As demand for water increases, innovative solutions stand to ensure stable market growth

Nasdaq is now signaling a bullish stance on water investment, finding the global water market attractive for its reliability and opportunity.

Water is essential, analysts noted, so market demand remains reliable regardless of economic volatility. Nasdaq also notes a budding revolution in the water sector, with many innovative solutions launching to conserve, treat, and capture water from nontraditional water sources, saying these will ensure stable market growth.

Explaining its decision, Nasdaq cited Mami Mizutori, United Nations special representative for disaster risk reduction, who warned, “Drought is on the verge of becoming the next pandemic, and there is no vaccine to cure it.”

While there may be no cure, there are new ways for water management to help economies grow despite climate change.

Reliability in the Global Water Market

A report on the Nasdaq website, “Water Infrastructure and Resiliency: Industry Report and Investment Case,” describes a triple threat that has driven water consumption down: water pollution, population growth, and water impacts associated with climate change.

Yet a strong rebound is expected. Domestic use from growing populations should outpace efficiency measures. And economic development will increase water demand in industry, particularly in the developing world. Utilities will enjoy a steady increase in demand over the coming decades, and the rate-based character of utilities lowers the cost of capital for higher investment yields.

Investment Opportunities

As regulation becomes stricter and labor costs mount, the report predicts that utilities will invest in innovation for long-term cost reduction. Through 2028, a 7.3% compound annual growth rate for the global water and wastewater treatment market is expected, with the global market rising to $465.23 billion. As drivers of growth in the need for water investment, the report cites:

• The high cost of distribution in rural areas
• Drought
• Regulation
• The need for replacement of degraded infrastructure with resilient infrastructure
• Population growth in cities

Decentralization, that is, positioning small plants near the source of need, is an economical strategy for meeting many of these issues challenging growth. It radically reduces the amount of pipe required for distribution, a plus in rural areas, and with time, savings mount on pipeline maintenance and pumping costs.

Fluence Solutions

Investment opportunities are arising with new technologies and trends in four areas of innovation:

• Water reuse
• Nutrient recapture
• Agricultural irrigation monitoring and remote metering
• Water capture from alternative sources

Fluence modular treatment units are ideal for meeting these needs. The units offer flexibility that’s necessary in our age of climate change. Instead of investing in large centralized plants that may be obsolete by the time they’re commissioned, modular units can be commissioned quickly, and moved or sold when they’re no longer necessary.

NIROBOX™ reverse osmosis units purify water from a number of nontraditional sources including stormwater, seawater, and brackish groundwater at revolutionary price points on even small and medium scales.

In the area of reuse, Fluence’s modular Aspiral™ wastewater treatment plants modular units are experiencing remarkable growth in the market, extending water reuse globally. The plants use membrane aerated biofilm reactor (MABR) technology to produce water that meets high standards for agricultural reuse, including California’s Title 22 and China’s Class 1A. MABR technology updates traditional biological treatment with a more robust and easier-to-maintain process that can cut aeration energy requirements by 90%.

In cities where population growth threatens to overwhelm treatment capacity, Fluence offers MABR-based SUBRE treatment units, which can be used to update existing plants, increasing capacity and improving water quality.

Financing Water-Sector Projects

Among sector challenges mentioned in the report was a lack of funding to upgrade infrastructure, a problem addressed by Fluence’s Water Management Services, which offer BOO and BOOT financing structures. Fluence builds and operates plants with no upfront investment, and the customer need only pay for water.

The innovation, resilience, and sustainability of the water market also positions it to benefit from the growth of environmental, social, and governance (ESG) investing. ESG-related bonds are nearing $1 trillion, and ESG assets under management could climb to $53 trillion by 2025, which is more than a third of the total of all managed assets globally.

Investors are looking toward an innovation-driven water market expansion for which Fluence has long prepared. Contact our experts to find out more about water innovation and resilient infrastructure.