Nicholas Parker from Cleantech Group gave a presentation on cleantech innovation for the water sector at the Canadian Water Summit in Toronto. He discussed how the world's urban infrastructure, including water infrastructure, requires $40 trillion in upgrades. Water demand is outstripping supply, so businesses must improve water productivity. Cleantech solutions can help increase efficiency across agriculture, industry, and municipal water use. Successful water companies will provide solutions to help customers reduce water and energy use. Water innovation is surging despite declines in venture capital funding, and China is leading initial public offerings in the water sector so far in 2010.

1. Cleantech for the Water Sector
Canadian Water Summit, Toronto
Nicholas Parker
Executive Chairman
Cleantech Group, LLC
June 16 2010

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3. Urban Infrastructure Needs Makeover
The World’s Urban Infrastructure Needs a $40 Trillion Makeover.

4. Framing our water focus
• Water risk exposure is reality for businesses – in a world where water
demand outstrips supply, businesses must improve their water
productivity and learn to do more with less!

5. Framing our water focus cont’d
• By some estimates, it could require $50 billion to $60 billion annually
over the next two decades to close the gap between supply and demand.
• And technology improvements to water productivity or efficiency cuts
across all industry value chains!
Agriculture Industry Municipal/Domestic
Automated Improved power production and other Improved water
irrigation and heavy-water use industrial processes. treatment and
crop yield distribution
enhancing productivity
technologies
to improve Inputs/ Process/ Delivery/ Product/
agriculture’s Raw Producti Distributi Service
Dispositi
on
Materials on on Use
heavy water
use

6. Where there is opportunity, there are challenges!
• The price of water does not reflect its scarce nature and ultimately
betrays its value.
• Holistic water policies and regulatory structures that incentivize
water efficiency or improved water productivity are slowly emerging.
• The water sector is currently a diffuse array of businesses
including:
– Steel & concrete pipe manufacturers, specialty chemical producers,
measurement, monitoring & testing firms, tank manufacturers, manufacturers
representatives, Consultants and engineers and various other new technology
developers, etc.
• Buyers of water related goods & services ranging across public and
private sectors have very different needs!
All of which make for a challenging investment environment!

7. Describing water sector winners
• Successful water services providers will migrate from selling
equipment and components to selling solutions aimed at helping
business customers reduce their water and energy use.
Key Takeaways from 2009 Venture Investments in Water
Energy water relationship heats up. Traditional ‘mousetrap’ technologies have been
replaced by energy efficient treatment technologies that fundamentally aim to improve the
productivity of water treatment and distribution.
Water reuse is another twist on the energy efficiency play. Reducing water conveyance
has an energy component built into its purchase cost making another attractive energy
efficiency twist for venture investors. To that end, alternative sources of water supply are top
of mind for industries facing water risk exposure.
Water analytics are the safe bet. As the saying goes, you cannot manage what you do not
know. The water sector has a clear need for the collection and analysis of water data at both
the industry and government levels. And water analytics are proving critical for businesses
across all sectors and geographies.

8. Commodity tradeoff debates intensify
• Watch for these tradeoffs to hit the
headlines in 2010
– Water-energy
– Land-energy
– Land-water
– Carbon-water
• Growing recognition of tradeoffs
– The internal combustion engine is far more
water efficient than fuel cell or biofuel
alternatives
– Solar thermal plants require large amounts of
water
– Environmentalists beginning to object to wind
and solar farms for land use reasons
• Water is going to be an increasingly
important variable in energy production
economics
– In some places, such as Alberta and
Australia, water for coal and oil mining may
soon compete with that for food production

9. Water innovation surges despite drop in venture dollars
• 2009 deal activity reached a record high of 50 deals, raising a total of $149
million.
• 1Q10 venture investments is the largest 1Q total next to 2007.

10. Water innovation surges despite drop in venture dollars
• 2009 deal activity reached a record high of 50 deals.
• The share of early-stage deal activity reached a 60 percent record high in
2009 continuing an increasing trend since 2007.

11. Canada

12. Select Venture-Backed Water Companies
Raw Water
Treatment
Distribution
Smart
Water/
Analytics
Use
Wastewater
Treatment &
Reuse
Seed/Early Stage Late Stage

13. Water M&A activity on pace for a record year
1
2
3
• Canada-based H20 Innovation is the most active water company acquirer
with 6 acquisitions since 2005 followed by Aqua America (3) and Siemens (3).

14. China leads the pack in 2010 ytd water IPO activity
• All 5 IPOs to date in 2010 are Chinese companies: Beijing Water Business
Doctor, Zheijang Weixing New Building Materials, Jiangxi Sanchuan
Water Meter, Chongqing Water Group and Beijing Origin Water
Technology.

15. Select Public Water Companies
Other water services players:

16. Building a green recovery: USD521bn
Asia leads the way with almost 2/3rd of green stimulus
Total Package- $32bn
Green- 9%
CC-39%, EE-51%, WW-10%
Total Package- $537bn Total Package- $649bn Total Package- $712bn
Green- 10% Green- 34% Green- 6%
CC-30%, EE-68%, WW-2% EE-84%, WW-16% CC-32%, EE-67%
Total Package- $977bn
Green- 12%
CC-33%, EE-50%, WW-17% Total Package- $76bn
Green- 79%
CC-51%, EE-25%, WW-23%
CC- Low carbon
power
EE- energy
efficiency
WW- water & waste Total Package- $8bn Total Package- $44bn
Green Component- 11% Green- 23%
EE-88%, WW-12% CC-35%, EE-65%
Source: HSBC estimates, government websites, others
16

17. Cleantech: The First Global Innovation Revolution
Mathematics Gunpowder Industrial IT Cleantech
Innovation
Centre(s)
Initial Spread
The Present Day: Multiple regional sources of cleantech innovation
are rapidly spreading globally.

18. Thanks!
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Emerging Clean Economy
www.cleantech.com
nick@cleantech.com
See you at
Cleantech Forum XXVIII, New York, October 12-13