Water Treatment Financing Model Takes Page From Solar PPAs


by | Dec 7, 2016

LagunitasThe solar industry has been using the no-money-down financing model for years. Now water is joining the party.

Cambrian Innovation today said that Lagunitas Brewing Company will be the first customer to use its water-energy purchase agreement (WEPA).

Under the WEPA, which Cambrian says is a first for the industrial wastewater treatment industry, Lagunitas will use Cambrian’s EcoVolt product to treat its wastewater onsite, producing recycled water and clean energy to use at its Azusa, California brewery, which will open early next year. The brewery will pay a monthly fee and zero money down for the wastewater treatment and renewable energy generation as a service.

By reducing its utility bills and eliminating its off-site wastewater hauling and treatment costs, Cambrian estimates the WEPA will save the brewery $22.5 million over the 20-year contract.

“It’s part of this broader trend of infrastructure as a service that has a huge amount of potential,” said Cambrian Innovation Founder and CEO Matthew Silver in an interview. “A lot of companies don’t want to be in the business of processing their waste streams — they’d rather be focused on their core products. What we’re doing with the WEPA is we’re saying we’ll come in and install a system on your behalf and operate it for you. You only pay us what you get out of it, per gallon of wastewater we treat or per kilowatt of energy generated.”

Silver said the WEPA fits into Cambrian’s efforts to enable the circular economy. This involves the company’s technology, which treats wastewater onsite while generating energy and water for reuse. “But a big part is also around business models and finance and investment and adoption models.”

Silver likens the WEPA to solar power purchase agreements (PPAs), where customers pay for solar electricity rather than solar panels. And in fact Generate Capital — its president and co-founder is Jigar Shah, who founded SunEdison and pioneered solar PPAs — is the lead financial partner in the WEPA.

“It’s a win for the customer in that it’s no risk, it’s cheaper [than buying the wastewater treatment system], it’s no money down and it’s immediate savings,” Silver said. “It’s a win for Cambrian because we’re able to provide a longer-term contract for the customers and be involved in a longer-term project and optimize the plants as they operate. And it’s a win for investors because there’s a huge gap for investment in water infrastructure in the developed world. A lot of folks are looking to solve that but there are only so many avenues.

Lagunitas Cuts Water Footprint 40%

Lagunitas has used the EcoVolt technology at its Petaluma, California brewery to treat wastewater onsite and provide recycled water and energy since 2014. The craft brewery, which was Cambrian’s EcoVolt Membrane Bioreactor customer, says using the water treatment system has cut its water footprint by 40 percent.

“That percentage reduction is incredible considering water usage at breweries is huge,” said Lagunitas spokesperson Karen Hamilton in an interview. “The average craft brewery water to beer ratio is something like 5 or 6 gallons of water to 1 gallon of beer. What the EcoVolt is going to do for us is bring that down to just under 3 gallons of water to 1 gallon of beer.”

Lagunitas doesn’t use recycled water in its beer — it’s only for cleaning and other industrial processes. But having this source of recycled water to reuse means the brewery can save its freshwater use for its beer and doesn’t have to use potable water for these other processes.

The EcoVolt also provides economic savings to the Petaluma brewery but Hamilton won’t give a dollar amount.

“But we were trucking something like eight truckloads of wastewater away from the brewery every single day,” she said. “Besides the cost of trucking and then the cost of diesel for the trucks, we’re also saving the cost of treating the water at a treatment facility.

“We’re happy with the product — so happy that we are implementing it in Azusa,” Hamilton said.

At the new brewery, the EcoVolt technology will be capable of producing an estimated 300,000 gallons of recycled water per day, over 2,300,000 kWh per year of gross renewable electricity, and 130,000 therms per year of gross renewable heat. The system is portable and modular, so as the brewery increases production at the Azusa facility to over 1 million barrels per year, Cambrian will install additional EcoVolt modules to treat increased wastewater flows.

Reduced Water Risk, Utility Bills

CPD (formerly Carbon Disclosure Project) has said a water supply shortfall represents a $63 trillion risk to business and communities by 2030.

As the drought becomes more acute in key markets, the WEPA will help industrial water users stabilize monthly operational costs amidst growing water market volatility, Silver says.

“If you look at the cost of water in the US, generally speaking it’s going up much faster than inflation,” Silver said. “The general reason the costs are going up is because there hasn’t been much investment in infrastructure; the others are a changing climate and water scarcity. That’s driving up the cost of getting clean water and treating wastewater. This is a huge risk and a growing concern for companies — can they get access to clean water — and also a financial risk. What we can do is lock in a long-term contract, making clean water available to them if they want and reducing their exposure to water risk.”

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