168. The Future of Freshwater is Subsea

Welcome everybody this is rotary called the Silicon Valley and every week we bring you the stories of people who are making the world better. They are doing this locally globally and digitally. They tell these stories as a way of inspiring you to see possibilities you haven't seen before. This is a part of what it means to be in rotary. Rotary is a service organization 121 years old and there are 36,000 clubs that are part of rotary international all over the world. One of them is online and asynchronous and uses video to have meetings every single week which can be found at rotary dot cool in your browser which we think is pretty awesome. That's us the rotary e-club of Silicon Valley. If you are interested in learning more about rotary go to rotary dot org and to learn more about us as I said go to rotary dot cool. Today's talk is with Alex Fugusong in Norway. He is one of those people who is bringing such an interesting story to the table about how to address a very important issue in a completely innovative way. It's exactly the kind of story that we love to share as part of our video library and our podcast libraries and we are excited to have him. Alex, welcome to the rotary e-club of Silicon Valley. I hand the mic over to you. Thank you, sir. It's the pleasure to be part of this great group. It's my first e-club participation, so I'm glad to be here. I'm going to share my screen here and show you a couple of things that we're doing here from Oslo, Norway. That's where I'm calling from today, and I am the founder and CEO of Floschen. It's a sub-C desalination company, so we're actually taking deep ocean water and converting it to potable water in a more competitive way economically but also much more sustainable for the environment. Let me take you through the reason why we're doing this. As most are familiar with, including the people of California, water is not an automatic resource that we can have available at any time, any place, and we're not just talking about droughts in the Middle East and Africa. It's a problem in Europe, North and South America, and Asia. The last ten years, the groundwater has been really disappearing from our aquifers at a much faster rate than we have been experiencing previously. In addition to using water more smart and avoiding leaky pipes, we actually have to turn to the ocean for freshwater. You can see a picture from Dubai where you have a desalination plant that takes up almost half a kilometer of beach area, and unfortunately, as been part of the news picture, they're pretty sensitive infrastructure parts as well when geopolitics are becoming challenging. We really need to find other ways of creating freshwater from the oceans, which are also less energy intensive and less polluting to the oceans. We do see an increase in storms, hurricanes, algae blooms, and flooding events and waves and rising water levels in some islands, so all this needs to come together to more resilient infrastructure around the globe. Here comes the subsea part. One of the beautiful things by going to a nature-based solution is in the deep ocean, you get three main benefits. You get already pressurized water, and we need high pressure to do the reverse osmosis on the seabed. I'll come back to the technology, but you have automatic free high pressure. Another thing is when you go deep into the ocean, you have much cleaner water because there's no sunlight down there. Typical problems that desalination plants have is that half of the plant is really about pre-tweeting the water, removing algae, bacteria, before you put it onto a membrane. You don't have that problem in the deep ocean. The third thing with the deep ocean is that you have predictability, whereas a conventional desalination plant is really a bespoke project, and there's about 19,000 of them around the world. They have to be tailor-made for the site, and you've seen examples in California where it can take more than 16 years to permit the plant. You have a huge cost associated with this, and uncertainty. In the deep ocean it's predictable, so 365 days a year, you have the same conditions in terms of salinity, temperature, biology, and chemistry of the water. It makes it really boring if you're a process engineer, but that boring is good for cost and reliability. What we're done is we're taking conventional desalination, and we're putting it in the deep ocean at a minimum of 400-meter depths, or 1200 feet, where we have these conditions available, and instead of pumping up a lot of sea water and pre-tweeting it, and only getting 40% fresh water, which was what happens in the conventional plant, and dumping the waste, the 60%, which is twice a saline back in the ocean, we are really just harvesting fresh water, leaving the ocean as it is, and using zero chemicals. Here you can see our first project, which we call it "Flotion 1", which is situated in western Norway, and you see all the desalination process is really contained in this box here, which is about 20 by 20 feet footprint, and about 25 feet tall. Here you have off the shelf, reverse osmosis, membranes, and filters, and you have a subsea pump, and really what we're doing is just sucking up fresh water to the surface. Then with the power cable to shore, where we would use access to power, and we provide the fresh water, which is lighter than sea water, so it naturally also wants to flow back to shore, we are pumping that back. So it's really a way to add capacity without using land area, which also is an improvement on biodiversity on land, in addition to the benefits of not using chemicals and discharging in a salty brine. So you're getting multiple biodiversity benefits, you're getting less energy consumption, we are using about 30% to 50% less energy than a conventional desalination plant, and we're solving water in a more economical way, because this water is actually cheaper to produce, so we're not depending on subsidies or grants to make this economical. Here you see a plant that can provide water up to 300,000 people in increments of 5,000 cubic meter per day per plant. Lots of data, lots of information, but so really what we're doing is trying to replace that big plant in Dubai that I showed you with something which is more or less just a landfall, and we can connect to an existing municipality or we deliver water to a corporate user. And our business model is as a service, so we would provide a water purchase agreement much like a renewable company would sell power as a service, we would sell water as a service under 20 year contracts typically. Here we see a little bit of an exciting, Norway is not really famous for being as good with marketing as people in the US, but we've managed to kind of be compared by ambassador to Egypt by the other Nordic, so we have the Fiskush brand, by the Finnish ambassador, we have the Swedish ambassador with Volvo and we have the Danish with the Lego, but our Norwegian ambassador is really promoting us as the Norwegian brand to follow, so that's pretty cool to be in that group. We won an award last year with Time Magazine and we've been lucky to get some coverage in Forbes and other places. So for an Norwegian company it's kind of where we die is that we don't tell anybody what we're doing and some of the cool facts about Norway is that we are still the biggest exporter globally of subsea processing equipment, so we really learned from 40 years of subsea oil and gas how to do these things, because this is essentially a subsea infrastructure which needs to be running day and night for years without human intervention. So this is a little bit of our sort of last few weeks, we had a little fun fact here's me with my son, we managed to, during the transport we figured out the, we lacked insurance for a part of the storage overnight, so instead of spending $3,000 on the security guard, we pitched a tent guarding our subsea pod and had a cool time and saved some money while we were at it. But this is really the 1,000 cubic meter per day unit supplying water to 6,000 people, which we are about to install in six weeks in Norway as the first project with commercial revenues. we are looking at really developing around 20%. projects over the next five to 10 years around the globe. California is one of the markets we're looking at. Happy to share that we have more than 30% of our equities owned by US investors. Really proud of having Xylem on our cap table. One of the biggest water tech companies in the world listed on the New York Stock Exchange, as well as a venture firm called Burnt Island Ventures, which is probably the most active venture firm in water globally. And a few ocean impact investors as well. So yeah, in our world, the future of water is subsea. So that's moving from a science project, because scientists have spoken about this for more than 20 years that you could use the pressure of the subsea to disseminate water, but we are the first one to take it into the commercial world and really solving the issues. So through the sort of trifecta of solving multiple problems with one solution, which I think is really key to get projects organized, executed, and not least finance these days, because financing infrastructure project is a tough thing. But we can do it, and happy to answer any questions. And thank you so much. Wonderful, Alex. We are certainly going to have questions. Let me quickly introduce who we've got in the group. So we'll go to the gallery review real quick. I'll have you stop sharing there for just a minute. And there are two of us from the E-Club of Silicon Valley. I am in the San Francisco Bay Area in California, and in Budapest, Hungary is Victoria. Good to see you as well. So good international crowd that we have got for ourselves today. I'm going to start with a question that Victoria asks. And that question is about just what got this going? We know what, at what point did you, as the founder of Flotian, say, oh, I've got a business idea here, for sure. Like, what was it that set you in motion here? Well, multiple things coming together, I think. Not a single thing. But I've been a passionate ocean person for all my whole lives. So I-- so-- and Nils Guberdair then sailed across the Atlantic and so on. So I think my passion always lay there. I had-- we had a family business dealing with very complicated pumping systems in the ocean for the Norwegian Navy and Subsea oil and gas. So there were some expertise, which is pretty hard to get at. And then we had in a piff in the moment, really, in 2015, with one of our oil and gas clients, when they wanted to remove sulfate and salt from the water to inject into an oil well, to suck more out of an oil-- old oil well, which is a nice idea without using-- so drilling less new oil wells. Anyway, so we saw that this membrane, the reverse osmosis membrane, which was actually invented in California in the late '50s, early '60s, that it didn't really care and didn't know that it was under pressure. So we pressurized it as if it was a 3,000-meter water depth. And it was behaving exactly the same. So it kind of clicked on us that if we put the pump not pushing sea water, which 60% is waste when you're making freshwater, but sucking the actual product with the pump. So you're sucking freshwater as opposed to pushing. That actually works. So that was a big moment for us. And then at the moment, we thought it was way too expensive for drinking water. Then, over time, when the oil company's kind of paid for the R&D, we went through multiple cycles of pilots, because these are expensive hardware projects-- hundreds of millions of nooks. In the multiple tens of millions of US dollars, we saw that now that the R&D is paid for, we could do a pivot, move us away from oil and gas, and into solving drinking water. And then you have the explosion of subsea robotics, which is phenomenal. And you guys have a great community in San Diego and other places which are working on this as well. But we need robotics at 500 meters. You cannot send people down there. So the costs start down about 90% over the last 15 years, which is also sort of putting a turbo on what we're doing. That's a long answer. So that's a good one. So we've got actually a whole series of questions related to the technology of this and the business side of it. I'll start with the technology. In one of your examples, you've talked about a system that could provide fresh water to 300,000 people. I tell me if I got the math right on this. But one unit can handle 6,000 people for some period of time. So if we're talking about 50 units, are we talking about an area of the-- if that's right. If we're talking about an area of the seabed that where we're actually running into some challenges with regards to protecting the environment down there, just in terms of the amount of space used for these, or is that a challenge that you had to overcome? Or is it something different? So yeah, so the good thing that you mentioned the number. So our first unit, first of a kind, which we're installing now with commercial revenues, is for 6,000 people. That's one MLD. So our standard units, which are actually the identical pumps and the identical system, is five MLD for 30,000 or 50,000. And you can scale 10 units. We'll give you 50 MLD, which is 300,000. So every MLD is about 5,000, 6,000 people. And so basically, to get to 300,000, 50 million liters per day, 50,000 cubic meter per day, it's 10 units of the industrial scale system. But your problem is, no, your point is still very valid that we are taking up space on the seabed. It's sort of like half-- well, at the maximum, for 300,000 people, we would take up about half a football field. So it will still be very modest compared to one of the traditional plants. But it is an area. We need to make sure these boxes can be-- we can move around them with the ROV. So highly likely, we'll take up less than half a football field as well. So it is an element that we need to cover in the environmental impact assessment that we need to do in every project. How do you plan for maintenance of the units once they are on the seabed? Yeah. So some features-- obviously, at the base of this, it's subsea design philosophy. So we have redundancy at many different levels, at the component system level, et cetera. So we want to extend that period. And we have techniques to do that based on the last 40 years. But when we do maintenance, we have two levels. Basically, we have some self-cleaning features of the unit down there. And we have some clever ways of doing it with or without intervention. Then, at some point, we're pulling the whole unit. So the main part of the-- if we were replacing something or doing deep cleaning of something, we are pulling the unit to shore. So we would have a barge come out, because this is near shore within about six, seven miles from shore, maximum, usually quite a bit closer. And then we'd pull the unit up with a barge. We'd put another one down. We connected with the subsea robotics, ROV. And so while you're pulling it, you actually have the other systems making up for the lost production. So you can have 100% uptime while you're doing all this. There's essentially swapping a system. And then the barge will go in and you'll do the cleaning conventional onshore. And depending on the situation, every 18 to 36 months, you're going to do an operation like that. So there's some ocean chemistry that I think you were describing in the presentation, but just to confirm. Salination changes by depth, is that right? It does. And it does a little bit differently by what ocean you're in. But you do have-- in some areas of the world, where it's really hot, you have operations. You have high salinity on the surface. And then it goes to lower salinity. And then it goes higher again when you come to the bottom. But with minor changes, actually. And then in other parts of the world, where you have river runoff and so on, you have lower salinity on the top. And you do have a simple gradient to higher salinity on the bottom. So it does depend a little bit also on the currents. But generally, it's extremely slow moving systems based on density that sort of characterizes the movement of water on the deep sea, as opposed to wind and ocean waves and so on on the surface, which are more violent and rapid. It sounds like choosing your spots for where the units will go is a really important component for making this a profitable, profitable effort. So when, how do you, how do you think about those pieces? if a company in Bahrain or something like this says, hey, we need fresh water for these things that we're doing, as opposed to a company in Brazil or something, what kinds of things become part of the conversation so that the customer really has a good ability to say, this makes a lot more sense than a traditional desalination plan or whatever it might be. Excellent. So we are, yeah, we're really moving ahead on those terms and we love the book crossing the chasm. So we're thinking about clients from a perspective of beach heads. So there's some regions that have characteristics where we are more sought after, like where energy is expensive, where we can produce energy and where ecosystems are sensitive and land is scarce or opportunity cost of land is high. Those are the regions. So Caribbean, Mediterranean, Red Sea would be three important beach heads for us. So you are coming from a lot of different points of expertise to look at this as a possibility. You know, you've had this business that you've been part of for years in terms of the oil and gas, right? You've got a VC background. You're a marine biologist. Are there particular lines of thinking that you have about opportunities that come from combining interests? I say this from the perspective of an educator, you know, I'm always trying to tell kids like, hey, take, take interest in two things and be the person who can handle both of those things and their interaction. Is that a part of the pitch that you're making for how Flushin works? I think it's a huge part and truth be told, I've never got the proper marine biology degree, but I did a lot of the graduate courses. I love to hang out in that department for years and years in Vancouver when I was at UBC. But yeah, but so having the ability to think outside the silos or combine silos and I think it's enormously important. You know, this is a very multidisciplinary system of not just business and project development work and the marine environment, the hydraulics, electrics, high voltage, low voltage, industrial internet of things, you know, it's all coming together in the system. So having the ability to think creatively and outside the box is kind of a part of the daily work and also having the ability to I think keep retain people. It's, it's, you know, we cannot have people moving away or coming in on a, kind of on a, by annual basis. So having people that have worked here for like eight, 10, 12 years is enormously important for the type of infrastructure that we're building. But yeah, some of our best people are definitely polymaths and able to cross over different disciplines. So we value that characteristics for sure. Nice. So last question before we finish up the recording. So rotary international 36,000 clubs, any club can, can set in motion a proposal for a global grant. Right. And these, these, you know, can, can really address some, some significant issues that are a community might, might face in terms of this challenge is I can imagine any number of places that are probably in the zone of what, where it makes sense for, for your work. Is, is there a scale of this that could be something that, that a, a club with the backing of other clubs could spearhead. So hey, we, we are connected to this community. We know that for them to be doing this good work, they're doing they need a better source of fresh water. Is that, is that kind of within range or, is the initial cost of a project through floation, something that really only a, a large corporate or municipality customer can handle? Well, this is great. I mean, for us, one of the real bottlenecks to actually getting projects done is the early project development work. And, and in order to, to, to go in and de-risk a project, so do the feasibility study, look at the bathroometry of the subsea and, you know, engaging with authorities and really creating the business case. You know, that, that has a cost because we're under the sea level. So, so having someone as a co-sponsor or a grant to go in and develop that project in the early phase, is will be enormously important. And quite often we need to, our priorities are governed by those first, you know, can be $20,000 or $100,000. That's really meaningful amount to really get going and, and, and, and calculate the economics and then the impact of the project. So, so that would be enormously valuable for us to have partners or friends who want to help us in that regard. And we, we'll do the early desktop stuff, you know, for free. And then really engaging with the local community to, to, to de-risk the project early is we need help for that. Nice. I will, I will happily take this to the, the environmental working group that is a part of our district, one of many districts around the world, just to see, see what we can learn. I will, I will wind things down and then hand it back to you for the final word. For all of you who have taken your time to watch this recording or to listen to the podcast version, we, we love that we have these stories out there in so many different ways for people to interact with it. As far as I know, there's only one rotary club in the world that you can attend each week by, by listening to it as a podcast on your commute. Just saying that kind of flexibility is something that we think is important for people who have a heart for service, but who are insanely busy. So, if you're interested, as I mentioned earlier, rotary dot cool will get you to our site. For those of you who are thinking yourself, man, I have to mention this, this exciting stuff to, to a friend, you probably want like the, the, the key item. And as always, we like to do what we're going to do is we're going to hand it back to our speaker for the final word so you'll have that, that, that main idea to share. Alex, what would you like people to have like front and center in mind as they finish the video or podcast? Like you to know and that, you know, sub-seed desalination is real. It's not a science project. This is absolutely coming. And, you know, I really urge you to check us out at www.flotion.green. So, slocan.green. And I'm happy to engage with with any one of you. So, thanks for the opportunity to speak here. Perfect. Alex, thank you, everyone. Thank you. We will see you next week.