At the beginning of the pandemic, COVID-19 put a break on a vast majority of businesses around the world. Logistical chains were broken, borders were closed, planes could not fly. This caused massive ramifications for certain sectors. Meanwhile, some sectors are growing even faster than expected. This is the case for water businesses which increase access to drinking water to local populations and which seem to digest these times rather well.
Since the start of the pandemic, through a series titled “Water Businesses in COVID-19 times, even more needed, even more wanted”, Incofin IM has been monitoring a number of water businesses around the world to better better understand the impact of COVID-19 on their operations. In previous articles we explored the case of water kiosks (safe water enterprises) and of small scale piping water companies.
Today, we dive into the world of the water technology and show how technology is playing an increasingly important role in helping water businesses build resilience, efficiency gain, and customer centricity.
This article is written in collaboration with Dick Bouman, water expert from Aqua For All, who is part of the Technical Expert Committee of the Water Access Acceleration Fund. Mr. Bouman provided practical examples from the field to share insights on potential solutions in the water sector.
First, we will show how the water sector faces increasing challenges, including higher costs, energy cuts, accelerated climate change and emerging contamination from industrial and agricultural activities. Yet, testing and purification technologies have evolved and have been able to provide some answers to those challenges.
In the following section, the article zooms into digital technology solutions and how they help water companies to be more efficient in problem detection, and to be closer to their clients.
Innovation in testing and purification techniques: faster, more energy efficient, more comprehensive…
Evolving purification technologies against evolving contamination risks:
Purification technologies are core to water businesses that strive to provide safe and affordable drinking water. The strength depends on how adapted the technologies are to the context in which they are applied, and to the contaminants they are expected to remove, which are also constantly evolving. Natural water resources are for instance contaminated with an increased amount of various types of pollutants such as nitrate, arsenic, fluoride, pharmaceutical residues, traces of heavy metal to name only a few. This means that in an increasing number of contexts, traditional treatment by simple filtration and chlorination is no longer sufficient. For example, arsenic can only be absorbed in multi-stage treatment, while fluoride can be absorbed by synthetic absorbents. The increase in pollutants requires rather sophisticated operations and consequentially, a cost increase.
The good news is that testing technologies have greatly evolved. While the main constraints of testing were typically the need of a stove (36°C) and 24 hours to detect micro-organisms, there are now new technologies available that can detect micro-organisms more quickly and accurately than before. For instance, the Comparative Bag Test of Aquagenx[1] works without a stove and lasts up to 48 hours. Aquagenx provides portable water quality test kits which are designed for field testing in low resource areas without labs and electricity. Another example is Udetect of Orvion, a Dutch company focused on water and environmental technology. Udetect is an analysis tool using DNA-based technology to detect several pathogens in water within two hours’ time[2]. These DNA techniques can also detect the source of the contamination, for example, measuring whether there is faecal or industrial contamination.
Another interesting development to look at are sensor technologies connected to a smartphone. These technologies enable faster water quality testing and provide a web based data solution for stand-alone testing equipment. Sensor based field testing leads to a great reduction in time between sampling and results (from over 24 hours to less than a few hours or even minutes). It also allows for onsite analysis cutting down the time spent on transport of the sample, costs and reporting. India based FFEM[3] developed chemical tests that use Android smartphones to digitize colorimetric tests. With the camera option of a smartphone, the results get automatically stored in any water businesses’ database.
A need for more energy efficient and more sustainable purification technologies…
Purification technologies that are more water and energy efficient allow water businesses to minimize waste and lower their operating costs. Which, in turn, creates an opportunity to price water affordably. For instance, while reverse osmosis (RO) has been the mainstay of water purification technologies for drinking purposes, it is notorious for wasting upwards of 3 units of water to produce 1 unit of drinking water.
To conserve water, the Government of India is considering banning the use of RO for water with a lower level of total dissolved solids. In this context another membrane technology, called capacitive de-ionization (CDI) has emerged. As effective as RO in purifying water, CDI has a water efficiency two times higher than RO. Well-designed membrane CDI can also consume less energy.
Additionally, some companies are turning to other power sources like solar energy, allowing them to gain efficiency and protecting them from power cuts. Elemental Water Makers[4], for example, uses both solar panels and energy recovering from the brine from RO-treatment, reducing the number of required panels by a factor of four. The company provides an efficient and easy reverse osmosis technology that is powered not only by sun, but also wind and waves, to provide reliable access to clean water that is more affordable.
Beyond purification, the role of technologies in digital innovations…
Digital innovations for faster decision making:
The water sector has been traditionally dominated by centralized utilities, whose financial viability is supported by economies of scale only. Centralized solutions have their limitations, especially when it comes to serving last mile customers. Decentralized solutions, such as mini grids and water kiosks, are more agile, but by definition face a more challenging cost structure as it is heavier on the fixed costs due to their smaller scale. However, this can be compensated for by new technologies which have been emerging, allowing efficiency increase, and reducing variable costs.
For instance, sensors and flow meters enable operators to manage their networks in real time, leading to faster and better decision-making. Technologies which allow companies to conduct activities remotely and perform real time process control checks help to reduce water loss. Leakages, for example, can be detected and repaired sooner. One example of such technology are the smart solutions of Upande[5] in Kenya. Upande uses low-power radio communication technology to run fully offline chlorine sensors in places where there is no internet connectivity. Another example, also in Kenya, is Mobitech[6], which offers a cloud-based platform for water monitoring, management and billing. Mobi-Water, as the platform is called, integrates remote sensors to allow users to remotely monitor water storage tanks, track and analyze water consumption using smart meters and pay their water bills using mobile money services.
Digital technologies… know your systems, monitor your cashflows…
Digital technologies open the possibility for water businesses to organize networks of kiosks or water stations, and to communicate with each other. Most safe water enterprises have a dispersed network of small water points of sales, run by local entrepreneurs who usually do not have a technology or engineering background. By using centralized IT platforms, water businesses provide their employees access to online training or real time instructions in case of system failures or maintenance and, by doing so, bridge the knowledge gap within their staff.
Digital innovation can also allow water companies to calculate their billing more precisely and by doing so, contribute to cashflow management and enhanced client relationships. For companies that cannot afford upfront payments, pay-as-you-go models offer an alternative payment plan since the information is available for this. These digital solutions are further adapted to allow for flexible payment e.g. pay for only what you can afford, a positive alternative to reach end consumers who have a low and unstable income, especially in COVID-19-times. For instance, the Dutch company Mobile Water Management[7] has developed a meter reading system using the camera of a smartphone to ‘read’ analog meters. This mobile application does not only allow a digital billing process, but also provides water businesses feedback on meter infrastructure health and monthly consumption patterns, while informing clients on exceptional use, which incentivizes saving of water. The system is applied in six small town networks in Mozambique.
Digital technologies.. engage with your customers – serve them better…
We observe an increasing number of water providers informing their customers more frequently about promotions, service disruptions, etc. This is possible, because real time data are available. The SAC-TIC application of the Cotonou water utility SONEB in Benin, for example, warns clients of planned interruptions in their water supply, while providing hygiene education[8].
IT focused on data collection plays an important role for impact results based funding models. Impact funders require well recorded data on specific impacts, such as CO2 reduction, volumes sold, time saved etc. There is an increasing number of projects to support water businesses with data collection and management. A filter project in Ethiopia has automated its sales and customer data to arrange for timely replacement of filter spare parts and to clearly communicate the impact it has on the immediate community.
Another example is the adoption of decentralised and smart contract technologies to facilitate financing and settlement of smart connections (prepaid) and monitoring of water supply service performances and licenses. A first pilot in Mozambique, supported by Walifi, has raised interest of small town operators, with an initial case load of 29,000 pre-paid water meters.
As highlighted above, digital technologies, ranging from smart meters, Internet of Things (IoT) monitoring, or digital billing, help decentralized water businesses build a holistic, real-time, centralized view of their water operations. It allows them to make faster and more relevant business decisions. These technologies also allow them to communicate more often with their end clients, be more transparent and proactive and therefore offer a higher quality of services. Such benefits ultimately help improve the margins of these businesses, allowing them to be more efficient and reach financial sustainability. For the most mature businesses, increasing margins due to efficiency gains may trickle down to the end clients in cheaper products.
Conclusion
Technology is at the heart of any water company business’ strategy. The environment from which water companies collect water will likely continue worsening from a pollution level and from a climate risk perspective. As such, water companies need to equip themselves with the most innovative, energy efficient and agile testing and purification technologies in order to remain relevant.
Water provision is a low margin business model. The end product sold, water, is a basic need which needs to be priced at the most affordable level to reach as many people as possible. In this context, water businesses aiming for financial sustainability have only one solution: reaching enough scale to realize gains. Digital technologies can be great contributors to such a strategy. By monitoring their operations real-time, collecting fees through digital billing system, increasing client engagements and being transparent about service issues and new products, technologies can help businesses act more efficiently and retain their customers better, leading to financial sustainability and social impact.
[1] https://www.aquagenx.com/cbt-ectc/
[2] https://en.orvion.nl/markets/water-quality-and-detection/; https://udetect.eu/
[3] for FFEM’s products see https://www.hueristicdevices.com/products/
[4] https://www.elementalwatermakers.com/solutions/
[7] https://mobilewatermanagement.nl/product-details/
[8] https://www.youtube.com/watch?v=Pp0nuOdBmq8 .This project was financed by Via Water (https://aquaforall.org/viawater/index.html), and set up by the Partneriat National de l’Eau (PNE-BENIN) in collaboration with Société nationale des eaux du Bénin (SONEB), Eau et Assainissement pour l’Afrique (EAA-BENIN); and the company Solutis from Benin.
