A startup that squeezes electricity out of city water

The water that sloshes through city pipes can both quench your thirst and generate electricity. However, the latter is far less common. But that’s the proposition from startup Rentricity, which has developed equipment that uses water pressure to produce electricity and helps water suppliers reduce their energy costs.

The New York City-based company was the runner-up for the grand prize in this year’s Cleantech Open competition and has seen its technology installed at two water treatment plants in the Pittsburgh region and one in Keene, New Hampshire. Its biggest project, its fourth one, is scheduled to come online in the first quarter of 2013 in the Palos Verdes area of Los Angeles County.

Finding multiple uses for the same resource is a good thing. It maximizes resources and reduces waste, especially if the resources are difficult to come by or finite. More advanced natural gas power plants, for example, use waste heat from gas turbines to generate steam and produce more electricity on site. Some solar technology also uses waste heat produced by solar cells to heat up water.

Rentricity’s technology makes use of the highly pressured water that flows through pipes to be delivered to neighborhoods. After leaving the treatment plant, water typically goes through the water utility equivalent of substations (concrete underground regulator vaults) where the flow and pressure are reduced as the water gets ready to enter the smaller pipes of homes and businesses.

The company’s technology includes a reverse pump, a generator, and controllers that would typically be installed at a water treatment plant or underground vaults. The pump harnesses the highly pressurized water and sends that through the generator to produce electricity. The controllers monitor and manage the valves and make sure the electricity moves on to the grid.

“We can monitor, control and optimize the pressure in the system so that we can get the most electricity potential out of the system,” said Frank Zammataro, the company’s CEO and founder.

The gear is designed to handle pipes from 10-inch to 36-inch in diameter; the generators range from 30 KW to 350 KW. Rentricity also has designed equipment in the 5-30 KW range in a partnership with water pump and treatment equipment maker Xylem (s XYL). The two companies are looking at demonstrating the new gear in two sites, located in Pennsylvania and Nova Scotia, Canada.

Rentricity’s intellectual property lies in the control system, Zammataro said. Rentricity also can install flow and pressure sensors that collect data and detect leakage for water utilities, particularly if the water treatment systems are located in remote areas.

The company is selling its technology to water utilities at the moment, though it would like to see its equipment installed at industrial sites that use a lot of water, such as pharmaceutical plants, food and beverage factories or mining operations.

Knowing that the upfront financing is often a hurdle for new infrastructure technology — especially for municipal water utilities — Rentricity began offering financing options to customers earlier this year. The financing makes the company the sole or co-owner of the power generation equipment for the 30-40 years of expected lifespan of the gear or until the water utilities pay to own it. In return, Rentricity gets a share of the revenue from selling the electricity. Zammataro said he’s talked with three fund managers who are interested in providing the money for the installations, but he declined to name them.

Rentricity has signed a letter of agreement to finance a 100 KW system with the city of Albany, New York, Zammataro said, and is now in the process of doing due diligence. The company hasn’t finalized the budget for the project but estimates that it could cost somewhere between $500,000 and $1 million.

Rentricity, the name of which is a mash up of “renewable” and “electricity,” was founded in 2003. But the company was a “part time project” for the three co-founders, Zammataro said. It wasn’t until 2008 when the company began to market its technology to water utilities in earnest, he said, that the project became a full time gig. Rentricity has been self-funded and raised $1.5 million from friends, family and government grants. The company is working on raising a $3.5 million round.