BlueTech Forum 2012 - Re-Inventing Sanitation for the Bottom of the Pyramid Market, Carl Hensman

I would like to invite up our second keynote of the day, which is Dr. Carl Hensman, who is program officer in the water sanitation and Hygiene division at the Bill and Melinda Gates Foundation. Carl's going to talk about an extremely interesting initiative, the Bill and Melinda Gates foundation of a competition to try and reinvent sanitation, particularly for the bottom 2 billion. And without wishing to steal Carl's thunder, I think I'll bring him up to tell you all about it. Carl Hensman.

Now, before I get into the presentation, I really want to sort of address what I expect from you as an audience. On the innovation side, we're going to talk about how the Warner sanitation hygiene team looks at its role within the bottom of the pyramid in the business development. And so I challenge everybody that's doing innovation here to look at that and say we can do it better. And if you think you can do something better, come talk to me. On the investment side, what we're looking at here is do we have a technology you're interested in? Fine, you can invest in that. But what I'm more interested in is what of all of those technologies that you've looked at but you don't quite have the stomach for the risk for. But we might be able to fit it into our strategy. We can buy down that risk for you. You can have the developing, the developed world. We'll take the developing world. Okay. So as I go through the presentation, look at it, try and challenge us that you can do it better. So the sanitation crisis, bottom line is about 2.6 billion people around the world. There's 7 billion people in the world at the moment. 2.6 billion don't have access to safe hygiene. When we talk about safe hygiene, do I have a laser pointer here? There. This is a pit latrine and this is the disposal mechanism for that pit latrine. Out of those 2.6 billion people, about 1.1 billion people still open defecate. That means they go find a bush and they'll go take a crap behind a bush. Sorry, I'm not going to be nice about my words here. This is how it works. So the opportunity to actually prevent disease and death through affecting sanitation on a global scale is huge. The foundation effectively within our group, what we're looking at is the safe and affordable sanitation within these low income groups. Key there is affordable. And part of the term of affordable is that we have to look at this as a business proposition. In our water sanitation group, we have three functions. I'm not really going to talk about the Delivery models at scale, which are the change. Behavioral management tends to be more rurally focused policy and advocacy here where we try and influence the local governments and the major governments that are actually putting in good sanitation policies. Because I'm the technology guy, I get to talk about sanitation and technology and it says tech here. So we're going to talk about that. Here's the sanitation value chain as we see it. And this effectively is the reinvent the toilet program. There is a challenge which Bill Gates gave us. I'll talk about that in a second. Within the sanitation value chain in the developing country, you've got a latrine, if you're lucky. And if you're lucky, that latrine goes to a pit where you can store your fecal material. If you're lucky, someone will come along and take that material out of the pit. And if you're really lucky, they won't drive around the corner of your house and drop it off. They'll actually take it to a location where they can process it. And if you're lucky, where they process it, they do it correctly. Okay, so what I'm going to do here is talk through this sanitation value chain and what currently happens at the moment, and then we'll talk about what we're trying to do to affect that. So in the latrine system, here's a typical type of latrine that you'll see in a peri. Urban or slum area. Okay, this one is in a schoolyard. Now, interestingly, this latrine is around about, I don't know, 500 yards away from the school because it smells so badly. The teachers don't even use this latrine. They'll go down the road and pay to use a park, public one within the latrine. And this is a public latrine. You have a clean place within a squat pad. Typically there's a hole, here's some African shit, and you'll actually poop over the top of the hole and you'll deposit into that latrine. The problems we have smell, sound, flies, custardy, sludge people when they go to the restroom over there, they don't. Restroom. What a term. They don't want to smell it. They don't want to see it, they don't want to hear it, and they don't want to hear all the other see or smell everybody that went before them. Okay, the cost of this sludge. Oops, sorry, I went to the wrong way back. There we go. Blank. There we go. The cost of the Sludge is around about 30 to $60 a year for an existing pit latrine. This is for people that earn $2 a day, if they're lucky, perhaps $1 a day. So that also means our business proposition starts capping at 60 bucks a day. Can we do something that reduces that $60 a day to $50 a day or 40. Sorry, 50. Sorry, $60 a year. Can we reduce it to 50 bucks a year for a pit disposal? Can we reduce it down to 40? So you can see where the business propositions start to come in pit emptying. So if you have a latrine, 50% of latrines are manually emptied. There's a gentleman down there, typically he'll start off up to about his chest and he'll start bucketing it out. Obviously, there's health issues there, there's health concerns. What we're starting to see, or what we have seen, is some efforts gulpers from Steve Sugden over at London School of Hygiene and Tropical Medicine. Very messy systems, but you're hand pumping. At least you're not standing in there. It comes out of here into a barrel. Part of the problem with this is you can only go so far down into the pit. And the other issue with the pit is that as you get a buildup of organic material in that pit, it starts to compress the bottom. So any vacuum pressure you get doesn't pull out all the material on the bottom. Vacuum trucks themselves have the same problem with that. And what you'll actually see if you look carefully, there's a guy down in the pit, even with the vacuum truck trying to help disturb this layer at the bottom of the pit to be able to pull it out. The other issue you'll find is the trucks are often too big to move up a peri urban area, so they end up lying a very long pipeline to the pit, which obviously reduces the vacuum pressure as well. And 80% of pit disposal or pit cleaning out, is the cost of the diesel to go from the pit to wherever they're disposing it. And part of that drives a reason why they'll go down the road and they'll just dump it into a natural location rather than to a proper treatment site. Disposal. 10% of accumulated sludge is disposed of correctly. In developing countries, sometimes you'll get the pit and it's just emptied out right by that. In other situations, you'll have people just dig a hole around the side of your house and that will be where your fecal material goes. In fact, one situation I know of. They didn't have room in the dense urban area, so they dug a hole in the living room and then they recovered it up again. Treatment. What you've got here is, this is actually a stabilization pond up in Kumasi in Ghana. This is about 5,000 people's worth of fecal material, about 4 to 6% sludge. It's a wet sludge area. The hydraulic flow in the treatment pond doesn't work. So this is the equivalent of 5,000 people over defecating, even though they think they have a solution there. We have a treatment system here which is out of Dacha, Senegal. It has some primary treatment, there's some mineral separation, goes to drying beds at the back. It actually works very well. The problem is the day I took this picture was halfway through the month and the local utility had run out of money, so nobody turned up to work. Okay, so how do we do it better? And this is where we come in. First of all, we don't believe in sewer lines. I think we saw some great numbers showing why we shouldn't believe in sewer lines in this situation. So our goal is to actually expand and improve the existing situation you have that is build up a sanitation network based on what happens and what works within that system anyway and to actually turn that into a business proposition. When I look at this value chain, I see cottage industries at every single point. So how do we make those cottage industries actually into a business model? And that business model then drives a sanitation issue for us. From the latrine side, this is actually for the next images that come up, we have a project with the London School of Hygiene and Tropical Medicine. They're looking at the actual pit latrine and they've determined what the rate limiting steps are within the decomposition of the organic matter in the pit latry. What they're now doing is developing what they would call a bio bomb that goes into the pit latrine that speeds up those rate limiting steps. And so now you can actually reduce the organic material in the pit latrine. What that means is Instead of paying 60 bucks a year, perhaps you say 60 bucks every five years. So now we start to see a value proposition there. As long as the additive is lower than the delta on their disposal costs more effective designs. In this situation here we have, you would go, basically you defecate on the toilet seat here. There's a valve in there which has. Oh, sorry. There's a valve in there that has a water seal on it. Where after you've been to the Bathroom. You'll kick this little handle here. There's a counterweight that opens a water seal. It drops it into this container here. You then wash your hands. That's eight ounces of water. That recreates the seal. Okay? That stops the smell, stops the flies. Within the actual box here, we have highly porous concrete that allows us to do source separation. The urine drops down. The organic material stays on top. You separate the ammonia from the bacteria. You reduce your smell as well. After about 10 days of installation and use, they put worms in there for vermicomposting. And you actually, because it's aerobic and because you have bugs, roaches, everything else in there, you get about reduction of the. You get a 90% reduction of the waste in about six days. There's about 2,000 of these units installed across Ghana at the moment. They're both about two years in operation. Then you have to empty them out. It goes straight onto the garden. The longest one that's been installed is six years. It's still working fine. So it goes again to what we were talking at the keynote at lunch about decentralized and how much can you treat this stuff on site? Commodity production. This is my favorite slide. What you've got here, really the key is fish meal is 60% protein. You feed chickens with fish meal in Africa, it's about $1,000 a ton. Like soldier fly larva and vermicomposting, they'll actually eat the organic material. Black soldier fly larvae are interesting. What they do is they eat the material and just before they pupate, they actually walk away from or they crawl away from the food source, and they try and find a nice quiet place to turn into black soldier flies. Black soldier flies are interesting because they only live for two days. They don't eat anything. And actually what they do is they excrete material on the food source. In this case, fecal material that actually deters other flies. If we take those larva and we actually take them and dry them, we get 40% protein from them. If we take worms, we get 70% protein from them. The business case here is fish meal is costing 1000 bucks a ton of. So if we start building up a commodity market here, you start to see whether a business proposition occurs. Emptying pits. This is our omni ingest competition. And there's only a couple of pictures I'll show on the next slide. Because this is with for profit vendors. We do have some IP issues involved. And so it's easier for me just to put the diagram here. The Business component of the emptying the pits. If you can actually take a pit emptying device and you can actually fully empty those pits, and instead of doing one pit in an hour, you can now do four pits in an hour, you're starting to see where there's a business proposition there. If you also take that material and you de trash it, you desand it and you dewater it, Instead of being able to get 1.5 pits onto a truck that will be trucked away, you can now get six or seven or eight pits onto a truck. Remembering that 80% of the cost is diesel and transportation. So now what we're allowing is a much reduced cost for emptying a pit, which can be translated onto the client. But also we allow the pit emptiers to make more money. Right. So within the emptying the pits, we've already started moving on our phase two. We've got our d trash component set in place with a couple of companies. We're looking at our dewatering system set in place. And we're moving forward now into actually how you sterilize this water on the fly. It's all on a mobile platform. And that's where we're moving to the next stage there, decentralized processing. So I've picked up this example. We're working with Janicky industries for decentralized processing. Because I think it's a really good example of how you don't have to be perfect, but you can achieve the goal. These guys are using a fluidized bed reactor, and then they're taking the heat from the fluidized bed reactor and using a steam engine. And everybody thinks this is low tech, it's historic, it's terrible. Well, actually, a modern steam engine is about 43% efficient. When you look at lubricants and current ceramic bearings, the fluidized bed reactor is a very efficient form of combustion. However, the keys to this project, the fluidized bed reactor, is basically an old boiler casing with a monotube wrapped around it for the heat exchange. And the steam engine is an old derelict diesel engine that's found at the side of the road where they just pull the camshaft, re engineer it, and make a steam engine from it. So while this could be potentially 43% efficient, we'll take 28% efficient if it's a minimal cost on purchasing materials. Now, the other good thing about this is given the fluidized bed reactor, we can actually get a net positive, theoretically this is on paper and I'll explain. So we get theoretically a net positive here with about 5 or 6% solids. Okay. After that we start to see an energy positive move. Now this is on paper, so I would expect that to be more like 10 or 15%. However, the key there is we can augment the solids with solid waste and you start to get an excess energy output to the system. So part of our deal with Janicky is, hey, this is good theoretically. Build it, show us it works, and then we'll believe and we'll start to propagate the technology on the treatment side. And there's a smattering of things that we deal with here. Part of the value proposition on treating materials is how do you actually sell most of that energy or biogas out to the people that are going to use it. So in this situation, we funded somebody to figure out how to remove the stir bar from the biogas reactors. And what they're doing here is they're essentially using a bubble cavitation system to create the turbulence that they need for anaerobic diagnostic. We remove that stir bar, we remove that parasitic cost. That means that people can sell more and create a better business. Delta, if we look at this situation here, we're looking at just a simple 55 gallon drum that's being turned into a biochar reactor rural situation, anybody can use it. You basically pick up your fecal material. Rechar are a very good example of someone we're working with on this. You have an insert in your pit. When you defecate in your pit, it fills up the insert, you pick it out, you drop it into your biochar reactor, you make your biochar, your biochar becomes fuel. This one is up in Kumasi. What we're doing here is we're making biodiesel from fecal material. So about 10 or 12% of fecal material is fats and lipids. So we're converting that directly. But what will happen here? Oops, there we go. What will happen here is in the first two reactors, we'll have a direct conversion to biodiesel. The other reactors are fermentation systems. And the goal there is you actually break down the rest of the organic material into amino acids and reconstitute more lipids and proteins. The lipids then can be converted back into biodiesel as well. So we get enhanced biodiesel recovery. If anyone wonders about is that possible? There was a Japanese researcher, I think two years ago, they did exactly the same thing. Reconstituted proteins and made meat from fecal material. I don't think we'd be serving it here. But so it's the same mechanism as that except for we're looking at biodiesel as an end product. And then we're also doing things in the area of basically bioelectric cell systems. We're looking at microbial fuel cells. More along the high technology side of things. Within the reinvent the toilet challenge. This is a specific challenge that was put to the WASH team by Bill Gates. And basically Bill Gates, very technology focused person as you would imagine. And what he wanted to do is say, okay, let's take this whole sanitation value chain, collapse it into a black box that can process everything at the location that you defecate. That there's no waste product doesn't mean there isn't a byproduct, but there's no waste products and any water that comes out is going to be potable. Big challenge. Right? You don't give away easy things when you Bill Gates. Right. The goal here is what do we get out of it? Do we get sub component technologies that can be applied to something else? Does somebody just amaze us like with cell phones? We've been talking to cell phones a lot with people out of the presentations in Africa. They were going to lay a lot of landlines. About a trillion dollars of landlines. Along comes a cell phone. No one thought it would take off in Africa because it was too high tech. Suddenly it's everywhere. So within, and this by the way is about 5% of our funding. It's not our own thing. Everything else takes up the majority of it. But the key here is the operational cost of $0.05 per user per day. Day. And that key is based on the basically the $60, the 30 to $60 pit latrine disposal cost. So can we make this standalone unit, put it in a. Basically a latrine site. And you will pay less for that than you will pay to have someone to come and basically empty your pit latrine. People sort of look at this strangely because they think that's a really high tech thing. You're not going to be able to imagine it. Well, effectively the first round of eight and we've just actually got round to setting up. We're about to set up awards for another 13. But the first round of eight really looked at things like pressure cookers, hydrothermal carbonization. Okay. Barbecues smouldering and microwaves. University adelt. Okay. So what we're looking at is not high flutent technologies that no one's ever thought of. We're looking at how do we Adapt common things that we do every day and put it into a field in the sense it works. So the one that I've just pulled out for an example, especially with the time here, is the barbecue. And basically you have. The University of Toronto presented a smoldering system. And within the smoldering system, you would defecate. There's a separation of liquids and solids. It goes down to a sand filter. They're developing an active sand filter. You would hand crank and it would scrape off the top, bring it back up to the wet solids. They've modeled the whole. I think we got. Yeah, they've modeled the whole drying regime along the conveyor belt, which moves, by the way, every time you lift up the seat, it hand cranks that conveyor belt along. Okay. So it dries along here. It drops into the smoldering site. And they've actually proved that you can fully smolder based on technology that's designed to remove coal tar from soil. You can smolder the fecal material and the sand from that then goes back into the center filter. The one thing that they're looking at that they're struggling with a little bit at the moment is the UV disinfection because they're having to use materials that are already in the field. So it tends to be low pressure uv. So they're modeling the low pressure UV out and what configurations they need to manage that with. Okay. This here doesn't have a byproduct. And what we're seeing at the moment is it's penciling out that it would be below $0.05 per user per day. Other things we're looking at, in the case of University of Delt, where they're doing microwave systems, they're making syngas, they're pushing it into a fuel cell. That fuel cell is enough to run a lamp. So the kids can be educated in the house or the wife can. And I'm sorry, it is. The wife can do more crafts that they can sell on the street. There's other situations where you'll look at, for example, the hydrothermal carbonization, the pressure cooker model that then becomes a fuel. The nice thing about hydrothermal carbonization, you don't have to do the water separation or any drying beforehand. And the goal there is to actually change the chemical form so you can get good water separation afterwards, because it literally becomes a filter concept of a filter aid. But then you can take that filter aid and use it as a fuel afterwards. So just to wrap up on the summary here, and this is My summary slide. The goal here is to make a business at every point. And our ultimate goal in the ideal world in the sense of how do we do this is create a value product to the end, whether it's biogas, whether it's electricity. Most likely it'll be biogas because of the cooking environment. But electricity make this so profitable that people would go back and say, I'm going to buy you a toilet because fecal sludge just became a commodity. So, any questions? The question was comparing the progress in achieving drinking water on the Millennium Goals versus sanitation. I'm going to talk more about sanitation on this side of things. Basically, the sanitation Millennium Goals or the emphasis on where they were going with them is not going to be achieved in the sense more because a lot of focus been made on drinking water. And so drinking water tends to go to a rural area as well in a rural environment. And if you look at a situation, the urban density on the drinking water has been lost a little and people have been focusing the NGOs in the rural areas. The other issue that you have within sanitation is it's very much based around an NGO model where people will go in and they'll say, okay, we're going to build a pit latrine for you. We're going to put a concrete slab over the top. And in five years, when it breaks or fails, we're going to build another one and put a concrete slab slab over the top. So there's no sustainability behind it. So the whole concept on sanitation is how do you make it sustainable? And that's the way we're going to achieve the goals. You know, you have to make it a business function. And we're not talking about a bunch, no offense to anyone, a bunch of white folks sitting in America telling people how to do their sanitation network in Africa. What we're talking about is how do we supply the technology and how do we actually supply the business model that's actually going to work for them? If you can actually take one person and you can elevate them to the level that they're an entrepreneur in Africa, I guarantee that there's going to be 10 or 20 people behind them that want to cut at the pelly. And that's where you start to get capitalistic floranthropy. I can't even say the word at this time of the day. So I know I didn't answer your question. Okay. But along the lines of it, that's really where we believe it has to go. Agriculture, you can make more Food vaccination, you can save your kids, sanitation. What's the metric? There isn't really a metric. So you have to play it back into the cash, the cash value. And if you're earning $2 a day and you can make an extra dollar, an extra $2 off of a sanitation practice, then you've got a sensible business saying that. The market in Accra, for example, is about 1 to 2 million. In East Africa in total is about a billion dollar market for sanitation, even at that lower level, because we're talking small profit but very high volume. So.

You talked about $0.05 per person per day.

Yeah.

Does that include the capital costs?

Yes.

And so what do you use as a term for your amortization?

We tend to look at, at the moment we're looking at 20 years with a 60% true money value, a 6% true money value. So we allow the people proposing to amortize over 20 years. You have to remember that these are challenge goals. You know, we're not going to turn around and say someone failed because they made it 6 cents a day or someone failed even because they made it 10 cents a day. These are tough goals in the challenge. They're very tough goals. And what we're looking for, you know, it's sort of out the NASA book a little the spin off from the shuttle program. I mean, we wouldn't have tempur pedic beds if we didn't have a shuttle program. Right. So it's a matter of if we really push people hard, what can we get from that? What sort of advances can be we achieve from that. And you know, it's a high risk. It's a high risk bet on the Foundation's part, but it's one that Bill Gates himself wants to make, so it's his money.

So has the foundation done any work at the intersection of this potential fuel source and many of those same people's need for cooking fuel and safe cooking stoves?

Yeah, it's actually a very interesting question. And the reason why it's an interesting question is that we can produce biogas. The question is how do you bottle it at pressure for a reasonable cost? Because we all know compressors cost a lot of money from the power side and get it out to the peri urban area so they have more than one day of cooking and they're not constantly running back and forth. We're actually working with a company in South Africa at the moment that are looking at cheaper absorbents in the bottles which will allow them to run for about seven days based on a couple of different absorption mechanisms. When you look at the langmu and they can do that at a much lower pressure. From a cooking stove standpoint, we do have a couple of projects where they're looking at the cooking stoves, but it's not from our perspective, the fundamental component here is how do you drive the sanitation network? How do you turn, as I said, turn the fecal sludge into a commodity? Commodity. You can make biogas from solid waste. And this is one of the things that we have to be very careful of, is if we create a technology and we create a business and it makes more biogas from solid waste, people will walk away from fecal sludge and go to solid waste. And our goal here is to solve the fecal sludge issue. So we have to balance that as well. So on the cooking stove side, there are people working on it. I'm trying to think of, I think WASP are doing part of that as well, and we will tailor onto the back of that. But at the moment, it's how do you actually get the biogas to begin with, before we start worrying about the cooking stove, how do you get that biogas into a form where someone can take it and use it for an existing period of time, really? Because it's a service model for a business.

I think we may have time for one final question. Any, Joel.

Is there any work to link this into any solar component, you know, to where you could elevate the temperature and operate thermophenically so you get a lot smaller process? We have a couple of projects from a wind component. We have someone working on autothermal aerobic digestion where they get it up to a thermophilic level. I think one of the potential RTTC grantees that will be coming up this year is actually doing hydrothermal carbonization. But they're using a solar collector to get the temperatures that they need to do it, or that's their proposed efforts. We do have a couple of other solar projects that are looking at basically just sterilization of the material. So then it becomes a safer sort of amendment for fertilizer. I mean, our preference is to try and get a bigger value from it, such as an in fuel source, rather than just put it out as a fertilizer. But if the fertilizer works at the cost value we need and we can get it out on the material safely, then we've sort of solved the problem there. So, I mean, ultimately our goal here is to create a business model in effort, in effect, that Propagates safe sanitation because people can make cash. So, you know, if you can actually sterilize and it can go onto a field using solar collectors, then as long as that drives enough money to propel that business model, we'll be happy with it.

Well, listen, with that I'd like to extend a round of applause and thank Carol very much for that. Thanks, Carol. Cheers. I think that fitted the theme of thinking outside the bubble. Most definitely drop. Indeed. So all that's left for me to do to conclude the day is to hand out the winners, the awards to our winners, which the results have come back. And prior to doing that, I'd like to maybe go to say a final word for our sponsors. Well, I think to thank all of the speakers, the keynote speakers, the panelists, the presenters, the exhibitors from a content perspective. I think it's been a very rich and a very dense and enlightening day and I think it certainly I could listen for another hour or two and I'm jet lagged and at six o', clock, so that says a lot. I'd like to thank our sponsors again for their support of the event and we look forward to partners partnering with them in future events and indeed hopefully to seeing all of you here again. So thank you very much for your rapt attention throughout the day and we'd invite you to join us in a drink to round out the day outside. But now, without further ado, you know, there were two awards. There was the Disruptometer Award and the Best Go to Market Strategy Award. And the winner of the Disruptometer Award is Equalize. Excellent. So I'd like to invite James on stage to receive the award. James, congratulations. Well done. We also look forward to hopefully seeing you at the Innovation Pavilion at WEF Tech in New Orleans in October. Thank you. Well done. Thank you. And the Best Go to Market Strategy Award. We should be taking bets on this to see, you know, what the feeling in the room was. But it went to wrt. So I'd like to invite Michael Demetria up to receive that. Michael, well done. Congratulations. Pleasure indeed. You're welcome. So thank the speakers. Thank you very much.