Global Smart Water Market `Unearthing the REAL Value of Water

Global Smart Water Market
‘Unearthing the REAL Value of Water and the Industry’
Presented at the Tekes Seminar on BioRefine and Water
on 27th November 2012 at the Marina Congress Center in Helsinki
By
Fredrick Royan – Research Director, Global Environment (Water) Markets
[email protected]
Agenda
 About Frost & Sullivan
 Global Water Market – Key Data and Mega Trend Drivers
 Key Challenges of the Global Water Industry
 Smart is the New Green
 Process and operational efficiency improvement drivers
 Landscape of the Global Smart Water Market
 Market opportunities in the Global Smart Water Market
 Market Segment Hot-spots
 Regional Hot-spots
 Illustrate the business case of Smart Water Solutions with project
examples
 Highlight the Competitive Landscape, Business Models and related
opportunities for Finnish Companies
2
The Frost & Sullivan Story
Pioneered Emerging Market
& Technology Research
Partnership Relationship
with Clients
Visionary Innovation
• Global Footprint Begins
• Growth Partnership Services
• Mega Trends Research
• Country Economic Research
• GIL Global Events
• CEO 360 Visionary Perspective
• Market & Technical Research
• GIL University
• GIL Think Tanks
• Best Practice Career Training
• Growth Team Membership™
• GIL Global Community
• MindXChange Events
• Growth Consulting
• Communities of Practice
3
Our Industry Coverage
Aerospace & Defense
Automotive
Transportation & Logistics
Minerals & Mining
4
Measurement &
Instrumentation
Energy & Power
Systems
Chemicals, Materials
& Food
Consumer
Technologies
Environment & Building
Technologies
Electronics &
Security
Information &
Communication
Technologies
Healthcare
Industrial Automation
& Process Control
Megatrends provide a big lens when evaluating
future growth opportunity areas for Smart Water
Total Global Water Market Value
Technical engineering & design
Operations & maintenance
$ 425 Billion
Chemicals supply
Technology/equipment supply
R & D and piloting
Key activities
across the value
chain
Construction
Water management
Environment
Protection
Agencies
Business &
Financial
Agencies
5
Rapid
Population
Growth &
Urbanisation
Water Quality &
Public Health
Water Supply &
Sanitation
Needs of Remote
Communities
Carbon
footprint
Ecological
Political & Financial
International
Agency
Social & Economical
Key Global Water Growth Drivers
Storm/Flood
water
Management
Water
Stress/Droughts
Top 10 Challenges of the Global Water Market
VALUE of Water and Nonrevenue Water(NRW)
Relatively High
Capex and Opex
Water Resource
Availability &
Water-Energy Nexus
Governance and
Accountability
Institutional
Capacity and
Resources
Sustainability of
Water Utilities and
Cities
6
Population Growth
and Urbanisation
Top 10 Global
Water Market
Challenges
Public Health – Water
Quality, Access to
Sanitation and Safe
Disposal
Climate Change
and Extreme
Weather Events
Risk in Water Intensive
Industry and Global Trade
Source: Frost & Sullivan
$425 Billion Global Water Market by Segments
Mega Trends Influencing Technology Innovation in Global Water Market
Segments
Water & Wastewater Utilities
$246 Billion
$ 80 Billion
Design & Engineering,
Maintenance and Monitoring
Services and Operation
Services
$32 Billion
Build Infrastructure
$35 Billion
Water & Wastewater
Treatment Technologies
$17
Billion
$15 Billion
Chemicals
Process Control &
Automation
Mega Trends of Value Chain Integration and Industry Convergence is set to combine
Treatment technologies, Chemicals and Process Control & Automation into a combined
segment of SOLUTIONS
New Segment of Smart Solutions is a Key Enabler in
Unearthing the VALUE of the Water Industry
Value Chain of the Water Industry with Representative Sample of Industry Participants
Design &
Engineering
Companies
Process Automation and Control
O&M
Companies
Water Utilities
Chemicals & Materials
Industries
Treatment Technology
Smart Water Analytics, Meters and Software Companies
8
Mega Trend – Smart is the New Green
9
Smart Water Solutions are Set to Revolutionise
Management Methods Across the Water Cycle
‘S”
Governance
‘S’ Business
‘S’ Citizen
‘S’ City
Planning
Real time monitoring and management of Services along the
Water Cycle
‘S’ Buildings
‘S’ Mobility
Data Analysis
and Exchange
‘S’ Water
‘S’ ICT
Source: Frost & Sullivan
10
Future Smart Water Grid
Smart Water
eters
Smart
and
Smart Water
uality
Monitors
alves
ipes
Data
Concentrator and
Communications
Sea
P
Smart
mps
Ground Water
River
Reservoir
Sewage
Treatment
Homes and
Businesses
Factories
Water Treatment Works
Note: Image was adapted from UK Drinking Water Inspectorate.
Source: Frost & Sullivan analysis.
Smart Water – Key Drivers
 Economic
-Cost of energy
-Water use inefficiencies
 Technological -ICT integration
-Increased granularity
-Exposed relationships
 Social
-Urbanization
-Globalization
-Access to Information
and Water
 Environmental -Water scarcity
-Resilience to
climate change
-Increased demand
-Carbon footprints
 Political
‘S’ Citizen
-Efficiency
-Innovation
‘S” -Accountability
Governance
-Sustainability
‘S’ Business
‘S’ City
Planning
‘S’ Buildings
‘S’ Mobility
‘S’ Water
‘S’ ICT
12
Smart Water – Key Restraints
 Political
-Low government push
 Technological -Hardware v Software
-Simplification
-Unsustainable subsidies
-Integration
-Longevity
 Organisational -Business Case
-Integration
-Proprietary v Open
-Risk averse
 Social
-Privacy
-Silos
-Health
-Buy in
 Market
-Fractured / Consolidating
-Low incentive
-Low turnkey opportunity
13
Smart Water Grid Market Value to Quadruple in
Decade
Smart Water Grid Market: Smart and Conventional Water Grid Penetration (Global),
2010-2020
100%
2020 Smart
Water Grid
Penetration 29%
90%
80%
Penetration Rate
70%
$5.8B
Total Market
Value
60%
50%
$8.7B
Total Market
Value
$22.2B
Total Market
Value
40%
30%
20%
10%
0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
Conventional Water Network
14
Smart Water Network
Smart Water – Market Landscape and Key Segments
Segment and
Market Size, 2010
Programmable
Logic Controller
Cellular
$3.38 billion
Sensors
15
Radio Frequency
Point-to-Point
Fibre Optic
Power Line
Communication
Broadband
Remote Energy
Pumps AMR/AMI Pipes and Valves
Generators
Meters
Data Loggers
Hardware
Radio Frequency
Mesh
Smart Water
Infrastructure
(including
Communications)
Design and
Engineering
Services
$0.34 billion
Distributed Control
Human Machine
System
Interface
SCADA
Combined
Analytical
Control
and
Automation
System
(expected)
Software
Automation
and Control
$1.05 billion
Cyber Security
Analytical
Software
$1.03 billion
Hydraulic
Grid
Prediction
Asset
Queries and
Modelling Monitoring Analysis Management Remote Upgrades
Bespoke
Remote Pressure
Meter Data
Event
Control
Reports
Management Prioritisation
Water Utilities
Source: Frost & Sullivan analysis.
Smart Water Market – Hot-Spots by Market Segment
Smart Water Grid Market: Vertical Market Attractiveness by Segment (Global), 20102020
4,00
Smart Water
Infrastructure, $3.38
billion
3,50
2010 Market Size ($ Billion)
3,00
2,50
2,00
ICT, Software and
Analytics, $1.03 billion
Automation and
Control, $1.05 billion
1,50
1,00
Design and Engineering
Services, $0.34 billion
0,50
0,00
0,0
5,0
10,0
15,0
20,0
25,0
30,0
CAGR (%), 2010-2020
Note: Size of bubble indicates degree of market share. All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
.
16
Smart Water Market – Hot-Spots by Regional
Segments
Smart Water Grid Market: Regional Attractiveness by Region (Global), 2010-2020
3,00
North America, $2.42
billion
2010 Market Size ($ Billion)
2,50
2,00
Europe, $1.68 billion
1,50
APAC, $0.82 billion
1,00
MEA, $0.54 billion
0,50
LatAm, $0.33 billion
0,00
0,0
5,0
10,0
CAGR (%), 2010-2020
15,0
20,0
25,0
Note: Size of bubble indicates degree of market share. All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.
.
17
2020 Smart Water Meter Penetration in Europe – 52%
Smart Water Meter Market Penetration, 2007 - 2020, 2030 (Europe)
Households ('000)
240 000
Water Meters ('000)
Smart Water Meters ('000)
200 000
Units('000)
160 000
120 000
80 000
$1.2B
Total Market
Value
$2.6B
Total Market
Value
$7.8B
Total Market
Value
40 000
*Based on predicted scenario
0
2007
18
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2030
2020 Smart Water Meter Market in Europe – Network
Management is likely to be the major contributor to
the market growth
Smart Water Metering Market: Market Attractiveness by Vertical Market (Europe),
2010-2020
40,0
Network & Data
Management, $744.0 m
Growth Rate, 2010-2020 (%)
35,0
30,0
25,0
20,0
15,0
Meter Installers,
$163.8 m
10,0
Smart Water Meter
Manufacturers,
$311.1 m
5,0
0,0
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
Market Share, 2010 (%)
Note: Bubble size and figures adjacent bubble name refers to market size in $ million for 2010. All figures
are rounded. The base year is 2010.
19
Source: Frost & Sullivan analysis.
Smart Water Management to bring Paradigm Shift as
Traditional Practices Overhauled for ICT-enabled Abilities
...To
...From
Departmentalized
Water Utility
Structure
Integrated through new data and information
communication
Responsive
Customer
Service
Proactive
Reactionary
Set Rates
Maintenance
and Repair
Billing
Pre-emptive
Based on Accurate Consumption Levels
Hands-on
System
Management
Remote fixes and prioritized call-outs
Manual
Data Collection
Automated
Inefficient
Energy
Consumption
Optimized
Source: Frost & Sullivan analysis.
20
Project Example – Global Water in the US
Source: Global Water
21
Project Example – Takadu’s Web Interface for Utilities
Source: Takadu
22
Complex Smart Water Universe – Relationships
Between Players will be Crucial to Future
Development
Smart Analytics
Automation and
Control
Utilities
Communications
23
Smart Hardware
Design and
Engineering
Smart Water Market – Development Areas
Smart Combined Sewer
Overflows
Smart Irrigation and
Agriculture
Source: greatlakes.org
Source:
agreenstarlandscape.com
Smart Wastewater
Management
Smart Ultrapure
Water
Source: organo.co.jp
Source: usa.siemens.com
Smart Water Supply
Management
Source: treehugger.com
24
Smart Water Distribution
Management
Source: precisionmeters.co.za
Source: Google Images
Smart Water Supply, Wastewater Management,
Recycling and Discharge Metering to Witness
Continued Revenue Growth
Source: volcanoes.usgs.gov
Source: owfp.ouce.ox.ac.uk
There are existing related market opportunities outside of the direct smart water grid and
smart water metering markets:
Smart Water
Resource Management
• Drainage and runoff monitoring
• Water harvesting
• Reservoir monitoring
• Water resource reallocation
Smart Wastewater
• Water discharge metering
• Water discharge quality
• Water treatment, reuse and
recycling
Both hardware and software can drive revenue. Software with annual fees and servicing
contracts, however, can ensure consistent and higher revenue.
Source: Frost & Sullivan analysis.
25
Mapping of a Few Finnish Companies in the Global
Smart Grid Market Landscape and Sample of
Competitors/Customers
Segment and
Market Size in 2010
Radio Frequency Mesh, Radio Frequency Point-to-Point, Power Line
Communication, Cellular, Fibre Optic, Broadband
Sensors, Pumps, AMR/AMI Meters, Pipes and Valves, Remote Energy Generators, Data loggers, etc
$3.38 billion
Design and
Engineering
Services
$0.34 billion
Source: Frost & Sullivan analysis.
26
Hardware
Smart Water
Infrastructure
(including
Communicatio
ns)
Programmable Logic Controller, Distributed Control System, Human Machine
Interface, SCADA
Combined
Analytical
Control
and
Automation
System
(expected)
Software
Automation
and Control
$1.05 billion
Cyber Security
Analytical
Software $1.03
billion
Hydraullic Modelling, Grid Monitoring, Prediction Analysis, Queries and Remote
Upgrades, AMR/AMI Metering, asset management, Event Prioritisation, Bespoke
reports, etc
High Level of Industrial Convergence and Movement
in the Smart Water Grid Market
Smart Water Grid Market: Future Business Models by Vertical Market (Global), 2012
Smart
Water
Meters
Engineering
and Design
Firms
Telemetry
Smart Pumps,
Pipes and
Valves
Software and
Analytic
Firms
ICT,
Automation
and Control
Smart Water
Meters
Active
Unlikely
Active
Likely
Active
Possible
Engineering and
Design Firms
Unlikely
Active
Possible
Unlikely
Possible
Possible
Telemetry
Possible
Unlikely
Active
Possible
Active
Possible
Smart Pumps,
Pipes and Valves
Possible
Unlikely
Active
Active
Active
Possible
Software and
Analytic Firms
Unlikely
Unlikely
Unlikely
Unlikely
Active
Active
ICT, Automation
and Control
Possible
Active
Active
Possible
Active
Active
Vertical
Market
Integration
Source: Frost & Sullivan analysis.
27
Key Conclusions
• Water Utilities see an opportunity of Unearthing the Value of the ICT
infrastructure especially in the water supply networks
• Cost Recovery Based Water Tariffs will be key Enablers of Smart Water
especially in the high potential emerging markets
• The Global Water Industry is set to strongly benefit from the current trend of
industry convergence(Ex. Xylem acquiring YSI) to quench the technology thirst
of the Water Sector
• Smart Water solutions deliver tangible benefits and addresses key
inadequacies and inefficiencies of the Water Industry
• Global Challenge of Water Stress has transformed Smart Water from a Virtual
solution to a REAL and urgent need for the Water Industry
28
Questions?
Thank you for listening
29