|
 About
Rentricity Inc.
www.rentricity.com
Rentricity Inc. is a renewable energy company that uses unique energy
recovery configurations to transform the untapped energy in various man-made
processes into electricity. The energy recovery systems called --
Flow-to-Wiresm
– convert excess pressure in water mains and other similar pipes into clean
electric power. A single
Flow-to-Wiresm
system produces between 30 and 350 kilowatts of electricity. Since this
electricity can then be sold onto the grid, Rentricity gives its generating
partners an additional source of revenue and a way to offset rising
electricity rates.
Rentricity is also developing
Sustainable Energy &
Monitoring Systems (SEMSsm), a set of
pre-packaged, pre-engineered, modular, skid mounted energy recovery systems
that will extend the Flow-to-Wire product line to the 5-30 kW range. The new
SEMSsm product line will be “plug and play” and equipped with an
integrated set of water quality sensors, providing the owner/operator with a
self powered water monitoring station. SEMSsm will use a portion
of its generated clean power to operate its integrated sensors.
Rentricity
Flow-to-Wiresm
systems have no environmental impact and represent a new class of clean,
renewable hydrokinetic energy. As the Company installs thousands of units
worldwide, Rentricity will produce hundreds of megawatts in aggregate.
Rentricity Inc., established in 2003, is based in New York City with offices
in New Jersey, Connecticut and Pennsylvania. Founder and President Frank
Zammataro welcomes the opportunity to discuss the technology and business
model with interested parties.
Frank
Zammataro
President & Co-Founder
Mr. Zammataro has over 25
years of operating experience with large and small organizations primarily
in the development and marketing of emerging technology. Prior to
co-founding Rentricity, Mr. Zammataro served as the Chief Marketing Officer
of w-Technologies, a wireless software company, where he drove the global
market and product strategy, business development, and corporate
communications activities.
At Merrill Lynch, he served as FVP/ Managing Director of Investments and
Alliances in the Private Client Division, where he maintained overall
responsibility for technology related strategic alliances, investments,
marketing, and sales.
Mr. Zammataro has been a contributing columnist, spoken frequently at
leading industry events, and participates in various industry, municipal,
and academic organizations. After graduating from St. John's University with
a B.A. in Political Science and Communications Arts, Mr. Zammataro attended
New York University pursuing a Master's in New Media. Mr. Zammataro also
completed the Executive Leadership Development Program at The Wharton
School.
Photo on the left:
MAWC Pump Station
Installation, Photo in the center:
Keene NH Water Treatment
Plant Dual Turbine Installation |
Clean
Technology
Hydrokinetic Energy
Rentricity
175 Varick Street, 5th Floor
New York, NY 10013
732.319.4501
www.rentricity.com
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Interview
conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published
–November 26, 2012
CEOCFO:
Rentricity is the industry leader in providing energy recovery solutions for
water systems. Would you tell us what you do?
Mr. Zammataro: Rentricity very simply
recovers energy; untapped energy that is found in our drinking water
pipeline that water utilities manage. What water utilities do is reduce or
regulate the pressure, because water is typically delivered from a higher
elevation reservoir to a lower elevation, and when they use pressure
reduction valves to dissipate the pressure, it just simply becomes wasted
energy. What Rentricity deploys is a reverse pump as a turbine
generator with a control system to manage the pressure while spinning that
turbine and making a clean form of energy. The water utilities can use that
energy either right at a treatment plant or at a pump station, or it can be
integrated with our electric grid to offset carbon footprint.
CEOCFO:
Would you explain to those of us who are technologically challenged, how it
is producing energy?
Mr. Zammataro: Yes, very simply, water
is travelling downhill from a reservoir at a high elevation; it may be 200
feet above the city that it is serving. Water utilities use that elevation
to help move the water. It literally just goes downhill, and as it is coming
down in a solid pipe, it is gaining speed. When it gets to the bottom, or
near the city, water utilities have to deploy a valve, which is a device
that stops the water, literally just causes the water to slow down by
closing the valve. It creates friction at that point and that friction
causes wasted heat or wasted energy. That is the point in the water system
where Rentricity can deploy its’
Flow-to-Wiresm
technology, actually spin a wheel that has been connected to a
generator, which creates clean electricity.
CEOCFO:
Have water companies typically recognized the wasted energy? Have they tried
to do other things about it, or is this a fairly new concept?
Mr. Zammataro: It is really a new
concept for smaller pipes. Hydroelectric has been around a very, very long
time, and in fact, there are some water utilities that have deployed
hydroelectric facilities at their reservoirs. The best example of this would
be Boulder, Colorado. They have actually a full-time hydroelectric manager
there, and they have installed hydroelectric facilities at their damns, at
their reservoirs, and a few in their distribution pipelines, because
obviously, Colorado--high mountains, a lot of elevation difference, there is
a lot of pressure reduction that is required. It has traditionally been
recognized, but what Rentricity is doing is bringing it together in a
turnkey package, and we are pricing it at the right level to make this
project feasible; which can be controlled by a typical operator, without all
of the typical headaches that come along with classic hydroelectric
projects.
CEOCFO:
Would you explain why it is simpler; what you figured out that allows it to
be done easily?
Mr. Zammataro: There is a control
package with turnkey components and services. Rentricity basically brings
together: piping, the valves, the turbine generator, and the control
system--all together, and we actually deliver this out to a site, all ready
to be installed within that pipeline. Rentricity, also, because we are a
turnkey service provider, we will in fact do the electrical design, the
mechanical design, and there is some permitting that is required with our
federal regulatory commission when the power goes on the grid. We bring
together all of the entire turnkey package for this installation: the
equipment, design, the permitting if required, and the commissioning and
startup.
CEOCFO:
What is the potential market and does everyone know about Rentricity yet
that should?
Mr. Zammataro: When Rentricity looked at
this from a perspective of how much power is actually potentially available,
and how does it help this industry? The water and wastewater industry uses
approximately 4% of all the energy generated and consumes in the United
States. That means that all the power generated, 4% is associated with water
operators treating that water, delivering that water, and wastewater
operators processing and cleaning that water. It is a huge number! In fact,
in the state of California, 20% of all the power generating in that state is
associated with water and wastewater processing. Do not forget, there are
investor owned or publicly traded water utilities, there are municipal
governments and there are quasigovernmental authorities that manage water.
They all are looking to be energy efficient; this is a large pain point. In
fact, we are starting to see energy costs very, very close to the cost of
staffing. It is right now the #2 cost of doing business in water.. We see
this as a great opportunity to bring this package to this marketplace, and
to provide them with a basis for lowering their electricity costs.
CEOCFO:
Does the industry know about Rentricity, by in large?
Mr. Zammataro: Rentricity has been
commercial since 2008. We have, in fact, installed three different units at
different locations around the United States, and our largest--350 kilowatt,
which is about 270 homes, of powers going live this year with the California
Water Service Company in the Los Angeles area. Our City of Keene, New
Hampshire project has been highlighted because American Water Intelligence,
[a leading industry research firm] has nominated it as the Technology
Project of the Year for their American Water Summit event in Chicago this
year. We installed two Rentricity turbines in parallel, so that Keene could
manage the difference in flow during the day, and in fact, the City of
Keene’s water treatment plant is now the very first carbon neutral, water
treatment plant powered by its own inflow of water. That is why I believe it
is getting that recognition. The company is in fact creating the standard in
the marketplace with this very installation, and its name is getting better
known in the industry. We are happy that we are getting that recognition.
CEOCFO:
When you are able to speak with a potential customer, when do they get it?
What do you say to them to produce the ‘aha’ moment like, “Of course we
should be doing this!”?
Mr. Zammataro: What it comes down to is
finding a water operator who wants to step outside of their typical
operations. Water utilities are required by law to provide you with
pressurized, quality drinking water. That is their primary mission.
Rentricity brings something that is a discretionary project to the table.
Typically, when we find that water utility operator or manager who has a
little bit of a green or sustainability bug and wants to be something in the
energy efficiency area, we find that the sale cycle moves very, very fast;
but this is not a requirement. Ultimately, any new pipeline project in the
United States should have some kind of energy recovery review mandate, and
we are hoping that in the future that will become as typical as when water
utilities design a new pipeline, or new regulator volt, or some new
infrastructure project. It comes down to identifying that water operator who
wants to do something in the energy efficiency area or has that green or
sustainability bug that they really feel they want to give something back to
their local community.
CEOCFO:
How do you find potential customers?
Mr. Zammataro: Rentricity does a number
of things. We will typically inform a mailing list of people who have said,
“Can you please let me know what is happening with Rentricity on different
events that are taking place, and different successful projects?” That is
one form of marketing. The most important one is really getting out to the
conferences. There are a variety of water events that take place both
regionally and nationally that Rentricity participates in. We will go to
regional American Water Works Association events. In fact, as I mentioned,
we are going to be presenting at the American Water Summit in Chicago and we
will be presenting our Keene project. These events really give Rentricity
the opportunity to meet face-to-face with the leaders in the water systems
around the country.
CEOCFO:
Development and commercialization is typically an expensive process; does
Rentricity have the funds to continue the effort or do you need to look for
investment or additional means of revenue to keep going?
Mr. Zammataro: Indeed we are. Rentricity
has been funded by its’ founders to initially get our
Flow-to-Wiresm
technology developed, and more recently, was able to get a grant from
NYSERDA, which is the New York State Energy Research and Development
Authority located in Albany, and to actually build a smaller, skid mounted
system that we can ship out to customers as well. That has allowed us to
continue to develop or expand our product line. Rentricity initially started
with the founders’ money, we have been able to win some grant money from New
York State, and now we are looking to raise approximately $3.5 million in
equity in order to continue to grow the business, and continue to ramp sales
and marketing and have regional reps at the locations around the United
States. The other important aspect of what we would call in-pipe hydro, is
the ability to fund projects. Let me dive a little deeper into this concept
of projects finance: Rentricity builds at site around a known-flow of water,
and known pressure differential or pressure regime, the predictability of
your cash or predictability of generating energy is very, very high. The
capacity factor associated with an in-pipe hydro is much, much superior to a
solar or wind project, which might have the capacity factor of 15% or maybe
25%, whereas a Rentricity in-pipe hydro has the capacity factor of 70-80%
with a very, very strong predictability of cash flow. Therefore, not only
does Rentricity see equity to help prop the company up and help ramp our
sales efforts, we are also looking for smart money investors in the project
finance realm, who want to actually finance a project and become an owner of
the generating assets. We can find that we can pay these projects back in a
five year timeline and create superior economic value and crafting internal
rates of return, unlevered, after tax, at about 12-30% range depending upon
the subsidies that are available. It is a very good story from both an
equity perspective to prop up the business, but also the project finance
opportunity is another way, another avenue of growing business as well.
CEOCFO:
Are there competing technologies or ideas to do what you are doing that you
are aware of in this industry?
Mr. Zammataro: There are. We are finding
that some of the large engineering firms in the United States are in fact
looking at this kind of energy recovery opportunity tied to various pipeline
projects that might be underway. The problem that they are having is that
the larger entities have a higher price-point for service, and therefore,
their ability to build those projects economically is greatly challenged. We
are hopeful. In some cases, we have received a phone call where we become
their subcontractor for those projects. There are one or two other new
technologies that are being developed both internationally and domestically
that are attempting to target pipeline energy recovery as well. Right now,
we are not necessarily sure that they are competitors per say, because the
technologies may be included along side Rentricity technology in different
parts of a water distribution network. We feel very strongly that our
reverse pump technology is really the winning solution, because it is pump
technology used in reverse that water utility operators understand and it
does not have to be proven. We feel very, very strongly that Rentricity’s
positioning as an applications solution provider with this turnkey ability
to bring the project into design, and into commissioning and startup is the
right solution right now. I think this emerging competition is
representative of the energy recovery space getting more attention, and I
think it will in fact help validate the industry in the future.
CEOCFO:
Do you feel that your industry or subsector are in favor with investors, of
interest to investors, or really just not much on the radar screen and that
is something you need to work on?
Mr. Zammataro: It depends upon your
perspective: “Is Rentricity a clean tech company, or is Rentricity a water
tech company, or are we something in between?” I think we are a hybrid. We
provide a nuance to the way water utility operators will consider the
development of future pipeline projects, and we bring a clean form of
electricity. I do feel that even while the clean tech industry has taken a
bit of a hit of late, Rentricity will find investors who really see the
water industry has a very, very safe haven for their investment dollars,
because it is just a critical component to what we do every single day and
what we need to do to survive and live on this earth. That is really the
positioning, we are really a cross between a clean tech company and a water
tech company, and I think we will definitely find investment interest.
CEOCFO:
Why should investors and people in the business community pay attention to
Rentricity today?
Mr. Zammataro: You are dealing with a
large, worldwide marketplace. We have already identified 23,000 locations in
the United States. That is a $2.4 billion market just in the U.S. It is a
$10 billion marketplace worldwide. Rentricity has proven technology, and a
proven management team that has developed the different commercial
installations in different parts of water infrastructure, and is now moving
towards larger installations and has also established strategic
relationships to build new technology. In addition, the company is focusing
on a very attractive project finance opportunity, and we believe that the
mixture of both equity and project finance coming together in a unique way
will in fact be a differential approach to creating investor value.
CEOCFO:
Final thoughts?
Mr. Zammataro: Again, I think the water
tech framework is very, very important. I think we take water infrastructure
for granted in this country. I believe there is an enormous opportunity for
building a smart and sustainable water grid. Many people focus on the
electric grid, but there is a water grid as well. Rentricity is at the
beginnings of articulating all of the various solutions. To bring not only a
clean form of electricity, a different part of water infrastructure, but
using that electricity to power up sensors of flow, and pressure sensors to
identify leakage, and even potentially disinfection devices that could
improve the water quality within our water
pipelines in this country. We feel very, very strongly that building a smart
and sustainable water grid will be a wave of the future.
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