Epic Cleantec: A water reuse revolution

To set the stage, here’s a famous Zen koan I’ve always enjoyed:

Now, here’s how it ties into a climate tech solution I’m a big fan of:

A water reuse revolution

Whether you look at California or Cape Town, recent years have come with worrying signs of water crises. Severe water shortages are likely to intensify over the coming decades; McKinsey predicts that demand for water will exceed supply by 40% as early as 2030 (source here). By 2050, demand for water could exceed sustainable supplies by 120%.

It’s not easy to create new water that’s fit for everyday use, let alone to drink. Desalination is taking off in places like Israel that are at the forefront of water shortages and also happen to be climate tech hotspots. While Israel plans to source the majority of its water from desalination ultimately, the process is energy-intensive and expensive. This won’t be an option everywhere: Think, for instance, of places with no coastline. 

As such, countries are already brokering international deals for water assets. Take, for instance, a 2021 deal between Israel and Jordan that will see Jordan send solar energy to Israel in exchange for some of the desalinated water.

The common denominator in all of this is that countries like Israel and Jordan, which are used to not having enough water naturally, are making big moves to secure their future water situation. Places like California that haven’t historically had to worry as much? They’re unprepared.

No stat is more revealing, perhaps, than the rate at which different places in the world reuse water. Most of the water we use every day goes towards things like flushing toilets and showering; drinking water is only a fraction of our water use. Countries like Israel are ahead of the curve here, too. In a recent conversation with Keep Cool, Aaron Tartakovsky, co-founder and CEO of Epic Cleantec, noted that Israel, where he used to live, reuses up to 90% of all of their wastewater. In Los Angeles, California, for example? That number is a mere 2%.

What right do we have to waste even a drop of water, especially when there are countless opportunities to reuse it? As much as water shortages are a big challenge, looking at how much better most of the world could get at reusing water is a golden opportunity. An opportunity that Epic Cleantec will take advantage of.

The inspiration

Water is all around us and is integral to basically everything we do. Here’s how Aaron laid this out for us:

Yet, most of us have a pretty limited understanding of where and how the water we use every day gets into our taps. Over the past century, we’ve hidden away much of our cities’ water infrastructure in the same way we’ve hidden away all the poultry and livestock that we eat. 

Out of sight, out of mind. Or, as Aaron and the Epic Cleantec team say, “Flush and forget.” This speaks in part to why we don’t do a good job of optimizing our water usage. If we were closer to our water, perhaps we’d value it more. 

When I spoke with Aaron, I figured I’d be the greenhorn on the water and wastewater infrastructure front. As it turns out, though, that was Aaron until seven years ago, too.

None of the Epic Cleantec founding team comes from a traditional water background. This may have been a helpful leg up, but not a ton has changed in the past hundred years of wastewater management and water reuse.

So, what was the genesis of the business? On the tech front, Epic Cleantec’s initial work with the Bill and Melinda Gates Foundation informed their approach: 

What issues did they identify? Most wastewater management at the municipal level is managed in big wastewater treatment plants that serve entire cities. In San Francisco, where Epic Cleantec is headquartered, one wastewater treatment plant treats 80% of the city’s wastewater. These centers connect to buildings throughout the city with long, labyrinthine networks of pipes. This model has worked well enough for hundreds of years. Still, Aaron identified three key problems with this setup, including ones that become more apparent as time wears on: 

1. Aging infrastructure: Pipes in U.S. cities are ~45 years old on average. Many weren’t designed to last longer than that.

2. Urban population growth: Many cities in the U.S. are growing rapidly, and the original infrastructure wasn’t necessarily built to accommodate this population growth. 

3. Climate change: Existing systems aren’t necessarily designed to handle shocks to the system that are becoming more frequent. Nor are they optimized to recycle water. 

At the extremes, problems with old water infrastructure can lead to disasters like what we saw in Flint, Michigan, earlier this decade. At a minimum, the cost it would take to simply perform needed maintenance on all of the water infrastructure in the U.S. is growing quickly. For perspective on said cost, Biden signed a $1T bill into law in November, of which $55B is devoted entirely to the U.S.'s water and wastewater infrastructure over the coming decades. 

Another challenge with the current model is how centralized it is. More than a million residents in Austin, Texas, were issued a boil notice earlier this month after errors at a treatment facility meant it could be unsafe to drink the city’s water. When a few treatment plants service an entire city, single failures become system-wide failures. 
Perhaps most importantly, the centralized nature of the current systems makes it difficult to update or overhaul them with new technology. Updating these massive wastewater treatment systems would be a massive undertaking, both in terms of time and capital. And if you wanted to revamp a wastewater treatment plant, where would you divert all that water in the interim?

The technology

Epic Cleantec wants to decentralize water reuse. Epic Cleantec designs systems that can integrate into existing and new buildings alike, enhancing water reuse onsite. No connection to the typical, centralized wastewater treatment plants is necessary. 

What do we mean by water reuse? Recycling isn’t just an opportunity for plastics. It’s a massive opportunity in water, too. Aaron shared a great anecdote from his father (also a co-founder) on this front:

While they’re not quite ready to reuse water for drinking, for non-potable applications, Epic Cleantec’s system can conserve a ton of water:

What do the treatment processes themselves look like? Epic Cleantec can treat greywater (which doesn’t include high organic content, like fecal contaminants or food waste) and blackwater (which does). On the water treatment side itself, one of the core technologies Epic offers is a membrane bioreactor, which is a combination of biology and physical filtration. Here’s how Aaron described the full process:

Epic Cleantec is more than just a stand-in for centralized wastewater treatment on a smaller scale, however. One of the things that separates their process from other wastewater treatment processes is that their outputs are threefold. They’re not just confined to reusing and cleaning water. They also produce carbon-rich soil products and help buildings save energy. 

The soil products come in from the blackwater treatment process. Specifically, when Epic Cleantec removes solids from wastewater, they are often carbon and nutrient-rich; Epic Cleantec can turn these into fertilizers for cities’ green spaces. 

On the heat and energy side, a lot of energy is used to heat water (e.g., for your morning shower). Most systems don’t reuse or retain any of that heat – you might see it coming up out of the ground as steam as you walk around your neighborhood in the winter. This is effectively a stranded energy source. Just like water can be recycled, Epic Cleantec creates a more circular system that retains more of this heat. 

In sum, the savings and efficiency passed on to clients are considerable. They save on water costs by recycling up to 95% of non-potable water in any given water' cycle’, they save money on water heating, and some of the ‘waste’ in wastewater is valorized for soil products, too.*

Aaron gave me a great tagline on this front, namely, “There’s no waste in wastewater. There is just wasted water.”

The business

One question I love to ask companies operating in climate tech verticals that are just now picking up steam is whether there’s another vertical that offers successful roadmaps that their own can follow, too. One vertical that comes up a lot is solar. Aaron noted wastewater could follow a similar path to solar: 

Epic Cleantec’s business model itself is reasonably straightforward – they make money on system sales and installations. To date, typical clients include everything from individual buildings to the scale of a district. Clients include operations like wineries, breweries, resorts, and tech campuses. Really, any operation with high water usage can be optimal. 

In some instances, they’ll also look to work with community systems. For e.g., one site they’re looking at is a community of approximately 100 homes in Hawaii, where broken water and wastewater infrastructure is a pernicious problem, both for communities and for the environment (think coral degradation from wastewater leaching into the ocean, for instance).

The impact

The impact of reusing more water is straightforward. In San Francisco, for instance, each drop of water reused in a system like Epic Cleantec’s is one less, and it has to be sourced from the Hetch Hetchy dam. That means there’s more water to use for other applications, whether it be for drinking water or for farmers in the Central Valley. As we’ve discussed, Epic Cleantec’s systems can also create other efficiencies in buildings, such as reducing the amount of energy needed to heat water. 

All of Epic Cleantec’s systems are electric. As long as the grid isn’t 100% renewable, there’s an emissions footprint associated with integrating the systems in a building. Still, at the macro level, water reuse with Epic Cleantec’s systems makes a significant impact even in the interim world in which fossil fuels still rule electricity production. Imagine, for instance, how much energy it would take to desalinate equivalent amounts of water instead of saving said water through re-use. Similarly, the heat savings that Epic Cleantec’s systems generate could, in Aaron’s view, ultimately make their operations energy-neutral, if not negative.

Globally, Epic Cleantec will also explore ways to make its solutions available to communities that desperately need access to clean water but don’t look like their current customer in San Francisco. In the U.S. alone, millions of people don’t have access to clean water or reliable sanitation. If you expand your focus globally, that number balloons to 2.5B. 

Aaron’s perspective on how to best get water to these communities is that they can skip straight over the centralized model that reigns in urban metros:

From San Francisco to Somalia, where 60% of people lack basic water services, there’s a lot of promise in implementing decentralized water treatment and reuse systems. In places that haven’t traditionally had centralized wastewater treatment, deploying decentralized systems could be a faster, cheaper way to democratize water access. 

Challenges and next steps

On the heels of a $9.4M Series A in December, Epic Cleantec is ready to scale its solutions across the country. Of course, scaling is never easy. Aaron positioned it as the premier challenge for all climate technologies, which is an aside that’s worth highlighting:

In Epic Cleantec’s case, the regulatory environment poses a challenge as well. Considering how critical clean water is, you can’t just march into any new municipality and set up a wastewater treatment system.

Regulatory headwinds can turn to tailwinds, too. San Francisco recently became the first city in the country to require all new significant developments over 100,000 sq. ft to include an onsite water cycling system. That’s a massive boon for Epic Cleantec. If they can partner with major developers in urban metros to include their systems in all of their new builds, that could make for an even stronger business model.

These regulatory changes don’t happen overnight, however; Aaron noted that legislation has been in the works for six years in San Francisco. Aaron’s background is in politics, which makes this a strong suit for him. Epic Cleantec garners incredible leverage by being at the center of creating these first-of-its-kind regulatory playbooks on how decentralized water systems can work in urban environments. Once San Francisco outlines the standards, Epic Cleantec can take that framework to other cities:

Beyond the regulatory environment, scaling onsite water reuse also comes with maintenance and monitoring challenges. Perhaps even more importantly than electricity generation, water reuse systems have to work. If you have hundreds or thousands of systems operating in a distributed fashion across the country, you need a robust way to monitor their performance. 

To this end, Epic Cleantec is investing heavily in robust data monitoring. This isn’t just to ensure its systems are all working properly. In addition, there are a ton of insights that they can give back to buildings and the city itself, e.g., with respect to buildings' energy usage in heating water. Further, even at the level of public health, processing wastewater can yield a lot of valuable insights that are more actionable at smaller scales:

When problems do arise, you also need to be able to service systems readily. Epic Cleantec plans to have a team of nationwide wastewater operators to ensure systems are running well and to fix any that aren’t. This strikes me as one of the hardest things to scale, actually, especially if they team up with philanthropies down the road to do work in the Global South as well. When we check in with Aaron in six months, we’ll make sure to get an update on that front.

The net-net

In The Big Short, there’s a famous ending screen that tells the viewers that one of the investors who successfully bet on the global financial system collapsing is now investing almost exclusively in water. 

A lot of climate tech innovation focuses on reducing or removing emissions. A lot of investment focuses on energy production and electrifying transport. Earlier in the century, between 2000 and 2013, total investment (across venture, public, corporate, etc.) in clean energy in the U.S. dwarfed investment in water nearly 50-fold. 

As the climate changes, water shortages are one of the most dangerous and problematic knock-on effects that we can expect to become very acute very quickly. Reusing as much water as possible is an intuitive place to start. 

We look forward to keeping up with Epic CCleantec'sprogress.

* Epic Cleantec is careful not to use these in soil in which food-producing crops grow. The reason being? PFAS, man-made chemicals in a lot of consumer products, can pass from our diets into our biosolids (i.e., poop). Subsequently, if those biosolids are used in fertilizer or on farms, the resulting crops can contain unhealthy levels of PFAS.