptake, it was the phase for renewable energy sources also for hydrogen.

And then. So I’ve done some studies also in policy making at some point of time. And then I run this very interesting to technology hypertension, which for me, this holistic solution, a holistic approach to the energy transition challenge and looks and affects the energy system as a whole or what can be challenging.

A lot of people, including myself wide sector blockers, and we may be tempted to search for a local optimal solution, which is not necessarily for one. And as far as energy transition includes lots of different angles. She did the production on energy. Should it be distribution or should it be decriminalization of, and uses the hydrogen will have a role all of there.

So. And very interested to discover more. And if that point of time, then I started my PhD on this topic. It was quite. I mean, hydrogen is not new that hydrogen for the energy solution at that point of time was quite a fresh topic. And so, yeah, I worked on first applying hydrogen for legalization of the transportation sector, including some work on dynamic carbon pricing and also financial means for hydrogen infrastructure finance.

After that I pull my interested in hydrogen and porous confirmed. So I stayed in hydrogen energy industry for six years. And after that I left to join the founding team of 20 foot profit transition. That was the first European funds dedicated to this renewable gas, hydrogen and bio gas.

Antoine Walter: And when does the change to know beyond that side of the table, because you you’ve mentioned you’ve been in the policy part of it in the industry, part of it, and now you’re in the finance part of it.

Was it because that’s where your thoughts there was a missing link or what’s the reason there?

Alena Fargere: My vision of the development does that work for me? It’s important to understand the technical side for the question and hydrogen technologies are not very new, to be honest with you, it’s been around for more.

Indicates and hydrogen market is already quite a big market, mainly used for a foundation. I didn’t dive in that if you went up to us. So I don’t see there, of course, always advice for innovation and new technologies and fishes increasing, decreasing. I don’t deny that it’s moving good if it happens.

However, for me, the main difficulty picks up. For the policy side, maybe you saw some recent announcements. I was very encouraged by them, 2020 and 2021 was if you hear of announcement of a national brief recovery plans in Germany, France, and Spain in the United Kingdom, and those compliments, I betting on hydrogen and putting an appropriate support for the announced.

It’s multi-billion paths around within or country European commission has announced the footage policies plan by 2030, and it’s enormous and get to scale rapidly. So I saw that technologically, I would say it’s quite well mustard. Take some momentum. It takes time. Of course it will be better if it’s more rapid, same how ready, you know, in policy and social conscious to post, to Cleantech and including.

And what I saw at the moment and not the industry. The main challenge is further ones. We talked about your blog as well. Technology policy and financial. I saw that the hydrogen, I still perceived as quite risky by the investment space. And it’s very difficult to be the first one in investment. So I’ve been concurrent there to understand that some, you know, existing investment funds will pick up the hydrogen team because.

It’s better to act now, waiting is not an option, I would say. And as far as Sepi, none, I came across amazing people and chance to be a prime spot and McNeil who was also working on this project of renewable molecules. And so the Hispanic transition was launched summer 2018.

Antoine Walter: You mentioned the investments and the big plans, which are right now existing from the countries, which are planning to invest money into that sector.

Why does it need also private capital to support that constant public capital be sufficient to push the revolution? I also

Alena Fargere: know, and it’s not intended to me. There is no lack of capital in the markets today. I would say the main challenge is to redirect the existing capital into moody. Clean technologies, new energy transition, business models, et cetera.

And the idea here is to mobilize privately. Industry money and policy money, policy money. I’m not there to say for me, their main role is to address a green finger, the greenest analogy, which is not populated for us by the market. Of course, there’s a tutor price. And we can also talk about that, but it’s not enough.

So this policy, a policy support is there to initially reduce the green. The green premium of hydrogen. And, uh, after there will be some economic effects, like learning by doing like scale effects, which will take it and drive costs down to the competitiveness with existing, um, say possible they are these technologies we’ve been seeing that maybe you remember.

When BB started, it was more than three times the price of electricity grid, electricity. And now we are hitting the price parity in more and more countries across the globe, and it will be continued and it’s very, very good. So the same thing will happen to hydrogen. They’re very tiny, little bit different than learning by doing basically is that then.

Production capacity price shop space or the percentage winded soul. It was up 30% and four hydrogen and his different breaks. It’s supposed to be between 10 and 17. So the idea here and what we are aiming to achieve with my team is to launch this first project to bring private finance. Of course, out of the public projects are also obligated in some cases, and create a proper risk sharing mechanism between project owners, between industry of takers, between support and between private investors and depth investors.

Antoine Walter: Talking of your investment funds. You just announced the closing of your second fund when it comes to those renewable gases, which means that you will be having at least 150 million euros to invest in these renewable gases and your first fan, if I’m right was off 75 millions. So now in total you have 225 million euros, which are at work to push a bit.

Those topics. I have a very blunt and direct question. Do you think that this beautiful project of decarbonizing our economies can be profitable? And if yes, of a which time when.

Alena Fargere: Just a side effect. We have more than double with emotion. The first fund was 175 million and we were intended to deploy it over.

Yes. And we’ve done it in two and a half years. So we are currently raising the successes exactly your toes, the second magazine. And we did our first closing in 150. And the target size for the fund is about 300, 400 million. So it will be two times. And then the previous one. So it’s indeed quite a number of million to universities in this space.

Um, was the first fund with, we see a very good traction. Because in my team, including myself, I have one industrial background and I have another colleagues of mine gain also from industry others have coming from financial. So we have south. And like I say, Terry on be take things in more rapid understanding of operational and industry challenges.

So we’ve been, uh, following a very good production and could address more than 100 installations. We try to find until we’ll be financed by us was the first fund.

Antoine Walter: When you say 100 installations, what are we talking about?

Alena Fargere: For both bio gas and hydrogen for the hydrogen was in the first Workfront. Uh, we’ve done one investment in the franchise and then hopefully we’ll be creating projects and projects to decolonize from industry.

You can also, if you want to discuss how it can be done in general terms and, uh, for the second fund we say on the same premises, uh, quite similar investment, this is a supporting renewable gas, having five gas and hydrogen production and distribution projects all across the board. Based on the first one was in European one.

And now via expenditure, you also asked about the profitability. Well, we are not a charity foundation. We invest in funds. So we also raised some money on the open market with our own nurses. Also in some of the, there, which I just in line of what is the current market expectations? So indeed the challenge here is, uh, to create with the project owners, long term profitable business models, which will be successful in three years.

We are currently also anticipating forthcoming regulation, which is not yet for hydrogen. I mean, not yet transcribing and local laws in France. We hope it will be done by the end of the year. And now the countries laws are under consultation as well. However, as I said, we don’t want to wait. I firmly believe that this will happen and we are already taking some good marks and some good projects.

Antoine Walter: When you say that regulation out in the cooking, somehow, what will the regulation tell? We say you have to have a certain share of your energy mix, which has to come from hydrogen and renewable biogas or what

Alena Fargere: will it be? Oh, those . So this is not to say the question is the question now is what kind of support mechanisms will be implemented.

And give you an example of holler. It was a feed-in tariff and the same is true for biogas. You have an injection premium, what we call, and basically this is state who guarantees some visibility or future cashflow and also in premium. So for hydrogen, there is no yet that visibility because these kinds of very particular laws haven’t been voted.

How well they, under what I saw there are different means on the discussion to support the hydrogen economy across Europe and I’ll of course, continuation of some topics, substance, basically helping to find is the captain of the infrastructure projects. Should it be production and distribution already existing?

There are also some OPEX sites and the discussion. And there is one I really appreciate in particular, which is hopefully will be altered in France. Basically. This is the laws supporting around consumption than production and basically making premium thing, ensuring her dream for the customer. Meaning. I customer choosing between green and break hydrogen will have those two molecules had the priority almost.

And so the extra to be paid for the green content of hydrogen will be acceptable for the client. And like I say, a chunk of this difference will be paid by the state for some time. Of course, it’s not, I really want to stress here that those kinds of folks is up there forever. And it’s great. The idea is that it’s there.

To support and to benefit from this learning by doing effects and cost and insurance necessary cost reduction to bring these technologies at cost parity with significant CO2.

Antoine Walter: So it’s kind of building this path to scale and support the transition to a point where it’s just economically in the middle of the market.

You mentioned gray and green hydrogen. When I started digging a bit into this word of hydrogen was surprised at this very colorful word, which is hydrogen, and there’s actually much more than just green and gray. So. Why did you decide to focus on green and not, I don’t know, blue or true cause or purple?

Alena Fargere: Uh, yeah, maybe listening to a little bit of all of you, of what are the colors, how does it work? The hybrid market is existing markets mainly, or today nine to five. It’s very well, it’s quite a bit quite the main consumers are refineries and fertilizer. The hydrogen today will 98% of hydrogen produced today is produced from seeing the same reforming on from fossil fuel.

Basically you crack the it’s from natural gas, the seed you crack it into. You have each two hydrogen in one hand and see you to come in on the other hand for one tone of hydrogen. And it’s always 10. And this what we call green hydrogen. Alexa, let’s say classical one. How have I want you to keep in mind?

If you take these drug hydrogen and you put it in a car and you run it next to the diesel car or for the overall emissions, you will be better than the diesel one. However, the idea here, if you want to unveil the full potential of hydrogen for the energy transition, we need to think of production and the.

He’s big and doubles. So if we need to pick up a knife, it production 100 and we also need to deploy different markets. Some of them are existing. For example, those consuming hydrogen today. How about there are many, many of them wants, including the dehumanization and passport decompensation. Industry using hydrogen music to, to, to create if you also name it that are a lot of things to be developed at the same time.

So we have this double protection and if we focus on the decarbonization of hydrogen production, there are different means something that is imposed straightforward. On the existing assets you want, and these can be done. And it is already done in some locations, in a centralized waste production plant, and you have create any cream, their technology to capture a, and it allows you to.

Around 60%, you can have more costly technology temperature up to 90%, how we will be. Well, the market practice has for today. This is I would say 60 67, which will add something between one, two feet, Urus, parochial, hydrogen production. Knowing that world, right? Hydrogen, the market price for the trusted increasing natural gas price was around 1.5 to three was secure.

So you have these, let us say intermediate way where you’ve reduced the carbon content of your hydrogen production. That would be blue hydrogen, right? Exactly. Exactly. So keep this in mind. And of course we want to go a step further and go to zero in misses and that can be done. This is the objective.

This is the pledging for hydrogen, and this can be done. Basically, if you in place the natural gas, which has zero carbon footprint. So basically you, the hydrogen will produce will heritage in a way these carbon content that will be also considered. And in other way, you may be. So it’s a lot, it’s probably a lot in process for now.

It’s renewable electricity where you take what a molecule pass the current in there. And basically what a molecule H two O will split two in each two, hydrogen and oxygen. And, uh, here, I also want to stress that the electricity. Should be, must be renewable because if, for example, you put your electrolysis, have you parked in Germany?

Well, if you hold process , which does that installation, and then realize that if you put it in the black, for example, the Domini in university and publicity from the German brick, which well, your father shouldn’t do the SMR in terms of carbon footprint. So I really want stress out. That’s really crucial to have a neutral energy, power, or edit policies to be able to call the hydrogen green and to have zero carbon footprint.

So we had, let us say 100% emission, uh, one total of hydrogen, hydrogen, 10 tons of CO2, three one. Then you go down by 60%. It’s a blue one. The green one and what is very nice. You can push logic even to the negative permission. For example, you use to produce your hydrogen and capture this U2, which is admitted in the process.

In this case, your is the only technology which can give you hydrogen with a negative.

Antoine Walter: Actually the discussion we’re having right now is part of a trilogy on that podcast. And this is episode two of the trilogy and the episode three is an interview I have with the Australian company called hazer. And what hazer does stats.

They have. Installed the process on the waste with the treatment plant. So they have biogas as an input source and then they do carbon capture in the hydrogen process because they use the graphite that transformed that, that carbon into graphite and they reuse the graphite. So the carbon is captured, which is exactly what two weeks spending right now.

That is a negative carbon process. And actually that’s interesting because. You investing in both bio gas and hydrogen topics. And it sounds to me like if you combined both you’re exactly at that point. So is it part of your investment teases to take both the projects and bridge them together? It

Alena Fargere: makes a lot of sense in some locations in some vacation, it does not.

However well, you know, that the energy transition is quite regional specific. And so of course, if we can explore the synergies between our gas and hydrogen participants, And, um, your thoughts? Tell them to bring their technology to relate, to have them.

Antoine Walter: You mentioned those various levels of hydrogen and, and why that makes sense to go into the green or beyond.

I know, just to take one step back and what are we exactly trying to do with this? Hydrogen is it’s a replacement of the gray hydrogen one-to-one or does the ambition go beyond that and say, there are other parts of the energy mix, which we could replace by hydrogen. So maybe taking directly on fossil fuels or.

There are many different options, but what is the primary aim?

Alena Fargere: As I told you, what is really nice about hydrogen that you can visit? So with the project I considering today, there are, I would say two main directions. Of course, mobility. You can power costs, traps, trains, planes by hydrogen and you’ll need.

Thank you will meet will be water. No smell whatsoever. So it makes a lot of sense. And there are some cases which are quite economical already today. Then there is one example is, uh, you may know, and I looked at companies here in Europe states who are choosing hydrogen folks for the, especially for the food entrepreneurs, because in this case you don’t have any mission.

It’s really irrelevant. Big autonomy and very fast recharging time, which is very close to the use of these overs. However, there’s no issues in their inbox for mobility. Also, it makes a lot of sense to put hydrogen when you want to travel long distances and especially what you want to travel long distances or transportation.

Hold it up here and their projects for buses, trucks, uh, you maybe saw there are some hydrogen trains already running in Germany, and there’ll be some discussion and commands done by France and the UK to replicate success in Germany. This is the first, the second direction is. And here, you mentioned that you have double options.

You can either replace the hydrogen great hydrogen, which is already use a green one and be done in your finding one on one. Yeah. And especially the ammonia production. And you can also replace some other carbon-based fuels by hydrogen diversity. You can be the case, for example, in steel making, when you replace Coke by hybrid.

You tend to look on process and it gets used to takes a dive to find out final product. So this is really interesting subject. And when discussing with some steel makers, because for them it’s very difficult or almost impossible to find. So the hydrogen is a valid option. And also you have these public concern and push.

Maybe you also heard about that. So to have also sustainable materials and used the limited cup unplug and here hydrogen also can help and not industrial example can be production of synthetic. What’d we call it fuels basically what you do. You will take brief hydrogens and combine it with, seem to Aaptiv somewhere, which has to make a small.

Well, the energy turtle up to 60 in order to succeed in energy transition, we made new for major levers. Those there, the first one of course is replacing fossil fuels variables. The second one is being able to switch to hydrogen. We also need to do massive CCS. Was this you or carbon capture storage there?

And also of course not last but not the least the energy efficiency and consumption. So in order to limit our, uh, in respect of the carbon budget, which is left to be compatible with 1.5 or two degrees scenario, don’t have that much time and not that much budget. So we need to use extensively this whole thing and the carbon capture.

Well, we need to do something with that problem. And these objects come and can be utilized in combined hypertrophy in order to produce synthetic. Which can replace the fuels, which will stay in the ground, which will not extract. And basically different studies estimate. I would say about a third of the known fossil fuel resources from staying where they are, if we don’t want to drastically run on the cup and budget.

So that makes sense as well. And during the transition. Of course fossil based a solution will be there with them, the entire energy systems locally by nature. So we will be progressive process and already along this way, this synthetic fuels, which is from green hydrogen, the carbon can help and replace these fossil fuels, which will be based to read the transition.

Antoine Walter: You mentioned. I mean, there are so many different types of assets, which you could be investing right now. Right? The total list you just gave just now gives a hint at all the possible implications. Do you intend to focus on some of them or do you want to be agnostic and say we are putting some bets in all these races and one of the horses might win and then maybe the main output is going to be, I don’t know, new fuels or, I mean, one of them, and then at least we have some stakes in that.

Alena Fargere: I hope they kind of Pelham kale horses for when we’ll, we’ll drag us to the company with action, because this is also one of our payments for the fund. We decided it to be. So we also focus very attentively on the production. We aren’t innovating without project, which is quite well. This is quite important for us and for the partners.

So you may notice that. Quite focused already on the bio gas and hydrogen and fully hydrogen. I’m looking for the different applications. I just mentioned to you I’ll look on, on production. Should it be used for industry? Whatever industry is also heating, who didn’t talk about that. But with hydrogen you can produce a low and high grade.

Should it be for domestic or industrial applications is synthetic fuels. We discussed as well. There is lots of things you can do. And some projects make more sense in particular locations. And, uh, it’s quite, yeah. Regional specific approach as for now, because we don’t have it’s quite fragmented. Europe has been the leading this process.

Two years after the endorsement of the European commission and for all of a national plans. So yes, depending on the country, depending on the region, depending on the degree hybriding of this solution will vary. However, all of them tend to feasible and can make a lot of sense. Depending on the company position is a very big partner.

They telling them itself.

Antoine Walter: You mentioned this original fragmented aspects of the topic I’ve seen that spend capital has invested in life. So that’s a company which is doing this electrolyzers, which are turning wind farm energy into hydrogen. I think the first unit is a one-on per day production plant.

And if I’m right, it’s in the north of France, it’s next to not.

Alena Fargere: Yes. If you come around for more than welcome to visit, it’s a very nice.

Antoine Walter: My question was going to be a nasty question against friends supporting me bats. But you mentioned this original fragmented aspect. If I was to make a plant of this.

Probably I’ll have even better yields if I install my plants in Chile or in Australia, or somewhere on the west coast of Africa, because there could combine a desserts with a notion, which means strong winds at night, I could have some solar panels on top of that, which would pour a little bit of additional energy into my mix.

Is it really a technology that has a chance to. Put everywhere or doesn’t have to be adapted to regional and local conditions.

Alena Fargere: Oh, this is what’s. You’re describing this long-term vision for how the level hydrogen system, it’s a more centralized way you are describing. And indeed there are countries with Richard Solon.

And France or the UK, for example. So indeed hydrogen being an energy that you can produce hydrogen from energy and reproduce energy from hydrogen, which is nice. You can. And the gene POM was hydrogen between different regions and different sectors. Of course, quite difficult to have electricity lines. I didn’t know between somewhere between the solid and defined, however you can transport molecules, which are easier to be transported.

Over longer distances and these hydrogen can be transported in whatever form from peak volumes can be done in a liquid form or in a form of ammonia or hydrogen carriers, et cetera. However, for me, it’s describing a more, I would say long-term scenario. And as for now that already some good setups or the projects you might have across the globe across different.

Which saying of hydrogen as one of the technologies, which we need to invest into France is a part of that in France. We’ll have already quite low carbon intensity of electricity. However, as we discussed earlier, if we really want to have green hydrogen, normally you need to have, and what life has in France next to Nancy is the first installation, which will be.

And as for now, the hydrogen would just produce these used mainly by mobility and what is also nice and maybe like a stress it out for hydrogen technology. It’s the kind of a Lego freak I would say. So you can start small and then just add some bricks and the maker be conservative. So in France or even in other countries, then there are some fortunate, uh, we are, uh, let us say the name.

For the solution can be a order of a hundred megawatts. So it was quite a big one today. The biggest installation is existing operating. So for mobility, you have installation. So I would say about five megawatts or less. And for industry, it makes sense 20, 30 and even higher. And, uh, what is really nice and you have big projects like that.

You can start with. You can already decarbonized for example, a part of the process was five to five Virginia, and also ensure that it works and it looks good and also a space all the time. And also not to do the appropriate height changes, but not progressively. And, uh, hydrogen makes a lot of sense there because yes.

And your installation. So this is the nice thing.

Antoine Walter: And do you expect some scale effects happening if that was installation grow bigger and less?

Alena Fargere: Sure you have this double up to learning by doing well. We are benefiting and contributing all of us in that now, you know, starting with small or needs hydrogen projects today already.

So we are increasing production capacity. This is a common voice we need to make all of us, even if we expect. Hydrogen go draw the price. We have no option to wait until someone does it because no one’s had to eat what happened. So there is also a conscious and a not carbonated back in. To contribute to this production.

And this is first by doing. And the second one is the scale of camp effects. You mentioned some things, the less corresponding costs to the numerous to keep the windows or whatever.

Antoine Walter: At the very beginning of this conversation, you mentioned how hydrogen could be supplementing and augmenting the electrification.

That way that we will have the two technologies in the future, which will coexist and each has its role and it is helping a bit, the other, or don’t you fear that at some point we have kind of a winner takes all and we all go for electricity and then you’re doomed, or we all go for hydrogen and then it’s a jackpot.

Do

Alena Fargere: you afraid that today the electricity use it in an apartment who conquered the gas we use for cooking some sometime. So basically we already have acquire existing infrastructure and carrier. So that’s not the problem I would say. And I really see the need of complimentary to them, both from the decolonization potential and the speed we can go.

So, you know, Mr. Technologist, you do more one and also in terms of associated costs, because when you go, for example, If I take the example of transplants, there been a scenario for battery electric for passenger cars. And if you decrease this 100 scenario and put 10% only of yourself in the mix of the overall cost of.

This is global optimum and not the local bud is more cost-efficient because for full electric, at some point of time fee, then the last percentage is inquired by drastic investments between first intended, some extra production, capacities, and hydrogen, which is more adapted to the renewable energy profile.

And the energy has joined for hydrogen. Make the investments in the grid. I was acceptable and the overall cost of the system assessed. So this is a very small example for the ability for passenger cars, which is quite cetera. And you can extend exactly the same logic for the entire system. So that’s also why we are pledging and working for the complementarity of renewable motels and Newport electrodes to make the energy transition a success at cost.

Antoine Walter: If I keep comparing a better, I think your, your explanation is very clear. I mean, it’s true that electricity didn’t kill the gas and it’s, it’s true that we have several energy carriers. It’s very, very clear way to present it. Now, if I still compare a bit to the path to market from hydrogen to the path to market from electricity, electricity had.

Devices, which helps to have this path to scale. The first guy who had a phone with a battery was paying his battery. Crazy expensive for what it is, but the service of the phone was worth it. And that way we have this path to scale on the hydrogen side, you mentioned the heavy transport, which is going to help to have this path to scale.

But if I recall maybe five or 10 years ago, there was this idea that maybe much more fuel cell vehicles would be on the road. So also this personal vehicles. So do you fear that you might be missing some links in the chain of that path to.

Alena Fargere: Um, let’s maybe take an example of transportation. It’s a good one.

You’re bringing on the table. So the transportation sector. So, like I say, small coast and for some of the segments in the constipation batteries, they will continue to be there. I hope that, you know, bring us to even cost-reduction and it makes absolute sense to have battery electric of, uh, your what called community.

So that’s fine. It makes less sense that then it is necessary to transport more weight over a long distance. Should it be trucks or trying to, at some point of time, you just add an add batteries and because it’s having a need to add even more batteries in some point. So I would say this is kind of, there are some segments for, for which the choice is clear.

Should it be battery or hydrogen for some areas, there is a competition there. However, what I also want to stress that both. There is these three aspects of, you know, making the system greener and the challenge is big. And so depending on the sector we are talking to, there will be some complementarity, the sun or wind to do efficiencies of battery electric and fuel cell electric vehicles can be comparable.

Uh, this you two over life cycle assessment. So, if you have both in the system, it can also low, more renewables, because as I said, we can transmit energy from Picatinny across different sectors and regions. And also important as you were describing the world in a centralized hydrogen production, important from wind and solar, which regions to some of the, you mean important regions, there is also reduced material.

If we want to go all battery, uh, there is a stress on the, they can be stressful nickel, cobalt, and lithium mining. And if you put hydrogen in the system, you reduce the stress on material needs. And also, well, there is a flattened catalyst process for the fuel cells. However, this vitamin category. So, this is like I say, green aspect of the combined system, uh, that is also a faster aspect of these compliant system, because, well, if you have to decode this, you can move faster with one, for some applications, you have a higher customer, but even for hydrogen technologies, because.

It’s quite low. And the autonomy you have is quite large. It makes a lot of sense for intense use, for example. And I’ve been getting the example of a taxi, a hydrophobic taxi business in price, because if you want to go zero emission in their culture, Actually lexical fuel cell electric vehicles. And when you need to run 24 7, well, we don’t want your car to be tattooed for eight hours in any profits.

And also you can tell you somewhere that makes sense for intense or for heavy weights as well. We’ve been discussing. Also there is this diverse regional needs, which can be a mix in, in a better way by electric battery, by metric on vacation and the project. So that was, I would say actually rated faster aspects of two technologies.

Fuel the energy transition dynamic. And the first is the cost we’ve been discussing that as well. So in the transportation sector, if you have both, you have less investment needed in enforcing the grid and UCP equals. So, um, give me, give you an example of cost efficiencies for the infrastructure. So instead of one.

And basically the cost of hydrogen infrastructure, I would say 90 10, 90 versus 10% scenario can be offset by the savings you made. So, yeah, betting on what you do risk in a way you’ve succeeded at the end of this position. And then you have more options, you know, combining this. Technologies together and yeah.

Benefit from this. I would say more sustainable, faster, cheaper aspects of

Antoine Walter: very clear. Let me throw a curve ball at you. And I’m sorry about that. I mentioned that this is episode two of a trilogy. And by episode one, I was discussing with Paul Martin. He was explaining how the provenance of hydrogen might be useful to DSI.

Listen to what he said, because I guess you disagree lecture, you have your argumentation on it. The hydrogen is

Alena Fargere: being pushed by two groups of people it’s being pushed by the fossil fuel industry for women. So a win-win situation and it’s being pushed by hydrogens useful idiots. They useful idiots in the hydrogen regime.

There are people that think they’re going to make giant amounts of renewable electricity, that nobody will know what to do with. And so they have to find something to do with it. So they’re going to make. I prefer to be useful idiot acting rather than a very intelligent person is not doing their thing, but just to be, I will be more well, I will interesting to, to listen maybe for other arguments he’s putting on indeed.

There is a need to decarbonize for the oil and gas me. And, uh, hydrogen can play a role there. As I said today, hydrogen is used extensively. And in any way, if the coal and gas major, well, it’s more challenging for you to stick to the carbon budget and you need to recognize. And so here, the hydrogen is a good, invaluable.

You may be so some projects in the north of the UK, they are to be 100%. And, uh, adapt their distribution grid to be able to transport 100% of hydrogen by 2050, they run some analysis there and it’s shown that the hydrogen option is a 150 million, less expensive than fluid education. So they are running this project.

And it’s good. Hydrogen is considered as one of the options for all of them gas and to change the business model, because at some point of time, we don’t want to use fossil fuels anymore. So that’s, I would say in argument for hydrogen and in other one, I also considered to be an argument for hydrogen because you need to replace fossil fuels by hurting will energy sources.

And that’s the, I think we all. Electricity’s difficultly story is this is one of the big challenges has for us for now. the big frustrations. Uh, you can do a pumped water storage, however dependents have the geographical. Uh, well you have it in all geographies. It is also regional specific and, uh, Holly is available and here, of course, hydrogen can also, you know how these more massive integration of renewables, which is.

And store this energy or between different regions and different locations. And Aquaman that wants to add for my own is that these hydrogen can also decarbonize different sectors. Should it be transportation? I believe Dr. Lott covered quite extensively. Uh, the challenges, the segmentation, the different technologies, which can play a role and transportation, uh, especially when you need to have an intensive travel longer distances for.

We haven’t spoken about obligation, but their hydrogen can also play a role by being combined to C2 and converted in sector as well. Uh, hydrogen will decarbonize industries, which are difficult or impossible to the key thing. Uh, we’ve mentioned also. So that’s a fuel. So I would say that. The aspects of which are covered by hydrogen, by large, it’s quite holistic.

And I would say that people, what can in hydrogen, they are rather driven and passionate and engaged for the energy transition success, rather than any other things.

Antoine Walter: So congrats. And I think that’s absolutely clear. I think what stands out from what you’ve been explaining so far is that first we don’t have to oppose hydrogen to other type of energy. It’s another carrier which plays into the mix and which has different capabilities in different. Properties and the rest of the mix, which makes for a good complimentary option.

And yeah, if one person of anything it is not possible, then you have to find the right mix and the right level of any type of carrier. And I think your explanation on, on what’s the role of hydrogen into that play is absolutely clear, which leads me to my closing question for this dip dive, which is a bit of a crystal ball question.

As an impact investor as an investor in that field of this green gas has been bio gas or green hydrogen. What will tell you that you’ve succeeded in 10 years?

Alena Fargere: Oh, there’s an excellent, I would say the twists exceeds if we need the CO2 abatement targets. Whereas I think with my team with all this great bio gas and hydrogen projects, And there is, of course, this very big aspects of carbon emission reductions hollow is not the only thing we’re working on.

It also attracts the sectors, also tracks some bright minds and driven people who want to activate for the energy transition. And this creates also some, uh, jobs, which is well received and well looked forward in the current context. And yeah. Would save these two minutes. We attained the carbon budget. I think we have income to contribute both the reduction of the think to contribute, and also the working places for people who act already today for the energy transition.

If we hit on two of them.

Antoine Walter: I would relax to see success as you described it, because I think that’s, that’s beneficial to the wellbeing and to the society in general. So I think there was a fascinating, deep dive you’ve shined a special lights on, on that word. So I learned a lot of things. I propose you to conclude it by switching to the rapid fire questions.

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Rapid fire questions:

Antoine Walter: In that last section, I’ll present you with short questions, which you can answer with short answers. And, um, any of course I’m not cutting the microphone if you want to be longer, but theoretically, the rule of the game is to be short. What is the most exciting project you’ve been working on and why?

Alena Fargere: Uh, as for now, I would say yes, these circle liberation was life, the French independent or producer of hydrogen. That’s amazing. They have a great team, a great capacity to attain the ambition and decarbonize industry and transportation was their project. So I’m really happy with our corporation.

Antoine Walter: Can you name one thing that you’ve learned the hard way

Alena Fargere: and working for them to transition can be tough.

And the talent is big. And sometimes personally makes me feel now the intelligence side to speak and I say, okay, I’m just. Means just me. So this is a huge thing.

Let us, let us focus on some small thing.

And I hope that if everyone does that, that way we can, you know, a big, big, big talent.

Antoine Walter: That’s a really good one. Is there something you’re doing today in your job that you will not be doing in 10 years?

Alena Fargere: I hope I won’t be educating people about high hydrogen can be beneficial for the physician success because it will be common knowledge.

I hope for you,

Antoine Walter: yeah.

Alena Fargere: Contributing to this mission, thinking until I’m,

Antoine Walter: I’m asking you, what is the trends to watch out for in the water sector. So I can give you a bit of context. So. From my water perspective, I’m discussing hydrogen is because the water sector was looking at hydrogen saying, okay, if you do, editorializes in their utilizes, you need a lot of water.

And that lot of water or someone has to produce it. And shall we align for that? So here for the trends, do you think it’s a reasonable concern from the water industry to say, we have to prepare ourselves to produce much more water because we need to make that available for the hydrogen sector.

Alena Fargere: With topic to be discussed for the hydrogen applications in some cases.

No particular what the test, I would say. If you look from an application, when you take water, then you split the molecule to create hydrogen. Then you put hydrogen in a fuel cell where it’s reacts with oxygen to create from, from air to create electricity. And so we have a kind of cost separately, uh, for some applications there.

The hydrogen is used, for example, for creating the inference advisors. Uh, this is not close cycle. However, I don’t see an enormous stress in water and I, I will be interested to, to have your thoughts on that as well. Probably, yes, I do believe that the hydrogen supply will be moving on. If you call us is quite ambitious targets.

However, using water hollow is not the only way to produce low carbon hydrogen

capture and storage. So I think there needs a way, you know, to balance unnecessarily on the

last

Antoine Walter: question for me, we, you have someone to recommend me that they should definitely invite on that microphone.

Alena Fargere: Um, well, of course I can, I can suggest you to speak with some of the project owners, which are we are working with and what we’d like to make the interest. And I think maybe it sounds our biogas, this school, we are creating a biogas from what the cleaning facility. May give you the good Vance on how to can Sweetwater recycled waste and create green gas at the same place by providing some, you know, nice tops and some nice benefits for the, for the community.

I think this can be.

Antoine Walter: That would be absolutely of interest. So I’m more than happy. If you have some suggestions to make me, it’s been a pleasure discussing with you for the past Hauer. If people want to follow on with you after this recording, where shall I redirect them the best? As usual, the link would be in the episode notes and then has been a pleasure.

Thanks a lot for your insights. Sorry for my muggle questions. And I really hope for you that in 10 years, you don’t have to explain all of that again. If not, you can just send them back to that interview said, Hey, I did it all once. I don’t have to do it all the time.

Alena Fargere: Just go and listen to Antoine’s podcast,

Antoine Walter: which is good advertising.

Let me use that one as well.

Alena Fargere: Thank you so much for your questions.

Other Episodes:

FREDsense: Revolutionizing Water Quality Monitoring with Biosensor Innovation

By Antoine Walter | 7 May 2025

Swirltex: Revolutionizing Wastewater Treatment with Bubbly Innovation

By Antoine Walter | 30 April 2025

Blue Foot Membranes: The Next Evolution in Water Filtration

By Antoine Walter | 16 April 2025

Echo River Capital: Pioneering the Future of Water Innovation

By Antoine Walter | 3 April 2025

1001 Fontaines: Engineering Sustainable Water Access Through Social Entrepreneurship

By Antoine Walter | 22 March 2025

Amazon’s Water Footprint: Tech Giant’s Quest for Water Sustainability

By Antoine Walter | 19 March 2025

Turing: The AI Revolution Quenching the Water Industry’s Thirst for Innovation

By Antoine Walter | 26 February 2025

Altillion: Pioneering Digital Intelligence for Water Asset Management

By Antoine Walter | 6 February 2025

Flocean: Pioneering Ocean-Based Water Solutions

By Antoine Walter | 15 January 2025

Botanical Water Technologies: Harvesting Liquid Gold from Plants

By Antoine Walter | 4 December 2024

The post Is the Hydrogen Economy actually an Astounding Investment Opportunity? appeared first on (don't) Waste Water.

Spitfire research is a Process development consulting company for a decarbonized future, where Paul acts as an antidote to marketing hopium and a tireless advocate for a fossil-fuel-free future.

This episode is part of a trilogy on the Hydrogen Economy (and its link with the Water Industry). Go check it out!

What we covered:

How the thermodynamics and fundamental properties of the Hydrogen molecule turn it into a false hope of decarbonization strategies

How given the way it’s produced, hydrogen actually is a decarbonization problem 

How Goethe is right: hope’s preferable to despair unless hope needs the laws of physics to stop applying 

How the biggest problem with green hydrogen production is not its water impact but its energy consumption 

How hydrogen barely moves today, and what that reveals about the difficulty of using it as a transportation fuel 

How producing small amounts of hydrogen from wastewater treatment plants is fully doable, yet barely desirable 

How optimizing the production of green hydrogen requires very specific geographic properties, and where that applies

How the World barely features half the renewable production capacity needed if we wanted to just switch from gray to green hydrogen

How the Hydrogen economy may well be the false nose of Fossil Fuel Companies to keep striving in a decarbonized world 

How Turquoise hydrogen production makes a lot of sense, already today, but has a limited market potential for its byproducts. 

How turning Biogas into Hydrogen sounds like a very weird thing to do. 

How electrolysis processes don’t really allow to valorize the oxygen byproduct today, and why. 

How Hydrogen is an amazing good and tool, just not to be wasted as a fuel 

How the European Union and the UK daydream about Hydrogen, and how it may be a last resort solution for Japan and South Korea

How batteries are not perfect but have a clear path to scale 

How to be serious and earnest about decarbonization, states shall start with relevant policies

How we shall start with the low-hanging fruit when putting hydrogen and decarbonization in the same equation

Canada tackling carbon taxes, CO2 prices as business enablers, Hydrogen promoters being useful idiots, Hydrogen as a sunk cost fallacy, Hopium… and more!

… and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨  

Teaser: Hydrogen is a Decarbonization Problem

Resources:

Have a look at Spitfire Research’s Website

Come say hi to Paul on Linkedin

is on Linkedin

Antoine Walter on LinkedIn

Infographic: Hydrogen is a Decarbonization Problem

Quotes: Hydrogen is a Decarbonization Problem

Full Transcript:

These are computer-generated, so expect some typos

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Antoine Walter: Hi, Paul, welcome to the show.

Paul Martin: Thank you. It’s a pleasure to be here.

Antoine Walter: I have to say we have a very packed agenda for today, so I won’t be spending too long on this opening, but there’s this tradition, which I really like, which is the postcard. So I’m going to ask you to send me a postcard from the place you’re at right now.

A carbon-free postcard from Toronto

What can you tell me about Toronto that I would ignore by now?

Paul Martin: Well, right now it’s about minus nine degrees. Celsius is middle of January. So very typical weather here. And in January you can see a lot of esteem rising out of people’s natural gas furnaces and boilers trying to keep their houses warm. But:

One of the things that’s changed in Canada over the past few years, that’s going to make a big difference over the longer term is that we now have a very durable and very interesting carbon tax. That for one thing is going to make it a lot more expensive for people to heat their homes. And that carbon tax is paired with a carbon dividend that gives everyone back the average amount of money that people pay in carbon tax.

The idea there is that if you’re poor and you’re not consuming very much, because you live in a multiunit apartment and you take public transit everywhere, you don’t pay much in carbon tax, but we want to reward you for your low consumption. So you actually get more money back than you pay extra in tax and your life becomes easier.

But if you’re living in a big house and you’re driving a big vehicle, like the one that ruined my electric, my homemade electric car, uh, you’re going to pay a lot of tax, but of course you have a lot of capital to spend to do things. And so this system is widely supported in Canada. It’s survived to federal elections, it’s survived a Supreme court challenge.

It’s the law of the land, and it’s headed to 170 Canadian dollars per ton, CO2 by 2030. So it’s really going to make a big difference in the country. So I’m delighted by that fact and, and really looking forward to seeing the changes that it makes in our society as a result.

Antoine Walter: It’s very interesting because your postcard gives us a clear hint towards what we are going to be discussing in the rest of this podcast.

So I guess if people didn’t guess it it’s going to be about this carbon aspect, this hydrogen aspect, there’s gonna be probably also steam and gas involved at some point. So, it’s like a jigsaw of the next minutes. So thanks for that. Plus you’re not my first guest from Toronto and you’re the first one to tell me that story, which I didn’t know at all.

Introducing Paul Martin: a tireless advocate for a fossil fuel-free future

And which sounds brilliant if you asked me, but I won’t sidetrack you from the first question on, I’d like to get to know you a bit better beyond the 2 million views of your various LinkedIn posts in 2021. Can you guide me through your path over the past 25 years? I’ve heard you were even involved with water at some point

Paul Martin: That’s right. At the beginning of my career, I worked developing water treatment technology and trying to remediate groundwaters that were contaminated by industrial chemicals. And then 25 years ago, I joined a company that designs and builds pilot plants. We’re actually the world’s largest designer and builder of pilot plants, and I’m still active with them, but only part-time.

And I partially own that company as well, but I have a private consultancy called Spitfire research where I serve the needs of people that are looking to try to make earnest efforts towards decarbonisation, but their, their projects aren’t to the stage where they need a pilot plant built yet. And in that time, in that 25 years, working with a company that designs and build pilot plants, we’ve seen every kind of new chemical process technology.

You can imagine from the sublime to the ridiculous, and some of them have been brilliant successes and have made a huge difference to decarbonisation and, and some, I’m not sure.

And after a time that gets very frustrating, as you can imagine. So, but yeah, I’ve been involved in all that time, obviously as a chemical engineer making and using hydrogen and synthesis gas is it’s a big part of the business and it’s something that I’m intensely familiar with back in the late nineties, for instance, I was involved in projects.

We were trying to make small reformer reactors for the purpose of making a hydrogen out of natural gas to feed first. It was going to be vehicle fuel cells. And then later it was going to be fuel cells for combined heat and power in homes. And so I was intensely interested in hydrogen and have been for a long time.

Hydrogen is not a decarbonization solution: it’s a decarbonization problem

And frankly, since the late nineties, not much has changed. I think we’re more earnest in desiring decarbonization and renewable electricity is also getting cheaper and cheaper.

Those two things have changed, but technology wise, and in terms of the properties of hydrogen and its thermodynamics nothing’s changed. So I find it very exasperating to watch this most recent exuberance, this hyperbole that I’ve been calling it, the hopium addiction, you know, thinking of people’s hope being turned into an opium that that’s used to delude them into thinking that things are solutions when they’re really not.

And I find that very frustrating because I think it’s distracting us from real earnest decarbonization. So we have to be careful there hydrogens. Hydrogen is great. It’s a molecule we use in giant quantity. It’s essential. We depend on it for our very lives, honestly, through ammonia, but half the humans on the planet survive because we can make Haber-Bosch, uh, ammonia right now.

And we make it all from black hydrogen. That’s made from fossil fuels without carbon capture, and we have to fix that. And that’s really important, but:

Antoine Walter: There’s a lot to unpack in what you just said. I think we’re going to come back to these colors: black hydrogen, gray hydrogen, green hydrogen and all the colors,

Paul Martin: The colors of euphemism I call it.

What is Hopium and why is it dangerous?

Antoine Walter: But right before, I’d like to stop a last time before going into the deep dive. I’ve got to discover your work through your fight against hopium – this combination of hope and opium.

 First, what is hopium and why did you strive to fight it?

Paul Martin: So hopium, I agree with Goethe, you know, the great German author. And he said that in all things hope is preferable to despair. And when you think about that, it’s, it’s gotta be pretty much true, except for one thing I think good too, would probably have said, well, except when your hope requires the laws of physics to be set aside, you know, if, if you’re falling from a cliff and your hope resides in gravity, suddenly not working, your hope is false.

It’s not getting you anywhere. So it’s really kind of pointless. Hopium is what, what happens when people’s hope is used as a drug to set aside their rational thing. And either caused them to waste their money or cause their governments to waste their money, you know, to expand it in a way that’s foolish or it’s, it’s used to pretend that the problem is being solved when really it’s being delayed and real solutions are being put off because they’re uncomfortable.

There’s lots of hopium in the world of all sorts. As hopium related to energy storage, this hopium related to hydrogen as hopium related to batteries, it’s not just hydrogen, but hydrogen is the most egregious example of hopium pushing and selling and dealing and consumption. And, um, you know, the hopium clouding people’s judgment.

It it’s, it’s the most obvious success.

Hydrogen: Beyond the Hype, by the numbers

Antoine Walter: So, let’s go to our deep dive on hydrogen. To give you a bit of background, and as an introduction to that conversation, I was reading the BlueTech insight reports on the hydrogen economy. I’m a water guy. To me, hydrogen trendy and fancy, and you’ll tell me to which extent I’m falling victim to hopium

By reading the report, it turns out that, what BlueTech is saying is that there is something happening. Don’t expect it to be as big as what people say and what you can hear left and right. But nevertheless, as the water industry, you should maybe prepare to something happening around hydrogen.

They go of course much more in depth than what I’m trying to summarize now, in under one minute. Yet, when I first discussed with you, I told you that I’m investigating this relationship between hydrogen and the water industry and you were straightforward. You said: this is not a podcast that is a five minute discussion because there is no relationship.

Is there a relationship between Hydrogen and Water?

And that is the first thing I’d like to understand. What makes you so affirmative to say that there is no relationship between hydrogen, which can be to a certain extent it’s made from water and the water industry.

Paul Martin: Sure. Yeah, it’s really easy. So there are two sides to this. So the first side is I think probably about five times per day on LinkedIn, which is where I’m most active with my commentary.

And so on. I encountered this concern from people that say, oh, well, you know, if we make hydrogen from water by electrolysis, it’s going to use a lot of water. And all of the amount of water is just mind-boggling. And it’s not a good idea because of the water use. And I have to reply to them and say, look, let’s say that you want to make one kilogram of hydrogen to make one kilogram of hydrogen.

You need nine kilograms of water, nine liters of water. And the water has to be. So let’s say it’s 10, because maybe we’re going to waste one, whatever. This is fine. So just tend to make it easy. So 10 kilograms of water per kilogram of hydrogen to desalinate enough seawater to make 10 kilograms of freshwater, pure water by reverse osmosis takes 0.035-kilowatt hours.

Okay. So a small fraction of a single kilowatt-hour and to make a kilogram of hydrogen from that takes between 50 and 65 kilowatt-hours. So you tell me, is water use a major issue with relation to hydrogen production or is it energy use? And by the way, to make 50 or 65-kilowatt hours of electricity, by say a thermal power plant, it doesn’t matter which one, whether it’s nuclear or coal or natural gas takes orders of magnitude more water than 10 kilograms.

When it comes to hydrogen, energy use is much more of an issue than water

You know, so that’s the one side, the one side is that hydrogens issue is energy use. It’s not water use. If you don’t, you have a problem with water and you have access to a brackish well or wastewater or the ocean, it’s far better for you to not make one kilogram of hydrogen. And instead use that energy to purify water so that you have water for whatever you need water for.

Then it is to make hydrogen out of it. I mean, that’s, that’s rather obvious. Then the other side of it is the relationship. If there is any between wastewater treatment and hydrogen, and there’s a number of different people going on about, okay, well, we make, you know, we can do anaerobic digestion of five solids and we can make biogas, which is a mixture of methane and CO2.

And we can use the, we can separate off the CO2 and then we can use the methane to make hydrogen and. Sort of thing. I mean, there are lots of, there’s a lot of energy used in waste wastewater treatment. And so on. It’s used in various forms, but a lot of this thinking just, it arises from ignorance of what hydrogen’s about and, and how it’s used industrially and what it takes to store it and use it and what it’s worth and why it costs what it costs.

Hydrogen is hardly moving today, why would it power transportation in the future?

And the, like, there are a lot of processes that make small amounts of hydrogen often mixed with other gases. And because of the difficulty in bringing that material to market it’s used as a fuel. And that arises from the fact that hydrogen is, I mean, it’s a bulky molecule. It there’s a very low density.

Uh, even at high pressures and even as a liquid, I mean, as a liquid at 24 Kelvin temperature, it’s only 71 kilograms per cubic meter. You know? So as a consequence, that bulkiness makes it hard to move and heart by heart to move. I don’t mean impossible. I mean, we do move hydrogen, quite a lot of it around in the world, but only about 8% of the hydrogen that we make in the world is moved any distance at all.

92% of it is used, right? Where it’s made when industry does something to that extreme extent, we’re not talking about 30% or 50% being moved and 50% being used on site, but 92% is used on site. That’s generally for good reasons. And it is in this case for good reasons that, you know, I won’t bore you with the details, but it’s for good reasons.

We don’t move hydrogen around much because it’s lossy inexpensive to move around. So, you know:

Is water abstraction for hydrogen production a legit concern?

Antoine Walter: We’ll come back to that waste water part because I have many questions on that one, but let’s start with what you just explained about the use of water.

You’re right, it sounds like focusing rather on the energy side of the equation makes more sense than looking to water. If I have to pick between the 50 to 65 kilowatt hour which are needed, to produce green hydrogen, and the 3 to 5 kilowatthour I need to desalinate water, it sounds like a no-brainer..

But now let’s say, that I stay within my silo, and only look at the water side of the equation. My only concern is to supply you water with sufficient quality so that you can produce green hydrogen out of it. That still makes for a lot of water! So if people raise you that concern five times per day to you, don’t you think it is because that concern is somewhat legit?

Paul Martin: No, it’s just because they miss analyze the problem that’s what’s going on. They don’t understand that our issue with water is the gargantuan quantity of water that we use most of which we use in a wasteful foolish way. That’s our issue with water when you’re talking about 0.03, five kilowatt hours to make 10 kilograms or three and a half kilowatt hours to make a cubic meter of freshwater from seawater.

Just about any treatment process that starting with a water, that’s not as contaminated as seawater is going to take less than that. Right? And yet we find water treatment to be a big deal. Why is that? Because we use millions of cubic meters of the stuff. That’s the issue. So this amount that we might use to make hydrogen, it’s really neither here nor there it’s trivial.

What separates dirty from clean water is energy

It’s it’s often the it’s often in the bushes and if you’re starting with reverse osmosis, You can start with wastewater, if you like. I mean, it’s all a matter of, of economics at that point. It’s not really an issue where you have to concern yourself with availability of water. So for instance, there are these projects that people are talking about doing in places where hydrogen production might make sense.

I’ll give you an ex a little bit more detailed about what I mean there to make hydrogen from water. You need gargantuan amounts of electricity for the reason that was mentioned. And if you want to make that hydrogen green, you’re going to have to make it from electricity that’s made from wind and solar.

So because electrolyzers are not cheap. In fact, they’re very expensive. They might get cheaper in the future, but right now they’re very expensive. I mean, very, very expensive. You have to feed them continuously or as close to continuously as possible. So that, that very expensive ass. Can I earn it’s living.

Okay. So, you know, I have an expensive car sitting in my driveway and I only drive it about 5% of the time. Right? If I could find a way to make use of that car, 95% of the time it’s cost to me per kilometer of driving would be much, much lower. Wouldn’t it? It would make a lot more sense. Now, of course, I can afford to have a car sitting there most of the time, because I derive enough value from the 5% of the time that I drive it, that it’s worth having it sit there and 95% of the time, but that’s because the car is not so expensive.

You need specific geographic conditions to produce green hydrogen

If you look in the electrolyzer, you can’t have it. Sit there 95% of the time and only make hydrogen from it. 5% of the time when electricity comes to you for free, okay, you have to have the electricity available at high capacity factors. So if you look in the world, it’s very easy to analyze this, what you need.

You need very specific conditions. You need a desert, okay. And it needs to have an ocean to the west. And when that happens, what you get is this perfect combination of you get nice access to sunlight, to, you know, high capacity factor solar. And then every night as the sun’s going down, the land starts to cool down and the winds blowing off the ocean.

So you get this perfect pairing of sun and wind with maybe a 70% capacity factor combined between the wind and the sun. And those places are places like Western Australia, Chile, maybe Namibia, maybe Morocco is a number of places in the world that don’t have quite perfect conditions, but these conditions exist in those places in the world.

And what’s the, I mean, they’re all deserts. So of course, what does that mean for water? Well, of course you have to be near the sea for this to work, right? So you have access to sea water, so you’re going to do desalination. Well, the nice thing is that if you set up desalination to make pure water for the purpose of making you hide.

Green hydrogen is maybe even an opportunity for water production (thanks to scale effects)

It’s not that difficult to make some extra water for the purposes of whoever’s living there. You just build a somewhat larger plant and use it with higher capacity factor, for instance. So again, the issue isn’t water use, even in dry places in the world, the issue is energy use because the thing that separates clean water from dirty is energy, right?

And ultimately it’s the sun, right? We’re taking clean water from lakes and rivers, which came from solar distillation off the oceans largely right. Or from transpiration, from plants. And like, so the, the thing that’s driving this purification process is solar energy. So water is actually a very low dollar value, but very high intrinsic value.

It’s a form of stored solar energy.

What is the World using hydrogen for today?

Antoine Walter: That’s absolutely clear, thanks. Let’s go back to your ammonia story. Today, this is the main use of hydrogen, through the Haber Bosch process.

Paul Martin: It’s not a third of hydrogen consumption, but yeah, it’s about 40 million of 120 million tons of hydrogen used per year.

But it’s the one that our lives depend on. Yeah. There’s we could live without

Antoine Walter: So, if that’s one third, what are the other two thirds? Petrochemical applications?

Paul Martin: About a third is made from and used in the petrochemical industry, mostly to remove sulfur from gasoline and diesel and other fuels jet fuel before we burn it.

And so that’s about 40 million tons and we’ll need about 10 of those 40 in the future because we’ll still in the future. Need chemicals and we’ll need plastics. And the like, so we’re going to keep using petroleum for those purposes and we’ll need to do fries that portion, but three quarters of the barrel right now we’re burning.

And we don’t need to do sell fries that in the future, if we don’t burn it. So we don’t need that hydrogen. And the other third is used for other things like the direct reduction of iron for making chemicals like methanol and in a myriad of other things it’s used as a coolant in gas turbines. And I I’ll make goodness a million uses for hydrogen.

There are numerous, but they’re fairly small. So those are the big ones, direct reduction of iron ammonia, methanol desulfurization of petroleum, and as a chemical reagent, as a reducing agent, for instance,

One third of hydrogen consumption enable to feed the World

Antoine Walter: So we have these 40 megatons,, which are the ones used today for the production of ammonium through the Haber Bosch process. And that is done today with gray Hydrogen, right?.

Paul Martin: Yeah. Gray is a lie. Okay. Let’s call it. Let’s call a spade, a shovel here. This is not great. It’s black. In fact, it’s ultra black, it’s black hole black it’s 30% blacker. Then the fossil fuel that it’s made from Purdue. Okay. Well, if you start with one Juul of a, of methane lower heating value and you make hydrogen from it, you only get 0.7 Juul of hydrogen, lower heating value, and you get the same number of kilograms of CO2 as you would get.

If you burned that natural gas in the first place. So it’s 30% blacker than burning methane. If you’re going to make hydrogen and then burn it. So that’s what I mean by that. So it is gray is, is a euphemism. It’s not a, it’s not the truth. It’s black. So let’s call it what it is. Okay. And then you can make it black or still if you make it from call.

Okay. Because for every kilogram of hydrogen you make from methane, you get about 10 kilograms of CO2 for every kilogram of hydrogen that you make from call. You get about 30 kilograms of CO2. So it’s even blacker. I don’t know how you say blacker than black, but that’s really it. But the majority of it is made from guests, right?

The majority of it is made from either gas or coal or petroleum gas is the most popular one because this is the cheapest way. And, uh, petroleum, like I said, all of the hydrogen that’s made from petroleum is used to refine petroleum. So it’s more or less cancels itself out. And about 25% of it is made from coal, mostly in places like China and India, where they don’t have access to cheap, natural gas..

How to decarbonize gray hydrogen

Antoine Walter: So we have these 40 megatons of black hydrogen. If we want to decarbonize our world, that’s the portion which is non negotiable. It has to be done with hydrogen.. So we have to replace gray, brown, black, whatever we call it, by a carbon-friendly alternative, that might be green hydrogen. How would you do that?

Paul Martin: So the way I like to think of it as this, so let’s remember, we were talking about 120 million tons in the first place and in a decarbonized future, we’re still going to need 90. Okay. Because 30 will go away when we stopped the self-rising fossils as fuels, right? So we need 90 million tons per year. So to make 90 million tons per year using the best electrolyzer in the world that you can buy.

That’s 50 kilowatt hours per kilogram of hydrogen. You can’t afford that one, but that’s okay. Let’s assume you can scale those up to an enormous scale and make lots of them. That would mean that you would need 4,500 terawatt hours of electricity. To make that 90 million tons of green hydrogen to replace the black hydrogen in the world that we will still need.

Right. Well, in 2019, all of the wind and solar in the whole world added up to only 2100 terawatt hours. So we would need more than twice as much wind and solar as we had in the whole world in 2019, just to decarbonize, just the fraction of hydrogen that we’ll need an decarbonized future. And yet we have all of these people frothing at the mouth, talking about how there’s going to be excess hydrogen to waste as a fuel.

And how can you take them seriously? So you can see my problem with this whole thing. It’s not the math doesn’t add up.

Who has interest in promoting Green Hydrogen and Power-to-X approaches?

Antoine Walter: Let me just try to scratch that surface, because you say: “people promote it.”. Personally I remember, it was probably two years before the pandemic, in 2018., I was at the European Utility Week in Vienna, and as an humble energy muggle, I’ve attended two full days of conferences explaining how hydrogen was the future and how the grid in Germany was about to fall apart, as there was too much of electricity at nights when wind was blowing and nobody consuming. And my take-home message was, that if you didn’t use hydrogen in a Power-to-X approach, you were in big, big, big, big, big trouble. And now that I’ve read your various articles, I’m starting to think this was hopium and a part of it might even be just pure lies

Paul Martin: Yeah! Some of it is motivated selling, you know,

Antoine Walter: Exactly, that was going to be my question. How much of that is people really believing that hydrogen is the future and how much is really people having something to sell?

Paul Martin: It’s a little hard to say. I’m a very rude man. Okay. And I’m old. I’m not that old, but I’m old enough that I stopped caring quite so much about whether people think that I’m being polite with them or not. And as a consequence, the way I view hydrogen. Now hydrogen is being pushed by two groups of people it’s being pushed by the fossil fuel industry for whom it’s a win-win situation.

Who are the Hydrogen useful idiots?

And it’s being pushed by hydrogens useful idiots. Okay. I don’t know if you recall, but back in the, back in the era of the cold war, the Soviets used to refer to the socialists in Western countries as they’re useful idiots, you know, their hearts were in the right place. Perhaps they were worried about the social conditions of their population, but they were serving the interests by manipulation of the Soviet apparatus.

And so hence they were referred to, and not just as ordinary idiots, but useful idiots. And so the useful idiots in the hydrogen regime. There are people that think they’re going to make giant amounts of renewable electricity, that nobody will know what to do with. And so they have to find something to do with it.

So they’re going to make hydrogen and it’s people that sell electrolyzers and fuel cells and entities like Airbus that, you know, get paid by dubious governments to, to design aircraft, whether they ever get built or not. You know, so people that are, you know, moral hazard position in that they benefit, whether the thing that they’re promoting is a successor or failure.

And you’ll note that I said that hydrogen is a win-win situation for the fossil fuel industry. That I’ve long thought that, but Michael Liebreich who founded a Bloomberg new energy finance, put it best when he said that for the fossil fuel industry, it really is a win-win situation. So hydrogen is pushed by the fossil fuel industry either to delay decarbonisation in which case.

So the promise of future hydrogen delays, electrification now, which would lead to decarbonisation now, and decarbonisation now would be bad for the fossil fuel industry, because it would mean that he would earn less revenue, right. And more important than that, it would mean that their assets in the ground that their shareholders currently think have value would turn into liabilities in a lot of cases.

Hydrogen could turn back liabilities into assets for Fossil Fuel Companies

I mean, if you can’t burn natural gas, what else are you going to do with it to the fossil fuel industry? It’s well, we can make hydrogen from it. Okay. Well, what are you going to do with the CO2? Oh, we can bury it. Yeah. We call it blue hydrogen. Right. And the challenge of course, with is blue hydrogen bill.

Is that it’s much easier and much cheaper to make very Blackish blue bruise colored hydrogen than it is to make really truly blue colored hydrogen. You know, the CCS, the carbon capture and storage is expensive. We know what it costs. We know how difficult it is to do. We’ve got projects doing this at scale.

Honestly, there’s a big one called shell quest in Canada that I’m quite familiar with. We know what it costs. It costs a lot of money even to do the easy stuff, the easy CO2. And of course they always forget about the methane leakage and the methane on the 20 year time horizon has 86 times the global warming potential of CO2.

So a little bit of methane leakage goes a long way. And if you do something wasteful, like convert natural gas and. Hydrogen and then use some of the natural gases energy to bury the CO2 that is produced at the same time. You’re generating a lot more methane leakage, which is leading to a lot more global warming potential.

Blue Hydrogen is kind of Blackish

So this blue hydrogen is really quite Blackish, blue bruise colored stuff. But you see if you’re, let’s say you’re a natural gas distribution utility. If you don’t have natural gas to sell, because decarbonisation requires that product to go away, you have to sell something, right. Otherwise you have to go out of business and going out of business is hard for people to accept.

So of course, you’re going to sell hydrogen, right? It’s the hydrogen must be the future. And we’ve got all these pipes in the ground and all this infrastructure, it would be a shame to let that go to waste. Right. But you see, this is a sunk cost fallacy, you know, w when you look at it in detail and I’ve looked at it in detail, putting hydrogen into the natural gas pipelines, it’s a really bad idea.

Like it’s a really, really bad idea. It’s not just very expensive. It’s full of. I mean, it serves a very useful purpose to the fossil fuel industry. It gives their investors, the illusion for a time that their natural gas assets have value in a decarbonized future. Whereas they don’t, they’re actually liabilities.

And you know, if you’re you’re the head of shell or BP or one of those big companies, you know, reliance or whoever on the world stage, you don’t want your investors to think that your natural gas assets or liabilities, you, you want them to keep thinking they’re assets because that way you’re you keep being willing to hold their shares.

So there’s the problem. It’s, it’s a win-win for the fossil fuel industry and it’s not really a tool in earnest for decarbonisation of much of anything. Really.

The colors of Hydrogen explained

Antoine Walter: I think we have to explain a bit what you’ve just said for the laymans like me. You’ve mentioned a lot of colors, and please jump in to correct me whenever I say something stupid. So you’ve explained us how gray is actually black.

Gray is supposed to be hydrogen made from fossil fuels, aka gas, through steam methane reforming. Let’s call it black. As next on my list, I have brown, which is made from coal gasification, and you just explained how that’s blacker than black. So now we have black and blacker than black, that replace gray and brown. What you’re now adding with blue is doing exactly the same than gray, but now instead of venting the carbon gas off to the birds, you capture it and you put it somewhere for storage. So gray with carbon capture becomes blue.

Then we have green, purple and pink, which are made through electrolysis of water, green from renewables, purple and pink from nuclear energy.

… at the end it’s almost only Gray Hydrogen

Paul Martin: In reality:

And that’s, it’s not really, in fact, the poor acolyte industry spends a lot of money to avoid making hydrogen because it costs them money. So they don’t want to make hydrogen, but in order to run their business, they have to. So about a third of this by-product hydrogen, you can claim was made from renewable electricity because of what a third of the electricity in the world is renewable or nuclear, no emissions.

But really ultimately you’re talking about low carbon hydrogen, potentially low carbon, hydrogen, and hydrogen as it is, which is really high. Right. So low carbon hydrogen. If you make hydrogen by electrolyzing water using wind and solar, that’s quite low carbon views electricity from nuclear while you’re wasting nuclear electricity, because nuclear electricity is dispatchable and perfect replacement for electricity on the grid that might be made from burning fossil.

So you would be much better to use your nuclear electricity, to supply people with electricity. You know, it’s not like nuclear plants that are in remote locations where they can’t get their electricity to market. They’re built only where there are people to consume it. So wasting nuclear electricity to make hydrogen is really questionable.

So I don’t believe in this pink stuff, it doesn’t make any sense. And the blue stuff is carbon capture and storage. As I mentioned, if you want to do a decent job of carbon capture and storage from hydrogen production, you need to do things differently than the way we make hydrogen right now. Right now, we make a lot of hydrogen by steam, methane reforming.

And that process involves a big furnace and about a third of the gas that you feed to the process goes to the furnace to keep the furnace hot. And that’s where the, the, uh, furnace tubes are that contain the catalyst and the endothermic heat absorbing reactions that make hydrogen out of water and methane happened in those tubes.

And what comes out the back end of that process is a mixture of hydrogen and carbon monoxide and carbon dioxide. And you shift the carbon monoxide to make more carbon dioxide and hydrogen, but in the end, you, you get a lot of, uh, a lot of carbon dioxide, but half the carbon dioxide is in the product hydrogen and you separate that out.

And that stuff by and large gets vented to the atmosphere. It’s not used for anything, but you also get some streams that have. A little bit of these contaminant molecules in it, but a lot of hydrogen. And what you do is you feed that back to the tube furnace to recover its energy. So when you do the math, about half of the CO2 from steam, methane reforming is easy to capture because it’s at high pressure inside a mixture with hydrogen.

So it’s easy to capture and then store. But about half of it comes out of the top of this furnace and it’s no different than a CO2 that might come out of a natural gas turbine. That stuff is hard to recover and expensive to recover. It takes energy to recover, and it’s true for that half that comes out of the seam reformer.

So if you want to make really blue hydrogen, you have to do something called auto thermal reforming instead. And so there, what you do is instead of using the furnace, you, you make the fire inside the process. So you feed oxygen instead of air. And you burn some methane inside the reactor to make the heat.

And then, uh, it goes over the capitalist and makes the hydrogen, and then now all of the CO2 comes out with the hydrogen so you can capture it theoretically all, but in reality, you you’re going to lose some. So maybe 90% capture is possible, but you need brand new equipment. And by the way that the auto thermal reforming, you need electricity to run the air separation unit, to make the oxygen.

You also need the capital to buy that equipment. And that process is less efficient at making hydrogen than steam. Methane reforming is so you actually need to buy more gas and you end up making more CO2 that you have to vary. And as far as this blue hydrogen, you’ll never do it from coal ever because the cost of burying all that extra CO2 is way, way more than you will save by buying the cheaper fuel, you know, coal instead of natural gas.

So forget about CCS for coal. Coal is dead as a doornail.

Is turquoise hydrogen a better solution?

Antoine Walter: So we have one color left on my list, which is turquoise.

Paul Martin: This is a good one, honestly, but it’s partial. So we have to be careful about this one in saying that it’s good when it can be done in the right way, but it’ll never be a major source of hydrogen.

So the idea here is instead of trying to react the energy that’s in methane to produce as much hydrogen as possible with either of those other two processes, steam, methane, reforming, or auto thermal reforming. What you do instead is you use an artificial heat source and you heat up the methane until it just falls apart.

And when it falls apart, it makes carbon and it makes. And so one of my clients, former clients is a company called monolith and they’ve actually commercialized this process. So what they do is they heat up a methane to very high temperatures using an electric plasma arc. And the electricity is supplied by a nuclear plant and they end up making, not just carbon, but a valuable form of carbon that’s called reinforcing grade, carbon black.

Turquoise hydrogen is already market competitive today, to a certain extent

So that’s the stuff that’s used in tires, for instance, then rubber goods in order to provide strength as well as UV resistance and other beneficial properties. And it’s quite valuable. And it’s normally made from heavy oil by a very dirty partial combustion process. So they’re eliminating that dirty process.

They’re making a nice high quality product that the rubber market wants and the by-product is hydrogen. And they use that hydrogen to make. And they’ve planted their plant in the middle of Nebraska. And if you draw a hundred mile circle around their plant, a hundred mile radius circle, you have about 40% of the users of Monia in the United States within that circle.

So this is a very good thing that what they’ve managed to do is they manage to decarbonize carbon black production and decarbonize hydrogen production for the purpose of making ammonia, which is something we need, right. For agriculture. And they’ve done that in a way where they make money, despite the fact that they have no carbon taxes in the United States.

So if the carbon tax has come, they’re going to be even better. They’re going to make even more money. So this is really wonderful. Okay. But let’s do the math to remember the math experiment we did. We said we needed 90 million tons of hydrogen in the future, right? Post decarbonisation. If we’re going to make that from, let’s say we find a renewable electricity to supply the energy that you need to run this kind of process.

There’s a limited market for Carbon Black and Graphite

And we’re going to PI realize methane to make the 90 million. Of a hydrogen, well, we’re going to make 270 million tons of carbon. And that’s 10 times the world market for both carbon black and graphite combined. So 90% of that carbon will have to be landfilled in kind of reverse coal mines, you know, where we find a hole on the ground and we fill it up with coal and then cover it up again, you know?

And, uh, it’s a little hard to imagine how throwing away half of the energy in three quarters of the mass of your feed is going to make money. Now, if you can sell it as a valuable product, it makes good sense. Right? So again, this turquoise hydrogen, which is made by pyrolysis of methane is a good process, low CO2 emissions, fairly low methane leakage, which can always be made.

It makes hydrogen, but it’s only really a good process if it makes a carbon product that you can sell. And if it doesn’t it’s, I dunno, maybe it’s easier to bury carbon than it is to very CO2, but to throw away half the energy and three-quarters of the mass in the form of a waste product that you have to pay someone to take away.

I dunno. It seems hard to imagine how that’s going to make money.

Did we just find a way to solve 10% of the Hydrogen Problem?

Antoine Walter: That is because you’re trying to replace the entire amount. But if we say let’s go with one fourth of your current use, then we still have approximately the right outputs for both carbon black and graphite.

Paul Martin: Yeah. So, so you could make 9 million tons of the.

And supply all of the carbon black and all of the graphite needs on earth and that would match, right? So we solve 10% of the problem, but it’s only one 10th of what, I mean, every problem is solved in slices, right? We don’t make all the hydrogen in the world the same way we make it this way and that way in different places, in different parts of the world, depending on the economics.

So if we can make 10% of the hydrogen that we need by a process that makes carbon black and graphite is a by-product. That’s good. What we don’t want to make is more carbon black and graphite do, or other carbon products that are waste materials. That would be foolish.

The Hazer process: a good prospect?

Antoine Walter: So you’ve mentioned one of turquoise hydrogen technologies and projects. And within my research for that discussion, I came across a process from an Australian company called Hazer. It’s a process developed by a university in Australia, which was then outsourced and incorporated into Hazer. And they locate that on a wastewater treatment plant.

So you see, we are back to this waste water treatment plant.

Paul Martin: Yeah. I’m well aware of, of, of Hazer his, his problem is that they’re not making a valuable form of carbon. They do graphite. Well, they make graphite, but they have no way to get the graphite off of their catalyst. So they don’t really make graphite.

Now, maybe that’s changed. I could be wrong. I mean, I’m, I’m not in the middle of their technology and I’m sure there’s lots of secrets, but you know, assuming that they can make graphite, that they can sell, that would be great. But the trouble is, if you think about even a very large wastewater treatment plant, it’s not making very much methane.

And if it’s not making very much methane, it can’t make very much hydrogen or very much. And so the size of the plant that you end up building will be small. And the resulting cost of the products, whether they be graphite or hydrogen will be high, right? This is, this is the fundamental problem that, that, and if you make hydrogen somewhere, you have to distribute it.

You have to have it. Do you have to use it in something either right on the site or you have to distribute it somewhere. And the infrastructure to distribute hydrogen from lots of comparatively, small sources, like say wastewater treatment plants all over, it doesn’t exist. It would have to be built. You can’t use the natural gas infrastructure for that purpose.

So you’re kind of stuck with a product that maybe is valuable in theory. But in reality, it’s not valuable that you can’t monetize it. The graphite it’s easy, it’s dense and you can ship it.

Shall we better leverage Biogas instead of Hydrogen?

Antoine Walter: Talking of Hazer, you would probably not like it, but if I’m right, their intended output is to use Hydrogen in a fuel cell, because utilities have heavy vehicles that could be powered with hydrogen.

Paul Martin: If that’s the case, why not skip all of this complicated technology burn, the CO2 burn, the methane make electricity by a much, much cheaper process.

That’s pretty much as efficient as the fuel cell, but without the conversion technology in the middle that throws away half the energy, you know, what are you getting? You’re getting a little bit of decarbonisation. If you bury the carbon product or you use that carbon product in some durable thing, that’s never burned in the future.

Right? So it’s not really doing much to my mind. I think bio gas is really valuable. I think we should use bio gas because we’ve got the infrastructure to distribute. Right. We have the natural gas infrastructure. So if you have excess of biogas somewhere, you should use it. And yet we have crazy people that want to make hydrogen out of it because they think hydrogen is sexy for some reason or another.

Right. And then on the other side, you have people that are thinking they’re going to have a giant wind farm somewhere, right. And there’s no, not enough use of electricity to pay for that wind farm. So what do they want to do? They want to make hydrogen from it, but then they go, oh, now I’ve got a problem.

I have to get this hydrogen to people that need it. And that’s hard because it’s a bulky molecule and transportation infrastructure doesn’t exist and it’s very expensive. Oh, I know what I’ll do. I’ll capture CO2 from somewhere and I’ll wrap the CO2 with hydrogen to make methane, and then I can put it in the natural gas infrastructure.

You see? So one of those two groups of people must be wrong or. I think we need a lot of bio gas in the future. I think all the bio gas we can make, we can definitely put, to use to replace things that can’t be easily electrified, like cement production and various other things and whatever excess we have, we can store for the cult Dunkel flour to conditions that are happening in the cold parts of the world.

Like where I live a couple of weeks, a year, there’s no wind. And the solar panels are covered with snow and a, what are you going to do? You have to burn some fuel. Otherwise you’re going to freeze to death, right? But that’s only a couple of weeks a year. So maybe you could store a whole year’s worth of methane in the existing natural gas infrastructure and use that for the cold Dunkel flow to instead of fooling around with making hydrogen, it makes more sense to me than making a.

Could Water Electrolysis produce valuable by-products such as Oxygen?

Antoine Walter: I think I’m starting to get the bigger scene,, but let me stay on my wastewater treatment plant for a minute. Let’s say I switch back to producing green hydrogen through an electrolysis. I’m now also producing a by-product. I’m splitting H2O into H2 and O2, so I’m also producing oxygen and oxygen can be a reactant for a waste water treatment plant.

So I could be using that oxygen as a feed gas for my ozone generators. I could be putting my oxygen into my biology and improve its yield,

Paul Martin: switch gears a little bit. So either we’re making hydrogen by pyrolysis of methane that comes from anaerobic degradation. In which case you’d not making any oxygen or you have excess electricity, which you could either use to put oxygen from the air into your wastewater treatment process, which is quite energy efficient.

Or you could use to electrolyze water, which is very energy inefficient to make hydrogen. And then, okay. Hey Presto, we’ve got some oxygen that we can use for some other secondary purpose. Most of the time, most electrolyzers vent their oxygen because the oxygen isn’t worth the bother of producing at pressure drying, purifying to remove the hydrogen contamination that it contains and then storing and carrying off the site to somebody that needs it.

So by all means, if, if you had some use for hydrogen in the wastewater treatment plant and not won’t be running a fuel cell by the way, because that would be nuts, right? If you’re using electricity to make hydrogen, you’re not going to then use the hydrogen to run a fuel cell. You’ve just created a very inefficient perpetual motion machine there.

But you know, if you had some excess electricity, it would make a lot more sense to just use it. Oxygen from the air and use that that’s going to take a lot less energy than it is to electrolyze water to make oxygen, um, unless you have some real purpose for the hydrogen.

How do we decarbonize the remaining 90% of the Hydrogen Economy?

Antoine Walter: So I’m going back to this real purpose because we’ve solved together, see how we made a big progress towards that, we solved 10% of the problem because I stand on my 10%, which is we take this turquoise hydrogen, and we use it to the maximum outputs we can have in carbon black and graphite. So 10% of the problem is solved. We have 90% of the problem to solve. If we want to keep feeding humanity in a carbon neutral world, with the Haber-Bosch process and all the other appliances that we’ve cited that at the beginning of this discussion. How do we do?

Paul Martin: So almost half of that.

90 is 40 and that’s the 40 that’s used to make ammonia. And what do we do there? We make all of that ammonia in those places in the world. I talked about before we make it in GLA, we make it in Australia because we can ship ammonia. We can’t ship. In ships. Okay. So that’s half the problem taken care of.

And then let’s say we do the turquoise hydrogen. We take care of another 10%. So we’ve got 60% taking care of the remaining 40%. How do we do it? Well, we either, you know, a lot of that stuff is being used for things like methanol and direct reduction of iron. We can do those in Australia and Chile too, because we can ship methanol and we can ship steel, right.

Or, or iron, uh, Hartford headed iron. So we would do all of those things in those places, in the world that are rich in high capacity factor renewables. So guess what? The Chileans and the Australians, maybe if, if we’re dreaming the Namibians, get really rich in the future as a result of their access to clean, renewable energy.

What better thing could you want? You know, it sounds great. And that leaves. Only a little bit left that kind of has to be produced closer to where it’s used and that we can probably do just not very efficiently cost efficiently by using local renewables. You know, so honestly I think taking care of the decarbonization of hydrogen, it’s just one of many parts of the puzzle, but it’s not impossible to imagine us doing it.

And the reason it doesn’t make sense to me is that it shouldn’t make sense to anybody. Honestly, again, it’s the result of hopium in my opinion, as opposed to an honest, dispassionate review of the thermodynamics and the properties of hydrogen and the energetics, there are better solutions that cost less.

So we’re going to use those instead.

Why do some countries so heavily invest in Hydrogen?

Antoine Walter: Talking of hopium, and of how much it should not make sense for anybody to quote you. Neither Chile nor Australia or Namibia are in the European union.

Paul Martin: That’s right. But they have trade relationships with them. So,

Antoine Walter: And nevertheless, European union plans to invest 400 billions into the hydrogen economy.

So does that mean that none of them ever heard of thermodynamics or that among your two million interactions on LinkedIn last year, nobody was working for the European union ? What’s the deal there?

Paul Martin: The deal is it’s actually, it’s funny that you speak about the European union. I honestly, I think that the European union and the UK together they’re tied for the most rampant, uh, hydrogen hopium addiction in the world, but the places that have the most justification for such an addiction are not in Europe or the UK.

The paradox of South Korea and Japan

There are South Korea and Japan. Okay. If you look at Europe in the UK, I mean, UK is already almost decarbonized its electricity grid. That’s shocking. If you told me 10 years ago that the UK by today would have almost decarbonized their electricity grid. I would have told you, you were lying. There was no likelihood of that.

They’re going to burn coal till the cows come home. And no, they did. They managed to do it, you know, but South Korea and Japan are different animals. Okay. So they have the problem that they don’t like their neighbors, their land neighbors so much, they have bad relationships with their land neighbors.

They don’t trust them. And they’re also very high energy hungry, very large populations, right. With a lot of heavy industry in both in both countries. And they’re totally dependent on fossil energy. Right. So guess who’s pushing the hydrogen hyperbole for hydrogen as a transport fuel. It’s the Japanese and the Koreans.

I mean, you can understand why, because to them, they really don’t want to import electricity via high voltage, DC, from people that might put their foot on the cable and kind of squeeze them anytime that they don’t like their politics or whatever’s going on. They’d like to import by ship from anybody that will sell them a product, just like they do with, you know, natural gas, LNG, and petroleum.

Right now. They like that. And of course, coal and both big burners are coal too. So they like that. But they think that in the future, maybe we won’t be able to do that because we’ll get serious about decarbonisation. So they want to recreate that economic model that they have just with a different fuel.

… Could their future dependency to Hydrogen be a deathly threat?

And that’s intellectually very simple. And the fossil fuel industry is going, yay. That’s what we want you to do because otherwise we’re not going to be supplying you anything, but the people that are sitting there in Japan and Korea that are talking about this, I don’t think that they’ve got a calculator in hand.

They haven’t run the. This is a nice little thought experiment. So if you go to the United States on the Gulf coast where the big chemical plants and refineries are there’s this facility, or they’re not really a facility, I guess it’s a, it’s a price metric that they call the Henry hub cost of natural gas.

So this is a raw wholesale, natural gas costs kind of like the Brent barrel of oil or, or the west Texas intermediate barrel of oil. These are metrics that are used in order to track the cost of a commodity and natural gas. It fluctuates. And of course it’s quite high in Europe right now. Um, went up and now it’s coming back down again and it fluctuates seasonally and so on.

But average, average average, the Henry hub costs in natural gas is about $3 and 50 cents per million. BTU’s so that’s a measure of energy. It’s like Juul, right? $3 and 50 cents per million. BTU’s if you convert. $3 and 50 cent per million BTU, natural gas to hydrogen. It costs about a dollar 50 wholesale.

Okay. That the hydrogen that you produce of which about a third of that cost is the cost of gas. And two thirds is the cost of the other ONM and capital. Okay. So at a dollar 50 per kilogram, that hydrogen now costs $11 per million. BTU’s it’s three times as expensive just by making hydrogen out of it.

Now that’s not capturing any CO2 or anything, that’s just making hydrogen out of it. So now when we look at that’s a dollar 50, a kilogram and the green hydrogen people are hyperventilating about maybe one day in 20, 40, or 2050, we can make hydrogen for a dollar 58 kilowatt. And I don’t even believe them.

I think they’re delusional. I think they’ll have a very, very hard time getting to those kinds of costs, largely because it would take hundreds of billions, of dollars of public subsidy to buy really, very much more expensive hydrogen than that in order to get to the scale necessary to drive the cost down to those little levels.

Green Hydrogen will be an expensive path to energetical independence

But let’s set, let’s set that aside for a moment. Green hydrogen is costing a multiple of the cost of black hydrogen and black hydrogen is costing a multiple of the cost of natural gas. So imagine that you’re Japan or Korea and you have a lot of heavy industry and your economic competitors get to use electricity directly.

Whereas you have to use somebody else’s electricity. That’s been partially converted to hydrogen and then into ammonia to ship to you for you to break the ammonia back down into hydrogen again, so that you can use it to make electricity or heat or. What kind of car you drive, doesn’t matter, your industry’s bankrupt, your energy cost per Juul is five times that of your economic competitors.

So any energy intensive process is not going to be done in the future in Japan or South Korea, because you couldn’t afford to do it. Right. So see, there’s the thing. I think a lot of this thinking is just not based in, you know, basic engineering economics. You have to think about it a little bit more carefully.

And when you do you’ll realize that direct electrification just makes an awful lot more sense. You know, I know people have this box on their head that if you want to make heat, the best way to make heat is burning stuff. Right. And that makes sense when all your energy is coming from stuff that you burn, you know, you make electricity by burning stuff.

You may keep by burning stuff. It makes it’s crazy. Electricity by burning stuff. And then using use that electricity to make heat, right? There’s too many steps and it costs you too much money. So you don’t do that well in the future, we’re going to be making electricity. So if we want heat, we’ll make it from electricity and they’re going to make a molecule from it and then burn that to make it cause let’s do many steps and it’s going to be too expensive.

So you see, we have an optimized thinking for the fossil fuel world and we’re trying to apply it to the decarbonized future and we’re getting the wrong conclusions and it’s going to cost a lot of money. That’s just going to be burned up and wasted and it’s not going to help us decarbonize. And that’s my worry.

In a parallel universe, could hydrogen win over batteries?

Antoine Walter: I have a last question for you in this deep dive, which will require some imagination. Let’s say we go to a steam punk alternative universe. In that steampunk universe, electricity didn’t win. There’s no battery. And we are starting from scratch. And so far, the biggest thing to power all our stuff is still steam.

And so we’re really restarting the race from scratch. And we have two candidates for that decarbonized future world. We have batteries and we have hydrogen. Batteries have to restart from scratch, so they don’t have the proxy of people having iPhones and hence having batteries and be ready to pay quite a lot to build the scale.

So we’re really starting from zero. There is no scale effect. Under those conditions, does hydrogen stand a chance against battery, or if we redo the race, batteries win again.

Paul Martin: If the source energy is electricity, then batteries still win because there is a path to scale for batteries, and there are greater efficiency pays for the path to scale.

Okay. And hydrogen’s problems. That’s the opposite. Hydrogen is a weight. Well, actually there’s your trouble is that once you’ve made hydrogen, your problems are just beginning because yeah, you have hydrogen. And if you need the hydrogen where you’ve made it, you could have just used electricity and cut out the middleman.

So the whole idea behind hydrogen is as a means to transport or store electricity. And if I told you that I had this a special bucket, you know, and I, I to fill it up with my nice homemade cider for you. And if I put it in one bucket, when you get it to your house, 90% of the cider will still be there.

What is the best tool to store energy?

And if I put it in another bucket, only a third of the cider will be there. Which bucket are you going to do? You’re paying the same for the cider, right? I don’t care how much you drink. I only care how much I pour into your bucket. You want to choose a bucket. That’s easier to carry, but it only has a third as much in it.

When you get it, get it home. It’s really not a good economic proposition. Is it? And so there’s your fundamental issue? The thing about batteries though, is that batteries are not the be-all and end-all, you know, batteries are in a very important tool. They’re the thing that’s going to help us with mobility, like mobile applications for energy.

Like most of transport will be handled by batteries, but they’re not the be-all and end-all, and we need a lot of other technologies in there as well. And fundamentally we need more important than any of this. What we need is the decarbonization policy, the carbon taxes and the emission bands that signal to people.

Hey, all of your choices are valid. But some choices generate a lot of fossil CO2 in the atmosphere and they’re going to be very expensive choices. So you shouldn’t make them unless you don’t really have an alternative. And once we’ve applied that high carbon tax for a long time, we’ll trim away the easy to substitute stuff, which by the way, should be our focus.

Right? When I go to an apple tree, I’m picking apples that are close to the ground before I go and get the ladder, that’s just human nature. Right? And why are we not doing that with energy?

And decarbonisation, I don’t understand. It makes no sense to me, except if your, your effort is really to delay doing anything, then I understand perfectly. So this focus on hard to decarbonize sectors is really an attempt to delay decarbonization because what we should be doing is pursuing easy to be carbon that second.

The story of hydrogen as Power-to-X is attractive to our psychological biases

Antoine Walter: I don’t want you to re-side track you. But to me, there’s a clear link with the psychology of humans. I mean, we love stories and we love something which we can really grasp . And it’s so beautiful as a story, this electricity, which is in excess and nobody knows what to do with it. And, oh, we can do an electrolysis and the byproduct, when you burn hydrogen again in a fuel cell, the byproduct is water! What’s not to love about that?

So that sounds so perfect. That it’s a cool story. So I get why people buy it.

Paul Martin: The trouble is. You’re skipping a lot of steps. All right. So first of all, it all, it makes water, but it makes NOx when you burn it in air, uh, it only time it doesn’t make NOx is when you burn it in a fuel cell at low temperature over a catalyst.

So that’s misstated. If you burn hydrogen in your cooker at home, you’re going to be making so much NOx that you’re going to give yourself asthma. I mean, it’s, it’s not a good thing to burn in your house, for sure. It’s possible on big engines, for instance, to put an SCR catalyst on there to take care of the NOx, but, but in on a cooker or other, you know, your home boiler, you’re not going to have an SCR.

You’re gonna make a lot more NOx. So there’s the first lie in the story. It’s a nice story, but it’s a story that’s told this way with head nodding. Yes. Now what you need is me. Okay. Cause I tell you this other story with head nodding. No, and you need both stories in order to understand what’s going on.

Right? Otherwise you have a fairytale. You don’t have a story.

Rationale for an expert opinion

Antoine Walter: I think that makes a perfect conclusion for this deep dive. Thanks a lot!

Paul Martin: You’re very welcome. And I, and I’ve made a lot of assertions in our discussion today that make me, it sounds like I’m stating things as if they’re fact without providing any backup.

I encourage people to go to my LinkedIn profile or to a Spitfire research.com where I have a lot of my articles republished go there and visit and take a look at the articles because I provide the references and the calculations. And I have long discussions with very smart people who have forgotten more about certain topics than I’ll ever know.

And they helped me refine my position. And when I’m wrong, I correct it, you know, cause I’m human being I’m often wrong, but I, I use the scientific principle of. Having people review and comment and go back and forth with the facts until we agree what makes sense. And then I revise my opinion to match the data.

And when new data comes along, if my opinion needs to change, it changes. So go there, visit those resources, listen to my podcasts and review my articles and so on. And you’ll get a sense that the points that I’m making, they’re not infallible, but they’re based in something they’re not just made up. And it’s not that I hate hydrogen.

I love hydrogen. Hydrogen is amazing. It’s just a tool that needs to be used for the right purposes and burning it as a fuel is not the right purpose for,

Antoine Walter: For anyone listening and being curious right now, if you look at the episode notes, you’ll find my personal selection of Paul’s articles, you’ll see, it’s pretty easy from those ones to navigate to the other ones.

And then it’s like a rabbit hole you start, and you don’t really know where you’re stopping. I have a last section to wrap things up, which is the rapid-fire questions.

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Rapid fire questions:

Antoine Walter: In this last section I’ll raise you short questions, which you can answer with short answers, of course. And you’ll see that I’m still the one which is sidetracking all the time. My first question is what is the most exciting project you’ve been working on, and why?

Paul Martin: Uh, in recent days, I’ve been helping through Spitfire, a client who is from the very first principles and ground up looking at how to make hydrogen production by electrolysis as cost effective as possible.

And I find that very exciting because as I mentioned,

The other one is more a past triumph and that’s that a monolith project. So I love the fact that they were commercially successful, that they just got a billion dollar loan from the USDA and that they’re making a huge benefit to decarbonisation without even the wisdom on the part of the United States to put in place carbon taxes.

That’s just amazing, but it’s kind of, it’s rare. It’s a purple squirrel type project. I don’t think there are going to be too many like that.

Antoine Walter: Can you name one thing that you’ve learned the hard way?

Paul Martin: One thing that I’ve learned the hard way. All my goodness, I learned the hard way. That I always encountered my nature, my personality as a detriment, to my ability to, to do business.

And it always got in the way. And now I’m finding that when I correctly deploy my effort, that my personality is actually an asset to business. Oh, I wish I learned that, uh, sooner, but I’ll add one more. And this one I learned early and it was wonderful. Okay. When I started, I was working for a startup company and they were trying their best to make money, but no young engineers like myself that were working there, well, they didn’t give us any shares or any opportunity to have any ownership in the company.

We were just working there and getting a salary. But man, we were working a lot and I was working 70 hour weeks for these guys because if my design tests weren’t done, they weren’t selling anything, you know, They came on hard times and they cut me down to four days per week. And we had this wonderful government program at the time that they would pay half of your salary.

The government would pay half of your salary, that the decrease in your salary as a result of a layoff, if the company would commit to keeping you over the longer term. So my hours per week went from 70 to 32 because there was no way I was going to work any overtime. If they weren’t even going to pay me my full salary, my pay dropped by 10%, the amount of the number of hours in the week that I worked dropped by more than 50%.

And I had a full day off every week to look for another job. And I realized the light bulb went off over top of my head. And now working for free for for-profit companies is a really bad strategy. I’m never going to do it again. And from that day until now, I have never worked a single. Oh, uncompensated overtime.

I’ve always either earned a piece of ownership or a bonus or time off or something of value to me in return for every hour that I’ve worked. And oh, what a huge thing it was to learn sort of early in my career, that workaholism is a bad thing and you don’t want to do it and making, if you’re going to donate your time, donate it to a charity or something noble, not to people that are earning profit from your labor.

Antoine Walter: Is there something you’re doing today in your job that you will not be doing in 10 years?

Paul Martin: Uh, well, I hope to not be doing any job beyond maybe my private consulting in 10 years, but I would say that probably the better way to put that in the more profound way to put that is that back before March of 2020, I was spending 122 kilometers.

On the road every day. And that was two and a half hours every day, four days a week. So 10 hours a week driving to, and from an office where I did exactly the same job that I’m doing now without driving. And I’ve been to the office now, three days out of a, that whole period of time until now. And I had fought for quite a long time to get one day per week working from home.

And it was always viewed with displeasure, but I found it very useful because I found I can focus and concentrate and, and, uh, I worked better at things like reading technical papers or reviewing, or, or checking or things that required concentration. I could do it better at home where there were fewer distractions than I could in a cubicle, in an office.

Well, I went seamlessly from working one day a week at home to working every day, a week at home and, uh, got 10 hours of my life per week back again. It was. So, yeah, I’m hoping that that change will still be in place in 10 years. I hope I’m not driving anywhere to work in 10 years.

Antoine Walter: I fully subscribe subscribed to that one, I somehow hope exactly the same. I have two questions for the former water professional in you, and the first is what is the trend to watch out for in the water sector, if apparently it’s not hydrogen anymore?

Paul Martin: Oh, you know, I’m terrible at that sort of thing. I can tell you what, isn’t the future much easier than I can tell you, what is the future?

I think water is, you know, an under appreciated resource. It’s, it’s my hope that we get smarter about how we use it and that we waste less of it. But honestly, I think that water ultimately largely it’s a dichotomy in that it’s extremely valuable to, you know, absolutely necessary to human life. And at the same time, it’s a very low value commodity that’s produced from solar energy and it’s really stored solar energy.

So I think. Tenancy we’ll continue in in the world. And, and that will continue to experience pressure related to people consuming too much water, uh, needlessly and not being really happy with being forced to do things more sensitively. So unfortunately that’s the way I see it, but I don’t see any magic technology coming.

That’s going to suddenly turn wastewater into clean water or, you know, be able to do it more efficiently or more effectively using sunlight or something, you know, back in my early days, that’s what we were doing. We were trying to use sunlight to treat water, and then we realized no sunlight’s availability factor is only 16%.

So we have to use artificial lights to do that. And, um, now we were consuming electricity rather than using sunlight, but in any way, it’s the way it worked out. Reality sunk in.

Antoine Walter: Well, you told me that in the early days of your career when you were working with the water industry, you were doing this AOP based on solar, if I get right what you’re explaining now, I had an interview on that microphone with Fajer Mushtaq, from a startup called Oxyle, and they’re turning that into a promising process.

Paul Martin: I would say this is an object lesson about technology development and research and development and the popularization of science and funding and all these things.

Titanium, dioxide, foot tall assists using visible or ultraviolet light has been studied extensively by hundreds and hundreds of research groups all over the world. And billions of dollars have been consumed on it. And it has no commercial applications other than self cleaning surfaces. None. You see it wrong to bells in the minds of the funding agencies, solar and environment.

And it was fun research, you know, but I mean, within five minutes, it speaking with a brilliant photo chemist, a guy named Allie and Mary, who I used to work with, it was quite clear what was wrong with titanium dioxide and why it would never be a commercial process for industrial or even pre-treatment of water and why that could not change.

Right. Couldn’t be made differently. And, uh, you know, Allie was right. He was absolutely right. So, you know, he was the thing is he was right presciently 30 years ago, you know, and now we can say, you know what, Ellie, wasn’t just suspecting that he was right. He was actually right.

Antoine Walter: So once you’re done fighting hopium on hydrogen , you can start fighting hopium on titanium dioxyde!

Paul Martin: It’s amazing how much money was wasted on the hopium of annotates Ty ox, you know, Crazy. And here we were doing homogeneous photochemical technology that actually made a meaningful difference and it didn’t make money because our company made foolish commercial decisions. It wasn’t because the technology didn’t have a promise and those, those patents have expired.

So they’re free to ever for everybody to use now. Uh, so anyway, it was a fascinating experience to have as a young engineer.

Antoine Walter: Well, it’s been really a blast discussing all of this matter with you, Paul. So thanks, thanks a lot for accepting my invitation. If I was to look for a guest equally brilliant, as you, who would you recommend me to invite as soon as possible on that microphone?

Paul Martin: I would say that there are two people that I would recommend. Well, in fact, three. So one of them is a guy who’s who is a very knowledgeable about. Lithium and lithium production. His name is Alex Grant and Alex is young and smart as a whip and extremely effective as a communicator and totally unafraid to tell the truth as he sees it.

So he’s a great guy to, to talk to. And, uh, so for instance, he knows a lot about trying to take lithium out of unconventional resources, like geothermal brines, and it’s going to be very interesting. There’s some very prominent projects all over the world that he’s involved with, that, uh, that are going to do just that.

Another guy is a guy in Australia named John Paul, Jack, and John is his thing. He has a site called key numbers. And what John’s specializes in is making little models of problems so that you can run the numbers yourself and get visual, rapid visual feedback on what’s making the thing. You know, so for instance, John’s got these great resources for the purpose of, uh, looking at the economics of making hydrogen.

John would be a great guy to talk to. And then the last one is kind of a polyglot guy who knows a lot about a lot of different things is very interesting thinker, uh, is a guy named Michael Barnard and he’s in, uh, Western Canada and Vancouver. And Michael knows a lot about energy and his company is called T F I E, which stands for the future is electric.

And on that Michael and I, 100% agree that those are the people that I would talk to. And one last guy, a guy named Paul, Brian, who recently left LinkedIn and discussed, unfortunately, uh, he’s a former VP of Chevron and a champion of biofuels, extremely knowledgeable chemical engineer, brilliant guy, very incisive thinker.

And, um, I think he’d be a really good guy to talk to this.

Antoine Walter: Well, thanks a lot Paul, I hope that you weren’t too bothered by my muggle questions about hydrogen

Paul Martin: not at all. This is the whole point. My job is to try to fill in that gap between the technical papers and the science popular is stuff that just gives the very lightest kind of skim of, of information. I try to fill in that piece in the middle, but to do it in a way that gets the point across as technically accurate, but still approachable. So I hope I’ve accomplished that. And I’ve enjoyed your questions!

Other Episodes:

FREDsense: Revolutionizing Water Quality Monitoring with Biosensor Innovation

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Swirltex: Revolutionizing Wastewater Treatment with Bubbly Innovation

By Antoine Walter | 30 April 2025

Blue Foot Membranes: The Next Evolution in Water Filtration

By Antoine Walter | 16 April 2025

Echo River Capital: Pioneering the Future of Water Innovation

By Antoine Walter | 3 April 2025

1001 Fontaines: Engineering Sustainable Water Access Through Social Entrepreneurship

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Amazon’s Water Footprint: Tech Giant’s Quest for Water Sustainability

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Turing: The AI Revolution Quenching the Water Industry’s Thirst for Innovation

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Flocean: Pioneering Ocean-Based Water Solutions

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Botanical Water Technologies: Harvesting Liquid Gold from Plants

By Antoine Walter | 4 December 2024

The post Is Hydrogen more of a Water Sector Miracle or a World’s Decarbonization Problem? appeared first on (don't) Waste Water.

Axine Water Technologies specializes in the on-site treatment of the toughest organics in industrial wastewater.

This episode is part of my series on Industrial Water. Go check it out!

What we covered:

How Wastewater treatment has often been a tax to be in business for Industrial Players

How chemicals we introduce in water are always more complex and how that commands advanced wastewater treatments

How the two typical solutions (on-site treatment and trucking it away) compare

How wastewater treatment is not core to industrial operator’s duties

How Axine Water Technologies developed innovative electrochemical oxidation solutions… out of a garage

How the development process was a journey (and what it involved)

How the decisive step was to rethink the industry standard and shake business models up

How Axine’s value proposition builds on a treatment performance guarantee

How cleantech innovations can fundamentally transform our world for the better

How Axine’s business model works and what’s in it for their customers and investors.

How Axine’s technology actually works, and where the inspiration came from.

How the wastewater industry ticks at a particular pace and why it’s fragmented and risk-averse.

How you need your technology to be ten times better than what you intend to replace, and how to win your own confidence in it

How Axine builds tailored solutions from beginning to end through all the important steps

How a process’ heartbeat is the key to efficient remote operation and predictive maintenance

Machine learning, automation, taking risks, succeeding where others failed, finding a sweet spot, hypergrowth… and more!

… and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨  

Teaser: Industrial Wastewater Treatment System

Resources:

Have a look at Axine Water Technologie’s website

Come say hi to Jonathan on Linkedin

is on Linkedin

Antoine Walter on LinkedIn

Infographic: Industrial Wastewater Treatment System

Quotes: Industrial Wastewater Treatment System

Full Transcript:

These are computer-generated, so expect some typos

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Antoine Walter: Hi, Jonathan, welcome to the show.

Jonathan Rhone: Thank you. A pleasure to be here.

Axine Water Technologies: A Postcard from Vancouver

Antoine Walter: Well, the pleasure is all mine because we have a full plate of topics for today, which I’d like to dive in with you today, but I have to additions and that involves starting with the postcard. And you’re sending today a postcard from Vancouver.

So what can you tell me about Vancouver, which I would ignore by now?

Jonathan Rhone: We’re very lucky to live in a forest. Vancouver’s a rainforest. We live in a rainforest. It’s a very beautiful part of the world. And you know, it’s interesting on the topic of environment that we’re going to talk about today. It’s been a little bit of an unusual year for us.

We’ve had a pretty significant impact of climate change. We’ve had some of these things called atmospheric rivers that have given us record rainfalls. And in the summers, we have a huge forest here in British Columbia. So we seem to be alternating between wildfires in the summers and atmospheric rivers.

So extreme swings in, in what we’re dealing with, but we live on the ocean. It’s a rainforest and it’s very beautiful here. And the people are lovely. So

Antoine Walter: the atmospheric river is, is really a topic which is coming back and back now because with this extreme events, more and more technologies and technology company, try to catch a bit of that, that water.

But despite the hints, that’s not what we will be discussing today, but more to that in a second before I like to better know you and one of us preparing for our discussion, I’ve seen different ways to introduce you. Introduce you as an award winning serial Cleantech entrepreneur, that’s an option or a venture capital fund founder, which is also an option aiming to transform the energy value chain.

What is the best way to present you?

Introducing: Jonathan Rhone

Jonathan Rhone: Well, thank you for that. I think of myself as somebody who is a serial entrepreneur in the clean tech area, but I think also I am somebody who is. Passionate about the idea that Cleantech innovations can fundamentally transform our world for the good

Antoine Walter: what’s your definition of clean tech?

Just that we have a common understanding,

Jonathan Rhone: clean tech are technology driven businesses that in general have an impact on improving the environment, energy technologies, water technologies. Energy efficiency, uh, everything from carbon capture and storage to water technologies. So transportation technologies is a pretty broad definition.

You asked about Vancouver and I’m very fortunate to live in a community where the clean tech sector is one of the fastest growing parts of our economy. And there are thousands and thousands of people who live here working every day to, uh, passionately improve the environment with new innovations in all aspects of our economy.

So I’m, I would describe myself as being part of that community as somebody who’s passionate about, about, about entrepreneurship in that area.

Antoine Walter: That goes also to one more level, because I’ve seen that you’ve been recognized as an industry icon. What’s the story.

Jonathan Rhone: Well, I think you’d have to ask the people who give the award.

Uh, but as I said, we’ve got a very, uh, cohesive, clean tech ecosystem. There’s an organization here that recognizes a leadership in the industry. And I guess I’ve been at it for awhile icon, I guess is a very humbling sort of term. But, uh, you know, I’ve tried to help other companies in our ecosystem. I’ve tried to set an example of leadership.

And I’ve been involved in a number of ventures. So I guess it’s some way of recognizing, uh, the impact I’ve had in our community.

What does Axine Water Technologies do?

Antoine Walter: So talking of this ventures, the latest you’re in is Axine water technologies. What would be your elevator pitch to Axine? And am I saying it right with Axine or is it “Axyne”?

Jonathan Rhone: Axine is a very exciting project. The whole reason we started Axine was a recognition that we are increasingly creating a synthetic chemicals. When we manufacture virtually any product you can think of from pharmaceuticals to. Chemicals to automobiles, to semiconductors. And, um, the wastewater that’s generated by manufacturing plants is increasingly complicated.

It’s got a lot of these very difficult to treat synthetic chemicals that don’t easily break down and biodegrade in the environment. There is no obvious solution for how to treat those. And so therefore, uh, many manufacturing plants. Resigned to the fact of having to truck this water off site somewhere to be incinerated.

And we think that that’s a terrible idea. So we created a solution that we can treat that water onsite with a disruptive technology and do it as a service so that our customers can focus on what they do. And we can take care of these complicated wastewaters. So we, uh, we treat industrial wastewater with these complex organic chemicals.

As a service on their multiple years, service contracts generating recurring revenue in partnership with our customers and as a disruptive technology disruptive business model. And we’re making an impact in the markets. We’re in,

The origins of Axine Water Technologies

Antoine Walter: there’s a lot to unpack in what you just explained, but we’ll unpack it by, by sequence.

During the deep dive we will have together. I electric go back. The beginning of Axin you said we, were you involved in the creation of the.

Jonathan Rhone: I was, in fact, it’s an interesting story because, and it’s the story of how many of these companies start? I had finished working in my previous company and I was doing some work with a couple of Cleantech venture capitalists and looking at their deal flow.

Helping them curate some of the opportunities that they were seeing. And I was introduced to the technical founder of Axine and she was a PhD materials engineer. She had left a fuel cell company and she had a vision to take the idea of electric chemistry. Because fuel cells are all based on electric chemical processes and apply it to wastewater.

She had built some prototypes in her garage and she was working away, uh, with, uh, different types of wastewater to try to figure out how to use electric, chemical oxidation. To break down and destroy these chemicals in a new way to solve what she believed is a big problem. And I was immediately taken by her passion and her ideas.

I knew nothing about water or wastewater at the time. And, uh, you know, you might argue that I’m still learning a lot. It’s a complicated area. But, uh, we formed a relationship in, in, in to explore how we could commercialize our technology and take it to market. And so that venture capital firm ended up investing in the company we brought in new investors.

And so she and I partnered to take the company forward fast forward to today. I think we’re realizing her original vision of, uh, that she had for the company.

The first steps of an innovative Industrial Wastewater Treatment Company

Antoine Walter: I don’t want to fast forward. I want to understand that path. It’s something we’ve been discussing regularly on that microphone. How having a technology isn’t sufficient in the water industry, you have to make a dent and you have to battle, I think Kobe Nagar from 374water on that microphone said it very right when he said.

The full industry wants to be first to be second. So I like to understand how you go from that point where you’re meeting your technical co-founder, which has this awesome technology and you work together up to the point. You get your first reference. What’s the story of that first record.

Jonathan Rhone: It’s been a fascinating journey.

I have to tell you the way I would say it is that. Different than many other markets and I’m I’m from the energy industry. So I’m, I’m a relative newcomer to water. Water is an incredibly fragmented and challenging market, particularly wastewater. And the reason it is, is because every single application you look at has a completely different chemistry.

It has different flow rates. It has different chemistry, different chemistry of the problem you’re trying to treat. And then all the other background chemistry is different as well. So if you’re creating a solution for addressing a particular application, you have to be able to address all these. And related issues.

And the other thing is that customers in wastewater, they’re not interested in technology, so to speak, they want a solution. They want a complete solution that may incorporate your technology, but you have to be able to provide them with a complete solution. And the third thing that I’ve noticed is that.

Wastewaters is generally regulated. It’s not a core competency of the manufacturing industry, so to speak, although they do have very competent people that are very knowledgeable about wastewater, but it’s not the main reason why, you know, a pharmaceutical plant exists or a semiconductor plant exists.

And therefore customers tend to be very risk averse. So taking all these things together, our journey was challenging. It really was. First of all, we had to make the technology work and we really struggled. We struggled for several years, treating toxic complex organic molecules with electric chemical oxidation is a very difficult and challenging.

Technically a challenging activity. And our vision was that if we were going to get into the market and be successful, we had to have a technology that was 10 times better than anything out there in the market. So we’re competing against chemical oxidation, we’re competing against incineration, and we had to be able to develop a technology that could be flexible and versatile to treat thousands of different types of chemicals.

We had to be able to package it into a complete solution. And we had to be able to offer it to the industry in a format, in a business model that would minimize their adoption risk.

Customers want solutions, not technologies

Antoine Walter: But you mentioned that it had to be a solution and you had to have all these elements. Was it a given that you said I have to have all of that?

Or did you discover on the go that you needed to have all these bricks in order to be able to offer something which was compelling for those.

Jonathan Rhone: When we looked at the market, many technology companies will choose a pathway, uh, to the market where they set up distribution channels and they sell their technology to a larger company that might be able to integrate it within a larger solution.

We decided to take a different approach where we would actually put the entire package together. So that was a fundamental decision point for us. We package our electric chemical oxidation technology with conventional pre-treatment post-treatment we deliver a full turnkey solution. And then we decided that we weren’t going to sell the technology.

We were going to sell it as a service where you go to customers and say, we can treat your water. We’ll deliver a complete turnkey solution. We’ll finance the cost of construction. We’ll deliver it to your site and we’ll operate it and we’ll service it and we’ll monitor it remotely and we’ll do it under a multi-year service contract.

And here’s the key point we’ll guarantee treatment performance. The whole point of that Antoine is we’re trying to remove the technology risk and the friction of adoption. You know, in our case, that business model has been really well received by the markets that we’re currently in. And, uh, we’re very excited about it because, you know, there’s sort of two parts to it.

One is we’re trying to address a market problem and accelerate adoption. And we’re also trying to come up with a business model that works for investors, investors love recurring revenue, and this revenue is very sticky. Once we establish a partnership with a big company and we can prove ourselves, then we can start replicating across their manufacturing network, but we can also address the problem of adoption.

So those are some of the problems that we were trying to address.

Pleasing Industrials, Investors and… yourself!

Antoine Walter: I see why that is very appealing for the industrial player. I do see why when it’s successful, it is also appealing to investors, but there’s an element of risk, but you are a young company. By the time you have your first references, you have your technology, which is.

Hot some, let’s say childhood sicknesses to overcome, and you’re going directly all in to saying you’re, you’re, you’re offering everything as a solution. You finance it and you take a treatment warranty. How do you mitigate that risk?

Jonathan Rhone: It’s a fundamental question. Here’s how I come at that question. First of all, we had to have confidence in our core technology.

That was the first principles we had to develop. An electric, chemical oxidation technology and a, an electric chemical system that we had full confidence in. And that took several years to develop. And we had lots of failures, you know, I would say. The original concept of the technology. We weren’t able to make work.

We were able to make it work perfectly for 30 hours and then 300 hours. But we needed 60,000 hours. We had lots and lots of failures in the development of the technology to the point where it was robust enough that we had the confidence to back it with our own money, you know, and that’s ongoing. Today, we have a technology that’s sort of a generation three.

We’re working on generation four and five. We’re adding machine learning and automation and new types of materials. It’s working beautifully in the field, but we’re not stopping with innovation. So that’s, that’s the core of what we’re doing. Secondly, we had to have a sophisticated enough and experienced enough team to be able to own the entire value chain.

You think about it? We’re not only developing the technology and we’re continuing to innovate with the technology. We have to be able to take that technology and package it into complete turnkey systems. And then we have to be able to finance it and we have to be able to deliver it to the field and set up a service operations network worldwide with a small company.

So we have a whole value chain that we have to put together, and that requires a certain level of experience. And no knowledge, uh, technical and business acumen, to be able to do that. And it’s not easy, but I do think that it is introduced a new type of standard in the market that customers don’t need to understand how these very challenging wastewaters are treated with a high tech solution.

So if they’re buying the technology, they need to know everything about it. And in our case, It’s not just the hardware, the software that we use to acquire the data, which tells us how the system’s performing. The two pieces go hand in hand. So it’s very difficult to hand that off to a customer and let them take the risk.

We are actually in the best position to take the technology risks. So if we’re not comfortable doing it, why should the customer do it?

Axine’s Electro-Chenical Wastewater Treatment Technology

Antoine Walter: We’ve been teasing your technology now. The first minutes of this discussion, let’s go into it. What is this electro-chemical technology, which is at the core of your system?

Jonathan Rhone: Well, first of all, electro chemical treatment of wastewater has been around for a long time. And there’s an electric chemistry is used widely in a number of different applications. What we’re doing is electro chemical oxidation, and there have been a long history of development, work of electric, chemical oxidation of challenging, complex organics.

We are taking this to the next level. So what we do is we combine. Advanced materials in an anode cathode configuration, and we apply electricity to those advanced materials. And that allows us to generate what’s called a hydroxyl radical one oxygen, one hydrogen. And that you’ve heard of this before. One of the most reactive oxidants.

That can be produced. They’re very hard to, they’re hard to make. And then we put these catalyst coded electrodes into a reactor configuration. We turn on the electricity and we flow the water through the electrodes. The pollutants come in contact with these OH radicals and the OH radicals grab onto the molecules and they tear apart the molecules.

They break the bonds within the molecule and they progressively. Oxidized those molecules back to their basic building blocks, hydrogen oxygen, nitrogen, CO2, CO2. And so these are benign gases that are then just released to the atmosphere. And people have been trying to do this for a long time. We have commercialized it and now we’re perfecting it.

And now we’re, we’re making it cheaper and more efficient by improving the application and the use of data. And, um, then the operation to make it a more efficient and lower costs,

Being different in the Red Ocean of Advanced Oxidation Processes (AOPs)

Antoine Walter: we’ll go to the operation of the system. But on the technology itself, you mentioned how wastewater is a scattered fields with many companies, addressing many different types of water in many different environments.

You have an interesting and different way to produce this hydroxyl radical. Nevertheless, there are many companies which have many different approaches to generate the hydroxyl radicals. What makes you different in the middle of that? Almost red ocean of advanced oxidation.

Jonathan Rhone: Thanks for asking that question.

There are many ways to make O H radicals and many different processes. Advanced oxidation processes are. Probably the most well-known and there’s many different combinations and configurations. So we don’t use any oxidation chemicals in our process. What I would say is that in any application you have to get to the point of saying here’s the treatment cost per unit volume.

So cost per cubic meter cost per gallon. Our sweet spot is in the industrial wastewater that has a concentrations of organic. That are in the several thousands of milligrams per liter. And we’re able to take those down to sub parts per billion or in the case of PFAS parts per trillion. That’s where we’re hyper competitive.

And the other area we’re competitive is advanced oxidation. Can work extremely well with, um, uh, in some applications we have not seen a, a molecule that we have not been able to completely mineralize and destroy, and that is a unique, competitive advantage. And we can do it cheaper and more reliably with full performance guarantees that we provide over multiple years.

And so I think we’re bringing a very competitive. Solution to the market, both from a performance basis and from a cost basis and treating oxidation of industrial water is complicated. Uh, oftentimes, uh, the Oxidation process creates other mixed oxidants and byproducts and our solution completely destroys all of those.

So we have to be able to guarantee that without getting into the real nitty-gritty of it, those are a few, the, the areas where we see ourselves being very competitive.

Zero Liquid Discharge… and Zero Solid Discharge!

Antoine Walter: There is one thing which really intrigued me about your technology. And I’m not sure I have understood it in my preparations to be really transparent with you.

I’ve seen zero liquid discharge processes in the past. I’ve seen advanced oxidation processes in the past. I’m not sure I’ve ever met a zero solid discharge process. That means that when you’re going to this mineralization realization step, you’re also going to get certifications for everything you have as, as, as an output is gas.

Correct. Can you explain me that?

Jonathan Rhone: Yeah, there’s no solid or liquid waste produced from our system. So these are solid state electrodes. The water is flowing through the electrodes and the oxidation happens. I mean, we’ve talked about the primary oxidation mechanism being OH radicals, but we also produce secondary oxidants and we also transfer electrons directly.

From the surface of our electrodes to the chemistry of the pollutant. So there’s, there’s multiple oxidation steps, but we do not produce any solid or liquid waste. Everything. The treatment process produces trace byproduct gases. And when I say trace by-product gases, For any customer, we have to be able to quantify those and they are extremely low concentrations and they have to be of course, validated and tested and so on, but they are, they’re all released, uh, directly to atmosphere.

Axine targets several Industrial Wastewater Treatment Applications

Antoine Walter: I’ve seen two kinds of application in the references you had featured on your, on your website. They are going from my understanding in two different directions. So I’d like to understand that in some of your references, You have several pre-treatments to concentrate the evidence, and then it goes to your proprietary technology and you have this gasification, or is there a liquid and zero solid discharge.

And in some other applications, you are a pre-treatment step, which enables to have a more effective and more reliable water reuse systems. In that case, there is a liquid discharge, but an ultra pure or quite clean liquid discharge. How is it that you are in those two extremes of the scope?

Jonathan Rhone: You’ve done your homework.

Very good observation. Maybe it makes sense just to talk about the market application as well, because that’s relevant to the question you asked. The primary market we’re focused on initially has been the pharmaceutical market. What we become really good at an expert at is treating. Active pharmaceutical ingredients in pharmaceutical wastewater.

And so when I say active pharmaceutical grades, I mean, everything from antibiotics to antiparasitics hormones, steroids, cancer therapies, and these API APIs, they get into the wastewater because during the manufacturing process, The plants have to rinse out the reactors that produce the API in the first place.

And so they pick up trace amounts of these API APIs and they end up in the wastewater stream. So we have a variety of different treatment applications for that problem. Number one. Sometimes plants are able to segment the rinse water that comes off of the reactors that has the API APIs. And it’s usually fairly small volumes.

And sometimes we can just the most cost-effective way for us to solve that problem is just to treat that water. Neat. We don’t need any pretreatment. Or any post-treatment we simply are able to put it through our electric chemical system and destroy the API APIs down to below the predicted no effects concentration.

In other cases, the API contaminated rinse water ends up going into the main wastewater stream of the plant. It’s a much, much larger volume. And then we have to, we have to really consider what’s the most cost-effective treatment solution. For example, if there’s a lot of biodegradable organics in that water, it might make sense to put in a membrane bioreactor as a pre-treatment step to destroy the biodegradable organics, leaving the APIs for Axine to treat.

In other cases, we might have an MBR that destroys the biodegradable again. But the API APIs are very low concentration in a high volume stream. So then we will use a, a re an ROI system and the roo system will concentrate the API. Into the RO reject and the RO permeate is, uh, can be discharged or reused.

And the reason we like to concentrate is because it reduces the cost of our solution because we have a smaller stream. With a higher concentration of API APIs. So sometimes we’ll use an MBR because it’s much cheaper to treat biodegradable organics with a biological process. Sometimes we’ll concentrate the APIs using an ROS system, and sometimes we’ll just treat the water neat, depending on what the application is, this really underscores something you and I talked about before.

Every single application is different. So you have to be able to quickly evaluate what the composition and volume of the water is. What’s the right pre-treatment process in order to provide a solution. That’s the most cost-effective for the customer.

The step-by-step implementation process of an innovative wastewater treatment company

Antoine Walter: So that means that’s for you. The first step in any kind of project is going to be to take a sample of the water or the API or all the backwash or, or the stream you, you will have to treat and to determine what’s going to be the best strategy and then come up with a treatment.

Jonathan Rhone: You’re pretty close. We’ve really, I think, honed and refined our approach to working with customers over the years. And I think this is a real source of competitive advantage for companies that do this. And we always looking for ways to improve it. The first thing we do is we work with the customer. Most of them have some pretty good data about their water.

They know what their volumes are. They generally know what the range of, uh, all the chemistry is in their water. So we typically do a paper exercise, and then we provide them with a preliminary proposal. We say, this is our treatment strategy based on what you’ve given us, based on the specification you’ve given us and what’s in the water and what the goal is, and here’s the, here’s the unit processes.

And here’s what it would look like. And here’s what it would cost. Over five years and here’s our service offering. We do that as a first step. Then they’ve got something that they can compare and they can use for decision-making. They can use it for budgeting. They can use it for comparing to other alternatives.

And then if they want to go to the next. Then we start getting samples of the water. We’ll bring water to our lab, our product development center in Vancouver, or we’ll do a field pilot, but we’ll really dig into the chemistry and the process and we’ll work with them. Sometimes we find ways to make suggestions on how they can improve their water process.

So we, we really partner with them to refine the strategy and the solution to hone in on the scope. And then we work on a final proposal, both technical and commercial.

Axine’s Go-To Market approach

Antoine Walter: You mentioned the piloting. If you had to make a wild guess from your experience, how often can you skip the pilot?

Jonathan Rhone: In the early stages?

We had the pilots just about every single time and what we have done as we’ve developed a increasingly robust set of data. On what the chemistry looks like. We’re using advanced analytics algorithms and machine learning to be able to predict the performance of our technology. So we’re using technology to define the system design, and then we’re validating that with actual test results.

And so the best way I can describe it to you at one is that our engineers. They don’t really care what the, whether it’s an antibiotic or a hormone or steroids. What they’re looking at is the molecular weight. How many carbons, how many rings are in that molecule? How many electrons are required in order to break all those bonds?

And we’re able to model that and predict that in, in an increasingly refined way. So that reduces our requirements to do field piloting. And to be able to design based on data. And I think this is just another innovation that we’re bringing to, to this area of wastewater,

Antoine Walter: to give you a bit of background for my question, you know, piloting can be a technical requirement, then you really have to prove something.

But as you said, I would have expected given the way you are set up, that you can have similar results by. Modeling and leveraging digital tools, but it’s also a hurdle you have to overcome in terms of sales, because that is a point for the end user to get, hold on your system and to gain confidence in your ability to do it.

So most of the time I’m extrapolating by saying most of the time. So that is my saying, it’s not yours. Most of the time, those pilots are about reassuring the customer and more than it, they are about proving something technical. But it’s also a sunk cost because as long as you are piloting, you are still in the sales process.

You don’t have a closed contract. You’re not in the active operation of the plans. So I guess that it has some financial consequences.

Jonathan Rhone: You’re exactly right. It’s the judgment call on the one end. It provides a very, very valuable technical input on design standards and specifications. It also allows you to build those relationships at the plant level, provides confidence to the customer.

So we still do piloting. I want to be clear about that, but piloting is expensive. It takes time. It’s expensive for the customer. It’s expensive for the supplier. It takes time probably more than anything. I’m a tech entrepreneur. So I’m always looking for ways that we can with reasonable risk to reduce costs of adoption.

And, you know, part of it depends on the relationship with the customer. We’ve taken a very strategic approach to market where we’re focusing on some of the largest companies where we can establish a beachhead under a master services contract, and then start replicating across their manufacturing needs.

With those customers, you know, where they already have systems in operation, they have a higher degree of confidence. We’ve already begun to win their confidence in our technology, not just our technology, but our ability to execute, which is equally as important. That’s a little bit more advanced relationship that somebody who’s just getting to know us so that those are all factors that play into the two pilot or not to pilot, you know,

Antoine Walter: I take a sign up for myself because that means you’re much more persuasive than I am.

I remember visiting some chemical customers and them telling me, you know, whatever you’ve done with our sister companies or other subsidiaries doesn’t count because we are a special

Jonathan Rhone: sometimes that’s the case. You’re absolutely right.

Case Study: Axine’s reference case in Puerto Rico

Antoine Walter: I’ve seen your recent reference in Puerto Rico? I don’t know if the reference is recent, but the video is a recent, so I’ve seen that one and I have two questions. I’ll take that one as, as an example, my first question is on the way you execute because. Pretty blown away by your fact that you are two days on site, basically.

So you do everything in offsite fabrication, you package it in containers and you bring those containers on sites. And between the moment that you enter the site and the moment when you leave with a system, which is fully commissioned, there’s 48 hours, how’d you do

Jonathan Rhone: that? Oh, it’s variable. It depends on the application.

The goal is not, you know, 48 hours or, or a week or two weeks. The goal is to be there as long as we need to be to support the installation, commissioning, and startup and performance testing. We also have engaged local technical support in every area that we operate and we’re, we’re getting better and better at defining.

The role of operations between the customer, what the customer and the operating team on the site will do to support the system. The local service technicians, our own team at our network operating system in Vancouver, and then our field services team that looks after the sites as well. So that whole system of service operations needs to function as a well-oiled machine.

And, you know, again, this is an area. If you’re going to own the system and operate it and guarantee the performance, it has to be seamless from the customer. If the customer is our VP engineering says, if you’re thinking about the Axine system, we’re not doing our jobs. That’s a real passion for us to make that work very well.

So it might say 48 hours, but it isn’t, that’s not the goal.

Fast Commissioning and Remote Operation

Antoine Walter: Very clear. So my second question along the same line is once it’s commissioned, you have exactly what you just said. If you’re thinking about the system, then there’s a problem. So we really you’re delivering this thing. That’s you’re also operating remotely.

I was curious about first, how do you automate all of that? What’s your concept of automation? And second, how much can the system work by itself?

Jonathan Rhone: Boy, there’s a lot there. We could talk for a long time about system automation strategy, but I’ll start by saying this. Our systems are designed to operate 24 7 without operator intervention, things go wrong.

Pumps, fail joints, fail, electrodes, fail. That’s normal industrial process equals. It’s very important to us that we have a locally engaged field services team that are able to respond within hours. If required. All of our systems are wirelessly connected and stream data back to our network operating system.

And it starts with the core electric chemical system. Those reactors are monitoring. 24 7. And when we do the testing and we do the commissioning, we establish a, what we call the heartbeat of the process and said data heartbeat. And it’s algorithms that give us the operating data signature of how those electrodes and how those select a chemical system is functioning in normal operation.

And if that data heartbeat and that data signature. Goes outside of our air bars, we’re notified immediately. And usually it’s one of, two things are happening. The wastewater is out of specification. Or there’s a problem with the electrodes and electrodes are a consumable. They do need to be replaced periodical.

They don’t fail suddenly, but they will degrade over a period of time. And we always have backup electrodes on site, but we start with all of that data comes back into our network operating system. And it’s all set up to, uh, provide us with alarms. And then that goes out to our field services crew and we’ll decide whether we have to dispatch the local, locally engaged people, or one of our people have to get down to site.

Towards fully automated industrial wastewater treatment plants?

Antoine Walter: I’ve made a bet for 2022. My bet was that we would see a waste with the treatments, which would be running automatically. I do know process automation helps a lot and it’s already quite automatic, but there’s still. Uh, human, which is taken care of all the elements. If my bed comes through, I would expect it to come from a system like yours, which is in the industrial world.

Well, if you’re taking guarantees at the end of the day, you’re taking the risk. So you’re also the one which is able to say my machine is clever enough. You’re saying leveraging machine learning, leveraging process modeling. So all of that speaks in favor of a plant that would be. Somewhere down the line, really working by,

Jonathan Rhone: you have to be able to respond to mechanical failures, but the advances in automation in sensor technology.

The cost of sensor technology and a data analytics and machine learning is getting us a long way down the road. And I will say our product development and engineering team is half hardware and half software and data analytics. It is an incredibly important part of being able to deliver these complex systems and, you know, here’s something else.

We can’t as a company neatly, think about we’re going to just focus in the United States or Europe, our customers. If they have a problem with a plant in south America or in Singapore, we have to be able to deliver a solution in where they need it. So that means that we have to be able to design, build, deliver, execute, service, and monitor.

Wherever their facilities are worldwide as a small company. And one of the advantages of the, of the pandemic was that it was the great leap forward in industrial automation. And it has taught us through necessity to be able to do this faster and better and made it an urgent priority throughout the company.

So it’s a passion for us and we, um, we’re not a hundred percent there, but we are a long way. And I think that that is a source of know-how and competitive advantage that will stand us in good stead for years. Going forward,

Industrial Wastewater Treatment Company: sizing a (future) unicorn?

Antoine Walter: you mentioned you were a small company, how many people are working for Axine today?

Jonathan Rhone: We’re just over 30.

And we’re adding people every month. We’re in a pretty big growth phase.

Antoine Walter: And what’s the driver to that growth?

Jonathan Rhone: I would say it’s successful beachheads with multinationals that are. Burning confidence in the market and driving adoption. Number one, number two, we have some very exciting new applications that we’re working on in the world of PFAS that, uh, we haven’t talked a lot about, but we think that’s going to be an exciting new market for us.

Is hypergrowth a possible path in industrial wastewater management?

Antoine Walter: So if I try to recap all of that, that means that you have a diferentiated technology. You have an approach with a full system, as a service, you have a market, which is booming, which is a goods and a bad news because yeah, there’s PFAS topic is here to stay. I mean, forever chemicals are by definition here to stay.

In a nutshell, you have a business which is highly scalable. So does that mean you are on the path? Hypergrowth is it’s some things you, you were seeing for the future of vaccine, or is it like a buzzword, which I should put back where it belongs as, as a buzz word?

Jonathan Rhone: I think hyper-growth is one of those dangerous words that gets thrown around.

Depends on how you define it.

Antoine Walter: I usually throw it to once per podcast. So I’m one of these guys that’s throws the wrong quite a lot. So

Jonathan Rhone: I think the sustained momentum and growth is very exciting for scene. These are industrial processes. They, all of our unit processes are modular and scalable, but they are custom designed custom deliberate, uh, systems, depending on the water.

You know, and, and the exciting part about our revenue is that our revenue model and business model is that we’re stacking recurring revenue on top of recurring revenue. So we’ve got a pretty exciting growth path from a revenue generation stem. And a scale-up standpoint. So, well, if you think about hypergrowth and water, maybe, uh, it would be, but I think it’s going to be steady, sustained growth, and we all have experience of this in, in industrial process, uh, uh, technologies we meet to make every system work really, really well.

We need really happy customers. That’s the most important thing for us and that’s, what’s going to drive growth for us. So making sure that we. You know, and we’re not selling equipment, we’re selling services. So we have very tight relationships with our client customers and manufacturing customers.

That’s so important to us for sustained growth.

Looking ahead: what’s coming in the next 5-10 years?

Antoine Walter: If you’re looking in my crystal ball and you’re looking, I’ll let you decide in five years in 10 years, where will Axion be first and what will tell you that you’ve succeeded?

Jonathan Rhone: Just stepping back for a moment. This whole area in industrial wastewater in water in general of these persistent complex organic molecules, I think is a mega trend in industrial water is kind of below the surface.

But, you know, I think the antibiotics, the. Concerns about AMR anti-microbial resistance in the pharmaceutical industry has created kind of a tsunami of work at the manufacturing plant level to ensure that that risk is taken care of. I think P is another, another one. I think there are other areas within the chemical industry of these synthetic chemicals.

So I think from a market fundamental standpoint, I just see increasing. Pressure on manufacturers across the board to treat water, you know, and here’s a novel idea. Let’s take the clean water into our plants and let’s put it back as clean as we got it. You know? I mean, that’s really, if you think about the other trends around ESG, And how companies are thinking about do no harm and harm reduction with their, with their manufacturing process.

I see there’s just a mega trend. So within that context, our goal at Axine is to be the world leader in providing solutions for manufacturing plants around the world, starting in the pharma industry, moving into the chemical manufacturing industry. And other sectors and to continue innovating and improving the, uh, you know, our product roadmap is very, very robust from a hardware and software.

We see opportunities for dramatic improvements in cost and performance, expanding our markets based on innovation. Those two pieces are, I think what’s going to drive us to being a world leader in this.

Antoine Walter: Sounds like a path to glory and victory, but I wouldn’t have expected anything different from an industry icon.

So I think we were closing the loop somehow. I think that makes for a perfect conclusion for that deep dive, unless I’ve missed an elephant in the room. I propose it to switch to the rapid for our questions

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Rapid fire questions:

Antoine Walter: So in that last section, I’ll try to keep the question short and your duty is to try to keep the answers short as well. And don’t worry, I’m always the one which sidetracks the conversation. My first question would be what is the most exciting project you’ve been working on and why?

Jonathan Rhone: I think, um, with some of our multinational pharma companies eliminating. Antibiotics and other API APIs from getting into water is so exciting and high impact.

Antoine Walter: Can you name one thing that you’ve learned the hard way

Jonathan Rhone: I can think of about 10 different things. Wastewater requires patients.

Antoine Walter: Do you have any example of that?

Jonathan Rhone: You, it goes back to the, the market is so fragmented. Every different industry market has different problems, a different market dynamic, and it requires patience and understanding to navigate and to find where the right beachhead application isn’t. It really requires a lot of listening from customers.

So it requires a lot of patients.

Antoine Walter: Is there something that you’re doing today in your job that you will not be doing in 10 years? I

Jonathan Rhone: think I will be less involved in day-to-day sales in 10 years.

Antoine Walter: How much does that represent in your daily job today?

Jonathan Rhone: Oh, well, over 50%. Okay.

Antoine Walter: What is the trend to watch out for in the water sector?

Jonathan Rhone: I think it’s all about the data that I think that when I look at water, when we started our vaccine, you know, I would have said that innovation in water was kind of 10 or 15 years behind the energy sector, which is my reference point. And I think that that’s catching up. But I still think there is an enormous opportunity for the application data in water.

We’re just getting,

Antoine Walter: that’s very interesting because we’ve been saying a lot on that microphone, how we are usually lagging a bit behind by design for good and bad reasons in the water industry. And also that’s usually when you look at the energy sector, which is our cousin, somehow you’re looking at the future of the water sector.

So it’s interesting to see that you have. Doing that travel from the energy sector to the water sector. You experienced that, but you sing it’s catching up is maybe a good sign for the water industry, maybe a bad sign for the energy sector, because if the laggards catches on you, it’s not good for you.

Jonathan Rhone: You’re right. You’re right. I think the other thing that’s going to happen is as we see the impact of changes in the climate, we’re going to see a much more severe impact on water resources. We talked about the tubing, interrelated, climate and water. I think we’re going to see that in very tangible and difficult terms in the next, the next decade.

Antoine Walter: I do fear you’re right. I would love you to be wrong on that, but you’re absolutely right

Jonathan Rhone: on that to tell you,

Antoine Walter: well, let me see a smooth transition for my next question. If you were a word political leader, what would be your first action to influence the fate of the words? What a challenge is?

Jonathan Rhone: I think that my first action would be.

To put a price on, on water that represents the value that water has in our society. When I started in the energy industry, there was no price on carbon. A price on carbon is having a dramatic impact on the market, on the economics and the adoption of solutions. And I think that does it continues to be a gap today.

Water is too cheap!.

Antoine Walter: Yeah, I don’t want to sidetrack you here because if I do where we are at for totally new episode, but you’re fully right. I couldn’t agree more with you. It’s been an awesome discussion on my end. I hope I didn’t bother with my weird questions. Would you have someone to recommend me that would be as awesome as you to have on that same microphone as soon as possible?

Jonathan Rhone: You know, I have been privileged to work with. Some of the most incredible people who understand water. Uh, and I, I, you know, I’m, I’m, I’m in my little corner of the water market, but I would encourage you to tap into some of the people in the pharmaceutical industry. There are some real leaders in that, in that sector that are trying to address some really challenging problems and they have some really interesting perspectives and, and express.

Antoine Walter: Uh, I think that’s an interesting recommendation because that’s for sure a sector of which must have some crazy water. I mean, what you said today is reassuring to me because I’ve met some of the industrials for which water was a cost to be in business. And I do believe that is something which is rapidly changing.

Because this push towards reuse towards different value streams around the water, make it appealing even for industrials. And also because companies that cures have this approach of turning it into a service, which, which changes the, the way you look at water, it’s not longer. This troubled kids, which is somewhere in your basement.

Jonathan Rhone: There is, I think it would be interesting to talk to some of the leadership in, in that industry. Is maybe a little bit different water is becoming less of a, not just a compliance issue. It’s becoming a strategic issue from an ESG standpoint. So if you’re a big tech company and you need to hire the best and the brightest and you’re selling products in the public markets, it’s important that the supply chain.

Of making your products not be creating other problems for society. And it’s important that you have a reputation of excellence in terms of managing your impact on the environment, because that’s what young people care about today. You know, you think about attraction and retention of talent, the relationship between.

Performance and commitments and, um, ESG and water becomes a really fundamental part of all of that equation. So it elevates it from compliance to strategic,

Antoine Walter: thanks for the precision and absolutely interesting topics. So thanks for the recommendation as well, Jeanette, and it’s been a pleasure to have you on that microphone.

If people want to follow up with you, where shall I redirect them the best?

Jonathan Rhone: They can go to our websites, uh, www dot vaccine, water.com and they can get ahold of us directly through the website.

Antoine Walter: Like always all these links are in the episode description. So I’ll have a look there. It’s been a pleasure and.

I’m not saying if I’m saying when, when you’re that weird leader in the solutions in that field, I’d be happy to have you back on that microphone to check on the next step of that fascinating path. Thank you very much. Thanks.

Other Episodes:

FREDsense: Revolutionizing Water Quality Monitoring with Biosensor Innovation

By Antoine Walter | 7 May 2025

Swirltex: Revolutionizing Wastewater Treatment with Bubbly Innovation

By Antoine Walter | 30 April 2025

Blue Foot Membranes: The Next Evolution in Water Filtration

By Antoine Walter | 16 April 2025

Echo River Capital: Pioneering the Future of Water Innovation

By Antoine Walter | 3 April 2025

1001 Fontaines: Engineering Sustainable Water Access Through Social Entrepreneurship

By Antoine Walter | 22 March 2025

Amazon’s Water Footprint: Tech Giant’s Quest for Water Sustainability

By Antoine Walter | 19 March 2025

Turing: The AI Revolution Quenching the Water Industry’s Thirst for Innovation

By Antoine Walter | 26 February 2025

Altillion: Pioneering Digital Intelligence for Water Asset Management

By Antoine Walter | 6 February 2025

Flocean: Pioneering Ocean-Based Water Solutions

By Antoine Walter | 15 January 2025

Botanical Water Technologies: Harvesting Liquid Gold from Plants

By Antoine Walter | 4 December 2024

The post The Best Industrial Wastewater Treatment System Is The One You Forget appeared first on (don't) Waste Water.

374Water is a cleantech company, that builds and develops Innovative physical-thermal technology (Supercritical Water Oxidation – SCWO) for resource recovery from waste and emerging contaminants elimination.

This episode is part of my series on Wastewater Energy. Go check it out!

What we covered:

How Supercritical Water was discovered 200 years by a French engineer: Charles Cagniard de Latour

How substances have a critical point, and where that one actually sits for water

How water’s physical properties change when we go past its critical point

How one can leverage these changes to run supercritical water oxidation

How supercritical water oxidation (or SCWO) works, and what it can deliver in terms of pollutant removal and resource recovery

The perks of supercritical water oxidation: how fast it goes and which feedstock it works with (spoiler: all of them)

How the process can be energy positive by tapping into the chemical energy dissolved in wastewater

The perks of taking time to evaluate options when developing a new tech (and of leveraging previous experiments)

How Supercritical Water Oxidation draws on simple building blocks available everywhere

How scale effects unlock even better energetical mass balances

How SCWO developed since the 1990s (and how some developments were unnecessary complex)

How challenging it is to introduce a new technology in the Water Industry (and which technologies SCWO intends to replace)

374Water’s business model and recent (external) growth

Spinning out of Duke University, Bill & Melinda Gates’ “Reinvent the Toilet” challenge, using Celsius instead of Fahrenheit, great French discoveries, being feedstock agnostic… and much more!

… and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨  

Teaser: Supercritical Water Oxidation

Resources:

Have a look at 374Water’s website

Come say hi to Kobe on Linkedin

is on Linkedin

Antoine Walter on LinkedIn

Infographic: Supercritical Water Oxidation

Quotes: Supercritical Water Oxidation

How does SuperCritical Water Oxidation Work?

Here’s a simple process flow diagram to describe how SCWO actually works

Full Transcript:

These are computer-generated, so expect some typos

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Antoine Walter: Hi, Kobe. Welcome to the show. Hey,

Kobe Nagar: hi. Good to be here.

A postcard from… Duke University

Antoine Walter: Well, we have a fascinating topic on our plate for today, so I have to tell you, I can’t wait to really dive into it, but right before I’m going to start with my good old traditions, which is the postcard. And your postcard comes from North Carolina. Am I right?

Kobe Nagar: Yeah. My postcard comes from Durham, North Carolina, which is the home of duke university. Well, can

Antoine Walter: you tell me about that place, which I would ignore it by now, aside from it’s the home of the duke university.

Kobe Nagar: So first of all, you know, everybody’s familiar with the duke basketball team, but the first thing that I saw when coming here was a lot of trees around.

It’s a pretty green place. I think it’s a really good. Place where you have talent from people from top university, but also the climate to really start and grow, uh, companies in, in the environmental space.

374Water is a Spin Off of Duke

Antoine Walter: So talking of growing a company in the environmental space, that makes a smooth transition. You’ve been a spinoff out of duke university.

So you were a professor at duke university, so. Yeah.

Kobe Nagar: So I was part of duke university. I wasn’t a professor. They don’t let me teach kids because I’m sending them out to do some real work. But I was leading a very fascinating project that we were able to turn into a company. I’ll talk about that and dive intointo that.

Introducing: Kobe Nagar, CEO & Co-Founder of 374Water

Antoine Walter: Before we discuss this adventure, which is going to be our deep dive. Of course, for today, I was trying to find, you know, that the red threads in your path and I’m the best I could find was you into engineering stuff. Sounds like pretty obvious, but also on the unconventional side of things, like really scratching the unknown, would that be a right definition or would you have a better one?

Kobe Nagar: It’s a good observation. You know, if you look in, in retrospect, I was always involved with industry that kind of pushed the envelope of the status quo. So, you know, going back early, early on in my career, like I was fascinated by rockets. Rocket Tyrian was, was the thing that I wanted to do. But you know, after a couple of years in that industry, I discovered that the defense industry is not as glamorous as people think.

And I like to say that, you know, I turn into the bright side of the world of renewable and clean tech. I was very, very fortunate to actually work on your terminal energy and travel the world, see places work on fuel cell energy. And before I joined juke, I was actually in a startup that was doing cement out of CO2.

And I think that can be a separate conversation for. And then, you know, going back to the university and after two years spawn off, spawn off a company spun off 3 74.

The importance of the Bill & Melinda Gates foundation

Antoine Walter: So let’s go back to that point in time where you do that. That’s been enough. What I’ve seen is that there is a link with the bill and Melinda gates foundation at some point.

And what’s the story. What did you, did you find out which was worth spinning off?

Kobe Nagar: So going back to 2018, you know, I was still parked in duke university. I wasn’t a professor, but at that time at the university, we,

And really to give credit to the foundation, to the bill and Melinda gates foundation, they’ve sparked a lot of new ideas and got people really excited about the wastewater industry and the importance of that.

So, you know, elevating that to discussion level, that’s a big credit to the foundation.

Antoine Walter: It’s very interesting that you mention that because I had Aaron Tartakovsky on that microphone from Epic Cleantec. And he also was one of these spin-offs of the reinventing, the toilet challenge. And it’s a totally different direction than the one you’ve been following.

So it sounds like, you know, it’s an opportunity for many good ideas to go out there and to walk there.

Kobe Nagar: Yeah. Yeah, absolutely. And there is a theory that:

And when we have to come up with a solution that will go into the developing world, you are forced to think differently.

You are forced to think about how you can leverage the entire ecosystem to do what is best for the community. Not just the individual part of how people are thinking about water and wastewater in today’s. Let’s

Why 374Water and not 705Water?

Antoine Walter: dive into your technology and just have the last stop before we do that, your company is called 374water you’re based in the US which to my knowledge work with Fahrenheit and not with Celsius.

I was just wondering, why are you not called 705 water?

Kobe Nagar: Yes, that’s actually a funny thing about that. W we actually had a short debate calling the company 7 0 5 or 3 74 water. And I remember at that time, I was, I was reading an article about movies that have the number three are more successful than other movies.

But to me, you know, frankly, yeah, the us is really big on the Fahrenheit scale. But to me, it was invented just to do a few Northern countries, not be below zero half of the year. So, you know, definitely Celsius makes more sense for engineers.

What is Supercritical Water Oxidation?

Antoine Walter: So actually, as we some spoiled it, the name of your company has something to do with the technology you were developing.

And there was that very special things that happens at 374 degree Celsius with water. If you go also beyond 221 bar, and that is. The critical point of water. And so far, I mean on that microphone, we’ve discussed a lot of technologies and none of them have been to that extreme. So above this 374 degrees and above this 221 bar, which is the super critical phase of water, what happens there and what got you interested in that field of behavior of.

Kobe Nagar: Yeah. So what happened in supercritical water is very fascinating. And let me go back because for a lot of people, when we talk about the technology, and again, if we did talk to the technology. For dummies, you know, another to make it simple, we say that:

And yes, it sounds very good. But to take it down a notch, we are using this technology called supercritical water oxidation, which sounds very bombastic. Right. But the only thing that people and that’s our job to educate is there are two things that. Warren told in, in school, one of them is everybody’s familiar with the three phases of water being bean, ice, liquid, and steam.

But as you mentioned:

And then what’s really fascinating about it, is that:

The solvent properties of Water change beyond its critical point

Antoine Walter: So, let me try to understand that that means that you have the normal behavior of water, which is, it is a perfect solvent.

You can mix whatever you want with water and it doesn’t mix with some stuff and pass that super critical point. It’s just the absolute opposite. It does the exact opposite from what he does below. Is that an oversimplification or is that.

Kobe Nagar: That’s exactly it. So the way I look at what a water is, the solvent of life, right?

There are a lot of things. That water is a, is a very basic molecule defy from a scientific perspective. This is another, another reason why water is such an interesting molecule, but it completely flipped.

That creates a very, a very, very unique properties. And the second component of supercritical water oxidation is, is the oxidation. So.

And when I say rapid, I, I mean seconds, you know, we like to say to people that:

Different oxidants can be used in supercritical conditions

Antoine Walter: we’ll come back to the potential efficiency of your treatments. I just want to understand this oxidation as well. When the student understood you placed at water in this super critical phase, but now you need to oxidize it.

You said you can do it with oxygen. You can do it, I guess, with air, which is 20% oxygen, 80% something else, or you can do it with different kinds of oxygen. And I saw that different takes at the technology on the market and. You are using air.

Kobe Nagar: Yes, that’s a great question on, on the, on the top of Fox oxidant that you can use.

So the oxidation can happen with, with any type of oxidant source and it can be pure oxygen. It can be even hydrogen peroxide or different types of oxygen, oxygen metals. But when we looked at the technology, we were looking on the developing world where, you know, the infrastructure, the grade is, is lacking or doesn’t exist at all.

And we choose to use. Uh, which is readily available, available anywhere. And that decision actually simplified the system and made it a lot safer. And later on, we found some, some really, really other cool benefits of using air. Like what, like, you know, things that are part of our IP portfolio.

Is it challenging to work at 374°C and 221 bar?

Antoine Walter: Just for me to understand here as well, air you fully right.

Makes a lot of sense is everywhere. So you have a compressor and you bring that air inside the system, I guess that makes it much more Kettering to any kind of field steel. You have to bring your water to this 374 degrees, which I guess doesn’t happen on your boiler. And same with the pressure you have to bring it to this 221 bar, is that complex or it’s also something which is pretty rich.

Kobe Nagar: I think it’s, you know, it’s, it’s complex, but it’s also very simple because in different industries, those are things that are being done in a very common piece of equipment. So if you take, for example, your, your diesel engine. You’re a diesel engine is running at a slightly lower pressure, but a much higher temperature.

And it’s all about having the system engineered to withstand that pressure. What really works for our advantage. And this is connected to the hive, how quickly the reaction is happening is the size of the system is very small. So when we talk about the size of our reactor, you know, kind of the heart of the system, we talking about a size of a one leader pair, a thousand people that makes the entire system, you know, very small, very compact, but mostly safe because you don’t deal in with a lot of volumes here.

What is the size and specificity of the reactor needed?

Antoine Walter: You mentioned the reactor as being the central part of your system. What’s special about it?.

Kobe Nagar: Surprisingly nothing special about our, our reactor. I’m saying that from a process perspective, I think, you know, for a lot of people in the field, they, they start to romanticize on a hydrothermal flame that is happening and you capture that.

But, you know, I’m, I’m looking at that as a, as a practical chemical engineer. So I’m looking at that as a chemical reaction. And in our case, we use in what has been called a plug flow, reactor that from a again, volume perspective and cost perspective on the system is a very small and similar ratio to the heart of the, the human body.

So, yeah, it’s, you know, it’s the core piece of our technology, but in terms of size, it’s more and very compare.

A single treatment step (that lasts 4 seconds)

Antoine Walter: So we have water entering. We have. Compressed air entering. Then we have that plug flow reactor where this quite simple technology, if I listen to you, which is mimicking a bit of the body, and then what happens at the outlets, what comes out of that reactor of through these very long four seconds, where we ask inside

Kobe Nagar:

So when we take any type of hydrocarbon or any type of a nitrogen species, we can break it down to the elemental CO2 water. And if you have nitrogenic, it becomes nitrogen gas. And really the end result is you get water, you kept your water, you kept your energy from the exothermic reaction.

And the rest is very nervous, inert gas. So nitrogen CO2 and all the inorganic minerals that were in the waste. And those minerals can be reuse. And in some cases, the values is big there because you have a lot of false.

Supercritical Water Oxidation’s energertical secret: it is an exothermic reaction

Antoine Walter: Just before we go back to that, I think you just correct a word which now explains everything about the energy.

You just said the reaction is exothermic. So that means that you’re producing more heat through the reaction. Then what you have to add at the beginning, hence the system can potentially be energy positive. Is that.

Kobe Nagar: Yeah, well, energy in is energy out, right? You can only lose energy in, in, in that, in that equation. But:

Can the treatment be energy neutral or even positive?

Antoine Walter: What would be the theoretical ratio? 100 person is what you need to just sustain your system to have perfect balance.

How much more could you with scale produce than the energy which you, you, you have as the space level. So we’re talking a 105 persons, 120 person, 700%.

Kobe Nagar: No. So there is, there is a trade off between sizes of equipment and efficiency of equipment. So for example, our smaller scale system is actually designed for 6,000 people.

And under 6,000 people, we still, we are getting close to energy neutral, but there is still a ciliary equipment that needs to be run where we become a producer of electricity is in the first thousands. And again, it all depends. How do you account for that? So w when we talk about the energy positive, we talking about the electricity positive in terms of heat, you’re always energy-positive was because you convert all of that to heat. So:

But for most people, when, when they see waste, they’re saying, this is something we get, we need to get through.

On a one-on-one example on a dry basis. you know:

And the supercritical water tradition, we call it SCOW for short. So the SCOW process can tap into that. And to me, you know, that was the reason I was drawn into this field from the first place.

I was looking at that as energy as an energy solution. And the challenge for us was how do we simplify the system and make it a user-friendly and ultimately autonomous.

Antoine Walter: But that thread, let me continue that one. You said that the technology has been invented by the French. Hey, in 1822, did I get that one?

Kobe Nagar: The concept of supercritical water was discovered by a French man that I forgot his name.

Why did it almost take 200 years between Supercritical Water’s discovery and SCWO’s first references?

Antoine Walter: I’ll find it. I have to battle for the French. So I’ll put it in the episode notes. Uh, but from what I’ve read in preparing for that episode, I found many research paper around supercritical oxidation or score let’s use score in the nineties, and then there are some tries and you have different companies left and right.

Which are trying, which is usually a good sign because if nobody tries, maybe they know something that you don’t know what’s different about you. That. You potentially be the one which is going to be very successful with it, or which is very successful.

Kobe Nagar: Great question. And then we get it a lot because the technology was tried and invented back in the nineties.

And I think, you know, what helps us be successful is we really took the time. That’s the beauty about starting in a, in an academic Institute. Like we had the real pleasure on looking on what people have done before. And trying to figure out what worked for them, what failed and came up with a hybrid that took the benefit from both worlds.

Uh, you know, again, I give the example of the air. You know, the first system that were developed were based on air and then the second generation that people strive where we’re based on pure oxygen, we were able to take those two thinking group. And figure out a hybrid that is using air, but using some of the elements that the folks that we’re focusing on on pure oxygen we’re, we’re using to me, that that would make us successful.

We had a very, uh, long time of developing the technology way. The pilot that we have at duke university, uh, has been operating from 2015. And it’s all about all about pushing the envelope. The holistic, you know, this is, this is another, another point for the French it’s. If you look back on history and I’m trying to correlate that to the wastewater industry in a lot of sense, what we’re doing in the wastewater industry is very similar to a hot air balloon.

Or the technology that was again invented by, by the French, in the 18 hundreds. Yeah. And then what we’re trying to do is accelerate all of that, then put a jet engine also invented by, by the French about a hundred years ago into this.

Antoine Walter: So you’re working for the French embassy.

Kobe Nagar: Don’t you, I’m getting, I’m getting something out of that, but yeah, you know, if you look on, on technologies and companies in the,

Antoine Walter: Okay. You were positive so far and you had to be also realistic itself.

Kobe Nagar: It’s all about the balance view.

Supercritical Water Oxidation enables Resource Recovery

Antoine Walter: So, absolutely. I’m sorry, because I’m dragging you a bit around, but I’ve cut you off when you were explaining the resource, because you said there are three pillars, there’s the water elements, there’s the energy element.

And there is the resources and the recovery of those resources, which is the third pillar of what you explained. And I cut you off when you were starting to explain that. So I like to get that part of the story. How do you recover those resources, which you have been successfully separating from water and one of the streams which you can generate with.

Kobe Nagar: The first resource that we recover is water. So we can,

And that’s the first thing in our system. What you get is half of the water is, is a distilled water quality. And then the other half is water that contains all the minerals. And it’s all a matter of the market drivers about the value of those minerals.

Recovering those. I mentioned the fact that for municipal sludge phosphorus is about 10 to 15% of those minerals and it’s, it’s very easy to recover. And on top of that, the entire mineral stream can be used as a fertilizer as.

… And eliminates forever chemicals like PFAS!

Antoine Walter: So you have this resource recovery element, which allows you to drag the water and the resources.

We also just touched on the efficiency of the removal that you have with your system. And you said it can break even PFS. And I’ve seen in one of your case studies that you are breaking down PFS 2 99 pound 98 or 99%, which sounds impressive. Is it something which is true for any kind of feed or. Do you have to have specific conditions for that to happen.

Kobe Nagar: So when we look on the process, we say our processes it’s feedstock agnostic. It doesn’t really matter which kind of hydrocarbon you’re fitting in. It can be fecal matter, frequent sludge, but it can also be any other organic like plastic or those molecules. At the end of the day, it’s a molecule that has a carbon bond, but you can break and get energy from breaking down.

The same way that you burn natural gas. What’s really unique about it is you do everything in a media water. You know, we go back to the fact that the water is the solvent of life. So:

And that’s very important because one of the biggest challenge of destroying eliminating P for us in incinerators is at the end of the day, you get HF or hydrofluoric acid. Which is bad for the equipment, but also also bad for the environment in our case. What you end up with is fluoride, usually calcium fluoride, which can actually be beneficial used, like this is the type of chemical that you have in your toothpaste.

Is supercritical water oxidation too good to be true?

Antoine Walter: Okay. So you’re treating water with a high efficiency. You are potentially energy positive, but you allow resource recovery, you use stuff which is available everywhere, heats and pressured air. I’m looking for a caveat. You know, that sounds really too good to be true. So please, can you give me one limitation or one drawback to your system?

Only one.

Kobe Nagar: It does sound too good to be true. And you know, when,

I think what we’re doing is all about managing, managing the stream in managing the stream out.

And, and this is, this is where we had to think about really, how can you feed. Uh, very viscous sludge into our system. So it took us several tries to figure it out.

And it took us some years to figure out what’s the right heat exchanger to use and how we can do that.

And, um, as you mentioned, you know, back in the nineties, The biggest challenge with supercritical water oxidation is the fact that reactors and the materials for their reactor were pretty limited. And you had problems with corrosion. And then we mentioned the phenomenon of supercritical water that it’s not great solvent for inorganic.

So you had plugging issues. So we had to work really hard around those issues and how to solve. Right now the biggest challenge is adoption in the market. You know, we know that the water industry is very risk averse. We have a saying that:

You know, it doesn’t matter if you’ve done it over and over again. Everybody thinks that their waste is a unique snowflake and you have to try it again. And again, the reality is we don’t right. And that’s something that we’re trying to change in the industry. Doing a custom design that is a copy paste from an under design.

We’re trying to say, this is our system. It’s been mass-produced and this is the way you operate that. And it kind of simplified the process.

How to deal with the new technology adoption curve

Antoine Walter: Talking over this adoption curve, which is, as we all know, one of the major herders, you know, our industry and we can debate it because it’s probably also for good reasons, not only for bad reasons, but what is your intended application?

What is the part of the industry where people are dying to get your solution?

Kobe Nagar: We mentioned the fact that the solution is very feedstock agnostic. So what we’re catering is not just the utility, not just the municipal side, but we also taken care of on the industrial waste. Uh, right now we are focusing on a sludge and biosolids treatment because it’s a big issue from a cost perspective, but also from emerging contaminants.

And before, uh, you know, a lot of folks talking about before solution, but they’re basically talking about removing PFAS. I think we are one of the only companies that are talking about elimination.

Antoine Walter: It’s not separating the PFS, it’s breaking them down and eliminating them.

Kobe Nagar: Yeah. It’s actually moving them out of our ecosystem, breaking them down completely.

We tend to joke that a lot of folks are doing basically . That is really pushing the problem to another location or, or, or the next generation. And we’re saying, no, let’s think about how we can solve it. And, and, and there are some synergies, for example, when you treat biosolids affinity to biosolids. So when you take and treat biosolids, you’re taking about a thousand more people, Smalley, pure.

Then water. So, you know, you take that out of the environment. And I would say, you know, our solution is in the, in the business of minding pollution and taking the beneficial part of that.

Is SCWO tailored to hard to treat wet streams?

Antoine Walter: But again, does that mean that the first place to use your technology is if I’m dealing with a complex problem and you’re probably the best, most trap.

To a different, totally different scale because you’re not just trapping the pollution. You’re reducing it. Mineralizing it. And just eliminating it, but just do know the benchmark. What is the portion of the water industry you intend to disrupt and replace to use the big words?

Kobe Nagar: Yeah. So, so right now, you know

Innovative business models to speed up the adoption of SCWO

Antoine Walter: So if you’re lower OPEX, lower CapEx and your, you have a difficulty for the early adopters. I want to be the first because everybody wants to be the second first to be second.

What is your business model? There is it to sell your containers? Is it to offer them as a service to rent them or to deliver a treatment of water as a service? What is your model right now?

Kobe Nagar: Our job is, is basically reducing barriers to the industry. And this year we, we are actually going to offer both, provide them as an equipment sale, but also provide service.

What’s really unique about our solution is you can relocate it just because it’s small it’s containerized that actually opens up another possibility of leasing in our equipment. So instead of designing your plan for the next 30 years, you only need to design it for the next six months until we can deliver another, another module.

Or if you have excess capacity, you can rent it out or move the entire asset to a different location. So it’s open, opens up new and innovative business models around waste treatment

374Water merged with PowerVerde to leverage synergies

Antoine Walter: Talking of new innovative business model. I just saw that. Um, I mean, when I was preparing for our discussion, I saw that you merged with PowerVerde, which from the name has or inside.

So I think that has to do something to do with the poor generation or something around power, which sounds to me like a way to extend the business model and to say there’s also the power element, but really that is my helicopter view from the other side of the Atlantic. So when was the, the idea with this.

Kobe Nagar: Yeah, thank you. You’re right on point, you know, for us, it was simple, a good alignment of the businesses at that time. Uh, PowerVerde were our supplier for the energy recovery piece. So, you know, think about the, the super critical oxidize. We make a lot of heat, right. And we need to convert that heat back to electricity.

So that’s why we, we needed, uh, an energy recovery system. And that’s what poverty had at that time. And we, we learned to, you know, work with each other and then, and then said, let’s figure out a way that we can merge and the, or is also been publicly traded. We wanted to use that vehicle to raise. So we were successful in, in merging, but also raising money for the merged business together.

374Water is half a unicorn (or a Zebra) as per its latest valuation

Antoine Walter: So that is a field, which is of course fascinating, but I was just reviewing the numbers before we discussed. So your public listed and if I’m right, you’re half a unique.

Kobe Nagar:

That’s essentially what we’re gearing gearing to do. So, so we want to be in those areas, we are connecting the technology into the water and waste and energy, and then the backend, the mineral and the heat is perfect for food production. So we go to be and connect those four communities in a, in a more decentralized ways that than what’s what’s exists out there.

Antoine Walter: That’s an interesting vision. Does that mean that you might have more in the pipe because we’ve seen that in terms of scope, the fact that now you are together with polar Verde allows you to have everything which is inside the container basically is yours, but we could imagine that on that decentralized, distributed scale on the agriculture or the food side of things, maybe you can also valorize these minerals that you gather and also transform them within one.

Potentially subsidiary. Is that something which, which makes about sense or so you really focus on what you do best and then you deliver the best components to the next.

Kobe Nagar: We have to focus, right? That’s the challenge for, uh, for a company we have to focus about our core technology, but what’s, what’s the strategy for us, you know, on, on growing the business and growing that concept that, that waste isn’t is the ultimate reason.

Is to create a bolt on technology that will come and provide that vision to again, decentralized solution that will cater the needs on water, waste, energy and food. So we’re not going to do it ourselves. We have, you know, an M and a strategy and partners that we work with.

What’s the growth outlook for 374Water?

Antoine Walter: If I look on the horizon, what are the triggers, which will help.

Grow even faster, because you said you took your time, but I would debate that because if you did your first pilot in 2015, I mean the usual timeline for a company in this water industry is to take 15 to 20 years to be in the middle of the market. You took five to seven years to be hauled for unicorn.

I’m debating the fact that you were going slow and I’m rather seeing that as you’re, you’re going pretty fast, but I would see different triggers that could help you. If we say the water industry has to decarbonize. Then the fact that you were energy positive and that you’re not producing methane is very positive for you.

If we start to go into resource recovery and we build the resource recovery routes while you’re the perfect feedstock for those resource recovery routes. So what is the, what is your future driver? Trends that you can write to grow.

Kobe Nagar: It’s definitely fascinating, right? Everything. And in order to be successful, you have to have the perfect time.

It’s all about timing in, in, in business. And luckily for us, you know, we are in four of the, of the critical element in, in the water industry right now. So, you know, last year we were in WEFTEC. And one of the big questions that we had with the organizer is where to put the 374 books, because we want the innovators of last year, we are focused on this centralized solution.

We are focusing on . And we are focused on, on resource recovery. So, you know, you kind of answer four of those buckets in, in the company. And the market is, is really, really first the four solution that can look at that from a moralistic perspective. And I believe that that super critical work sedation is, is, is the key to achieve.

Where will the company be in 5 years?

Antoine Walter: Now last question for me in that deep dive, you know, have my crystal bowl next to me and you can look in my crystal ball and it’s, it shows you where a 374 water is in five years. What tells you that you’ve succeeded when you look in that crystal?

Kobe Nagar: And again, it’s about targets that we put in, in front of us.

So, you know, the targets that, uh, that we put for last year is to sell two units. And for this year, we are actually going and selling 10 units and that’s the target for this year. So it’s all about pushing the company forward. You know:

Wrapping up Supercritical Water Oxidation

Antoine Walter: Well, I think that makes for a perfect tour of supercritical water oxidation and of what makes you special in that field, which is bubbling. And I have to say that you were on my bucket list of in VTS. People I wanted to have as a guest, but also your name came regularly from suggestions. So it’s not like I’m the only one who wanted you to be on that microphone.

So it sounds like you’re onto something it’s not everyday that I get to guest, which is requested by the audience. So. I think that’s assigned seats as you wish, but that’s a sign. I

Kobe Nagar: appreciate that. Yeah. We really try to do good in this, in this world, you know, going back. And I think, you know, one of the questions that people are.

You know, asking is why did you create this? Why, why are you going against the giants? And it was mostly because the giants didn’t want to develop technology. You know:

And when I saw that, I said, you know, something needs to be done in, in this world. On my kids and I want them to have clean drinking water. And right now the solution that we have in the industry or are limited. And:

The importance of R&D

Antoine Walter: Actually what you see on R&D makes me think of what Paul O’Callaghan was explaining on that microphone. When we were discussing his stages on the dynamics of water innovation, I was asking him because in his fears it shows that there’s only a fraction of the companies which really invest into and.

And to me, that’s not obvious. I thought all the companies are investing in R and D, but it’s not the case. And what he was seeing is he wasn’t blaming them at all. They were saying, it’s all a matter of return on investment. If you can prove that investing so much in RNG brings you so much and a bit more than everybody would do it, but it’s about having them the right scale, the right fields, the right ideas.

So that’s what you invest has a clear output in a sizable. Timeline. And from what I understand from 3 74 water, that’s probably your chance there is that you’re looking at a scale where you can see the effects pretty fast. You’re surfing a wave, which is a tidal wave. I mean, what I mentioned about the resource recovery and the decarbonization is there to stay.

And what you mentioned about the food, water, energy nexus, I mean that clearly is also here to stay so that places. You know, if you’re tracing a Venn diagram at the center of that Venn diagram and it’s I guess, a good place to be in. And I’m pretty sure you’re not there by accident either. So

Kobe Nagar: yeah. Well, you know, sometimes something you need a little bit of luck to be in that.

Specific Venn diagram, but luck is on our side. I think from being in the industry, seeing people, I think everybody in the industry, people are great. You know, there are people that really care about the environment, people that want to do good. And it’s all about recognition. You know, I think the big companies are really challenged or facing failures.

And if you don’t, if you take risk, you might have. And, uh, and that’s something that, you know, mentally needs to be changed.

Because you need to advance society forward.

And unfortunately, you know, we weren’t really. Picking the pace on water and wastewater, and that’s going to change. It’s going to change from people know and want to know more about water.

So how do we have a similar industry, the power industry, that every product you buy, you know, how many kilowatts it consume, you know, how much it’s going to cost you for a year.

And it’s, it’s part of the decision process. And electricity comes in one flavor, water comes in many flavor, you have different contaminants and people are not really aware of. And that’s part of our job is to educate, educate the industry and really elevate the value of water. We treated as a, as a subsidized resource that is there.

But the reality is very far from that. The quality is not there. And, uh, I always tell people, you know, the water quality, for example, in, uh, in Michigan can be worse than what you, what you will find in Ethiopia. That’s something that, that needs to be.

Antoine Walter: I fully agree. I fully agree, but unless you have two more hours, I’m not opening that sidetrack because that is a fascinating, fascinating sidetrack.

And the auditors of that podcast know that I can rent quite long about it. So I’m, I’m cautious of your time, but it take a note that that should be, uh, an old. Secret episode at some point to discuss the value of water and the way we tell the stories of water and how we promote it. Because if people value its rights, it’s also a huge business opportunity which has created, and which is a win-win for society.

But I said, I’m not opening can rent. So I propose it to switch to the rapid fire questions.

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Rapid fire questions:

Antoine Walter: So in that last section, I’m going to ask two short questions, which you can answer with short answers and you’ll see that I’m the one site tracking. My first question is what is the most exciting project you’ve been working on and why?

Kobe Nagar: Yeah, I would say my kids are the most exciting project that I was, I was working on, but you probably ask them the business world business world definitely, you know, 3 74 is, is a miracle.

And it’s all about how you. Transform and dream into a reality. Can

Antoine Walter: you name one thing that you’ve learned the hard way,

Kobe Nagar: um, that it takes a long time for people to see and understand your alternative universe and vision, you know, for us, the 3 74, it took us almost two years to get the investor behind it.

Antoine Walter: Is there something you are doing today in your job that you will not be doing in 10 years?

Kobe Nagar: I would say, hopefully not work on the weekend, but, uh, you know, it’s a wishful thinking for an emergent company. I get you. I think it’s more of a binary, right? You either get bought out and, uh, and retired or work as hard as you can.

Antoine Walter: What is the trend to watch out for in the water sector?

Kobe Nagar: I think again, maybe I’m a little bit biased, but having those couple. Uh, ideas around water waste, energy and food. And again, this is, this is something that I’m seeing. I hope that more people will see it.

Antoine Walter: If you were a word political leader, what would be your first action to influence the fate of the World’s Water Challenge?

Kobe Nagar: I would say, first of all, listen to scientists. Right? Listen, listening is a good action to do, but mainly kind of incentivize companies to sprout new ideas and innovation. How would you do. So part of that, we talked about, you know, how much of your revenue needs to be allocated for R and D.

I would want to put some kind of legislation that will force you to do that. I’m coming from the mindset of, I was born and raised in Israel and Israel is doing a lot in R and D. So a lot of the revenue, a lot of the reason companies are, are, are created and growing is because you invent in inventing.

Antoine Walter: It sounds like a good program.

I would be voting for you as a word political leader.

Kobe Nagar: Thank you. One toilet at a time. Yeah.

Antoine Walter: Last question. Would you have someone to recommend me that I should definitely invite on that microphone?

Kobe Nagar: That’s the one that might be, might be hard for you, but I would want you to interview, you know, the head of the APA Michael Regan.

And get his perspective about what needs to be done in the sector from a regulatory perspective.

Antoine Walter: Sounds good. I mean, when you said it would be hard, I was hoping you wouldn’t recommend me bill gates, because that’s, I can tell you it’s going to be really impossible for me. I can try, but also suggestion.

Thanks. Yeah.

Kobe Nagar: Well, you know, okay. We’ll talk about it offline.

Antoine Walter: Well, if you have his phone, I can take it.

Kobe Nagar: We have like three tiers below it, but I think, uh, you know, if the right proposal will come like a

Antoine Walter: interesting, you got me hooked. Well, Coby has been a pleasure. Thanks for sharing all of that with us today, I’ll be watching closely the next path of your route.

I mentioned. Half a unicorn, lets you build the other half and then probably we have something to celebrate on that microphone.

Kobe Nagar: Yeah, that’s let’s do it again. Our goal is, is not becoming a unicorn. Our goal is to become a big company that really connects those, those dots and offer something, something else to the world.

But we will celebrate. You mentioned your,

Antoine Walter: your bias and that is my bias and trying to see unicorns everywhere. And maybe it’s because I have two daughters. I don’t know what’s if there’s a link, but, uh, you know, my partner in crime bureau called me a unicorn hunter. So it’s good because, um, I’m hunting something which doesn’t really exist.

So I’m still a good guy, but. Yeah. Anyways, I’d be happy to have you again. So thanks a lot.

Kobe Nagar: Absolutely. It was a pleasure. Thank you. Thank you very much. And keep doing what you’re doing. It’s a big part of educating the audience and, uh, this is what we need in order to attract.

Other Episodes:

FREDsense: Revolutionizing Water Quality Monitoring with Biosensor Innovation

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Swirltex: Revolutionizing Wastewater Treatment with Bubbly Innovation

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Blue Foot Membranes: The Next Evolution in Water Filtration

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Echo River Capital: Pioneering the Future of Water Innovation

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1001 Fontaines: Engineering Sustainable Water Access Through Social Entrepreneurship

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Amazon’s Water Footprint: Tech Giant’s Quest for Water Sustainability

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Turing: The AI Revolution Quenching the Water Industry’s Thirst for Innovation

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Flocean: Pioneering Ocean-Based Water Solutions

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The post Is Supercritical Water Oxidation a Solution for PFAS, Energy (& More)? appeared first on (don't) Waste Water.

Klir is building the All-In-One Operating System for Water.

This episode is part of my series on Water Digitization. Go check it out!

What we covered:

How the Water Industry really differs from any other economic sector in its core mission itself

… and what the core differences between the Water Sector and any other vertical actually are

How usual approaches generate alarms and triggers but leave operators helpless to translate this into a clear path to action

How task management can be enhanced when it is addressed in a Water-specific way

How Klir helps out water operators by learning on the go which tasks really move the needle

How digitization of processes is not about replacing people but enhancing them

How there may well be many existing tools on the general market, like Asana, Monday.com, or Rippling, but bending them to Water Topics isn’t easy as pie

How the low-value many users still give to Water is a challenge across the entire value chain.

How water professionals are still the unsung local community heroes (and why)

How the software landscape has changed quite a lot over the past decade

Who the power users of Klir are, and what the two largest use cases are

How water utilities shall communicate with their end-users (and what to avoid)

How Klir intends to become a Water Unicorn and how they align themselves towards that goal

Klir being a “saxophone,” being laser-focused on your customer, two Potties helping to solve Water, the proof being in the pudding… and much more!

… and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨  

Teaser: Compliance Confidence

Resources:

Have a look at Klir’s website

Come say hi to David on Linkedin

is on Linkedin

Antoine Walter on LinkedIn

Infographic: Compliance Confidence

Quotes: Compliance Confidence

Full Transcript:

These are computer-generated, so expect some typos

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Antoine Walter: Hi, David, welcome to the show.

David Lynch: Thank you very much. So happy to be here.

Klir sends a postcard from Toronto

Antoine Walter: So from Europe much, I can notice a little bit of this Irish accent we had on the podcast already, but you’re sending a postcard from Toronto. So what can you tell me about Toronto? Which I would ignore, by now.

David Lynch: Yeah, I know you’ve had other Irish people on the podcast.

So I think we are supposed to be the sexiest accent in the world, but not definitely doesn’t beat the French. I don’t think so. Talking to you today from Toronto, it’s a balmy minus 28 degrees Celsius, which Irish people are most definitely not built for, but it’s a great city. I actually have to say one of the reasons that.

Moved from, from Ireland over here was, uh, reading the diversity. They say it’s a city where everyone’s from somewhere. And I think that’s brilliant. Like, I think that’s what I love about the city. You’re, you’re accepted no matter where you’re from or, or what’s your, what’s your creed or color or.

Making a dent in the Water Industry

Antoine Walter: So that makes for an interesting transition because you’re coming from a field which has this it field, even if it’s sustainable it environments of it.

And you’re trying to move something in the water industry, which brings me to a very simple question. How do you get accepted as a newcomer? Is it exactly like Toronto style or to have to make a dense into, into that?

David Lynch: Oh, you definitely have to make a dent, you know, particularly in, in water, it’s definitely, uh, a much more conservative industry.

You know, I know a lot of my colleagues and other companies sort of rail a little bit against your, how conservative they are, but having spent my entire career working with water professional.

I was lucky that I got the experience in Ireland and cause trauma in Europe and get experience and then be able to take that reputation that’s in north America, but definitely have to rebuild it again. What’s something I’m actually pretty happy.

Klir’s elevator pitch

Antoine Walter: Looking at what you’re happy doing. What’s your elevator pitch to Klir?

David Lynch: Yeah. So for Klir, basically what we say is it’s the operating system for water. My experience is pretty much working in the trenches, working with water professionals day in, day out, and we know that water operates as one single interconnected system, albeit a system of chaos.

What it is, it is one single site and a one single system. And yet that’s not how it is managed. So basically what Klir is it’s this one single platform that manages and will eventually manage at a watershed or water cost from base approach, what happens and what activities are taking place inside that watershed with the ultimate aim to be able to in essence, collaborate and make water better.

What is RegTech?

Antoine Walter: That’s

a neat pitch. Should we go inside and just deconstruct the verse elements in just a minute, but I have elapsed stuff before going into plunging into the deep dive. And I’ve discovered a term when having a look at your, at your path and that’s the reg tech. So what is the reg tech

David Lynch: Reg Tech is something that came from like the financial sector whereby.

You know, if you’re a bank or you’re a financial institution, a large part of your business is making sure you adhere to different regulations. And when we started off Klir, we caught, we were in that category. It can also apply to health and safety on that side of it. And just applying that to water and basically using the tools and technology that you need to make sure your regulatory, regulatory compliance, what we know though that water, and this is the nuance, which I think.

You know, a lot of people don’t understand is if you’re thinking about like

It doesn’t run away with itself. Where if you actually take water, the whole purpose of a water authority or water, utility or water municipal delivery of services is to deliver safe and secure. Um, that’s an essence while regulations are. So:

And so it often gets lost that I think in the construct of how water service is delivered today that we have that’s optimized engineering or let’s operate, optimize operations. What does it actually make water better? Is this improving our ability to deliver safe and secure water services?

I think that’s what sometimes gets missed because even if you have the best engineering department in the world, it doesn’t mean that you’re going to deliver the best services or they’re not correlated. So when you think about the entire purpose of all of that authority is basically regulation and there’s nuance to that.

And not sometimes regulation, doesn’t always align to safe and secure services, but that tends to be more in the implementation site, but the principles are.

Regulation and Compliance is at the core of the Water Industry

Antoine Walter: It’s very, very, very underestimated. When I, when I say that, it’s very interesting what you just said, because we are somewhere at episode 80 of the podcast and the spin you’re giving to that is unique.

It’s the first time I heard that and it makes a lot of sense that this regular retreat aspect is at the center of it. And that’s somewhat, we’re delivering to that before everything else. I don’t know if it’s a good thing by the way, but it’s certainly. The way we’re set. So it’s a very interesting encapsulation.

David Lynch: Absolutely. You know, like I think in my experience, because what my background is very much on the water framework directive site, which I actually, I love as a piece of legislation. I think many people will look around and say, they love particularly. I love it because it’s a relatively simple piece of legislation, like 13 pages or so long, but the technical, the patient is much, much more difficult, but the principle is, is takes a, you know, an epidemiological approach and just making sure that you protect that.

Of the water and then you can use various tools and various different techniques to try and protect us now, the implementation and when regulation comes along, a lot of vested, interests has come in. A lot of interpretation plays into it. What’s great about the water framework directive is this, for example, if you’re a wastewater treatment, And, you know, let’s say you’re discharging to a local river on the nitrate level of the river needs to be without 10 milligrams per liter or something like that.

If it arrives at your pipe at nine milligrams or where you’re discharging on, you’re just discharging to traditionally, you would be the person who was making that water body. But what the framework allows and that the principles behind proper good regulation is, and allows you to challenge us and allows you to say, I’m not putting in this massively cost ineffective and nutrient reduction program or treatment, or my facility.

And I’m actually going to challenge the licensing limits. You’ve put on me. I’m going to challenge you to say, this is, this is happening upstream. Maybe it’s runoff from agriculture or whatever, maybe. And I’m going to challenge them as you’re facing. If you allow this flexibility and pragmatism into regulation and allow a structure to challenge us, it works.

What the problem with so much regulation is it’s very much a stick that’s like, you must do it to this level or else, or you must do these jobs or else. And when we set out to build Klir and to deliver this type of that,

And that’s what this is all about.

Antoine Walter: There’s a lot I’d like to unpack in what you just said, but I have to, to put them in the fridge and let me come back to that later, what you’re saying is that that sector has to undergo some transformations and some of this transformation has to do with the digitization aspect of it too.

Do I get that right first to have the right starting points?

David Lynch: Yep. That’s exactly it.

“Why does the Water Sector need another piece of Software?”

Antoine Walter: And you think you have care ideas to support? In that, and then we can deconstruct why, so the why elements, but let’s start with the how and the, how is, that’s you say that you have clear ideas on this digitization path and you can help the sector get better and more efficient and, and both different stuff with Klir, but why do you think that you have something special in difference to answer that specific question on the hall to get better

as a second?

David Lynch: I suppose I’ll take that as a question of maybe why does the sector need another piece of software or platform and Klir, you know, maybe, maybe that’s the way to address it. And I think the way we thought about this is first off,

They were made for health and safety. They were made for electricity transmission or something, something like that. And then. Maybe I’ll have to cut out this bastardized or software.So forgive my French and turn it into something that sort of works for water. And it goes back to that initial thing I said at the top, which is the nuance of water is that regulation is aligned. And the jobs we’re doing is in safe and secure delivery of water services.

The water sector is special, its software should as well

Antoine Walter: Sorry to cut you, but, but to that extent, do you think the water sector is very different from the energy sector for instance?.

David Lynch: Absolutely. Yeah, for sure does a couple of reasons that it’s different from the energy sector. First of all, there’s a huge quote. Like I know there’s arguments against this, but there’s a huge quantitative adamant of the product we deliver. So is it more like a food, like.

I know on your podcast before, you know, this is something that you’re passionate innovation, it’s like, do we, as a species, do we, as a, as communities really understand the value of the product we’re getting.

So you’re delivering. Source of food thing. That’s sorta perceived as free. You have to maintain the quality from upstream of your catchment of what’s happening up there. You need to do the production that needs to deliver it out to your, at your end consumers, then you need to, or one of your colleagues is to bring that back and treated and discharged.

Water Professionals are unsung heroes

You can draw similarities to different markets, but it’s definitely not the same as electricity or gas. I think the people I would also argue in water are fundamentally different. And, you know, I, I often say when I spend time in the fields, you know,

And it’s a more for human health than anything else. This is a job, a thankless job, 24 7. It doesn’t command the same pay rates as other sectors, but the people who work in water and have a very, very deep rooted sense, their community, very, very passionate about the job they do.

They really are very, very tightly aligned to the mission of what their authority does, which is delivery of this service to their community. So these nuances about the people in the field on the product we’re delivering, I think is often under, under estimated under appreciated by others. Uh,

How does that make the Water Sector’s Compliance and Task Management tools different?

Antoine Walter: I fully get your explanation.

It makes a lot of sense, especially people special, good. We working on and special frame. We are evolving in, but how does that make the tools that we need different??

David Lynch:

Whereby the nuance of water. Just to follow is a tool to be creative for a sector. So for example, if you have a permit, a permit, which can be anything from an NPD, yes. Pollution permits, or discharge permit to an obstruction permit in a lot of systems that are like electricity or health and safety management. They just think that those, that.

A series of jobs that need to be gone, and they can just sit as a task list for someone to be done in a sort of a basement somewhere else. Where if you actually think about it, those are the jobs where I’ve lined in those permits. And then those jobs that need to be done our courts to the very business of the authority or the utility.

So by basically taking components and taking tools that are now readily available and sort of tweaking them and making sure that they integrate the things like your Lim system, your sampling, your SCADA systems and SCADA systems as well. Field operating the nuance of like working in low connectivity environments, which isn’t, which always isn’t the case for other sectors on being able to have this closed loop or the singular loop from start to finish of the job that you need to do.

Did it work are the results in one system? Can I see that contextually within the job I need to do? And did that ultimately have an impact on water?

The software landscape has evolved

So things like mapping is not a product anymore. It’s a feature that you should be seeing in a platform or a piece of software that’s contextual to your business speed on water delivery or whatever it may be.

So I think Ed’s, there is definitely enough nuance in water that justifies its own products. And if you talk to people in the fields,

I think that’s the USP and white, white Klir has grown so much and we’ve, we’ve made the impact we have so far.

What is an “Operating System for Water” aka Klir?

Antoine Walter: Let’s jump into it. Let’s be very transparent. What is Klir? What is your scope of work and where does it start? Where does it end?

David Lynch: Yeah. So as, as I touched on Klir is an essence, the operating system of water and what is at the heart of this is basically your tasks, the jobs that you need to do in your authority.

Antoine Walter: Let’s be very clear about this. OS you’re thinking, OS in the sense of windows of MacOS of iOS is re that’s the definition you use?

David Lynch: I would say it’s maybe if we, if we look at Morris or the similarities,

So it’s not like that you replaced the windows, that’s on your PC. It’s just that. Now we’re in the, sort of the second iteration of what an essence operating systems mean to be. In essence, when we, when we think about operating systems, it’s not like the Linux or windows services we were before, this is about

And that’s the sort of next iteration of operating systems. And that is what Klir is for Water.

Klir connects with your SCADA, telemetry, GIS (and more)

Antoine Walter: So that is the user interface somehow. What, what what’s the operator will see as he will be working in Klir instead of any kind of other constellation of tools that he may have, but on the other end of it, what exactly can you all bring into Klir on the, um, let’s say behind the scenes, up to which level of depth do you go with Klir?

David Lynch: So I would say we’re rapidly investing in our product. Like that’s where our latest, random best with this. So we have a very, very clear product roadmap right now. Today we have API hooks into your SCADA, your telemetry, your LIM systems, your customer care and billing, uh, your work order management. So, this is a very much a layer that ties your very GIS as well.

And it ties those various different stacks together. The way I sort of think about like what’s at the heart of Klir is really the task. It’s the jobs that need to be done. So. Intelligent to make Klir is we start off by taking all the prescriptive tasks that are listed in documents all around your organization.

So they come from permits from regs and they’re all either prepopulated or seamlessly brought into the platform.

So for example, if you have an Ecolab breach, there’s a series of tasks that need to be undertaken, uh, changing and something frequencies and dots have a logic needs to happen.

Or if there’s a heaven forbid, a terrorist attack or a spill or something like that, it basically fires off instantaneous VR on the trigger of an event, all the work that needs to be done. So the task is the core of this. And then what’s great about it is that the end of the.

So the way I sort of, the analogy I would use is I think in the water sector, We have lots and lots of tools coming out, lots and lots of alarms and lots of, lots of fancy systems that are saying we can predict leaks or issues in your water. But what happens after that alarm is sound. And typically, typically speaking, that is all an offline process.

So you get these great tools, this AIML, you know, all this fancy stuff for what happens when you learn something or when it tells you. Um, doc generally is done by email or text, or it goes into someone’s head. And then as soon as they retire or are you the industry knowledge, not insight is.

Break down your mission into task and keep only what’s proven to work: ensure compliance!

Antoine Walter: Let me try to rephrase that just to see if I got it right.

That means that whatever happens, it’s broken down into a list of tasks. And then once you’ve completed, the tasks Klir is asking you to, was that effective or not. And on the long run, it’s going to be become better at telling you those tasks are the ones that really mattered. So you shall do those and forget about these.

David Lynch: Exactly. That’s exactly it. And I think one of our customers, our director of operations said as the water sector matures, you know, the job traditionally for operators is to press buttons. And I think what we need to move to is the operator saying, should we press that button? like a very, very simplified way of saying it, but

Does exactly. Yes. It is about a hundred percent of enhancing and it’s about being a. It’s been operating in an environment. Thus, the people who worked in water at this point are, are only starting to see, which is we’re operating a much more constrained environment, much more regulatory, heavy, much more operational challenges that are in place, you know, as well as much more resource constraints in the entire sector.

So it’s not about reducing. This might just be coming down a little bit more in hunts so we can face the challenges that we are going to be facing over the next 20 or 30 years.

Who can benefit from Klir?

Antoine Walter: Who’s the typical user of Klir today?

David Lynch: So th it generally, it goes from the general monitoring from the CEO of water’s already done to consultants and third-party contractors, as well as the operators in the fields.

And I love technicians. Pretty much most people in the organization will touch off at some points in Klir the core or

at the moment, or they’re managing programs for the authority such as contract management, such as backflow or.

Are those types of initiatives or those type of teams within the utility.

How shall Utilities communicate with the Public?

Antoine Walter: And what is the visibility of Klir today for the outside world as it’s something which really like the example you gave some to me, like, like really internal tools that really stay inside the utility or insights, the office, which is working with it.

Whereas if you look at the way you communicate and the way you advertise. The sector, it sounds to me like you, you want to push them towards a bit more transparency and towards discussing what they do towards the outside so that it’s not longer the unsung heroes, like you were saying that the special people from the water industry, but maybe not to the level of the firefighters, we cannot compete with them, but at least we get a bit of that message out stats.

We’ve solved seven problems. We’ve done these, we’ve done that. So what’s your vision there?.

David Lynch: So I think the first thing I learned in my experience, and so in Europe and in America,

Like, you know, if you’re not, even if you are a water professional, you’re, you know, you’re, the user is asking the question is my water safe to drink? And when we did, when we did a project or when we did our first sort of first digitizing these type of approaches, we came across the sort of concept or the ethical position that

And so what will you find is the most optimal ways to guide consumers and guide stakeholders through what these results and what this data means? So, although in principle,

By opening up the information as opposed to maybe the data and like, don’t hold me over. You know, obviously, uh, there’s nuance to that. I’m not saying we shouldn’t open up the data, but I think we just did. There’s definitely health warnings that needs to come with us. I think the benefits from that then is if we message it right, is that consumers will place a greater value in water when they understand.

Oh my God, this is what it needed to be for water to get to me, to make sure it’s safe and secure to these are the things that happened. This is where my water rates go. This is why I’m paying these things. To help in the bottle with driving value and having consumers and stakeholders based on value on what as it is very, very important to get that, to get that out there.

But I think there’s a, we need as an industry to reach consensus as best we can with what the best format is for us. But generally speaking, I think more transparency is going to be better as a whole from.

Will Klir move into hardware in the future?

Antoine Walter: Let me come back for one second on the scope question, because your answer is absolutely clear to no pun intended.

I actually, but, but, but the answer was, it was very clear about what you’re doing, what you plan to do. If there’s one vertical that we didn’t explore, which is the one which leads to the hardware, you said you can connect to the SCADA, you can connect to APIs and things like that, but you have no ambition at any point to go into hardware?

David Lynch: No, hardware is not in our, in our scope. I suppose our vision and what we have in here.

We don’t need a hundred different software solutions with a hundred different dashboards in a water authority. We need. A singular place where we can contextually collaborate with the same level of information, because otherwise we’re just perpetuating the Excel problem where we have 25 different versions of Excel and the data that’s in it.

I can tell you many are stories of the consequences of that. What this. I know where I can hook in, where this data, where the data and the things come from this, and what’s going to happen. What happens as a result was that piece of hardware, was it a good purchase? Did it achieve the objectives of what we were doing?

So we are not in the hardware game. We are in the solutions game, or we’re helping our end users solve a problem. And, you know, I know it’s sort of shame this bloke and maybe I think one of the things that’s unique about clear on it is the most that you kind to think it’s, it’s the opposite of. As we just listened to us, the users want, and it sounds so simple, but I can tell you I’ve been working in the sector for a very long time.

A lot of times that’s not done. We don’t listen to water professionals. We go in and we tell them, this is how it shall be done. This is how it’s started to where else, or this is how I think you should do it. Or we don’t actually listen. I’m really open or go into them with both ears open and listen to what they need.

And it’s amazing what you will learn and amazing the different tasks of tools you can deliver by just listening to the people who are actually doing the jobs.

Entrepreneurship 101: Listen to your Customers

Antoine Walter: Let me share you an anecdote. I voted what you just said. It’s a month ago I had Meena Sankaran, the CEO of Ketos on that microphone.

And she, she was sharing similar stuff to what you said with regards to you still listen to your customer. And she said exactly what you said. She apologized saying, oh, I, it always sounds like everybody should do that. And I was reviewing the infographic after that. So to summarize what she said, and I’ve put that in infographic.

And then I had to chat with her, a marketing director and said, are you really sure you want to put that? Because you know what? That’s just entrepreneurship 101. Everybody should know that they’re not my feeling. And still today is still the same as that. Yes, we shall put that because you know, that’s, that is what you should do to listen to your customer.

And she, she knew that that is what you have to do to listen to your customer. But honestly, That is not the norm. That is not what everyone is doing. So I think that is still a core and the key message we should share. So, sorry, just reclosing the, my sidetracking, but I think that it’s important to hear.

So don’t apologize to give, giving some simple advice on the paper, but it’s crucial.

David Lynch: And I think if I was to offer my thought process on this, I think it’s because it’s a very consulting that markets, you know, consultants don’t get paid. And like, as a recovering consultant myself, we didn’t get in and get the rates, um, the daily rates to, to go in and listen and talk and like, you know, reflect and think nicely, right things.

We go in to be like this. And not listen. And you can just see it, it really grinds up against the people in the field when they’re like, would you just listen to what I’m trying to say? You know, I think it’s the. Not the only, but one of the really good things that I’d sit on having gone through Y Combinator program is they just condition you in a practical level to basically build a massive microphone on a system to process all the things that are coming down, microphone on and build what the users need and iterate very, very quickly.

So instead of. Buying something a consultant built 20 years ago on it’s just sitting there and it’s not really updated very often, but like, you know, it seems to sorta do the job. You really want to invest more in, like, if you look at any seminars, he’s such as like a payments processing in Silicon valley whereby you know, that’s one of the most heavily regulated industries in the world, you know, you’re moving money at the end of the day, how the start to get started there.

Well, you know, not without paying, but by continuously iterating rapidly, delivering new features and. Helping end users solve their pain. And that’s what we’re we’re as a company set up to do is to like what we are today is not perfect by any stretch of imagination, but we are set up to constantly get better every single day.

Uh, and that’s where, when you’re investing in care, that’s what you’re investing in.

How to Build the “Saxophone” of Water Software?

Antoine Walter: Let me come back to the digital playgrounds and battlefields, depending on how you want to see that. Do you play music?

David Lynch: I do play music and not very well, not very well, but I try, what do you play? I play, I’m learning the piano and I played an Irish instrument called the Baron, which is like a drum completely a biasing.

Me. Now I got to be asked to play it there. Next time. This almost sees me.

Antoine Walter: The reason why I’m asking is that sometimes when I’m looking a bit at the digitization in the water industry, it makes me think of, you know, that special time. I think it was the end of the 19th century in the musical sphere. Every single inventor that was, was creating a new musical instrument.

And when you look at those symphonies, which were written at the time, each of those features instruments that nobody’s playing nowadays anymore, but they were there. People were writing music for those instruments. And all of a sudden there was Adolf Sax who came along and he created the saxophone. So the saxophone or the four main saxophones and.

He basically killed all the other ones, just because his instruments, was better, a more versatile, more ready for any kind of music, which was written at the time. And that’s ended that really tidal wave of instruments coming along and where I’m going with my analogy is that nowadays every single hardware manufacturer in the water industry I’m discussing with tells me, you know, I’m building a platform.

And he knows that his platform it’s not gonna be the one to rule them all. He just builds it to preempt a space, with the hope to get to be at the table when the ones that rules them all, or the couple of ones that can rule them all the will be established. But we are still in this phase where there’s no saxophone yet, or it’s still in the making, it hasn’t killed all the other ones.

So everybody’s is around some of them, you wash them and, and you know, it’s a zombie, you know, it has no chance of. Till the end and some others like, okay, it’s a reasonable bet. Would that be the right? Or what would that be the wrong? And now if you’re a customer in that phase and you’re a utility and you have to pick one, okay, how do you bet that the one you pick where you’re going to invest time, money, your teams on will be still alive in five or 10 years.

And in the middle of that, you’re not one of these contestants. So how do you behave in that markets and how. How’d you get through the fog yourself as a company with your roadmap and your ambition to be one of the survivors, hopefully on the five to 10 years timeline.

David Lynch: Yeah. Well, let’s, say…

and that’s what we’re going to be.

That we’re going to be that I think, I think the, the first thing is there’s a coconut, there’s a coconut threads. It’s a really good question because if you’re, you know, if you’re already authority like on, this is the reality today you’re being inundated. So much sales material, like there’s so much money to be made.

Concentrate on your core business to deliver consistently

It’s like a noisy bar, you know, like everyone’s shouting their orders, everyone chatting what they want. And at the end of the day, you know, what is it that they’re actually trying to do? Or what is it they’re trying to achieve? And I think I like to go to the point that. You should concentrate on what your core businesses and just do that.

I think a lot of businesses, a lot of solutions out there and tried to respond to it because I think it’s the next shiny thing for also, we are extremely myopic in what we are about. We are about at time to gather information on allowing water operators, do their job at spend less time and data administration spend less time on.

Data and try and get the jobs on and figure out what is it I need to do today. I did that job work. That’s what we do. And that’s what, we’re our entire sense of being. And

you know, so we definitely do need, but I think what’s going to happen is a lot of the hardware providers are those ones. Uh, you know, have a core business and they’re very, very good at their technology.

You’ll be able to buy that software that service through us, which is one of the biggest challenges for you in comments is like, how do I sat into water authorities or into government entities or public entities? And then I can just concentrate on making my technology the best that it is. So I think it’s a useful thing that it happens for the end user.

When you’re thinking about making this purchase decisions, the first question you want to ask is, is this something that’s at end of life or that has been around for 20 or 30 years and it’s not really being improved. Um, it’s the same as a was really, really frustrated. It’s the first thing, a lot of the technologies and offerings today are that, is this going to be a huge capital investment up front?

So if my Totex is to take a 10 or 15 year payback, because I invest so heavily in consulting to get the thing implemented, which leads me to sort of the sort of latter point is, you know, what we’ve noticed when you look at other verticals is if you try pilot projects, if you try to. Tools and software solve problems right.

At home, but in a very containerizing safe, like sandbox within a team or whatever, rather than doing. Multi-year digital transformations that generally leads to much, much better adoption. And ultimately when it comes to tech tools and technology, this is all about change management. It’s not about the software.

So I empathize that like the so much coming at you as a, as a water user, um, of like which ones that I picked. But I think you need to pick the people behind the product and say, is it. To do what I need to do, or are they specific to my industry? And do they have a roadmap of how they’re going to help me solve the problems that are coming over the next many years?

Or are they just a one trick pony? Are they this thing that they say they’re on volume today? And they say, they’ll develop things in the future, but there’s no guarantee of that happening. So look at their core mission and make sure it applies to, or, you know, has great alignment to your own mission would be sort of my advice on the other side of the.

For which water professional is digitization the best opportunity?

Antoine Walter: So that’s extent, who’s your ideal customer or who’s the one that can help the most is the early adopter who potentially already has 10 platforms and you will be the 11th and maybe the one to rule them all. Or is it more of them? Lag guard is not a mean way to define it, but let’s say someone who would be a bit later to the game.

David Lynch: It’s really good question for me. When I look at the, I suppose, the growth trajectory and the amount of customers, we brought on very quick. And who’s adopted us, does definitely an innovative element. So those who are looking for a better way to do something, those who are actively looking for not being an Excel definitely is the, you know, our ideal customer.

Saving years of experience from Silver Wave collaborators

There’s a couple of sort of people who it tends to be if you’re approaching retirement and does definitely a group of people who are like,

So they didn’t want to take this at a very sort of small basis near you on.

Helping new managers to ensure compliance

The second scenario generally is someone who’s just recently promoted into a management role.

They just come in after that person has left maybe, or in a newly created role or they’ve moved on, they look at it across our purview. Oh my God, this is all the things I need to do. If I miss some of this, I could go to jail. I could have non-compliance violations like Mike and promote. I might can get promoted and I could, you know, any, any array of these terrible things are gonna happen on.

They want a singular way to see across the Fairview, all the stuff that they need to do. And a lot of those cases, what we do find is we are switching off a lot of legacy. It systems doesn’t tend to be any of the newer market entrance and what we find. The contextual collaboration nearly negates the need for them over time.

So the fact that they can talk to other people around their organization, they can record the conversations in the chest and talk during those conversations, be talking about the actual data that they’re trying to reference, but it does tend to be a lot of the Excel displacements. Custom application development.

And of course, some of the old known at companies which shall remain nameless, where we all know who they are. And then I think what is happening, I suppose, when it comes to the newer entrance. They are getting a little bit, um, I would say contained in particular teams and because what’s happening is the it team are saying there’s some, I don’t want to manage a 50 or a hundred different applications.

We need to sort of a unified digital transformation strategy. Like where are they going? How can we rationalize it down and protect ourselves from a lot of different systems, which are just opening up to more cyber security risks and how can we consolidate here? It tends to be. Platforms likelier can offer solutions to that because it is all very rationally rationalizing it.

Klir just closed a $16 Million Series A

Antoine Walter: I have a couple of questions on the business side of things. Let’s start with the elephant in the room. Somehow you’ve closed a series A right of 16 million end of last year. Yeah. Which places you in quite a special position in this industry, because already the amount, it is not common within what industry first and second, because the profile of investor is, I would say also quite uncommon because it’s venture capital money, which places you on the path for hypergrowth, theoretically speaking, because that’s supposed to be what comes together with, with VC money.

So what is your vision? What does it add value in terms of perspective to have this, this backing. This past fall hypergrowth.

David Lynch: Thank you for not calling me the elephant because I’m this. If you don’t know when it always be on this big six foot six person, that’s normally the joke that’s cracked. So thank you for that.

First off, obviously we are delighted with how such an incredible partners with high reputation. One of the leading VCs in the world see the level of growth we have enjoyed. And back us on this next stage of our journey. So, you know, I think straight up what’s really exciting is that this is just money that we’re planting into a product for water professionals.

Klir’s co-founders mission

And that’s what really, really excites me. Like I sort of view myself, like, you know, when we even started to Klir myself on my co-founder lane, we asked ourselves the question of like,

Uh, We know we can’t, I mean, it was a very, very complicated issue to solve, but what we can do is basically free up time and allow those professionals, the people who were experts who have trained as operators who are PhDs, who are masters, who have all these other things just stopped doing work that can be automated, that can be assisted and just allow them to actually solve the problems at hand.

So, you know, we are just a tool. We are just a means for these people to do the job that our species needs them to do, and our communities need them. And so I’m just so excited that we have this incredible backing, this incredible demands of. To deliver a product that should have been in the sector 20 years ago.

It should have been of this quality. And we’re taking the same, many of the same playbooks from other enterprise software, such as sales, HR, finance, those playbooks that have revolutionized all sectors. And we’re going to be able to deliver products of that caliber to water. And, you know, if you think about a water professional, like they drive to work and they listen to podcasts, they consume media on Facebook and Instagram.

They’re used to a user interface that’s in the center. Um, and I think it’s time that when they go to work and they sit at their desktops or they remotely log in or they, or whatever may be that they get those same levels of tools. So yes, we are absolutely poised for growth. And I think it’s also necessary in the sector.

You know, water, as I said at the top is wanting to connect to the system. If we continue to go on and manage this in hundreds of different. We’re not going to be able to move to the integrated Cashion monitoring or integrate a watershed monitoring to posts we need. So we know what the left hand on the right hand are doing.

And because that’s the only way that we are going to successfully face the challenges that we’re going to be, that we’re going to face over the next one to a hundred years.

Growing at a Venture Capital pace in the Water Industry

Antoine Walter: Yet. It’s not that I want to be the party pooper at all, but that would be a first of its kind. I don’t know if you’ve ever met Paul O’Callaghan he’s the CEO of BlueTech research and he’s written this awesome paper on the dynamics of water innovation. And, uh, what is explaining is that basically innovation in this very specific markets, it goes at a particular pace and companies, developments also goes at a particular pace. The, so what’s usually takes five years in a regular industry, takes 15 years in that sector.

So the timelines are a bit challenging to the extent, is it something which puzzles you or your confidence that’s times will change to that extent?

David Lynch: I’m not naive, I think is the first thing. And like, you know, it, it is a challenge, but like, isn’t that what we all were, we’re here to try and solve challenges that aren’t easy dissolve, you know, definitely it excites me.

You know, I, since the beginning of my career in water, many of the projects that we’ve worked on with some of them, the most, the greatest leading minds in water, many people have said that it’s not possible, but it’s not possible to do this. It’s not possible. Build these types of solutions. It’s not possible to run these types of programs and B they even non software programs or projects.

I know we were able to, to grow at rates that are in many of early stage investors. And in many of the benchmarks, we are number one in our stock.

And number one on our portfolio side, sort of. And many often I say:

We’ve proven we’ve delivered to customers. And we’re excited to be able to take us experience on the proof that we’ve done on, on, uh, on just basically you there’s even more, you know, there is, of course there’s challenges.

There is challenges in terms of the cycles for innovation, but I will come back to the listening to users and I think, you know, innovation is one massive bucket and water it’s. LoRa sensors to AMI technology, to UV filtration, to deploying physical infrastructure anywhere in your water to software. If you look at the level of innovative or water, innovation does not a huge amount on the software side there’s a lot on the physical side.

And so I think it’s, it’s a little bit of a very, very big sector that you contemplate the same uniform approach to. And I suppose, you know, it goes a code it’s crazy until you do this. And then everyone started wondering how you did it. And I think that’s what we’re going to try on. We’re going to, you know, I think we’re going to go position where we’re poised first.

We’re well slammed and we’re able to, uh, to take that approach. I’m quite confident of that. Looking at where we’re sitting in, what our opportunities are at the moment that we’re going to be able to surprise a few people over the next.

Klir’s Business Model to help you build compliance confidence: Software as a Service

Antoine Walter: What is your business model? Are you a software as a service?

David Lynch: Yep. Completely software as a service and no consultancy fees. It’s pretty much what you, what you see is what you get. And it’s one annualized fee that, um, provides sort of, you know, I think that’s, that’s again, really contextual and really important that our go to market strategy and very nuanced this water sector is that you need to, again, this is the, what the customer wants and what they need and how they report to their rate payers on this transparent.

Is is important to our customers and that as not, you’re not overburdened by consultancy or unforeseen fees, I guess.

What is Klir’s activation metric or Wow effect?

Antoine Walter: You’ve you, you must have seen that video of Dave McClure was on the stage and it says R and says that there’s the growth path for pirates. I think that’s, that’s the full sentence. So it’s this AARRR framework.

And. Your business model, the thing you we’ve all been the, the industry you’re, you’re evolving in. Did you identify your activation metric? That specific thing that when people do that on Klir, that is, I mean, they can play with tons of stuff all around, but when they do that single thing, then you won because they saw that you are unique.

David Lynch: I think the aha moments if I was to sort of maybe at take it that way, you know, when people look at Klir, they go, oh, this is just another task management platform or another software that’s is it really even needed in water. But I have been in many meetings on. Some of the biggest names who are actually doing the work and water on they’re sitting around a table and you’re showing them the product.

And you’re like, this is how it works. This is how different teams from different parts of organization, all collaborate and work together. And here’s a use case on it just, it happens at around 12 to 15 minute mark and in any of these meetings and you show them that the product. And so you’ve done your 10 minute instructions going around the room.

That’s the way they say it, so that when they’re, when they visualize everything, water monitors just happen. They see what Klir is and how it manifests and the ability to work.

So simply across multiple teams with one unified approach to water under the mission of the authority and that they can all work in this collaborative unified way that singular corporate mission. That is there a hot moment? That is just when they’re like, I just need it. I want to get it in now. And that’s when they get very, very excited about it.

That tends to come from all the way from users to managers, the general managers, all, all across the spectrum at different levels, in different parts of the organization. That is the Eureka moment. What they are talking about. If they have talked that this is the way they wanted us and where they can never seem to get us.

There was a couple of different companies who try to do a, an M and a strategy to try and build a product like ours. But of course they don’t, it doesn’t, you know, on its very basic and raw roots knit together the way it needs to. And so that aha moment, it happens very, very early on. You know, I was sort of saying in terms of metrics that we measure, it always comes down to the task is how do you collaborate when you see things like alarms going off?

At detection of chemical or, um, or an issue in a network on the workflows triggering off on an everything just hopping happening seamlessly. So 10 sites, when the task is divvied, open jobs, get to go across the organization and they all work on it’s a little bit like you’re in Algeria, but the music is like when the orchestra all comes together, it’s like when they see these events, And they see their entire orchestra just came together in a sort of a perfect symphony.

That’s when they go, oh my God, how did I even survive before clear? Maybe there’s lots of very, very good individual musicians, but there’s something special about bring in, bring all those together, play that symphony.

Klir is currently deployed in three countries

Antoine Walter: What’s your level of deployment today?

David Lynch: We are in three countries where across Canada, the U S and Australia, and we were across nine states in the US.

Antoine Walter: And how many people are working inside Klir?

David Lynch: If you asked me that a month ago, it would have been 20. And now we’re up to, I think 35 as of this morning.

Antoine Walter: So you’re, you’re living the hyper-growth path.

David Lynch: Yes, absolutely. That’s the way,

Where’s the road heading for Klir?

Antoine Walter: Last question in this deep dive, you know, I have this crystal ball, you can have a look in my crystal ball.

You decided if you look in 10 years in five years, right? If you’re in the hyper-growth path, maybe in two years, what’s your rising.

David Lynch: For us, it’s about getting this tool into the most amount of people’s hands in, where we’re operating. So we don’t want to differentiate whether you’re a, an authority managing or a community system managed for 5,000 all the way up to 5 million that we have a democratic on an available product, which is what we do today, uh, available for all those people to use.

And so for me, Hoping to engage with solving the amount of users that are active and clear on that as seeing some of that, you know, sharing some of the information on the insights that we’ve already gained across different, uh, different customers to show these are the jobs that actually are having the most impact.

These are the areas you can challenge in your restricted, regular. And here’s how you have made water better today this week, this year. So I’m excited to be able to just get this product into as many people’s hands as possible. And for me, when I look in five or 10 years, it’s done, I look across the sector with water professionals.

All of their time solving the challenges they’re facing, being a water constraints, via eutrophication, being whatever, maybe working on those problems rather than spending a day or two weeks, trying to cajole information out of one of their colleagues in the different departments, or trying to find that old Excel sheet that they couldn’t find.

Building a Water Unicorn to ensure Compliance Confidence

Antoine Walter: Let me cheat and add a last question is deep dive. You mentioned how others have tried M&A you’ve mentioned how you are on the path of. What’s the outlook for you is that to become the first real water unicorn as it’s to going in on an M&A towards a big group is then to go towards an IPO.

David Lynch: Yeah.

And I know this is sort of, a lot of people would not answer this question, but I will send us down bread and answer this question. And for us,

That’s what we’re putting all our, every waking moments on Africa behind, and the logic behind that there is sort of solid logic.

This is there’s a couple of reasons for it. M and a is rife in the sector. Definitely, you know, a consolidation around the coconut core entities. Like of course, you know, you can never say never at the end of the day, the mantra is still to get this into as many people’s hands as possible. But really what we want to try and do is to IPO, because I think the information we’re collecting, the data we have, and I think it’s important that that has.

Remains and also be a public market ownership or some, whatever the equivalent is, be it a sort of maybe a crypto public market or whatever the future may hold for us all to even start predicting. And, but I think it’s important. There is accountability and autonomy in an organization has such powerful data across water in different jurisdictions.

So IPO is exactly what we’re focusing on. And the other aspect, when I think about on a personal level, my mission when it comes to water is I think when you do get your. Proper unicorn and water. What naturally happens is it flows so much other VC dollars slow into water. So what’s great about that is the great thing about VC money is they know that like 90% or 80% of at the early of their investments has just gone through evaporation.

What’s going to happen then is we’re going to have much, much more funding available. So. The innovation that we need in this water sector, as opposed to maybe a very laggard centric, modular approach to innovation, which is, I think that’s probably one of the contributors that maybe Paul references, um, is that, you know, you’re not, you’re not, we’re not investing in companies that it’s okay to say, like, it’s okay to try, you know, these, these very different things.

When there’s such construction around the level of availability of money for innovation, you’re not going to innovate very quickly. So. The IPO route is really important for us. We want to be able to show that I maintain the trust that our customers and put in us that we are going to be here for the long haul.

Antoine Walter: I think that it makes the perfect conclusion for this deep dive. So thanks for that one. I propose you to switch to the rapid fire questions.

David Lynch: Absolutely.

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Rapid fire questions:

Antoine Walter: So in this last section, I’ll try to keep the questions short and you, you are allowed to keep the answers short. And of course, we’ll see that I’m the one side tracking. So don’t worry. My first question is what is the most exciting project you’ve been working on?

David Lynch: I’m actually going to go internal for this one. And so I am fortunate enough to be able to work with our product team on a lot of the discovery team that are right there talking with users every day. So like delve into too many details just for commercial reasons. But what’s really exciting is to run these pilots or these sort of discovery based initiatives and actually see this entire unified platform.

Water operators in the field can use every employee in the organization can use and basically just do the job that needs to every day. And so anything I got to do in the product team, anything I got to do when I got to listen to water users, I’m really happy. I’m very excited to take parts. Can you name

Antoine Walter: one thing that you’ve learned the

David Lynch: hard way?

Everything happens for a reason. There have been in any startup journey. It is not easy. And there are a lot of challenges that come, and I know, uh, and he goes, Wayne was saying the same thing. So I’m sort of reusing maybe as answering your previous podcast on reflection, even in those hearts. And you wonder why it’s fallen a particular way or issues have happened or, you know, Adidas fall through and whatever, maybe it is.

It all happens for a reason. So it might seem like terrible in the time it all comes. Go to the end. Is there

Antoine Walter: something you’re doing today in your job that you will not be doing?

David Lynch: I hope in my job today, it’ll be much more remote focused. And I hope that I became 80 sitting at sitting in beaches are doing remote more remote enabled work than I am today.

Definitely has gotten much better than it has in the more office centric approach that we’re all used to. And what I hope in 10 years time, that workforces that are, or there are ways of working as caught up that we can basically work wherever whenever we want would be, would be fantastic. I’d love to hear.

Antoine Walter: See how I sidetracked you’re here just for one minutes. But you mentioned how you went from 20 to 35. Did you meet all of them physically?

David Lynch: Nope. I’m on, we even add even one or two of our fundraisers. We never even met the investors and in person. So this is the new world. Um, you know, and even we’re able to, I think one of the unique things, which is let’s just go back there is we’re able to.

You know, we’ve proven we can sell our motives and it’s a lot, it’s do our reputation and loss with our deep knowledge of the world of water users and their problems they face. And, but it’s a different world. You know, being able to sell enterprise software, meeting them, we’ll be able to raise the phone, but I need to be able to hire people, but I’d never meeting them is definitely.

Now I will say, though, you know, as a company, we like remote is a grace and neighbor, it’s race and gender of diversity, but it’s really important to have the physical contact as well. So, uh, you know, we do try to bond and particularly for mental health as well. And that we, we, we still do, we are social creatures and that we’re able to enable that through, through some sort of physical contact.

So hopefully we’ll be able to do more of it in the short to medium term. Uh, hopefully we’ll be able to even, even ourselves meet in person at the next water conference or whatever, maybe first with

Antoine Walter: pleasure. And second, I have a second sidetrack question and I give you a joker. You don’t have to answer that.

But if you wish I’d be happy given the field that you’re in during the digitization of something which was done with Xcel and stuff like that, it’s in the past a pandemic comes. Is there a part of you which has to admit it’s a good.

David Lynch: Oh, that’s a difficult one. And I suppose the first thing is to recognize how difficult it has been for some people, you know, like unfortunately in everything in life, there is sort of people who benefit from things more than others.

There’s definitely been pros and cons of endemic. It is being good in many ways, the digital transformation has just lit up overnight and water at what would have taken a long, much longer time is definitely becoming much more prevalent and much more open technology. So I’m very positive at. I am very positive in that remote work is now here to say one of my big passion projects is something I’m very passionate about is diversity in the workforce, um, is enabling, is, is, uh, gender party and work.

Um, is gender equality is people who are, who are not in the, who does not fit the formal Tartine categories of what makes you different. You know, there’s so many different aspects of, of how we live our lives. Remote work has enabled people who are, who are marginalized, even though it might not be immediately apparent being able to come to work.

And so I’m really, really happy. And I think like all things in life, like there are no, there’s no nothing that’s truly bad and truly go to, we all live on a, on a spectrum of good and bad, and I’m happy with that. Um, you know, I think, I think we all are. I think we’ve all reached baseline of what’s important, even on a personal level.

I’d love to see my kids going back to school and having physical context. And so there’s good and bad things. But overall, I suppose, from a business perspective, it has been, we are very lucky and very fortunate to have been in the right time, in the right place. Like since I started working in water, I think seven and 10, it’s a, it’s a 10 year overnight success.

I’m glad to have being here at the right place.

Antoine Walter: I think it’s the best possible answer to a curve ball. So congrats for that one. Sorry about the question. What is the trend to watch out for in one second?

David Lynch: There’s a couple of aspects of this is the old way of thinking and how it’s all been done before that’s gone on.

If you’re not moving forward, you know, you are going to be left behind. So I think we have a rapidly changing workforce to touch them. My, my biggest point, we are getting more diverse in the water sector as well. We are bringing more women into water, which is critically important to how we’re actually going to solve this.

I’m an engineer, mechanical engineer by trade. And so I know that engineers always have one solution to every problem, which is to build something or to do it that way. Or I think a more holistic, collaborative integrated approach is what’s going to help us solve this, this challenge. And so I’m really excited to see that diversity coming into the workforce and to see that new perspectives.

More new ideas coming on. Even if that’s not limited to age or gender or anything, we are 100% as an industry and becoming much, much more open-minded I think this week as we face into the shotguns, because we know there’s no other way, this is a, this is the new reality.

Antoine Walter: We’re a word political leader.

What would be your first action to influence the fate of the words? What a challenge.

David Lynch: I ain’t going to be boring here. And I got to reuse, I think about a few of your guests hoping for, but we need to get, we need to really ramp up and get a value on water and we need to place a nicer price. We need to, as a species on their sons, and we need to understand that the value and the importance of water has, you know, it just is a completely unsustainable model that we have when it comes to water.

And we need much more equality. Like, you know, this is not limited to particular jurisdictions. You know, you would think that one of the most developed countries in the world that doesn’t have a water poverty. Yes, we do have people making money on their water training, you know, and then all the while people will go out and spend however much they do in bottled water in store.

But I will argue against paying their municipal bill. So we just need to, you know, this might come from Ireland that there is another case of, you know, an incredible historic case study on the implementation of water. But like we just, as a space, we need to, we need to just like shake our head and realize that this is something that we just can’t meet.

We can’t forget about, and we need to place a value on a place.

Antoine Walter: Last question. Would you have someone to recommend me to invite on that same micro.

David Lynch: You’ve had so many incredible guests, so it’s difficult to them. Well, one of the, one of the people who I’ve continuously been impressed by, and I’m just, as you probably know, from this to me, I love people who were operators, water experts.

I would recommend Dave Johnson from Southern amount of water authority, and incredible thought leader in the, in the sector and balancing the, you know, actually doing what he needs to do or doing what’s happening in the field, making these decisions with incredible innovation and one of. Innovative progressive best managed water authorities in the world. And so I would definitely, I think that you were bringing unique insight of like the practicalities of what’s happening in the field. Perfect. So thanks to those. Absolutely. And thank you so much for having me.

Other Episodes:

FREDsense: Revolutionizing Water Quality Monitoring with Biosensor Innovation

By Antoine Walter | 7 May 2025

Swirltex: Revolutionizing Wastewater Treatment with Bubbly Innovation

By Antoine Walter | 30 April 2025

Blue Foot Membranes: The Next Evolution in Water Filtration

By Antoine Walter | 16 April 2025

Echo River Capital: Pioneering the Future of Water Innovation

By Antoine Walter | 3 April 2025

1001 Fontaines: Engineering Sustainable Water Access Through Social Entrepreneurship

By Antoine Walter | 22 March 2025

Amazon’s Water Footprint: Tech Giant’s Quest for Water Sustainability

By Antoine Walter | 19 March 2025

Turing: The AI Revolution Quenching the Water Industry’s Thirst for Innovation

By Antoine Walter | 26 February 2025

Altillion: Pioneering Digital Intelligence for Water Asset Management

By Antoine Walter | 6 February 2025

Flocean: Pioneering Ocean-Based Water Solutions

By Antoine Walter | 15 January 2025

Botanical Water Technologies: Harvesting Liquid Gold from Plants

By Antoine Walter | 4 December 2024

The post How to Establish Compliance Confidence for Every Water Utility appeared first on (don't) Waste Water.

The Department of Agricultural and Resource Economics at UC Berkeley leads research and outreach on economic and policy issues relevant to California’s agriculture and natural resources.

This episode is part of my series on Water Finance. Did you miss some episodes? Go check them out!

What we covered:

How the Sustainable Groundwater Management Act is a challenge and an opportunity for all the Californian water users

How when reducing water allowances, some approaches are more efficient than others

How the price of Water influences its uses – and to which extent

What the price elasticity of water demand actually is, and how of inelastic good water is

How water trading and groundwater markets could better market failures and smoothen the transition towards water restrictions

How markets are not perfect, yet can be the best tool in a given context

How if you’ve invested in a crop, a bottom-line calculation enables you to determine the threshold at which it’s profitable to stop watering it and let it die

How research happening in universities shall be leveraged into practical knowledge

Which levers can influence a water market, and how pertinent that influence actually is in the Californian example

How the groundwater tariffs in place in Coachella enable to artificially replenish the water table

How agricultural and urban users have slightly different behaviors when it comes to water and how to leverage it

How water market experiments are rolled out, and who shall best be participating in this trading

How to measure the (positive) impact of a water market compared with the status quo

The specificities of Water Management in Coachella, resemblances, and differences with Israel & Australia, farmers doing what’s best for business, why groundwater is better suited to trading than surface water… and much more!

… and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨  

Teaser: Groundwater Trading

Resources:

Have a look at Ellen’s website – (you might even discover some cool jazz music! )

Come say hi to Ellen on Linkedin

is on Linkedin

Antoine Walter on LinkedIn

Infographic: Groundwater Trading

Quotes: Groundwater Trading

Quiz: How does Water Use evolve when Price goes up?

Full Transcript:

These are computer-generated, so expect some typos

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Antoine Walter: Hi Ellen, welcome to the show.

Ellen Bruno: Thank you. Thanks for having me.

Antoine Walter: We have a fascinating topic today, which is a follow-up from something we’ve been discussing on the podcast in the past. But right before, you know, I have some traditions here and I’d like to open with a postcard and you’re sending today a postcard from a place I don’t know at all.

What can you tell me about Berkeley, which I wouldn’t know by now?

A postcard from Berkeley

Ellen Bruno: Well, yeah, UC Berkeley. It is California is a land grant university. I don’t know if you know that as part of the mission of the university. In addition to teaching and research, there’s also a public service component, which is relevant to the job that I’m in.

As an extension economist, I focus on public outreach. So in this role, I, UC Berkeley, I do economics research and I also conduct extension public outreach, where I try to connect to the research that’s happening at the university that I’m doing to stakeholders, particularly in California that could potentially benefit from the research.

And that’s one of the cool things about being at a land grant university, like UC Berkeley,

Antoine Walter: what kind of stakeholder can that be?

Ellen Bruno: Uh, it depends on what sort of research you’re doing. I personally focus on water resource economics. And so all of the stakeholders that I think about and work for are water related stakeholders.

So I think primarily of like managers of water utilities or irrigation districts, it could be farmers as well, who are using water directly. But since I work on sort of policy questions, I think of my stakeholders more so as those who might. Right. Policy implement policy. So the water managers at the local level, or even state level policy makers as

Advising California’s Water and Agricultural Policies

Antoine Walter: well.

So what’s the aim to that extent, is it to share the best practices of whatever you’ve developed in the research and to then translate it into facts and actual policies or actions or whatever?

Ellen Bruno: Yeah, it’s to benefit Californians, right?

And then there’s this other component too, where. We want to be conducting research that is relevant, right? So we want to learn from stakeholders. What are the needs of the people, and so that we can be doing relevant research as well

Introducing: Ellen Bruno

Antoine Walter: regarding your personal path.

How did you arrive to that position you’re in today? What brought you to that special field? I would say at the intersection of the water world, the agricultural world and the economy?

Ellen Bruno: Well, growing up, actually, my mom worked as a manager of a water utility, and so I was always interested in water issues. And then in college I was studying economics and took one class on the economics of ocean resources.

And I just thought I was so cool. This sort of tragedy of the commons in our fisheries and how we could use. You know, really some of the environmental problems that we see in the world and including in water issues are often times where the market is failing, but

And so I just thought this was so cool in school. And, you know, since agriculture is one of the biggest users. Is the biggest user of water. It’s a natural fit. If you’re interested in water issues to think about ag in that sense,

How to Correct Water Market Failures?

Antoine Walter: it’s pretty interesting that you mentioned the market failing there, because I found that to be kind of a red thread in the various publications I’ve read from you because you’re, you’re addressing how to correct those market failures to identify them and then to correct them.

So I guess that makes for a smooth transition towards our deep dive today, which would be about. water markets.

Water markets are a topic. The last time we’ve touched on it on that microphone, it was with Scott Hamilton and we were covering how markets and water markets somehow failed Australia and how they went to an extreme, which had some bad consequences on the Murray-Darling river basin.

And when I was reading your papers, you actually cite that case as one example of something which didn’t go exactly right. Nevertheless, your full papers and the series of three papers on the topic show that it’s not the only outcome. So I’d like to investigate how water markets can be beneficial so that we have the two sides of the story and that maybe we identify what can be done differently to have a better outcome than what we’ve seen in, in Australia.

And to that extent, my first very simple question is simple is maybe not the right definition, but why do you think that markets can be beneficial when we have on the other end of the scopes some bad examples?

Water Markets can ease the transition towards restricted uses of Groundwater

Ellen Bruno: Oftentimes when I’m thinking about water markets and water trading, which I’ll use interchangeably, it’s in a context where we need to restrict the amount of water use that’s being used relative to the status quo.

And so

Who are using it and by facilitating trade, by having a market, you know, in theory, we can get to this allocation of a scarce resource that maximizes the benefits to society. That’s what the market will do for us in theory.

And so. When thinking about, okay, there are some clear positives to implementing them. There can be these voluntary trades that will benefit both parties involved, but there are several ways that, you know, it could go wrong. As we’ve seen in Australia. And in other environmental markets, there are several different ways they can sort of break down.

Market Power can decrease the efficiency of Groundwater Trading – but it’s still better than the status quo

And in the paper you’re referring to, I think particularly about market power, which is just one element that is one form of market imperfection. And so that’s whenever. A market participant or a group of market participants can influence the market price. They have enough sort of control in the market that they can influence the price.

And you know, all these things that economists love about markets really come out when a market is super competitive and you have. It drives down the price.

And so it’s all really relative to what baseline we’re considering.

How Groundwater Trading would provide 36% better outcomes

Antoine Walter: I’m going to give just from the top of my head, the number which stood in your research, which I’m still impressed with

What you were showing is that compared to the status quo. Putting a market would be 36% better when it comes to water uses.

And with regards to this market power, you just mentioned you were studying if I’m right, two different types of market power, the first where. The buyers have the power, the second where the sellers have the powers. And in both cases, I think the reduction of the efficiency was about 11%. So that means that even in that scenario, you’re still better than the status quo.

So even in a rigged market, somehow rigged, you’re in a better situation than today. So, it’s a win-win.

Ellen Bruno: Right, right. You know, of course,

We want them to be as competitive as possible, but even in the presence of market power, we’re still finding that there are benefits from allowing the trade because when you have a curtailment, like the one we study in this paper, it’s hard to really nail that, to sort of get that allocation.

Right. So that, you know, it’s the best possible use of the resource.

Coachella: an interesting Case Study for Groundwater Management

Antoine Walter: Two of your papers focus on Coachella. Right? So on the Coachella Valley Basin, which I’m sorry, it’s a French point of view, but to me, Coachella is, the famous music festival

Ellen Bruno: The music festival of course!

Antoine Walter: See? what’s special about Coachella, which made you take that one as a study example?

Ellen Bruno: Sure. Well, there’s sort of two elements to it in picking this area. One is just, it was important for me to pick a study area in California because California has some new groundwater policy underway. And so by having a study region in California, it was making the research more policy relevant in terms of the sustainable groundwater management act that the.

Pass at the end of 2014, requiring basins throughout the state to reach groundwater sustainability, but focusing on the Coachella valley in particular within California was largely due to data reasons. So for the most part in California, I mean many places, groundwater isn’t metered. And so it isn’t monitored in how much is being extracted.

And then on top of that, it’s rarely priced. So groundwater, pumpers will pay whatever it costs to extract the groundwater from below. Like those electricity. Costs from their pump, but it’s not like the irrigation district is charging an explicit price for that water on top of those pumping costs. And so

It’s very hard to look at any data and try to get a sense of what does that demand curve look like when prices don’t even exist? How can you sketch out a relationship between quantity and price? And in Coachella, they happen to have a price in place because they do some groundwater, a special groundwater program where they charge prices to the irrigators in the region.

And so I was able to work with that irrigation district to look at their data on prices and quantity, and try to use that to tease out a relationship about the groundwater demand.

How is Groundwater charged in Coachella today?

Antoine Walter: How does that work in practice? How do they measure the water, which is pumped from the groundwater and how do they charge it?

Yeah. So

Ellen Bruno: they’d have meters on all the Wells in Coachella, which has makes them somewhat different from the majority of groundwater in California. And they charge a flat volume metric fee for the groundwater that’s pumped. So on average in our sample set it’s about $64 per acre foot. And so that’s a flat per acre foot fee, regardless of how much you pump and you know, the district bills according.

How the charges are financing Groundwater Replenishment

Antoine Walter: What I found interesting in that scheme is the way that that money is used. Can you maybe explain us what this money, which they charge is used for?

Ellen Bruno: Yeah. In this region, they do some artificial groundwater replenishment because they’ve been really proactive in managing their groundwater. So they have these fees and then use those revenues in order to carry out this artificial replenishment to try to keep the storage levels high in their aquifer.

Antoine Walter: So that means that somehow that loop is closed. The uses of ground water serve as a way to replenish the groundwater. So it’s kind of, of a reuse loop with the nature in between, but still a reuse loop.

Ellen Bruno: Yeah. And I don’t know that much about, you know, how. When they implemented this price sort of how it was perceived amongst the farmers who are being charged.

But I would imagine that that sort of argument is helpful. It’s like we’re paying into this, but we’re going to get out the benefits as well. We’re going to use the money to recharge the aquifer and close the loop amongst those who are paying into the program.

Concept: The Price Elasticity of Water Demand

Antoine Walter: I actually need you to make, a muggle stop, just because for the next steps of our discussion, there is a concept which I’ll need you to define, which is price elasticity.,

honestly, I read your first paper and I thought, you know, I’m going to understand it.

And then I thought, okay, that was a stupid move. Let’s go back to Wikipedia, have a look at what price elasticity means. I went into that. I read it and then I re-read your paper. And all of a sudden I understood it. So let’s just set the scene for everyone. Can you define price elasticity?

Ellen Bruno: Sure. Absolutely. So in my paper, I’m looking specifically at the price elasticity of demand for water.

And so it’s the same idea. That’s the price elasticity. It is a parameter that characterizes this relationship. It tells us how sensitive we are to a change in price.

So, for example,

[click_to_tweet tweet=”You can play at home! If the #WaterPrice were to increase by 10%, how much consumption would go down in percentage terms? @ellenm_bruno ran the numbers, find her answer on the (don’t) Waste Water #podcast – https://bit.ly/3u5Lw7o #California #Groundwater” quote=”if the price were to increase by 10%, how much consumption would go down in percentage terms? ” theme=””]

And so this is important when we’re thinking about. Sustainability policies for water. If, for example, suppose a regulator wants to encourage a certain amount of conservation of water, and they want to set a price in order to do that.

Water is an inelastic good

Antoine Walter: What’s interesting is that I’ve been discussing water tariffs and water price on that microphone with many guests in the past.

And I have to admit, we’ve all said a lot of stupid stuff because I really thought, you know, it was that direct. You put your prices 20% higher and people would reduce their consumption by at least 20%, which means it would be an elasticity of one, but still. It would be quite okay-ish with the preconception I had.

And your results are totally different. What did you find?

Ellen Bruno: Yeah. So:

So much less than that one-to-one ratio that you just suggested. And, and we think this is kind of intuitive actually, because water is a required input to production.

Antoine Walter: Yeah. Explained that way, absolutely. But what’s surprising to me is something I read in your summary paper where you’re reviewing both the urban and the rural side, I mean, I understand for the farmer for sure. If he doesn’t water his crop, the crop dies. He’s lost everything he’s invested in.

So there’s a sunk cost element, but in cities, I mean, there’s these three liters per day, which we have to drink, which we cannot negotiate. But aside from that, everything else can be delayed, can be reduced, can be managed. And out of all the studies you, you cite in your bibliography, which goes over almost 20 years of research.

Price Elasticity of Water Demand is different between urban and agricultural users

There’s only a couple of studies, which show an elasticity, which is above one, meaning that all the others show that you have very low impact of consumption when you’re playing with the price. How’s that possible in cities as well?

Ellen Bruno: Well, yeah. When thinking about the sensitivity to price of urban residential water users, I think it’s also important to keep in mind that.

For example, that outdoor water use is a huge portion of urban and residential water use. That is much more elastic than that component. That is essential. That’s actually relatively small within that.

And then the other thing I want to mention is that.

Think about the crops that are being grown on the agricultural side is going to affect that elasticity and make a different in different places where you have a different mixture of.

Being grown or a different climate. That’s interacting with this as well. And same on the urban side, there are different factors that changes over time. This, this sensitivity, isn’t something that’s fixed in time. And so we might do our best as a researcher to try to estimate it because we really want to know that information for designing good policy, but it’s an elusive parameter.

That’s not the same everywhere. And so that in part explains some of the variation that we’ve found when we’ve looked at all these past studies,

Our behavior towards groundwater can change over time

Antoine Walter: actually that element that you mentioned of the change over time is pretty spectacular. When you look at the various graphs, you’re showcasing for Coachella because. you have this Wide array of data over 16 years, and there are three districts and each of them has its own price, which is raising all the time. So the price is never decreasing. it went relatively, constantly up over the 16 years. And if you look at the seasonal peaks of consumption and you still try to look at the trends, the trend goes down, which means water is always more expensive.

and there’s always less use. Do you see that as just a sign that there’s less water in California or do you see that as a long-term impact of the price evolution?.

Ellen Bruno: Yeah. I mean, it’s so hard to say from looking at the raw data that you’re talking about. Right. I mean, when you look at that groundwater extraction data it’s yeah.

This squiggly mess. Right. And then you see some things, like there’s a clear seasonal pattern and you’re like, yeah, that makes sense. You’re irrigating in the summer and less in the winter and that sort of thing, but it’s. It’s hard to draw any conclusions when looking at that data that something is, is causing whatever you’re seeing.

And, you know, trying to take tools from econometrics to try to isolate that one signal. And so. It is encouraging that when you look at the raw data, you know, you see prices are trending upward and you see extraction is trending downwards in the way you might anticipate given that signal.

But just looking at the data, you can’t really conclude that anything is caused by something else. Yeah.

Does Groundwater Pricing impact crop choices?

Antoine Walter: I guess it’s my non-scientific mind because there’s causality and causation, and it’s hard to say which one is which one I get you, you mentioned the crops. You mentioned how various crops would lead to various uses of water.

I was wondering there as well, who’s the chicken, who’s the egg. Do you decide on the type of crops you use so that you’re a bit more flexible with water or is it the other way around because if you’re not sure to get the water? Well, you adapt your crops.

Ellen Bruno: Yeah. That’s a great question. That I’m not sure that, you know, the research I’ve done can really speak to that.

I would imagine. That expectations about future water availability definitely play into planting decisions on farmers, but I’ve also heard sort of anecdotally that there are other factors that are much bigger drivers of crop choice. And this is not something I’ve studied specifically, but for example, world market forces of what’s driving crop prices and you know, those sorts of expectations on what crops will be profitable are bigger factors.

Maybe some of the uncertainty related to the water supply

Antoine Walter: on the crops I had that discussion with Scott Hamilton about the Australian case. And he was saying that the big water traders were using almond trees because almond trees can afford not to be watered. So you get a higher elasticity to that extent

What’s the impact of Industrial players on Groundwater Use in California?

 there was something special about your study, which surprised me, honestly, I was reading your summary paper and it was showing that there is a much lower proportion of industrial water in the United States already then globally in terms of percentage of use and much wider urban uses of water as well compared to the world’s use there.In a nutshell, the ratios are pretty different compared to the usual 70, 20 10, you see in the rest of the world, but with that specific example of Coachella and California, It sounds like there is no industry.

So it’s like negligible or is there really no industry

Ellen Bruno: at all?

At all? No. I mean, I don’t know the statistics for California in particular, but there’s definitely some industrial use in California, but I think that the urban residential and the agricultural use gets a lot more attention in the literature. For two reasons.

One, because they are the larger water users. They just get studied more. But also for data availability, I don’t know of good data sources on industrial water use and it makes it harder to conduct these types of micro level economic studies.

Antoine Walter: The reason why I’m asking is that it makes the case somehow simpler.

You have two main users and you can play with one and with the other. So I just was wondering if, this was a simplification or if it was actually a state of the local market?

Ellen Bruno: Yeah, no, I, I think it is a simplification, but one that’s very, it’s, it’s pretty, um, I don’t know, well accepted because of its reflection of the real world.

What are the ideal conditions for Groundwater Trading to be beneficial?

Antoine Walter: So now really for the muggles. For a market to be beneficial here. The key parameter, if I understand your body of work right is you need to have heterogeneity. You need to have various elasticity, various demands, various users. And that way you can have this kind of triggers, which activate some and don’t activate some others.

So it means you must avoid at any cost to have like a monoculture of one type of stuff at one specific place, because that would mean, an elasticity of zero, is that right?

Ellen Bruno: