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By Frost & Sullivan

With rapid urbanization, availability of good-quality water is becoming scarce. Adding to that pressure is increasing population and pollution. The world population is increasing by 80 million each year, growing to be globally water-scarce by 2025. Hence, it is getting crucial to consider alternative options before the global scarcity increases significantly. The increasing population triggering growth in water demand calls for improvement in both the quantity and quality of water. Increasing water demand to support cities, industries, and agriculture is resulting in a limited distribution of freshwater resources. Urban development is also impacting freshwater resources and the water cycle. Hence, decreasing freshwater resources will encourage resource recovery and water recycling and reuse, thereby driving the need for advanced treatment systems.

The ageing wastewater infrastructure is making the treatment process complex and forcing operators to make the difficult decision of either refurbishing or replacing equipment with new advanced technology. With numerous facilities functioning beyond their designed lifespan, it will make more sense for equipment to be replaced with new and advanced treatment systems. Many systems are close to 100 years old—far surpassing their design lives. Over time, these systems will have experienced inadequate repair, upgrades, and maintenance, leading to increased stress, reduced efficiency, and rapid failure and deterioration. Hence, it becomes important to replace such systems with new and smart treatment technologies. One of the pivotal drivers for advanced treatment systems is stringent regulations. Globally, every country has its own legislation on water quality and reuse with an increasing level of enforcement.

Innovation in the water industry has led to a number of cutting-edge advancements in wastewater treatment. Water and wastewater municipalities are on a continuous search for novel tools. The treatment technologies have been evolving over time, addressing different kinds of pollution problems. For instance, utilities were not too particular about treating micro-pollutants a few years ago; however, it has become a concern in Europe. Micro-pollutants can be addressed with technologies that can detect and treat low-concentration pollutants. Activated carbon adsorption and innovative filtration technologies are employed by utilities to treat micro-pollutants.

Many technology companies are constantly addressing issues related to drinking water quality and effluent quality. Automation of such treatment processes has been made possible through Supervisory Control and Data Acquisition (SCADA), albeit with limitations. Developments in the field of IoT in the water industry have improved water management. With various collaborative tools that can integrate water treatment technologies with sensors, analytics platforms have enhanced customer satisfaction. IoT-led innovation is re-designing the water industry and its value chain. It is changing a vertically integrated water industry into a diverse, dynamic, and well-distributed system. For instance, IoT has transformed the way smart meters are collecting and processing customer data, thus aiding utilities in producing critical business insights concerning real-time and historic usage, peer comparison, behavioral analysis, and so much more.

Customer-centric innovation, digital transformation, predictive analytics, value-added services, and exemplary customer service will drive the advanced water treatment systems market. Frost & Sullivan has identified the market potential of advanced water treatment systems with an estimated market revenue of USD 4.5 billion and is expected to grow at a CAGR of 14.3% from 2017-2022. Some of the key technologies and services in the advanced water treatment systems that will add great value are advanced desalination technologies, UV-LED disinfection, Ceramic membranes, big data, and predictive analytics, etc. While the innovations in desalination technologies will move towards removal of salt from the water rather than water from the salt, with a drastic reduction in energy consumption, LED-based UV disinfection systems will be the microchip of health, due to their ability to achieve 99.999% disinfection in 60 seconds. Also, Digital transformation has enabled the prediction of chemical usage and dosage patterns, enabling reduction of treatment chemical wastage.

Despite all these advancements in the water and wastewater treatment systems, many emerging economies lack the funding option to move to advanced treatment systems. These utilities heavily rely on subsidies and, hence, look out for financially viable options or business models. In some cases, the utilities delay the implementation of such technologies. Such lacuna can be addressed by innovative business models that can add tremendous value to the utilities and increase the penetration rate of these technologies. One of the innovative business models is Pay for Performance where companies set up pilot plants for utilities or industries and establish the performance of the system before charging clients.

Prepaid water and wastewater treatment services is another innovative business model that can robustly address lack of funding problems in utilities in emerging economies. Many African cities are continuing to grow both in population and development at historic rates. Basic facilities such as water supply and sanitation are struggling to keep up with this growth rate. Driven by challenges experienced by many water utilities to connect unaffordable or poor communities to networks and recover the cost of water supply, there has been a tremendous rise in the interest for pre-paid meters for water supply provisions in African cities. As urban service providers in Africa still have low network penetration rate and are unable to deliver continuous 24-hour water supply to existing customers, many dwellers are forced to rely on expensive alternatives such as vendors, wells, and boreholes. which carry a high risk of potential contamination. The focus of this business model lies in not just prepaid meters, but an entire prepaid system. Numerous factors can drive or restrain the effectiveness of the prepaid system. These include access to a potentially scarce replacement of parts by services providers, accessibility and convenience of pay points of customers, the existence of uninterrupted water supply to reduce technical failures, data integration and IT management, and importance of strong communication strategy.

The advanced treatment technologies or smart technologies will be the ‘new green’, as they serve to improve process efficiencies while cutting costs and making the measurements and indication aspect of a technology simple and hassle-free.

Deepthi Sugumar is a Research Analyst at Frost and Sullivan.

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