"Ooops... We need 6.6 million gallons of water... a day... "
How Sustainability Innovation Can Save Hyundai's $7.6B Investment
Among recent Clean Tech investments announced here in Georgia, the Hyundai electric vehicle plant near Savannah is one of the highest profile projects. A $7.6B investment, it gets top billing on the Metro Atlanta Chamber site and was compared by economic development officials when it was announced as the equivalent of “winning 10 Super Bowls.”
It’s easy to see why: The plant — known as a “Metaplant” — is projected to bring in 8,000+ jobs. It’s the largest single economic development project in Georgia. Ever.
There’s just one catch:
It’s permitted to pull up to 6.6M gallons of water—per day—from the local aquifer. And the aquifer, which provides drinking water to the entire region and supports hundreds of local family farms, might not be able to handle the added demand. Water levels in the aquifer around the plant could drop by 15-19 feet, by some estimates.
As a result, the Army Corps of Engineers is now reevaluating the original permit they issued to the plant.
Role for Climate Innovation
Hyundai’s situation perfectly illustrates why every organization needs to be thinking about sustainability & climate innovation—particularly on giant capital projects like this. It’s also a great example of how, as I wrote about earlier, innovation can power both defensive and offensive strategies.
I’m no water expert, but smart water-use technologies are becoming incredibly popular and cost effective. Many are already deployed here in Georgia. Rather than simply defaulting to relying on (potentially scarce) groundwater resources, here’s how I’d recommend Hyundai approach the challenge:
Define the True Problem. Talk to the experts, both internally and externally, to define what the real challenge is. Understand what the concerns are from the relevant stakeholders. Is it total water use? Is it water use specifically from the aquifer? Is it a seasonality issue? Are there other trends or issues at play that should be considered? Are issues like environmental justice in play?
If the real danger is pulling water from the aquifer, but there is no concern about using surface water supplies, that’s a very different problem to solve for—and likely easier—than having to reduce water overall.
From these conversations comes a quantifiable goal and a scorecard that are used to define the landscape of potential solutions, identify the metrics that what we’re looking for in a solution and gauge whether we’re succeeded or not.
Review water use technologies that exist today and can scale. There are hundreds of different solutions that could be incorporated to make the facility more efficient, many of which are already used in Georgia. Talk to experts and other manufacturing plants. Talk to academics at Georgia Tech and elsewhere. Reach out to the startup community (locally and nationally) and see what other options are available.
Coming out of this is a long list of potential solutions that could be deployed and partners that Hyundai could work with. As each technology is investigated, we’d update the scorecard—capturing how it stacks up vs the other options based on the metrics that are the most important to us.
Create a hybrid solution that incorporates multiple new technologies. There is rarely a single magic bullet solution that solves the entire problem—rather, it’s a combination of different technologies that get you to your goal. This is also a benefit—if one solution doesn’t perform at the expected level, the entire project isn’t at risk.
Critically, I’d focus on creating this hybrid solution with an eye towards commercialization—this is where our “offensive” sustainability strategy fits in. There are dozens of EV manufacturing plants around the world, and likely thousands of plants with similar water-use needs. If Hyundai developed the internal expertise about how to create a world-class facility that uses water sustainably, it can sell that expertise to other manufacturers and potentially create a valuable new business line. There might even be the potential to resell the hybrid solution Hyundai created for their needs to others. What company doesn’t want to monetize its own expertise?
Implement, evaluate and refine. Once the innovations are incorporated into the facility, compare them to expected performance. Are they doing their job sufficiently? If not, why not—and how can they be improved upon? What needs to be improved or swapped out? What solutions are performing better than expected?
Again, by learning how to create a manufacturing plant that uses less ground water, Hyundai is building internal knowledge—knowledge that it can use in future facilities and commercialize to other organizations facing similar challenges.
Is this approach likely to cost more?
In the immediate term, probably. I’d assume that advanced water-recycling technologies and rainwater capture/storage/resuse solutions would add to the cost of the facility. But even if it’s tens of millions of dollars more—which seems unlikely—that disappears into a $7.6 billion project.
In the longer-term, though, incorporating sustainability innovation likely makes financial sense too. Consider:
a/ Operating costs may be lower.
Ironically, Hyundai was incorporating many sustainable innovations in the plant already—solar panels on the parking lot were projected to create up to 5% of the electricity needed to power the plant, for example—so they’re not blind to the opportunity to incorporate sustainability innovation. Might there be some payback to the initial water-conservation investment in reduced operating costs? Potentially.
b/ Hyundai is protected against water regulations—here and in the future. What’s the cost of having to deal with added groundwater use regulations—whether here in Georgia or elsewhere in the future? In a rapidly changing climate where more pressure is put on water resources, it’s likely that regulations are only going to get more complex. Getting in front of that challenge today defends Hyundai’s future business against regulatory complexity.
c/ Possible monetization. As noted above, Hyundai may even be able to monetize its expertise coming from this facility to manufacturers. In that light, smart water usage is an investment into a future business opportunity for the company.
Hyundai needs to take some action to deal with its water use, now that the local community and regulators have realized what the plant’s needs are. Few environmental problems today are intractable — most challenges can be cost effective to solve, and many can be monetized if they’re approached with the right strategy.
Will Hyundai take this challenge as an opportunity? We’ll see!