STOWA Innovation Fund
Innovative technologies such as the membrane bioreactor (MBR) are generally not yet competing with conventional technologies because they are still under development and market forces are therefore not yet functioning. Additionally, putting such technologies into practice is not entirely without risk. After all, the infrastructure of the water boards must be used to do so.
To jointly bear the risk of damage and the additional costs, the Dutch water boards decided in 2001 to set up a so-called Innovation Fund. The Fund operates as follows: the costs of the plant to be designed are estimated and compared to the costs of a similar (fictitious) conventional plant. After deducting a substantial extra contribution from the water board that is to ‘host’ the proposed plant, the difference is paid out of the Innovation Fund. Should the project fail to succeed, the renovation costs will also be borne jointly and paid from the Fund. The Fund is managed by the STOWA Foundation for Applied Water Research and is financed on the basis of the number of pollution units produced by the control areas of the various water boards.
The annual contribution by the water boards was based on the costs of the Varsseveld project. The water boards made a four-year commitment, which was initially intended only for the application of MBR technology. The water boards agreed to evaluate the operation of the Fund after four years and to decide on the Fund’s future on the basis of that evaluation. The Ministry of Transport, Public Works and Water Management made a one-off contribution of approximately EUR 1.4 million when the Fund was established. In the period 2002-2005, the water quality managers have managed to raise over EUR 4.4 million for the Fund.
Subsidies for the Varsseveld project were obtained as part of the LIFE regulation (an EU subsidy scheme) and the EINP scheme (a subsidy scheme of the Ministry of Economic Affairs providing energy investment incentives to non-profit organizations). These subsidies were partly allocated to the budget of the STOWA Innovation Fund. After deduction of the contribution to the Varsseveld project, the remaining amount was recently allocated to two hybrid MBR projects in Heenvliet and Ootmarsum.
In April 2004, the operation of the Innovation Fund was evaluated at a STOWA meeting attended by all the water boards. A proposal was put forward at this meeting to continue the contributions to the Innovation Fund after 2005. Proposals were also put forward to broaden the objectives of the Fund beyond MBR applications or projects related to wastewater treatment systems. All task areas of the water boards (water chain, water systems, and flood prevention and maintenance of water barriers) should qualify for funding, including projects of a non-technical nature. In mid-2004, the board of directors of the STOWA Foundation decided to accept this proposal. From 2005 onwards, the Innovation Fund will be integrated with the STOWA research program so that a mature R&D policy can be developed for the water boards. In the long-range planning process, innovation forms a separate theme across all task areas.