The deployment of the next generation of renewable energy technologies and energy efficiency initiatives is occurring in conjunction with the recent push in many parts of the country facing potential water shortages to invest in new or improved water and wastewater infrastructure projects. This post is the third in our series on the challenges posed by the “water/energy nexus” and how water and wastewater utilities are responding to those challenges. As discussed in more detail in our prior posts, linked Part I and Part II, the term “water/energy nexus” refers generally to the interdependence between the water/wastewater and energy sectors of the economy. Because water and wastewater utilities use massive amounts of electricity, many utilities are looking for ways to off-set their power consumption through the adoption of new renewable energy technologies and energy efficiency approaches that hold the promise of significantly improving the economic performance of the utilities. This, in turn, can improve the investment profile of the utilities, and provide new opportunities for funding needed expansions or upgrades of water/wastewater infrastructure. The following represent options for utilities, cities and policymakers considering managing water-energy-nexus issues.

Technology Solutions

One example comes from the city of Portland, Oregon, where a local startup, Lucid Energy, designed a new system in which small turbines can be installed in water distribution systems (i.e., pipes) and generate energy when the turbines spin in the flowing water. The power generated by the turbines either can be used to off-set a utility’s own power demands, or be sold into the grid as a separate source of revenue for the utility.

The Lucid technology also has the added benefit of predictability. The amount of power that it generates is not dependent on the vagaries of whether the sun is shining or the wind is blowing – although it is only cost-effective in the portions of a utility’s distribution system that operate by gravity flow due to a downward gradient.

Portland’s local water utility recently installed the new technology into its water distribution system, and other cities, including San Antonio and Riverside California, have followed suit. The Lucid technology also would seem to offer a promising model for power generation in developing countries, many areas of which often do not have access to an established electricity grid.

Policy Solutions

Another innovative approach on the energy efficiency side of the ledger is the Chicago Infrastructure Trust, a municipal initiative that is designed to bring together investors with infrastructure projects that will generate a revenue stream to cover the cost of the original investment, plus a return on investment. This initiative enables the City to obtain funding from a broad array of investors, including overseas investors, charities and pension funds that are not interested in tax-exempt municipal bonds because they have little tax liability.

The first project targeted the implementation of energy-savings measures in city buildings, the cost of which was valued at approximately $100 million. An initial round of lighting retrofits in Chicago’s public schools was estimated to cost roughly $14 million, and to yield savings in the range of $3 million per annum. The private investors will be repaid with interest from the cost savings. The Chicago model also could be used to fund energy efficiency and water-conservation projects, the savings from which could be invested in upgrades to the City’s drinking water and wastewater treatment systems.