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Firm eyes shift in wastewater industry

Rochester Business Journal
January 9, 2015

Coming off an electric year, Clear-Cove Systems Inc. expects to double its workforce and log $6 million in revenues in 2015.

The firm has received two grants totaling $600,000 from the New York State Energy Research and Development Authority. It recently was recognized with an Outstanding Venture Award from the U.S. Department of Energy’s National Renewable Energy Laboratory, placing second out of 30 national companies. Also this year—only its second—the firm has already generated revenues. Over the next five years the firm plans to at least double its revenue annually.

The company has 12 employees and expects to reach 24 in 2015.

ClearCove Systems offers a trifecta for wastewater treatment plants: It reduces energy and creates energy for less money while potentially doubling the capacity of a facility.

“We are really trying to move the industry to think about wastewater as energy,” said Gary Miller, president and chief operating officer. “It’s not wastewater; it’s energy. When we talk about ourselves as a company we are a renewable energy company. We harvest the highest value fuel for energy creation that you can in wastewater.”

ClearCove aims to reform how wastewater is treated at plants across the country, most of which were built in the 1970s and often have not been upgraded.

Its process focuses on the primary treatment of wastewater, with a patented screening technology that enhances the settling process of a wastewater treatment plant. It removes organic matter from the waste system before aeration begins. Its system creates an organic byproduct that can be used for anaerobic digestion to convert to gas or electricity.

“By fate, we discovered that the stuff that was left behind by the organics makes pretty powerful energy through the anaerobic digestion process, and that led to a whole different conversation,” CEO Greg Westbrook said.

It helps to produce cleaner water, protect the environment from millions of tons of CO2 and methane CH4, reduce energy costs and enable a more efficient production of bio-gas from organic waste, officials said. The system potentially can reduce landfill waste by 65 percent depending on the treatment plant.

ClearCove deploys its technology for both municipalities and industrial markets, focusing on the food and beverage industry.

The firm was founded by Terry Wright, a 30-year veteran of the wastewater industry who believed there had to be a better way of doing things.

“We like to say that Terry patented gravity,” Miller said. “It’s as simple as stopping the water and let gravity take over, and that intellectual property protection doesn’t exist anywhere else. It seems pretty simple, (but) you needed somebody who understood how to design plants well enough to figure out that (the traditional way) isn’t how you do it.

“Then you needed somebody who had the foresight—and really the guts—to spend their own money to prove ... it. Our founder is unique from that standpoint,” he added.

Key grants
NYSERDA’s grants were a catalyst for the young company.

The NYSERDA grants were awarded in December 2013 and implemented in March 2014. Each grant’s purpose was to demonstrate the company’s technology, at two different locations, in the state. The first installation was completed at the Ithaca Wastewater Treatment Facility. It ran from April to October.

A second, at the Nott Road Wastewater Treatment Plant in the Capital Region town of Guilderland, is underway with completion expected in February.

With the Ithaca pilot project, the results were better than expected, officials say.

The data confirmed 62 percent in energy reduction in the secondary process and up to 400 percent higher energy production. For Ithaca, that means a potential economic impact around $650,000, which includes electricity savings and electricity generation—in addition to the energy that the plant already creates.

“So, we set up the pond starting in April down in Ithaca,” Miller said. “It was to prove: can we get a wastewater treatment plant to net zero energy, can we create more energy than the plant can consume out of our material, what’s the operating and maintenance cost impact of our process, and what’s the cost impact of the chemical side of it to the plant.”

The Ithaca plant’s leadership has not seen anything like ClearCove’s innovation but the results are too good to ignore, they said.

“I think I’m one of the people ready to become a guinea pig,” said Daniel Ramer, chief operator of the Ithaca Area Wastewater Treatment Facility. “Our plant’s heading towards 30 years old, so it would give us a small footprint solution to solving some of our current infrastructure problems. It’s funny that nobody has really looked at the primary treatment part of our operations.

“Most big wastewater plants have the same type of primary treatment: gravity settling. What these guys looked at was a way to basically double its capacity for removals,” he added.

Proving the technology was akin to controlling a human’s digestive process, ClearCove’s Miller said.

“We knew that it would work. The worst part about it was digesters are like a living being; they’re full of biology, live bugs and it’s just like your digestive tract,” he said. “You know if your bugs get off in your digestive tract, you don’t feel well, you don’t create as much energy. We had to keep these digesters cuddly warm—they had to be between 95 and 98 degrees all the time—like a human body.”

The company has 10 pilot systems underway, completed or geared up for 2015. The other pilot systems have been held mainly in New York with some in held in Virginia. The firm will be con-ducting a pilot of its technology in Dallas this February and has run other pilots for both industrial and municipal customers in the United States and in Puerto Rico.

“They were very difficult to run, but at the end of the day we did and it was expensive. We spent more money than we actually were granted, (but) we had to,” Miller said. “It was worth it. The results were better than everything we thought they were going to be.”

Working with municipalities creates a crossroads between innovation and tradition, Miller says.

“The challenge is innovating in an industry that is rightly so risk averse,” he said. “Their primary goal in the municipal side is to protect the public by having clean water, and on the industrial side it’s less risk averse. It’s more about the economic benefits.

“We come from worlds where it’s innovate or die,” Miller added.

There are 610 municipal wastewater treatment plants in New York and 27,000 nationwide. Each is custom built. The state Department of Environmental Conservation reported one-quarter of the state’s wastewater treatment plants are operating beyond their life expectancy.

“(The technology) fits in with solving some infrastructure problems,” Ithaca’s Ramer said. “(It is) a definite payback, which is rare in our business.

“Wastewater is expensive and the one piece of the facilities that we depend on the most—the secondary process—is incredibly energy intensive, so if we don’t find these type of solutions over the next 25 years we’re potentially going to price ourselves out of being able to supply the service.”

Ultimately the biggest risk could come from waiting to implement ClearCove’s system, Ramer said.

“Somebody’s got to take that risk, and I guess I see us as one of those entities that recognizes risk and can take a little bit of it,” he said. “We’re not going to sit there and say no just because it’s scary. The big risk to me is not doing it, which means we’ve missed an opportunity that now we’re going to have to pay more for in the future when somebody else proves it.”

The state’s wastewater sector uses roughly 25 percent more electricity on a per-unit basis than the national average, NYSERDA reports.

“Most of the municipalities, their largest utility bills are the wastewater treatment plants,” ClearCove’s Westbrook said.  “Most of that cost is associated with the secondary treatment, which we just cut by 60-70 percent. It’s a big deal to every municipality.

Guy Hallgren, director for municipal utilities for Bath Electric Gas & Water Systems, is an early adopter of the technology. He planned to spend $15.5 million for a plant upgrade with no return on investment but knew there had to be a better option. That is where ClearCove came in, he said.

“Essentially, what we do in today’s world from a wastewater treatment process is we spend a lot on electric and pumps and motors and blowers to reduce the amount of pollutants that go into the waste stream, and we get nothing back out of that,” he said. “That $15.5 million that I would have had to spend is essentially lost money. It would have been a burden on the ratepayers, and that was a substantial reason for wanting to go down the road of resource recovery.”

As a former employee of Corning Inc., Hallgren has been open to technology in his new role, he said.

“I think there’s a lot of interest in the municipal world around generating as much energy as possible—it’s starting to catch on,” he said. “And I think ClearCove’s very knowledgeable. They’ve got some very good private industry expertise and a good combination of technical skills.”

Next stage
The focus in 2015 is implementation. The company expects to install its first full system at Bath Wastewater Management Plant by early summer.

It is piloting systems for some food and beverage processing companies in New York and is in final contract negotiations for others.

“We need to get one in the ground and demonstrate to people—our pilots are big ... but nothing shows it better than having one in Bath or having one in Ithaca that they can come to,” Westbrook said.

The technology offers communities an economic opportunity, Miller said.

“We can really help the world by creating more energy, cheaper energy, renewable energy, and improve the atmosphere and the environment—and, frankly, do it for less money,” he said. “And give communities the ability to take that money and apply it to something that can create jobs.

“What we do is exponentially better than anything else out there. I’d love for the community to get excited about the fact that we’re a green sustainable company. ”

1/9/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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