Israel's Sewage-Powered Fuel Cell is Attracting Investors

In building a fuel cell that uses bacteria to break down waste in water, Israel's water company Emefcy Ltd. has raised about $10 million from investors including GE, NRG Energy Inc. and ConocoPhillips. The process reduces the amount of energy required to treat sewage and generates electricity, and is a small part of Israel's effort to alleviate a water shortage without straining limited energy supplies.

"We've seen a significant increase in interest in resource recovery from wastewater that wasn't there just a few years ago," CEO Eytan Levy said from Caesarea, Israel. The company is targeting sales in Europe and the U.S., and forecasts annual revenue of more than $100 million by 2017, he said.

The country's dry climate and lack of desalination capacity put it at the forefront of a global increase in water scarcity, which the United Nations says will extend to 30 countries by 2025.

Israel has doubled its exports of water technology to $1.5 billion following a state-funded program that began in 2006, said Dimitra Christakou, head of water insight services at Bloomberg New Energy Finance in London. The nation has attracted global interest as governments and utilities study how it has invested to cope with the depletion of underground aquifers.

Connecticut-based GE opened a research and development center in Haifa, Israel in June and invested in Emefcy through Energy Technology Ventures, a joint venture with NRG Energy and ConocoPhillips. "It's important for us to make sure that we've got the right technologies," Steve Kloos, advanced technologies leader at GE Power & Water, said. "Energy is a big deal in water treatment," he said, adding that Emefcy's equipment is different because it generates power while treating the wastewater. "The more efficient you can be from an energy standpoint, the better the overall economics are going to be," he said.

Construction of Emefcy's $1 million fuel-cell production plant on the outskirts of Caesarea will be completed by the end of the year, with first commercial orders ready for shipping by early 2012, Levy said.

Israel produces 500 million cubic meters of sewage a year, enough to fill 200,000 Olympic-size swimming pools according to the environment ministry. Some 75 percent of that is reused for irrigation, New Energy Finance data show. The country's Administration for the Development of Sewage Infrastructures invests about $128 million a year on maintenance and upgrades, according to the Ministry of National Infrastructures.