| TEL AVIV
TEL AVIV Outside a small town near Tel Aviv, a pilotless drone aircraft with a three-foot (1-meter) wingspan collects data from hundreds of gauges.
A single technician with a laptop monitors the flight from the ground and receives an instant picture of the town's system, including, he says, a house with a leaky toilet.
That may seem petty, but the plane that reads water meters -- as well as a tiny turbine that can generate electricity from within water pipes -- are among technologies Israeli companies are developing to help save billions of dollars in water lost from leaky pipes.
The systems are part of a drive for export orders as rising populations and massive urbanization boost demand for fresh water, and experts say pipe leakage is one of the biggest problems facing the world today.
A World Bank study in 2006 showed water lost in the system before it reaches the customer -- known as "non-revenue water" -- costs utilities at least $14 billion worldwide every year, largely from leaky pipes and poor maintenance.
Most of the loss is in developing countries: 12 billion gallons (45 million cubic meters) of water are lost daily, enough to serve nearly 200 million people, the study said.
The problem is also endemic in industrialized countries. For example, the Environmental Protection Agency (EPA) estimates losses from the U.S. water distribution system cost the country $2.6 billion a year.
"Israel is one of the leading countries in initiative ideas to reduce non-revenue water and losses," said Stuart Hamilton, a task force member of the International Water Association (IWA). His group measures performance at the world's utilities.
Israel is two-thirds desert, and water concerns affect decision-making at the highest levels. For decades, companies here have developed water technologies more for domestic use than for foreign markets.
But seeing an opportunity to penetrate markets abroad, it set a goal of exporting $2.5 billion annually in water technology by 2011, said the Ministry of Industry and Trade.
Several firms globally offer complete leak detection services, from telephone hotlines to teams that walk the street at night with acoustic leakage detection devices, said Philippe Marin, the World Bank's senior water and sanitation specialist.
Companies such as France's Suez Environnement and Veolia Environnement run through such routines when taking over utilities.
Companies do not always need to replace large tracts of piping if they can pinpoint leaks, said Dewi Rogers, who runs Italian water-loss management consultancy firm DEWI Srl.
One key to detecting and then plugging leaks is getting real-time data from water meters in the field. For years, monitoring was done by a person stopping by each meter and jotting down the information. This can take months.
Many meters are now equipped with transmitters, and a car driving in the vicinity can receive the data. But hours pass between the readings, so the information is not accurate.
The fly-by system that spotted the leaky toilet near Tel Aviv was developed by Israel's Arad Group: a listed company majority-owned by two Kibbutzim -- Israeli agricultural communes, with an interest in water conservation for crops.
Its drone weighs about 2 lb (1 kg) and flies on auto-pilot 900 feet above ground, receiving signals from up to a mile away.
The company has market capitalization of 300 million shekel ($80 million), sold more than $100 million in water meters last year and just contracted to supply meters to the city of Mumbai by 2012.
It competes in the automatic meter-reading market with U.S.-based Badger Meter Inc, Itron Inc and Neptune, a business of Roper Industries Inc.
The fly-by system including three drones and software costs about $100,000 and first ships to Mansfield, Texas later this month, said Dan Winter, CEO of Arad Technologies, a subsidiary of Arad Group.
The in-pipe hydroelectric turbine -- developed by Leviathan Energy, a three-year old Israeli start-up with some $2 million in private equity funding -- works like a tiny water wheel to generate power and reduce leakage by regulating water pressure within pipes.
Israel's national water company, Mekorot, installed a test system at a station in a forest outside Jerusalem.
Far from the energy grid, the station controlling the water tower that supplies the village of Neve Shalom was until recently powered by solar panels. Now, the water that flows through the 4-inch (10-cm) pipes drives the turbine to provide the 1 kilowatt of electricity needed to maintain operations.
The IWA's Hamilton said such in-pipe turbines would be "absolutely beneficial to the water industries" and Gideon Alkan, an engineer at Mekorot, said the turbine could power off-grid locations as well as selling electricity to the grid.
But Hamilton said the turbines had yet to be introduced to the market because companies in the past were unable to successly store the electricity generated, and Alkan said Mekorot has not yet decided whether to install the Leviathan turbine in other stations.
Leviathan has yet to mass-manufacture its turbine, but company COO Gadi Hareli said it had received its first order for a few units to be installed in Africa through an unnamed European company, with a letter of intent to buy 200 more.
The system, which varies in size depending on the pipes and customer needs, costs about $2,000 per kilowatt of installed power, Hareli said. He added that it could also be used in large factories with vast piping.
Mini-hydro on existing pond or weirs costs may be in the region of $6,500 per kW installed up to about 10kW, according to data from the British government.
(Additional reporting by Daniel Fineren; Editing by Sara Ledwith)