This presentation was originally given by G.G. Pique, president and CEO of Energy Recovery Inc, at the Green California Summit on March 17, 2010. It discusses increasing global and domestic water scarcity as one of the most significant issues facing mandkind today. It also offers desalination as a viable, long-term solution thanks to technology innovations such as the Energy Recovery PX device that dramatically reduces the energy consumption and cost of desalination.

1. Sustainable Water Use and Infrastructure
Sustainable Water Use and Infrastructure
for the 21st Century
for the 21st Century
Green California Summit 2010
Green California Summit 2010
G.G. Pique, President and CEO
G.G. Pique, President and CEO
17 March 2010
17 March 2010
1 CONFIDENTIAL

2. Agenda
Water Scarcity
Desalination as a Solution
Energy Savings Around the World
Energy Recovery Technologies
2 CONFIDENTIAL

3. Access to Sustainable, Fresh Water is Increasingly Scarce
The severely dammed Colorado River Lake Tiberius, Israel
Ziz River, Algeria Basin (Sea of Galilee, Jordan)
• Climate change is • One child dies every
causing widespread 15 seconds due to
drought, compounded water sanitation
by population growth issues
and pollution
3 CONFIDENTIAL

4. The
Worldwide
Thirst
for
Water
is
Unquenchable
4 CONFIDENTIAL

5. Worldwide Thirst for Water is Unquenchable
1000
800 Water Withdrawals
Index: 1905 = 100
Population
600
400
200
1905 1925 1955 1975 1995 2015
• Water consumption • Fast growing • 1 in 5 people lack
outgrowing world agricultural demand access to safe
population (9 billion (crops, livestock drinking water –
people by 2050) and biofuels) 1.1 billion people
Source: GWI, IDA
5 CONFIDENTIAL

6. Approximately 1 billion people worldwide, lack access
to safe water supplies …
6 CONFIDENTIAL

7. Most of these people are in the developing world,
where 98% of water-related deaths occur …
7 CONFIDENTIAL

8. Are We Safe in California?
The rains are coming with this next El Niño.
Right?
8 CONFIDENTIAL

9. Local Water Trends – Northern CA Sierra Precipitation
rte z
Co rte
z
o
a of C
e Sea
of
Se
to the
2010 El
2010 El
ed o
th
w ed t
Nino
Nino
r f ow
ve fl
Long Term Average
lo
Ri ver
do Ri Long Term Average
Long Term Average
Long Term Average
ra o
l o ad
Co or
e Col
t t me
as t i
im
-L st
2- La
98 2--
r1 8
te r 19
1923
1923
1923
1923
W inte
Source: CA
W
in
Dept of Water
Resources
1976
1976
1976
1976 (as of
3/15/2010)
9 CONFIDENTIAL

10. 20+ Million Population Increase (1980-2010) Draining Colorado Basin Dry
http://www.usbr.gov/lc/region/g4000/hourly/mead-elv.html
10 CONFIDENTIAL

11. The cost of municipal water is exploding in stressed areas
$3.00
st *
Co
$2.50
ter
Wa
$2.00
l
ipa
$/m3
nic
$1.50
Mu
$1.00
$0.50
$0.00
1972 1982 1992 2002 2010
**February 2010, Monterey CA $7/m3
* Water costs for San Diego, Monterey, Perth, Sydney, Barcelona
11 CONFIDENTIAL

12. Energy Efficiency Enabling Technology – ERI’s PX™ Device
Low pressure
Membrane fresh water exits
the plant 40%
High
pressure
seawater
High pressure
High pressure reject stream
High pressure seawater flow 60% flow 60%
pump flow 40%
Low pressure
seawater enters Low pressure
the plant reject stream
• PX Pressure Exchanger™ • Reduces energy
technology is up to consumption
98% efficient by ~ 60%
12 CONFIDENTIAL

13. Unique Technology and Elegant Design
• Only one moving part
• Engineered ceramics
− Tremendous durability
− No corrosion
• Highest efficiency
• No scheduled maintenance
• Low life-cycle costs
• Minimal footprint
13 CONFIDENTIAL

14. Desalination—Affordable Solution
$3.00
Steam
st *
Elec. Power
Co
$2.50
Maintenance
ter
Wa
$2.00 Capex charges
l
ipa
$/m3
nic
$1.50
Mu
$1.00
$0.50
$0.00
1972 1982 1992 2002 2010
Thermal SWRO SWRO SWRO SWRO
* Water costs for San Diego, Monterey, Perth, Sydney, Barcelona
14 CONFIDENTIAL

15. Seawater Reverse Osmosis (SWRO) is a Sustainable Solution
Desalination Energy Costs SWRO Capacity
10 2.5 584
Capacity (m3 / d) (Millions)
MGD
20 ye
8 ars 2.0 454
DOWN 418
50% MGD
MGD
KWh/ m3
6 1.5 312
7y 281
ea MGD
MGD
D
rs
O
4 1.0
W
N
6
1
65
%
2 .5
MGD
0 0
1980 1990 2000 2001 2007 2002 2003 2004 2005 2006 2007
Annual Installed SWRO Capacity
Utilization of (1)
PX Technology Sources: Affordable Desalination Collaboration,
Management estimates, GWI and IDA
• SWRO offers • Growing at • New desal • Lower SWRO
sustainable, 55% per year capacity energy
secure supply since 2002 pipeline of consumption
of water > 22 MM m3/day leads to
~ $0.70/m3 by 2012 increased
desal capacity
15 CONFIDENTIAL

16. Desalination Plant Revenue Model–Privatization M3 water rate
Capital
Expense Operating
43% Expense
57%
Source: Perth Seawater ASSUMPTIONS
Desalination Plant, 2008
Power Cost USD/kWh 0.09
Debt Equity Ratio 80/20
Debt Interest Rate 8%
Equity Return on Inv 18%
Zero Greenhouse Gas Emissions
16 CONFIDENTIAL

17. Global Footprint — Sales, Service & Installations
6,300,000 m3/day
6,300,000 m3/day
890 MW of Energy
890 MW of Energy
Headquarters
San Leandro New Boston, MI 4.7 million tons of CO2 savings
4.7 million tons of CO2 savings
California
Madrid, Spain
Sunrise, FL Dubai, UAE Shanghai,
China
Sales Offices
PXTM Device Installations
TM
17 CONFIDENTIAL
CONFIDENTIAL 17

18. Market Opportunities for Energy Recovery Devices
• SWRO and Brackish Desalination
− Growth in these established markets growing on a global scale
− US Capacity – More than 3 million m3/day ~ 30% global market
• Osmotic Power
− Nascent market using ERDs in renewable energy generation
− First pilot plant in Tofte, Norway, run by Statkraft
− Energy Recovery devices ensure the net-positive production of
electricity
“Osmotic power is clean, renewable energy, with a
global potential of 1600 to 1700 TWh – equal to
China’s total electricity consumption in 2002.”
- Statkraft CEO, Bård Mikkelsen
18 CONFIDENTIAL

19. Big Water Factories
Barcelona, Algeria
SWRO Desalination Plant –
200,000 m3/day (each)
19 CONFIDENTIAL

20. Barcelona (Spain) 200,000 m3/day (53 MGD)
20 CONFIDENTIAL

21. Al Hamma (Algeria) 200,000 m3/day (53 MGD)
21 CONFIDENTIAL

22. Large and Medium Desal Project Builders
22 CONFIDENTIAL

23. Other Opportunities
23 CONFIDENTIAL

24. Modular, Portable Solutions for Smaller Communities
24 CONFIDENTIAL

25. 25 CONFIDENTIAL

26. Energy Recovery Inc
HEADQUARTERS/CERAMICS
San Leandro (San Francisco),
California USA
REGIONAL OFFICES PUMP ENGINEERING
Spain, China, (New Boston) Michigan
Florida, UAE USA
26 CONFIDENTIAL

27. 27 CONFIDENTIAL