Florida Emerging As Key U.S. Water Market
By Reese Tisdale, president, Bluefield Research
Water stress across the U.S. is taking on greater significance and Florida’s increasing pipeline of opportunities cannot be overlooked. In contrast to California, where policy-makers are currently grappling with demand-side mandates, Florida and its five water management districts are barreling ahead with a mix of alternative water solutions that could total more than US$17 billion of water related investments by 2025. The solutions, including wastewater treatment and reuse and public-private partnerships, are aimed at mitigating the impacts — salt-water intrusion into aquifers and environmental degradation — of a surging population that is forecasted to increase 23 percent from 2015 to 2040.
Wastewater reuse in Florida has been part of a concerted statewide effort for decades. Since 2008, wastewater reuse flows in Florida have increased 8 percent, reaching 2.7 million m3/d in 2013. While limited compared to global reuse leaders Israel and Singapore, where reuse percentages top 30 percent, the 2014 total places the state at the forefront of the U.S. wastewater reuse market. California and Texas rank second and third among states with 2.4 million m3/d and 1.6 million m3/d of flows, respectively. Looking forward, Bluefield’s analysis of more than 500 existing facilities and another 86 planned reuse projects in Florida, which alone could total over US$6 billion of investment, signal growth opportunities ahead.
The lion’s share of spend will be in Miami-Dade County, where policy makers plan to invest over US$13.4 billion in water and wastewater improvements. It is expected that 99 percent of spend will go towards major upgrades and greenfield expansion, including US$5.1 billion by 2020, 65 percent of which will go to wastewater and reuse projects. Another key part of the spend will be related to Ocean Outfall Legislation that requires the elimination of treated sewage disposal through ocean outfalls by 2025. Compliance will cost the county US$3.3 billion between 2015 and 2025.
Additionally, in June 2013, Florida passed legislation HB-85 that expands the range of valid public-private partnership (P3) models in the state. The law allows companies to submit unsolicited proposals to local governments and agencies. Later that year in November 2013, Miami-Dade requested expressions of interest (EOI) for P3 structures for its planned water and wastewater capital improvement projects and received responses from 32 companies with a mix of proposed contract structures including DBFOM, DBOM, and DBO. At the start of 2015, Miami-Dade awarded management contracts, with a combined capacity of 1.4 million m3/d, for its OOL compliance program and upgrades of existing wastewater treatment plants to CDM Smith and MWH, respectively.
Competition in Florida’s water market will be fierce and the diversity of players vying for a stake in Miami-Dade is a bellwether for what can be expected in the rest of the country. A segmentation of global and domestic firms — EPCs, IOUs, renewable developers, and infrastructure investors — indicates a wide range of companies with US water sector ambitions. While other state regulations and opportunities shake-out, Florida represents a critical opportunity for new and established companies to penetrate the U.S. market.
Reese Tisdale is president of Bluefield Research, an independent insight and advisory firm providing research and analysis of water strategies and market trends to companies addressing global water markets. This article draws from Bluefield’s global water market analysis that is available to clients through the Advanced Water Treatment & Desalination and Private Water Insight Services.
To learn more about Bluefield Research, please visit www.bluefieldresearch.com.