Host: Reese Tisdale
Guest: Keith Hays | Co-Founder | Bluefield Research
Category: 🔬 Research
Podcast’s Essential Bites:
[6:21] KH: “Already since last year, energy prices in Europe have been going through the roof. In Spain, there has been a fourfold increase in the price per megawatt hour since 2021. […] There are considerable supply challenges that Europe has been facing that have led to rising regional prices for natural gas. […] I think what we're going to see is a steady increase here. […] This is where the energy and water nexus converge, obviously. Energy is obviously always going to be prone to some of these political shocks, the way that our energy infrastructure and the industry is aligned in terms of supply and demand. And for that, I think what we're looking at here is a period of greater uncertainty and higher cost that is going to be hitting the water sector. And obviously, we know that energy […] is fundamental to driving the functioning of life of our water infrastructure.”
[11:04] KH: “Czech Republic, Finland, Hungary get almost 100% of their natural gas from Russia. […] Germany's at about 49% of their gas is coming from Russia. As an average across the 27. EU countries, it's at around 41%. Probably the least exposed here in terms of the larger economies are France, which is at 22%, and Spain, which is around 10%. And that's because they've got gas lines coming up from Northern Africa. […] So, Russia is a major energy supplier to Europe […] and any risk to those supply lines is going to have that ripple effect on the water industry in the way that it uses electricity.”
[14:26] KH: “OpEx costs attributed to energy for water systems can range between 3% to 22%. And that's having to do with pumping the water. It's having to do with the equipment costs. It has to do with all the treatment equipment used in different treatment trains, sludge drying. […] There's a lot of municipalities where their highest energy costs are running their wastewater treatment plants. We've seen that it's probably around 15 billion a year for Europe's utilities [that] is accounted for […] running their water systems. And of that we estimate about 10% of that is probably energy related. So we're talking about 1.5 to 2 billion annually, that is being used just for some treatment plants to run in Europe. And if the cost of energy is going to double, obviously that's gonna be a huge hit to their bottom line.”
[16:13] “For industrial water treatment, energy cost is so fundamental to running whatever kind of factory you're talking about, whether it's beer, whether it's a chemical plan, whether it's petrochemical, whether it's a meatpacking operation. Energy is really embedded in the core OpEx cost that they have. […] I think a lot of industries are going to start to feel hurt now. […] I do think there could be a silver lining longer term here, just around sustainability. […] I think as Europe tries to move further and further away from fossil fuels, from relying on gas to try and decarbonize, they can also think about reducing their water footprint, because moving all that water requires a lot of energy. […] So I think maybe the positive thing that we can hope for out of this crisis is think even more about sustainability and factoring water more into the decision making there.”
Rating: 💧💧💧
🎙️ Full Episode: Apple | Spotify | Google
🕰️ 36 min | 🗓️ 03/01/2022
✅ Time saved: 34 min
