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Market Turmoil ….. just when you thought is was safe to invest in Water!

With the recent turmoil in the markets, optimism has been a commodity in short supply and good investment opportunities as scarce as hens teeth; though this may be changing if you believe Warren Buffets ‘buy now’ call. In the midst of this, two  new water based investment funds were recently launched.

On September 30, 2008, the investment group Calvert launched the Calvert Global Water Fund (CFWAX). This fund is its latest Sustainable and Responsible Investment (SRI) mutual fund, part of a new series of investment portfolios known as Calvert Solution™ Strategies. Calvert have partnered with KBC Asset Management International, Ltd., of Dublin, Ireland, to sub-advise them on the management of this fund. KBC apparently ‘boasts an eight-year track record of strong performance in the global water sector’. Be that as it may, their timing for the launch probably wasn’t great given the stampede out of equities and they have dropped 18% from $15 at the start of October to approximately $12.20 today.
KBC say that they stay on top of the technological issues involved in the water cycle through its outside environmental advisory committee of scientists. Jens Peers, lead portfolio manager of the Calvert Global Water Fund says ‘we believe that no other water asset management group has set up a comparable committee of unbiased experts.”
Another recent development was that Four Winds Capital Management launched the first London listed water fund on July 24th. The fund, which is referred to as the Aqua Resources Fund was launched on the London Stock Exchange and will invest in water related assets in areas such as infrastructure, technology, recycling, treatment, distribution and water to energy, mainly by taking direct stakes in unquoted companies and projects. The investments must be at least 60% involved in water activities.

Aqua Resources could have done with some help on their website however, it really isn’t very inspiring, it doesn’t have very much meat to it and contains platitudes such as ‘The Company intends to implement its investment policy via its investment strategy. Using global research and sourcing, the Company intends to build a portfolio focused on investments that offer water-related returns.’ Yawn!

However one thing which differentiates Four Winds from other water funds is that they are focused on unquoted assets. This enables them to access a broader base of investments and go after small cap, pure plays, in the water sector. Most other water funds focus on public equity investments with significant non water business activities, e.g. Nestle and General Electric. Leonora Walters provides some good commentary on this at the Investegate.

Despite all the long term positive signs and reasons to invest in water, this didn’t however stop a number of water indexes from taking a hammering in the past few weeks, the ISE-B&S Water Index (^HHO) is down approximately 30% since the start of August and the Global Water Intelligence (GWI) Global Water Index was down 9.9% between 10th August and 19th September 2008. So it seems like in the old movie, when people hear the scary music they still go running for the beach. 

Paul O’Callaghan is the founding CEO of the Clean Tech development consultancy O2 Environmental. He lectures on Environmental Protection technology at Kwantlen University College is a Director with Ionic Water Technologies and an industry expert reviewer for Sustainable Development Technology Canada.

There’s water in dem dar clouds!

With seawater covering seventy-one per cent of the Earth’s surface, at an average depth of four kilometers, and another 1,000,000,000,000,000 liters of water in the first kilometer alone of the earth’ atmosphere, water could hardly be described as a rare element. Its more a case of ‘water water everywhere and not a drop to drink‘. I’m going to highlight a few different ways in which renewable energy can be used to produce drinking water.
One of the readers last week commented that use of wind turbines or wave energy to power desalination would be a great idea. Well in Perth Australia they are doing exactly that. Perth Australia has now established one of the largest desalination plants outside of the Middle East and set up a wind farm to power it. Electricity for the desalination plant, which has an overall 24MW requirement, comes from the new 80MW Emu Downs Wind Farm, located 30km east of the town of Cervantes. (anyone else see the irony here… Miguel Cervantes, …Don Quixote, Windmills?)

Speaking of windmills, another Australian, Max Whisson, an energetic septuagenarian inventor, believes he can solve the current water crisis with his Water Windmill invention, a unique technology to extract moisture from the atmosphere. The concept is to use windmills to cool air and extract water directly from the air and was partly inspired from an African beetle, Stenocara, who manages to be completely water sufficient by standing on his head in the desert and using cooling plates on his body to extract water vapor from the air. Here is a link to a video
showing the wind turbine in operation. The “Whisson Windmill” will make it possible to get adequate water anywhere at any time, drought or no drought” says Dr. Whisson. Given that between 1% and 4% of the earths atmosphere is water vapor, he may be onto something.
Max also had another concept he called a ‘Water Road’ which Nick Bruce featured on his podcast, the CleanTech Show. In the “Water Road”, seawater is transported inland in black pipes covered with Perspex; solar energy heats up the water at it travels through the pipes to 70-80 C. Water vapor is produced and condensed several hundred kilometers inland to provide water for irrigation. The genius of both of his ideas is the direct conversion of primary energy to the desired end result which is pure water. They are very early stage, conceptual as far as I can tell.

Another technology being developed by the New Mexico State University uses low grade heat and a vacuum to run a distillation process. The system can convert saltwater to pure drinking water on a round-the-clock basis – and its energy needs are so low it could be powered by the waste heat of an air conditioning system. At the risk of losing you, here’s the 101 of how it works. The system consists of two 30-foot vertical tubes – one rising from a tank of saline water and the other from a tank of pure water – which are connected by a horizontal tube. The natural effect of gravity creates a vacuum in the air space above the water column. The lower pressure in the headspace causes water to evaporate at a lower temperature, (this is why water boils at lower temperatures on top of a mountain). Then they use waste heat, for example from an air conditioning system, to heat up the saline water (e.g. seawater or brackish groundwater) to 10 -150 C more than the freshwater. Water vapor from the salt water column travels across the horizontal bridge and condenses in the freshwater column.
Commenting on its energy efficiency, one of the inventors, Nirmala Khandan, an environmental engineering professor in NMSU’s Department of Civil Engineering said “That’s the trick of this vacuum, we don’t have to boil the water like normal distillation, so you can use low-grade heat like solar energy or waste heat from a diesel engine or some other source of waste heat.”
So there you have it. Both energy and water are present in abundance on the planet and if we can use our ingenuity, we may be able to harness and access both in a sustainable manner.

Paul O’Callaghan is the founding CEO of the Clean Tech development consultancy O2 Environmental. Paul is the author of numerous papers environmental technologies and lectures on Environmental Protection technology at Kwantlen University College. He is chair of a technical committee on decentralized wastewater management in British Columbia, is a Director with Ionic Water Technologies and an industry expert reviewer for Sustainable Development Technology Canada.

Whiskey’s for drinkin’, water’s for investing in

Last week I put out the idea that we were approaching a tipping point in water re-use. There were a few other headlines this week which support that. For one thing California’s second largest reservoir is now ‘at its lowest level in 30 years’. Last Monday the California Department of Water Resources Director, Lester Snow, stated that next year “could be the worst drought in California history”. Governor Arnold Schwarzenegger and U.S. Senator Dianne Feinstein have proposed a $9.3 billion plan to the Legislature to fund a number of measures aimed at improving California’s water system.
So that’s California, – which bear in mind would be the 7th largest economy in the world if it was a country and has been the number one food producer in the United States for more than 50 years. Now let’s take a look at what’s happening in the capital of the world’s second largest economy. In Beijing, in the run up to the 2008 Olympic Games, Siemens Water Technologies has started up a wastewater reuse system at the city’s Beixiaohe wastewater treatment plant. The goal is to process 90% of the wastewater with 50% of the treated wastewater being recycled and reused.

2008 may be remembered as the year in which China hosted the Olympic Games but is also an auspicious year for another reason. 2008 is the first year in which the population of the planet will be more urban than rural. (Apparently this change occurred May 23rd 2008!). That’s an important turning point and if we are to increasingly live in cities, this of course means that we need to have means of sustainably meeting demands on water use in these cities.

Al Gores’ challenge to the US to move towards 100% non fossil fuel energy by the end of the decade, may be a long shot, but at least in theory it is achievable. There are alternatives to fossil fuels. The same can’t be said of water. There is an elasticity in water use, – up to a point, but there comes a point where you can not reduce water use any further without seriously impacting our ability to live. Mark Twain put it well when he said ‘Whiskey’s for drinking and water’s for fighting over’. Whether or not we end up fighting over it, history has shown that times of crisis leads to accelerated technological innovation.

This technological innovation is likely to take place in small start-up companies. Commenting on this in his article Inventing Water’s Future, William Pentland, noted that in purchasing Zenon Membranes for $700M, GE is effectively outsourcing their innovation in clean technology to small start-ups.

Some venture capital firms, like Toronto’s XPV Capital have placed big bets on this and are choosing to invest in innovative water start ups on the assumption that they will be future targets for ‘Big Water’ industry giants like GE Veolia, Siemens etc as scarcity, climate change and energy prices increase the value of water. In fact overall the amount of money invested in water and wastewater technologies in the U.S. rose 436% between 2006 and 2007, according to the Cleantech Group,

A good general yard stick to track the water business is the ISE Water Index (HHO). This index tracks a bundle of 36 companies engaged in water distribution, water filtration, flow technology and other water solutions. The ISE Water Index has enjoyed an impressive rally this year, has tacked on nearly 5% since the start of 2008, which compares favorably with the S&P 500 Index’s (SPX) loss of 7.7% during the same time frame. In fact, the index has climbed steadily higher since it was created in January 2006, gaining more than 36% along the way. As was outlined in Jocelyn Drakes ‘Cross Currents In Water World’ article.

Finally to close, one technology I came across this week which I thought was really ingenious and also just a lovely idea is called Play Pumps. It’s basically a children’s merry-go-round that pumps clean, safe drinking water from a deep borehole every time the children start to spin. So the system utilizes the energy of children playing, to purify water. Genius. You can check out a video of it in use in Africa on You Tube.

Paul O’Callaghan is the founding CEO of the Clean Tech development consultancy O2 Environmental. Paul is the author of numerous papers environmental technologies and lectures on Environmental Protection technology at Kwantlen University College. He is chair of a technical committee on decentralized wastewater management in British Columbia, is a Director with Ionic Water Technologies and an industry expert reviewer for Sustainable Development Technology Canada.