For former Merrill Lynch banker Frank Zammataro, a new view in midtown Manhattan led to a complete career overhaul.

Post-9/11, Zammataro found himself working in a temp space that overlooked a water tower. “I envisioned, ‘Could you use the water on these buildings to power emergency evacuations? ‘” says Zammataro, who became determined to find the answer.

Speaking with professors at New York’s Rensselaer Polytechnic Institute, Zammataro says they were unconvinced water towers could generate electricity for evacuations, but suggested he talk to water utilities about his idea.

“We soon discovered there are thousands upon thousands of valves deployed to slow down and regulate pressure,” says Zammataro, providing a major opportunity to convert that pressure into electricity.

“By the end of the summer of 2002, we had enough information to actually start writing a business plan,” says Zammataro; by the spring of 2003, his renewable energy startup Rentricity was born.

How Rentricity Converts Water Into Energy

Rentricity focuses on gravity-fed water, which flows from places of high elevation to low elevation.

“When this water comes downhill, it needs to be regulated and slowed down, and valves are deployed by water operators. Those valves squeeze the column of water, creating friction,” explains Zammataro.

Rentricity takes advantage of that wasted pressure and essentially converts it to electricity. While the company doesn’t manufacture pumps, it integrates electrical and control systems to manage the process. In some cases, Rentricity is also financing the installation of its systems, and then sharing the energy-generating revenue with clients.

Since its commercial launch in 2009, Rentricity has worked primarily with municipal water utilities. In the city of Keene, New Hampshire, for instance, the water utility processes 3 million gallons of water each day for approximately 25,000 residents.

“It’s powering up their entire water treatment plant, making it the very first energy-neutral water treatment plant powered by its very own inflow of water,” says Zammataro. Over the life of the unit, he estimates Keene will save $1.5 million in energy expenses.

Untapping the Potential in Water Energy

While Rentricity is a relatively young company, hydropower has been a source of renewable energy since the late 1800s, with the first commercial plant introduced in Appleton, Wisconsin in 1882.

“In 1940, water produced one-third of all U.S. electrical energy,” says Matt Nocella, a spokesman for the National Hydropower Association.

While the total amount of energy produced by water hasn’t been on the decline, over the last decade hydroelectricity has produced only 7% of the electricity consumed by the United States. But among renewable energy sources including wind and solar, water is king: It accounts for over 60% of all renewable energy used in the United States, according to the government’s Energy Information Administration.

Seven percent of total electricity is no small feat, but the Department of Energy and the NHA suggest water is being underutilized as a source of power. The DOE reports only 3% of the nation’s 80,000 dams are generating electricity, not to mention the many water utilities that could also produce energy.

Getting down to hard numbers, a 2009 study commissioned by the NHA found 60,000 MW of potential hydropower in the United States. Harnessing the potential, the study concludes, can lead to a 60% increase in the amount of electricity created by water. It would also add an estimated 1.4 million jobs by 2025, thanks in part to new hydropower companies like Rentricity or Portland’s Lucid Energy, which employs similar technology.

Government Challenges Facing Hydropower

For hydropower companies, permitting and regulatory hurdles are major factors at play when it comes to more widespread adoption of hydropower technology, says Linda Church Ciocci, executive director of the NHA.  

“Licensing and permitting costs are about 25% of overall development costs,” says Church Ciocci. She says this financial burden can be challenging for businesses like Rentricity when approaching cities that need to get approval for hydropower projects.

Church Ciocci says her organization is focused on streamlining the approval process, and recent laws that received bipartisan support are moving in the right direction. For instance, the Hydropower Regulatory Efficiency Act and the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act were signed into law by President Obama on August 9, 2013, promising to minimize regulatory challenges for smaller projects.

At the same time that it has presented difficulties, however, the government has also enabled Rentricity to grow.

“We were lucky enough to join ACRE [NYC’s Accelerator for a Clean and Resilient Economy], which is an incubator in Manhattan … cofounded by the state of New York as well as the local mayor’s office,” says Zammataro. He says the accelerator provided the company with access to rent-subsidized office space, and allowed Rentricity to use the help of students at NYU Polytechnic. Rentricity was also the beneficiary of grants from the states of Rhode Island and Connecticut, which were instrumental in helping the company develop its technology before going commercial.

That said, all of the licenses and permits, not to mention the lengthy timeline associated with government projects, is leading Rentricity to seek out opportunities besides those presented by municipal water utilities.

“The sales cycle at the classic B-to-G (or business-to-government) level are longer, and that’s why Rentricity is now looking at other kinds of businesses like industrial food processors,” says Zammataro.

Between municipal water utilities, commercial processors, pharmaceutical companies and mining operations, Zammataro estimates Rentricity will be able to sell approximately 724 units of its technology over the next five years.
 

Follow Gabrielle Karol on Twitter @GabrielleKarol