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Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank
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Interlinkages and trade-offs between water and energy, by Diego J. Rodriguez, Senior Economist, The World Bank

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2014 UN-Water Annual International Zaragoza Conference. Preparing for World Water Day 2014: Partnerships for improving water and energy access, efficiency and sustainability. 13-16 January 2014

2014 UN-Water Annual International Zaragoza Conference. Preparing for World Water Day 2014: Partnerships for improving water and energy access, efficiency and sustainability. 13-16 January 2014

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  • The world’s water and energy systems are inextricably linked Significant amounts of water are needed in almost all energy processes (from generating hydropower, cooling and other purposes in thermal power plants, to extracting and processing fuels) Conversely, the water sector needs energy – mainly in the form of electricity – to extract, treat and transport water Energy and water are used in the production of crops, including those used to generate energy through biofuelsAs demand for water and energy increases, stronger integrated planning will be necessary to evaluate tradeoffs, find synergies, and ensure sustainable development
  • Water scarcity is increasing as demand for water intensifies with population and economic growthClimate change is exacerbating water and energy challengesTo a great extent, many energy models do not address water constraints in an integrated manner
  • Africa’s electricity generation will be 7 times as high as nowadays by 2050Asia’s primary energy production will almost double, and electricity generation will more than triple by 2050In Latin America, the amount of electricity generated is expected to increase fivefold in the next 40 years and the amount of water needed will triple
  • Water constraints are presently affecting the energy sector: In the U.S., several power plants have had to shut down or reduce power generationdue to low water flows or high water temperatures. In India, a thermal power plant recently had to shut down due to a severe water shortage. Francehas been forced to reduce or halt energy production in nuclear power plants due to high water temperatures threatening cooling processes during heatwaves.Recurring and prolonged droughts are threatening hydropower capacity in many countries, such as Sri Lanka, China and Brazil.
  • The energy sector faces several water–related risksIncreased water temperatures can prevent power plants from cooling properly, causing them to shut down or decrease production, incurring financial and economic losses Decreased water availability can affect thermal power plants, hydropower, and fuel extraction processes due to their large water requirementsRegulatory uncertainty including restricted operational water permits, rising discharge compliance costs and withdrawal limitsSea level rise could impact coastal energy infrastructure and power plant operationsWater quality can impact energy operations if it is not regulated and managed adequately
  • The baselines water stress is defined as the ratio of total annual freshwater withdrawals for the year 2000, relative to expected annual renewable freshwater supply based on 1950–1990 climatic norms. This ratio provides an assessment of the demand for freshwater fromhouseholds, industry, and irrigation agriculture relative to freshwater availability in a typical year.3 In this study, water stress is defined as the ratio of water withdrawal to renewable supply.4 ‘Medium-high’ corresponds to a ratio of 20 to 40 percent of available freshwater used; ‘high’ corresponds to a ratio of 40 to 80 percent of available freshwater used; and ‘extremely-high’ corresponds to a ratio of more than 80 percent of available water used.5 WRI defines “significantly worse” as 2 to 2.8 times worse than baseline conditions; “extremely worse” means 2.8 to 8 times worse than baseline conditions; and “exceptionally worse” means more than 8 times worse than baseline conditions.
  • Transcript

    • 1. Interlinkages and trade-offs between water and energy Diego J. Rodriguez, Senior Economist, The World Bank
    • 2.  
    • 3.  In the U.S., several power plants have had to shut down or reduce power generation due to low water flows or high water temperatures.  In India, a thermal power plant recently had to shut down due to a severe water shortage.  France has been forced to reduce or halt energy production in nuclear power plants due to high water temperatures threatening cooling processes during heat-waves.  Recurring and prolonged droughts are threatening hydropower capacity in many countries, such as Sri Lanka, China and Brazil.
    • 4.    
    • 5. ENERGY IMPACT CLIMATE CHANGE RE resources Changes in runoff, wind, crop response, ocean climate Energy supply Hydro – water availability and seasonality Wind – variable wind regime Bio-fuels – reduced transformation efficiency Solar – reduced solar cell efficiency Thermal - Generation efficiency and cooling water availability Oil & Gas – extreme events Transport/ T&D Extreme event frequency, sea level rise Design, O&M Siting – sea level rise, extreme events Downtime/ trade – extreme events Demand Temperature rise, inter-annual variations Cross sector Water resource management/ competition & siting SOURCE: ESMAP PRESENTATION ON CLIMATE IMPACTS ON ENERGY SYSTEMS. NOVEMBER 16, 2010
    • 6. Water scarcity changes is Asia messages SOURCE: WRI, 2012. The baselines water stress is defined as the ratio of total annual freshwater withdrawals for the year 2000, relative to expected annual renewable freshwater supply based on 1950–1990 climatic norms. Relative location of power plants vs. hurricane/typhoon zoning areas in Mexico SOURCE: ESMAP PRESENTATION ON CLIMATE IMPACTS ON ENERGY SYSTEMS. NOVEMBER 16, 2010 Projected changes in hydropower generation
    • 7. Climate impact: Major increases in climate variability expected, with increased frequency of droughts and floods. Heaviest impact will be borne by the poorest, who are already underinvested in adaptation to current climate Health and human settlements Major demand increases… ▪ ▪ ▪ ▪ …with the potential to derail growth Changing settlement patterns, with a 2004-15 to see 40% increase in urban population without basic WSS access 80% of all people lacking WSS access in rural areas Half of urban water supplies are from groundwater with very little knowledge of hydrology Rapid urbanization Lack of sanitation access can cost countries up to 6% of GDP Food and agriculture ▪ ▪ ▪ 70% increase in food production will be required in 40 years (with it already 70% of withdrawals) Half the world’s food is grown on groundwater, much of which is unsustainable Use of crops for biofuels affecting food prices Unreliable water supply and farm-to-market access can deprive farmers of 2/3rd of their potential income Energy and industry ▪ ▪ ▪ Global energy consumption expected to increase by ~50% from 2007-2035 Water-intensive thermal and hydro account for 90% of current power generation Power outages caused by lack of cooling water already seen in many countries Energy security is threat-ened by water challenges; 3% of Kenya’s GDP from lost hydro production over 1998 - 2000 Competition for water allocation Impaired water quality affecting all uses Environment ▪ ▪ Ecosystem damage largely coincides with high water stress (e.g., Indo-Gangetic Plain, North China Plain) and fertilizer runoff (dead zones) Over-consumption of water, water pollution and inadequate pricing of the resource results in loss of massive ecosystem benefits Losses of biodiversity and ecosystem services with increasingly visible economic cost (e.g., China losing 5% GDP to pollution)
    • 8. Water – GHG tradeoff Dry cooling vs cost of electricity Dry cooling systems require no water for their operation, but decrease efficiency of the plant: Some policies to reduce GHG emissions can increase water requirements by the energy sector if not designed properly - biofuels, carbon capture… - increasing capital and operational costs - increasing GHG emissions per kwh Water for energy vs. water for agriculture The value of water for energy might be higher regarding economic outputs, but agriculture is often required for - national security reasons (food) - social reasons (people employed in the agricultural sector) Energy vs. agriculture crops What makes more economic, social and environmental sense? Hydropower Assessing tradeoffs, environmental and social impacts and exploring the use of multipurpose dams is necessary for sustainable development
    • 9. Political-level challenges impede effective planning:  The two sectors have been regulated separately  Current energy planning is often made without considering changes in water availability and quality, competing uses or the impacts of climate change. Challenges in securing enough water for energy and energy for water will increase with population and economic growth and climate change Stronger integrated planning will be necessary to evaluate tradeoffs, find synergies, and ensure sustainable development Hot Spots – where “low flows” and “water temperature increase” meet SOURCE: VULNERABILITY OF US AND EUROPEAN ELECTRICITY SUPPLY TO CLIMATE CHANGE. VAN VLIET ET AL, 2012
    • 10. • Planning processes for water allocation don’t always consider expected future demand for power • Planning processes for power don’t consider water availability • When constructing individual plants and schemes, typically consider today’s water rather than tomorrow’s water • Decisions being made today are locking rivers, cities, ecosystems, power systems into particular water consumption patterns
    • 11. Thermal pollution from once through cooling has adverse effects on ecosystem Photograph: Paul Owen/Guardian Hoover Dam, where record-low water levels are threatening cheap electricity Fracking requires large amount of water and also generates waste water that needs to be treated Cooling towers – requires water and may affect water quality (return and abstraction)
    • 12. ▪ Flexible modeling framework to facilitate tailored analyses over different geographical regions and challenges ▪ Build on existing country knowledge and modeling tools ▪ Robust treatment of risk and uncertainty ▪ Incorporate the long-term effects of climate change ▪ Economic tools to assess the tradeoffs between competing sectors and to provide policy recommendations to mitigate potential effects ▪ Case studies or pilots to illustrate different types of situations in that are most relevant for client countries
    • 13. Water scarce country with very stressed basins in terms of water allocation Coal Thermal Power plants account for almost 90% of the power capacity installed Competition for water across sectors will increase – Power plants have priority, which could negatively affect other sectors such as agriculture Fracking for Shale Gas is being explored, which will put additional pressure on water resources Need for Water and Energy Integrated planning to achieve a sustainable future and avoid water scarcity problems in the next years Sources - Top: CSIR, Bottom: ESKOM and Department of Energy of South Africa
    • 14. South Africa TIMES (SATIM):  Partial equilibrium linear optimization model capable of representing the whole energy system, including its economic costs and its emissions  Five demand sectors – industry, agriculture, residential commercial and transport - and two supply sectors - electricity and liquid fuels  The model is capable of solving for a variety of constraints PHASE 1: 1. Develop marginal water supply cost schedules 2. Develop the “water smart” SATIM 3. Energy-Water Model Simulations : run different scenarios to assess how energy sector development strategies change relative to the reference scenario depending if water is constraint, if water has a price, etc. Look at expansion of coal, fracking, imposed GHG limits, etc.
    • 15. SOURCE: ERC - UCT
    • 16. …but as of now there is no constraint on it, the model assumes that it is an infinite resource and with no price or regional constraint SOURCE: ERC - UCT
    • 17. E-SAGE: Energy--‐extended South African General Equilibrium model PHASE 2:  Run the CGE model to establish reference scenario demand projections for energy.  Run SATIM with these given demand projections to produce a new Reference case, and then run a new EW-Nexus case that allows for reduced energy demands from economy-wide adjustments when energy prices rise to reflect water scarcity.  Pass SATIM findings on increased energy production costs back into the CGE model in order to evaluate the economy-wide impact of accounting for water scarcity in energy sector development.  Compare these reference and EW-Nexus scenarios.  Compare the incremental water supply costs for energy expansion across the different water management areas in the model to other figures for water shadow prices by water management area. Using such comparisons, highlight where increased demands on water sources from energy sector expansion may particularly pose challenges to efficient water management across sectors and water management areas.
    • 18. SOURCE: THURLOW, UNU-­­WIDER
    • 19. messages ECONOMIC – Future water scarcity can threaten the long-term viability of projects and hinder development. Water constraints may compromise existing operations and proposed projects, and increase operational costs DEVELOPMENT/SOCIAL – Water and energy are indispensable to sustainable growth. Demand for water and energy is increasing. Several regions are already experiencing resource shortages, with profound social impacts. Climate change and economic growth can exacerbate the problem. ENVIRONMENTAL – Poor management of energy and water has farreaching, adverse environmental impacts. Given their interdependence energy resources should be planned with water resources in mind and vice versa. Adequate regulations will be crucial to ensure a sustainable growth. POLITICAL – If political leaders do not act now, there could be serious economic, social and environmental consequences. Quantifying tradeoffs between resources and planning across sectors is critical to avoid social instability and ensure sustainable development. TECHNICAL – Solutions include 1) technological innovation, development and adoption, 2) improved operations to reduce water use and impacts in water quality, and 3) integrated planning to assess constraints and synergies, minimize costs, maximize welfare.
    • 20. Thank You Diego J. Rodriguez, Senior Economist, World Bank drodriguez1@worldbank.org http://www.worldbank.org/thirstyenergy

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