Savings, Efficiency From Compact Water-Treatment SolutionsThu, 01/11/2018 - 10:45
Q: How do Fluence’s projects help countries and communities solve their water needs?
A: Water shortages and the pollution and salinization of fresh water wells are key hydric challenges worldwide. In lieu of this situation, Fluence looks for opportunities to promote its solutions in the countries and communities that need them. We have gained a great deal of experience in water treatment thanks to our presence in Israel, where we have an R&D center and a sales office. Israel reuses up to 80 percent of the water it uses and its government works strongly with desalinization companies to transform seawater into freshwater.
Q: What are the main differences between desalinization processes in Mexico and in other countries where Fluence is present?
A: In terms of the desalinization of seawater, countries such as Chile desalinize water for industrial and economic activities such as mining, which is not the case in Mexico. Desalinization in the country focuses more commonly on producing freshwater for human consumption rather than for industrial purposes. Cities such as Los Cabos or islands like Cozumel need desalination to cater to the needs of their floating population, so it is common to find small plants that treat wastewater and desalinize seawater. The largest concentration of desalinization plants in Mexico is found in the Baja California Peninsula, in northern cities like Tijuana and Ensenada, with big desalination plants going into construction like our own project, San Quintin; and in the south, in Los Cabos and San Jose due to the growth of the tourism industry. Hotels there tend to have their own desalinization and purification plants.
Q: What best international practices do you think Mexico needs to implement to improve the efficiency of its water consumption?
A: Water reuse is an important practice that Mexico should adopt because the future of well replenishment depends on it. The country reuses only a small proportion of the water it consumes when it should aim to reuse 80 percent of its used hydric resources. This is a complicated goal because freshwater is needed in all activities, including water reuse. A greater reuse of water in sectors such as agriculture, industrial activities and domestic use should be Mexico’s main goal. As the demand for water for industrial or farming activities increases and companies lack the necessary amount or quality of water, reusing water becomes more important and needed.
Q: How are Fluence’s modular, containerized water-treatment solutions more competitive than traditional water-treatment plants?
A: Fluence´s decentralized solutions are an economical solution. Building a giant water-treatment plant and transporting water to communities through distribution networks are expensive activities. Water or wastewater must be transported through long-distance piping infrastructure to a central treatment location and back out to its end-use location, which may be miles away from the treatment plant. This method is complicated and inefficient in terms of the need to pump, distribute and collect the resource between the consumer and the plant. Our solutions limit the cost of building pipelines to a centralized facility. Decentralized treatment reduces startup time and expense as water and treated wastewater can circulate directly back to a municipality, to local surface water or to another nearby user, such as an industrial cooling tower or landscape irrigation system. Fluence’s NIROBOX and ASPIRAL are good examples of that. While the company does not pay so much attention to the size of a project as it does to making sure it is local, it is important to point out that communities with more than 100,000 inhabitants need over 200L/s of freshwater, which is not insignificant.
Q: What can be done to make sure that water-treatment plants in Mexico are working to their full capacity?
A: The challenge of maximizing the treatment capacities of plants in Mexico is usually found in the maintenance and operation areas. These activities always entail a cost for the operator and energy consumption is perhaps the main source of costs in water-treatment plants, so reducing energy consumption allows plants to operate more efficiently. With this in mind, we focus on offering decentralized and containerized treatment solutions that, due to their compactness, require less electricity to operate and last longer. For instance, in the segment of wastewater treatment the company has a patent for a membrane aerated biofilm reactor (MABR) that requires less energy to operate. Using this technology can curb energy consumption by up to 80 percent in wastewater treatment plants, which translates to a longer uptime.
Q: What is Fluence’s preferred scheme to build its water-treatment projects?
A: We usually focus on building and delivering water-treatment plants to clients. However, Fluence can also provide water service solutions through different financing models, such as a PPP, BOT and BOO, when projects are large enough to be feasible and their concessions last at least 10 years. Not all water-treatment projects can be easily financed. For instance, smaller ones may not be profitable under these schemes because their financing costs rise.
Q: How is Fluence’s Mexico client portfolio divided between the public and private sectors?
A: The tourism real estate segment is experiencing strong growth, especially in the form of houses, but private clients have a smaller participation in our portfolio. These companies demand solutions for water reuse and discharge but the largest market demand in Mexico is in purifying water for communities and treating city wastewater. The public sector accounts for the largest share of our portfolio. For instance, the government of the state of Baja California is a key client for Fluence. We have four desalinization plants in the state that take seawater, treat it to meet national and international purity standards and deliver freshwater to local communities. The next step in this area is to close the cycle by treating wastewater for their use in irrigation in agriculture-intensive areas such as Ensenada.
There are still many areas of opportunity to treat water in Mexico but players in this segment are aware of the needs of the market and have the expertise and intelligence to develop in it. In northwestern Mexico, this is evident in the public tenders. The desalinization plant in Los Cabos was built in 2003, which was followed by the Ensenada plant 15 years later and then the San Quintin, Rosarito and Guaymas plants that were awarded with a lapse of only three years.
Q: How are Fluence’s projects in Baja California being financed and when are they planned to start operations?
A: The most representative project in this state, the San Quintin plant, is being developed under a PPP scheme. The State Water Commission (CEA) of the state government is a key partner of this project but Fluence is developing it in partnership with two Mexican construction companies. This plant’s costs amount to MX$550 million approximately and its tariff for treating each cubic meter of water amounts to an inflation-indexed MX$16.95. These types of water tariffs are often highly subsidized by the government and final consumers such as households or industrial facilities end up paying only a fraction of that cost.
Q: A bill that prevents the participation of private capital in water management activities was presented before the Mexican Senate in September 2018. How could such a regulation impact Fluence’s operations if it became mandatory?
A: I think this initiative is a step backward, but even if it enters into force, the contracts that had been previously signed between the public and private sector would continue to be valid until their maturation. This means the population would continue to perceive that it is a company rather than a public dependency that sells water, which would cause conflicts. It is important that the public educates itself on how water treatment is handled in Mexico and why private capital is key to this process. The private and public sectors leverage each other when it comes to developing infrastructure and the absence of private investments translates to stagnation in this segment. Fluence engages in PPPs to build and operate water plants but we neither distribute water to final consumers nor account or charge for it. These activities are the government’s responsibility. Fluence focuses on continuing to build and finance water-treatment plants and then operate them for the duration of the contract with the government.
Q: What role is Fluence planning to play in Mexico’s water-management market in the coming five years?
A: Our concept of centralization through the offering of containerized solutions that ensure important energy savings help us differentiate ourselves from other companies in this sector. Similarly, we are not too large a company, which reduces the size of our administrative structure and increases our competitiveness. In Mexico, Fluence offers solutions that target the specific water needs of each region. For instance, our NIROBOX product is designed to desalinize seawater and supply fresh water to remote areas such as islands. These solutions are also useful for situations where a development must be built quickly or for industrial facilities that need to fit a small water-treatment plant in their operations or grow step by step. Containerized water-treatment solutions prevent manufacturing companies or hotels from having to build a large water-treatment plant according to growth expectations that may not be met. Instead, these companies can grow and acquire a new modular treatment station as they need more water.