For Water Industry, Small Hydropower Is Big Opportunity



2 July 2015 | Sara Jerome

Faced with revenue challenges, a growing number of water utilities are looking to become energy providers — at least for themselves — using their own infrastructure to harness electricity.

Small hydropower “captures electricity by using water that flows through a pipe to turn micro turbines in the lines, or by harvesting energy from stream flows in irrigation canals and streams” CNBC reported.

With utilities facing tough economic and environmental circumstances, including aging infrastructure and revenue challenges as a result of drought and conservation, it may be a big moment for small hydropower at water utilities.

“Venture capital and crowdsourcing funds have flowed into the space. Some of the big companies active in the solar and wind markets also finance small hydropower systems that can generate revenue that's then reinvested into infrastructure work. That's potentially a significant development in places like California, where a serious, four - year drought is cutting into water utilities' revenue” the report said.

NLine Energy CEO Matt Swindle explained the trend in financial terms.

"Many agencies are not going to the municipal bond market, but instead going to private banks to put separate debt vehicles right on these little hydro units and creating a new revenue line” he said, per the report.

Still, uncertainties surrounding these investments remain. According to a paper published in the journal Water Policy, “Significant potential exists for energy recovery in the water industry. However, many previous investigations have not considered key complexities such as variations in flows or turbine efficiency. Similarly, accurate costing and return on investment data are often absent or lacking sensitivity analysis. Further research is required to address the risks and long-term reliability of installations, alongside the development of firm policy to direct and incentivise sustainability gains in this area”

There is little to confirm that this avenue would be economically viable.

“Water flow and pressure are known to vary significantly throughout a typical day, from day to day, weekday to weekend, by season and over the longer term. Water flow and pressure are also subject to significant changes due to the addition of new industries, new demands, water charging or water saving schemes, etc. Such changes in flow and pressure would have a significant influence on the efficiency of a turbine converting the excess energy to electricity” the report said.

In a larger sense, hydropower is seen as a prime space for water and energy utilities to collaborate and save resources.

“Across the western U.S., water and power are linked. Hydropower provides about 21 percent of the region’s electricity. Nearly 20 percent of California’s electricity is used to move, treat and heat water” The Conservation reported. “Having both water and electricity utilities actively collaborate on planning and efficiency would make California a unique case.”

This insight was originally posted on Water Online. To read the original insight, click here.