Material Insights · Understanding the Material World

Pressure and flow recovery: Economics and contracts

Quick wins in water, slow paybacks in small hydro

What this tab covers Economics and commercial structures: levelised cost of the recovered energy against the fuel it avoids, host-site risk, and service models such as heat-as-a-service.

PX and compressor heat recovery pay back quickly. Small in-pipe hydro and gas expanders are marginal unless power prices are high or the preheat is free.

Levelised cost of heat or avoided cost

Mixed

Compressed-air heat is cheap to capture. A 100 bhp air-cooled compressor on two shifts yields about 847 million Btu (about 248 MWh) of heat a year (calculated conversion). That saved about USD 6,975 a year against gas at USD 0.70 per therm. Small hydro paybacks are long. Manitou Springs expected more than 300,000 kWh a year and 12 to 14 years to pay back. Gas expanders can lose money if the preheat is gas-fired. A 2010 study using 2004 energy data found a plain expander with a boiler earned only about USD 10,600 a year, against a valve station's USD 23,700 fuel cost. Pairing with a fuel cell lifted income to about USD 129,000 to 143,000 a year.246

Compressor heat saving, 100 bhp about USD 6,975/y (gas at USD 0.70/therm)2 Small hydro payback 12-14 years (Manitou Springs)6 Expander plus boiler net income about USD 10,600/y (2004 energy data)4

Host factory credit risk

Favourable

Hosts are mostly utilities and municipal water boards, which carry low credit risk and rarely close. The risk is in volume. A gas grid that shrinks as buildings electrify will push less gas through each letdown station. For PX, the supplier carries the market risk. ERI's revenue depends on large desalination projects, and in February 2026 it decided to wind down its CO2 retail grocery refrigeration business, while continuing to develop the PX G1300.1

Water from plants using ERI devices over 43 million m3/day1

Heat-as-a-service and ESCO models

Mixed

Vendors increasingly offer ownership models. InPipe Energy's HydroXS at EBMUD and Rentricity's Flow-to-Wire at Manitou Springs are vendor-designed systems at municipal water plants. At Manitou Springs the output offsets the city's own demand charges, which made up more than half of its bills. Public funding helped there, and the sources did not state the ownership terms. PX units are sold outright through EPC contractors (firms that design and build the plant), not on a service basis.156

Peak demand share of Manitou Springs bill over 50%6

Sources

  1. Energy Recovery, Inc. Form 10-K for fiscal year 2025 (company filing) Energy Recovery, Inc. (US SEC filing), 2026
  2. Fact Sheet 10: Heat recovery with compressed air systems (updated 2026) Compressed Air Challenge (sourcebook developed with US DOE), 2026
  3. Hybrid turboexpander and fuel cell system for power recovery at natural gas pressure reduction stations (Howard, Oosthuizen and Peppley), Chemical Engineering Transactions 21 AIDIC, 2010
  4. Water and wastewater systems hydropower guide (document 24-50213) Pacific Northwest National Laboratory and Idaho National Laboratory for US DOE Water Power Technologies Office, 2024
  5. Manitou Springs water treatment plant case study (vendor case study) Rentricity, 2022