Why We Invested in Power & Water
Hard-to-treat wastewaters are as difficult to deal with as they sound (and probably more). They’re heavy, toxin-loaded, a liability, and a huge pain in the neck. And municipal and industrial players are finding it increasingly hard to meet stringent compliance standards around discharge. The EU Urban Wastewater Treatment Directive and the Environment Act and Water Framework Directive in the UK are just two of the latest changes tightening regulations. Penalties for failing to meet discharge limits are high and getting higher. The average pollution prosecution fine in the UK over the last decade was £6M, and there were £103M in total fines in 2021.
Existing treatment methodologies are insufficient for harder-to-treat wastewater with suspended solids and contaminants, especially phosphorus. One option, chemical dosing, involves the transport, storage, and handling of hazardous liquid chemicals, which can be extremely expensive. It also requires regular training, controls, and reporting on the use of chemicals that are a safety and environmental hazard. These chemicals often have high carbon supply chains, which can be an issue for companies with net zero commitments. The UK water utilities alone set their goal to be net zero by 2030. Overall, there is strong across-the-board motivation to eliminate chemicals wherever possible. Municipal and industrial customers need a better way to treat wastewater cheaply, effectively, and sustainably to avoid fines and keep their social license to operate.
Enter, Power and Water (P&W), a patented electrocoagulation (EC) reactor to handle hard-to-treat wastewaters without using liquid chemicals and at lower energy consumption and maintenance costs than incumbents. P&W helps customers meet discharge limits in an efficient way and at low cost. We’re thrilled to be joining them along for the ride. Kunal and team, thanks for letting us join along. Here’s why we did it.
A Seriously Messy Pain Point
Standard electrocoagulation tech (a form of electrolysis to break up the gunk) is effective, but inconsistent performance and passivation (essentially, fouling) drives up energy consumption and running costs, limiting its use. Technologies treating a wide range of contaminants in an efficient, single-stage process would mean cost savings across the board, from energy to manpower. Companies would be able to meet their compliance targets and capital would be freed up for other investments. Power and Water’s technology combines electrocoagulation with ultrasonic technology to remove the oxide build up on the electrodes. It’s like an oven with a self-cleaning function, so they can operate consistently, at scale, without a cleaning maintenance or replacement. That’s a huge OPEX reduction that opens the technology up as a viable treatment alternative in a wide variety of markets where costs were previously prohibitive, including municipal water, aquaculture, construction, groundwater management, mining, O&G, the industrial sector, and even carbon capture. Compared to liquid chemical dosing, it’s a no-brainer for small to medium-sized projects.
Team
Power and Water was founded by Kunal Patel and Philip Morgan back in 2014. Sadly, Philip passed in 2018. Kunal has done an excellent job steering the company since. Kunal previously founded several businesses (in hospitality, finance, real estate, software, and industrial hardware), and has done a great job at forging early partnerships, particularly in the municipal space. He’s joined by Mike Rattenbury (COO), who’s done strong work across process, design, and R&D execution, Ankith Patel (CCO), who brings financial and operational expertise from the real estate and water industries, and Charlie Norton (CFO), who has recently joined the senior team from Deloitte. They are joined by a wider team of 20, including 12 design and production engineers, 2 business development execs, and 3 R&D scientists. Kunal and the team have had considerable success in their early market experiments, especially in helping UK water utilities to meet phosphorus discharge limits, and in the aquaculture and construction sectors.
Staying Close to their Customers
One issue that emerged early-on - with early customers was the difficulty of removing and replacing the anode plates without a forklift or lifting arm. The team responded by adding a fixed or removable lifting arm to the system at a small extra cost and offering maintenance contracts for the anode changing and disposal. This is a team that stays close to their customers and listens to their needs. The flexibility of the business model (incorporating both a leasing model and a product sale option) is a positive for customers and shows insight - allowing industries with short-term needs (e.g. construction) to access the product while offering the typical capital sale structure that utilities and other industries are used to. A leasing model can be a more expensive way to build the whole solution, but the team understands this and is focused on building a stronger balance sheet before expanding this offering. It’s no surprise that they have a 2025 weighted pipeline at a solid £10.9M across 4 market segments with 26 systems in the field today. They’re a picture-perfect example of how listening to your customers leads to traction.
BIG Markets
And this is a team that has quite a lot of room to run. Municipal wastewater is estimated $28.8B, aquaculture water treatment at $15.5B, construction erosion and sediment control at $2.6B, industrial water pretreatment at $17.2B, and those are just the beachheads. They’ve already identified 3,500 potential sites for their technology in the UK alone. And because the company currently tracks carbon savings (compared to liquid chemicals, energy input and removal of pH correction downstream), a future potential market segment would be carbon capture at $2.4B and growing at a 13.5 t% CAGR. They’ve got a lot to go after and a massive potential impact if they do.
If Kunal and team are able to repeat their strong performance in these next customer deployments, that could lead to repeat orders and high loyalty from construction customers who continue to use the unit in future projects. And that would open several new directions for the business. The company also conducts remote monitoring and is building out their services offering. Ultimately, they have a real chance at becoming the go-to solution for hard-to-treat wastewater across multiple industries. It’s deeply exciting, and we’re thrilled to be building alongside them. Kunal and team, thanks for letting us join for the ride.