Globally, 80% of wastewater returns to ecosystems without any treatment or reuse. A large share of this pollution is from developing countries like India, China, and Indonesia without widespread wastewater systems. Developed wastewater systems like Israel and Singapore provide water reuse and advanced treatment technologies across their populations. While developing countries lack extensive infrastructure, countries like Israel and Singapore must carefully maintain extensive piping and high-stress treatment plants.

Infrastructure life expectancy is not an exact science, but mass failures directly increase in older, decaying systems. This unique pain point is exacerbated in similarly wealthy but much larger and less urban countries like the U.S. or Germany.

While developing countries produce the bulk of wastewater pollution and suffer effects like cholera, dysentery, typhoid and polio, developed countries’ infrastructure are approaching disaster through age-related failure. Further complicated by unique rural/urban issues, each country has specific wastewater challenges that a suite of technological innovations can solve.

Market Types

Wastewater systems are not uniform but tailored to meet the specific regulatory standards and demands of communities. For this reason, wastewater innovation must be grounded in market context. Successful wastewater systems are quantified by their ratio of treated waste to total volume of wastewater produced. Historically, this ratio correlates with urbanization, municipal government expansion, and economic development. Yet, many countries like Brazil and Nigeria are urbanizing faster than their municipal governments can construct wastewater systems. Figure one represents this trend of non-linear development.

Figure 1:  Extent of Wastewater Treatment by Country

The U.S. created expansive wastewater standards through the Clean Water Act. Twenty-five years later, American wastewater is a model for extensive urban/rural infrastructure and rigorous treatment standards. Unfortunately, the system is aging rapidly. The U.S.’s wastewater infrastructure will require investment and repairs totaling over $412B in the next twenty years.

Over 20% of pipes have exceeded their intended lifespan and must be replaced, a staggering 452,000 miles of pipe. Similar trends are occurring globally in developed economies like New Zealand, the UK, Spain, and Italy. Each of these examples struggle with funding repairs without significant increases on utility rates, driving tension between rate payer and municipality.

These two trends are radically different and separated by system stress and innovation ability. System stress is a measure of strain and/or degradation in wastewater infrastructure while adaptive capacity refers to a wastewater system’s ability to respond to technological or policy innovation. Figure 2 charts these metrics and corresponding niches of emerging technological innovation.

Figure 2: Wastewater Technology Market Fits

Most innovations originate in the high adaptive capacity markets as they are more affluent and have more ambitious water quality standards. Novel technologies then establish defined product-market fit in high system stress markets as they trickle down to developing economies.

Two distinct but widely applicable trends emerge from this analysis:

1.) Decentralized treatment systems

2.) Software in infrastructure and system management

Decentralized Wastewater Treatment

Decentralized or distributed wastewater systems operate without direct integration into conventional wastewater grids. These systems can treat and recycle water on-site at higher efficiency than large municipal facilities.

Decentralized systems excel in treating consistent waste streams, making them an optimal candidate for modular applications in industry, residential, and commercial applications. The core technology aims to replicate the performance of traditional, municipal wastewater services at a smaller scale tailored to site-specific water quality and human interactions.

Figure 3: Epic Cleantec Diagram

Source: Epic Cleantec

Decentralized treatment is a unique technology with emerging applications in urban and developing markets. Urban markets are particularly interested in decentralized solutions due to contentious relationships with municipalities increasing utility rates. Salesforce Tower in San Francisco now saves over a million dollars a year with a decentralized treatment system while also producing revenue from soil amendments extracted in the treatment process.

While this trend is concentrated in wealthy urban centers like Los Angeles and San Francisco, product market fit is calcifying in developing states. Indra’s India installments include industrial, rural, and urban applications, often implementing the site’s first wastewater treatment system. A true 0 to 1 technology, Indra’s modular units also offer tremendous flexibility for governments aiming at strategic wastewater initiatives, especially in countries like India with accelerating power grids.

While innovators like Innovatreat have found great success in rural projects in the U.S., these emerging applications in urban and developing markets must overcome specific challenges in scaling solutions. In urban markets, a clear owner-operator dynamic and supply chains have not been established. Some buildings prefer to pass responsibility off to local operators while other building managers refuse any oversight.

Similarly, technology integrators like Epic Cleantec do not manufacture their own reactors, limiting their growth and placing them in competition with their own partners. In the developing markets, it is often only through government initiatives that education, organization, funding, and power access are developed alongside decentralized systems. More an issue for rural markets than urban markets, return on investment is exceptionally difficult to gauge due to distributed populations and no evidence of product-market fit in areas without any history of wastewater treatment.

Software, Efficiency, and Infrastructure

Emerging software solutions analyze wastewater operations and repairs, increasing system efficiency, extending the lifespan of aging infrastructure, or expediting overdue repairs.

Tools here can be consolidated into two distinct categories:

            1.) AI infrastructure inspection

            2.) Automated facility management

AI in infrastructure analysis currently focuses on conveyance analysis and defect detection with these two fields frequently overlapping. Conveyance analysis uses cameras or sound waves to identify leaks in wastewater systems for repair. While it sounds minor, conveyance losses, especially in older, developed wastewater systems, can waste upward of 12% of total water volume or spread sewage into ecosystems. Innovators like Hydropoint have been especially successful in large corporate or university properties with diverse water use that is difficult to monitor.

Defect detection, while apart from conveyance analysis, applies to a range of wastewater system issues. SewerAI is the most prominent innovator in the U.S., gaining significant traction from a joint project with the city of Houston and the EPA. Using their proprietary computer vision platform, SewerAI records the insides of pipes, stiches the images together, and then analyzes the system for cracks and decay. Automated sewer analysis reduces manual review time by 70%, increases detection by 33%+, and lowers daily operational cost from $1,000+ to less than $300. Truly revolutionary in accuracy, cost, and speed, utilizing AI in infrastructure assessment could be the exact surge teetering wastewater systems’ need to unleash needed infrastructure replacement and retrofits.

Automated facility management is a less dramatic but more contentious improvement. Largely borrowed from industrial manufacturing facilities, automated systems intake sensor data on water quality, anticipate incoming waste, and perform the job of a managing engineer to keep the facility operational. Another unique application of automation, these systems are particularly helpful in aging facilities or increased regulatory scrutiny.

Municipal facilities remain hesitant to trial these systems due to a variety of reasons despite the low cost. A chief reason for hesitancy is the proprietary nature of these software systems. Municipal wastewater facilities are exceptionally reluctant to hand over control to algorithms without guiding them or editing them, but software providers believe these edits could lead to pollution events and legal liability. Beyond issues in accessing the relevant skilled laborers, this control/liability dynamic has yet to be fully addressed and will limit growth.

Perhaps the best reference for success here is the use of hydrological simulation software over the last ten years in Combined Sewer Overflow (CSO) systems. The system works to predict potential sewer-rainwater contamination episodes and automate management. Rapid implementation and transparency with software systems between providers and facilities decreased the assessed need of American CSO systems by over 30% in ten years.

Takeaways

Regardless of system stress or adaptive capacity, no technology will save a wastewater system from poor management. Governments like Israel, Germany, and Singapore have excelled, building extensive and advanced systems closely mirroring the U.S. Where countries like the U.S., Italy, and Spain must focus on is mobilizing software to extend aging infrastructure’s lifespan through repair, replacement, and automation of operations. On the other side, the thriving systems mentioned, and a few other European states must remain diligent in their system repairs and analysis to avoid a backslide into a high-stress system.

Decentralized systems present the most unique trend in this ecosystem. American wastewater utility rates rose 79% in the last decade, a trend that will push more urban clients toward decentralized systems. Real estate developments are tightening control over buildings by installing decentralized systems and saving millions doing so. The downside is significantly more challenging permitting processes slowing development speed and overall novelty of the market defined by low product differentiation.

Developing countries are in a more straightforward situation with decentralization. Without significant infrastructure linking rural and urban communities, decentralized systems offer a way to rapidly improve wastewater standards. Identifying optimal market-fit in rural systems remains a challenge and will be vital in bypassing traditional steps in wastewater system development. Mobilizing data and limited forms of system automation should also be a priority for countries with higher adaptive capacity.