The Corporate Influence on Water Efficiency

Prepared for the Cleantech Water Focus Event

November 4, 2010

Prepared By: Mia Javier, Analyst Water Technologies Cleantech Group, LLC

Agenda
Water Innovation in Perspective
Core of Cleantech Ecosystem Tool for Economic Development & Security Key Issues Driving Innovation Need

Paradox of Water Innovation

Significant gap between opportunity and innovation financing Investor Hesitancy: Complex Market

Influence of Corporations Remains Strong

Water Joins the Cleantech Club: Watershed Acquisitions Convening the Stakeholders: Water Efficiency Water Analytics: Opportunities at the Convergence of IT & Water Water Reuse/ Wastewater Treatment Panel Accelerating the Business of Conservation:

Water: Core to a Rapidly Growing Cleantech Ecosystem

Cleantech is new technology and related business models that offer competitive returns for investors and customers while providing solutions to global challenges

ENERGY Energy Generation, Storage, Infrastructure and Efficiency

TRANSPORTATION Vehicles design and technology, fuels and logistics

WATER Filtration, purification, water conservation and wastewater treatment

AIR & ENVIRONMENT Remediation, emission control, trading and offsets

MATERIALS Nanotech, biotech, chemical materials

MANUFACTURING Monitoring/control appliance and smart production industries

AGRICULTURE Land management, natural pesticides, natural fertilizers, irrigation

RECYCLING & WASTE Various recycling services and waste treatment services

Tool for economic development & security

Cleantech manufacturing jobs grow in China, South Korea, Japan, Taiwan and Singapore for solar panels, advanced batteries and wind turbine components. Germany and Denmark continue to expand their clean energy manufacturing capacity

Cleantech attracting innovation finance

$5.7 billion dollars across 590 deals in 2010 YTD.

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Water Innovation Is Critical

Energy Food

Water Urbanization and Economic Development

Common Goods

Water Tradeoffs Aging Infrastructure Emerging Contaminants / Infrastructure Gapes

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Supply Shortages

Large market opportunity in global water equipment

$188 B
Source: GWI, Cleantech Group Analysis

Water Remains Small % Of Cleantech Venture Finance

Challenging Go-To-Market Strategies in Water

U.S. Water Market
Asset Owners

1. Geographic Differences

2. Fragmented Customer Base

Asset Operators Engineering Services (& System Integrators) Equipment Vendors

Collection
Wastewater Treatment/ Reuse

3. Disaggregated Processes
Extraction

Treatment

Distribution

Use

ROI Is Not Predictable: Water Economics Vary Widely

2010 Likely New High in VC Investments

$166 M raised during the first three quarters of 2010 just $15 million short of the 2007 record.

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Key Acquisitions Put Water on the Map

Zenon, Ionics, Osmotics, Betz Dearborn

U.S. Filter

Actaris Metering Service

U.S. Filter
Sold to Vivendi Environnment

Vivendi Environnement
Vivendi Environnment renamed

Veolia Environnement
Veolia sells U.S. Filter to Siemens

Siemens Water Technologies

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Corporate Influence on Water Innovation Continues in 3Q10

$4.6 million round of venture funding to support the commercialization of its capacitive deionization technology. Acquired Intevras EVRAS evaporative system is used for the treatment of frac or produced water from natural gas exploration. Their systems utilize waste heat from the existing national gas compression via evaporation to treat 1,350 barrels per day of produced water. Minority stake help the company finalize the development of their REX Sensor, which has the ability to detect dissolved metals down to the parts-per-billion in realtime.

Voltea

Intevras Technologies

American Micro Detection Systems

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Looking Ahead
We have a lot of work ahead of us!

- There is steady, albeit slow, progress being made

Incubation platforms and testbeds to pilot and prove out technologies will be critical.

Genuine interest on the part of large corporations,

utilities and regulators to deploy innovation could truly catalyze investment in the sector.
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LA Water Focus: Convening the stakeholders

SAIL XPV Capital Vantage Point Venture Partners CMEA Ecomundi ventures

Veolia GE IBM Syngenta

HydroPoint Banyan Water Exhibitors

Corporations Investors Innovators

U.S. EPA

Regulators

Utilities

MWD LADWP

Ontario Government

Governments

Innovative Solutions to Water Resource Management/ Efficiency Approaches

Experts

McKinsey The Artemis Project M2 Renewables

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The Business Case for Water Analytics

William Fahey & Veolia Water North America Real-time monitoring of water treatment and distribution at the utility, industrial and commercial/residential scales continue to attract the interest of investors. While there are a handful of established players in analytics and instrumentation, a market that aims to address water loss is emerging. Furthermore, real-time water quality management remains the holy grail for water utilities seeking prevention measures and many other industries that require monitoring of process water. This panel of experts discusses the solutions that are selling today, who the dominant players are in the market and who and what they expect to see as the future winners of this space

Jeff Fulgham Chief Sustainability Officer and Ecomagin Leader GE Power & Water John Picard Author and Founder John Picard & Associates Alex McIntosh Founder & CEO Ecomundi Ventures

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Emerging Trends in Wastewater Reuse and Energy Recovery

Andy Corr Associate Principal McKinsey & Co.

Corporations and utilities are increasingly using reuse technologies to diversify water supply sources. This panel of experts will discuss the challenges and opportunities in the current procurement process for reuse systems, as well as who will be the leading technology providers today and tomorrow.

Thomas Erb Water Resources Director Los Angeles Department of Water & Power Ken Stedman Founder M2 Renewables Sally Gutierrez Director National Risk Management Lab U.S. Environmental Protection Agency

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Accelerating the Business of Conservation

Peleg Chevion Head of Business Development, Water Syngenta In addition to diversifying sources of water supplies with reuse technologies, utilities, industry and commercial water users are seeking ways in which to conserve water resources. With over 60% of water use attributed to agriculture 25% to industry and the remaining share attributed to commercial/residential water use, innovative irrigation is emerging as an important demandside market. The appeal of such IT-driven technologies are its lower upfront costs and fast potential payback. This panel of experts discuss the opportunity and challenges of such technologies. What barriers to adoption are present and how can regulation incentivize such technologies?
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Paul Ciandrini HydroPoint Data Systems, Inc.

John Coburn Managing Director XPV Capital Corporation

Thank You!

Mia Javier Analyst, Cleantech Group mia.javier@cleantech.com

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