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Ep water paper_121011_final

  1. 1. Energy-H20 Calculating Water as Energy Points Draft White Paper by Seth Sheldon, Ph.D. Ory Zik, Ph.D. © Zik Energy Points Inc.
  2. 2. © Energy Points 2012 DRAFT Last update: 10/11/12 2 Forward Water has global significance. However, when it comes to estimating an organization’s water footprint in the context of other activities such as energy consumption, or quantifying the environmental and economic risks of water use, we’re all muddling through a fog. Energy-H2O is a whitepaper aimed at sharing ideas, explaining the energy points approach to water, and showing how businesses and individuals can use it to understand their overall environmental impact with numbers that “add up”—not with adjectives. We designed this system to interpret and express information clearly and to find the right balance between accuracy and simplicity. Both are required to make the right decisions. By sharing our approach, we hope to collaborate with business leaders, scientists, consultants and engineers, environmentalists, and public officials worldwide that are interested in a comprehensive, yet practical system for quantifying resource consumption and environmental sustainability with simple, intuitive, and accurate numbers—for the benefit of all. We welcome your comments. With best regards, Ory Zik, Founder & CEO Zik Energy Points, Inc.
  3. 3. © Energy Points 2012 DRAFT Last update: 10/11/12 3 Contents Section 1. Introduction .................................................................................................................. 4 Section 2. Existing Approaches to Measuring Water Use ............................................................. 7 Section 3. A Better Approach: Measuring Sustainable Water Use ............................................. 11 Section 4. Measuring the Energy Intensity of a Water Supply ................................................... 16 Section 5. Measuring the Energy Intensity of a Durable Water Supply ...................................... 21 Section 6. Calculating Water EPG and Energy Points, and Applying Those Measures in the Real World ............................................................... 24 Section 7. Conclusion .................................................................................................................. 32 Citations ....................................................................................................................................... 34 Appendix A. Key Definitions ........................................................................................................ 38 Appendix B. Key Assumptions ..................................................................................................... 39 Appendix C. How Business Leaders Can Use the Energy Gap to Weigh Water-Related Risk ..................................................................................................... 40 Appendix D. Water Scarcity: An Energy Problem ........................................................Attachment Acknowledgments Energy-H2O is a living document that continues to improve with time, thanks to all those who have made and continue to make technical, editorial and stylistic contributions to this work. We thank the Energy Points team here in Cambridge, MA, as well as our Sustainability Council, including Fred Abernathy (Harvard University, Center for the Environment), Sarah Slaughter (Massachusetts Institute of Technology), Ralph Earle (Alliance for Environmental Innovation), Sanjay Sarma (Massachusetts Institute of Technology), Nalin Kulatilaka (Boston University), Gilbert Hedstrom (Hedstrom Associates), Gregory Rueger (Pacific Gas & Electric), John Spengler and Ramon Sanchez (Harvard University, Sustainability and Environmental Management Program), and Mitch Tyson (New England Clean Energy Council). Our sincerest gratitude also goes to Tim Diehl (U.S. Geological Survey), Pete Caldwell (U.S. Forest Service), Mark McElroy (Center for Sustainable Organizations), Peter Haff (Duke University), and Raanan Miller (Massachusetts Institute of Technology) whose thoughtful review and commentary has greatly improved this document. For graphical support, we thank Tyler Kemp-Benedict. For her substantial editorial assistance, we thank Sandra Hackman. Finally, we thank those scientists and practitioners whose ongoing efforts in the fields of water, energy, and the environment make this work possible.
  4. 4. © Energy Points 2012 DRAFT Last update: 10/11/12 4 1. Introduction Water is essential to agriculture, electricity production, transportation, and sanitation, among many other uses. Any effort to improve environmental sustainability must consider this vital resource. However, on the whole, our society is not using water in a way that ensures a long-term supply. Nor is water priced in a way that relates to its sustainable use, and there are no simple ways of quantifying the environmental impact of water use. There are nearly as many definitions of “sustainable water use” as there are ways of using water. We begin by discussing commercial water users who rely upon municipal systems. Faced with a goal of reducing company-wide water use by 20 percent, for example, a chief sustainability officer (CSO) and chief financial officer (CFO) will come to the simplest solution: aggressively pursue more efficient water use in the location with the most expensive water. That approach will improve the payback period for the “sustainability project” and will allow the company to tout its success in its next environmental performance report. However, did the CSO and CFO succeed in minimizing risk and making the best long-term financial and environmental decision? Not necessarily. The reason is that the price of water is based on local politics and the costs of the infrastructure required for pumping and treating it, rather than its actual availability, scarcity or other externalities. The result is that water pricing systems often give skewed signals to consumers. Figure 1. Water cost is not correlated to water supply and demand. Saudi Arabia and Denmark are outstanding examples [63]. Photo credits: (above) Andy and Susanne Carvin; (left) QuiteLucid on Flickr
  5. 5. © Energy Points 2012 DRAFT Last update: 10/11/12 5 Globally the situation is striking. One would expect water in dry places to cost more than in wet places. Reality is different. Water in Denmark is three orders of magnitude more expensive than in Saudi Arabia (Figure 1). In the US, consider that municipal water costs more than four times as much in Boston, where water is abundant, than in Albuquerque, where it is scarce. Saving a thousand gallons in Boston will enable a user to save more money, but the environmental benefit may be negligible [1]. Figure 2. The Consumer Price Index for water compared to other utility services [62]. Where they are doing so, businesses and other organizations are right to pay attention to water. While there is no local correlation between water availability and prices, on average, water prices are the fastest growing among other utility services. The trend signals water’s increasing importance, and is one reason that executives are beginning to take notice. In addition to price, other measures of water sustainability are also incomplete, or comprehensive and difficult to apply (see more on this in the next section). Today’s metrics for measuring water sustainability also make it difficult to weigh the importance of using water more efficiently against efforts to conserve other natural resources such as energy and raw materials. To address this problem, we have developed a system that accounts for the environmental impact of all resources, including water. It is both comprehensive and practical. We do so by expressing the water used by a facility in energy points (EP).1 We define one energy point as the chemical energy in the amount of crude oil needed to make one gallon of gasoline (embodied energy as well as refining and other losses2 ), which turns out to be about 1 EnergyPoints™ is a trademark of Zik Energy Points Inc. The energy points methodology and system are patent pending, and a fuller description of the rationale and methodology behind the energy points system is available in Energy Points: Environmental Math, not Myth [65]. 2 We estimate losses by taken an average across different oil refineries. Water Postage CPI Electricity Natural gas
  6. 6. © Energy Points 2012 DRAFT Last update: 10/11/12 6 42 kilowatt-hours (kWh) of thermal energy denoted as kWhth.3 Primary energy, such as crude oil, is the energy associated with raw fuels before they have been converted to other forms of energy. We chose that as our standard unit in order to popularize quantitative intuition for energy, based on society’s existing familiarity with volumes of gasoline. An energy point measures total energy use associated with any kind of resource consumption. It is not a relative index, but rather expresses a physical quantity of energy,4 so while visualizing an energy point is easy (roughly a gallon of gasoline), the computations that occur at the backend are precise and consistent. Our basic premise is that energy is a good proxy for resource use. Since anything could be created or done in an environmentally benign way given enough energy, the amount of primary energy needed to create or implement a product or process is an indication of its total environmental impact. So, a question arises: What is enough? Water could be desalinated, materials could be recycled indefinitely, and so forth. However, accessible primary energy is not infinite. That means that supplying water—or any natural resource—without depleting it is, at heart, an energy challenge. There is always a long term solution (e.g. desalination, recycling), but the energy costs can be quite high. Like any proxy, our calculation of primary energy use for water requires additional calibration in order to make the conversion of “water” to “energy” as accurate and meaningful as possible. By way of analogy, it is similar to the familiar way in which we rate weather. We don’t feel temperature; we feel heat loss. The temperature itself is corrected to account for additional factors such as humidity or wind chill. The correction allows us to make the most informed decision possible, based on our goal of comfort. The energy points system as applied to water is based on several concepts. First, many cities do not use water sustainably, due to long term depletion and/or contamination of existing supplies that leads to reduced availability for people and ecosystems. However, we determine a mix of water sources for any given location that does not deplete surface and groundwater supplies5 given present demand, effectively internalizing many of the human health and environmental cost. That mix could include recycled municipal wastewater and even desalinated seawater, if local surface water and groundwater supplies are scarce. We refer to this as the durable water mix. Second, cities must use energy to transport and treat water, with the amount of energy depending on the type, quality, and location of the water source. The same is true for industrial and agricultural water users who do not rely on municipal systems. For instance, delivering drinking water from clean, local sources such as lakes requires less energy than delivering drinking water from a distant seawater desalination plant. Treating wastewater also requires energy to ensure that it will not degrade the environment. To account for these factors, we measure the energy intensity of the durable water mix. The energy intensity of a city’s durable water mix is typically higher than that of its existing water supply mix, because it takes into account the scarcity and contamination of water in that location. We call this the scarcity-adjusted energy intensity. This measure tells us how much energy per unit of water is required to deliver water to that location without putting surface and groundwater supplies at risk, if demand remains constant. 3 We distinguish thermal (denoted by “th”) from electrical energy (denoted by “e”) to make sure that our accounting captures the quality of the different forms of energy 4 Technically, an energy point is equivalent 151 megajoules, having dimensions of kg·m 2 ·s -2 . 5 We use “surface water and groundwater supplies” often throughout, rather than “fresh water supplies.” We do this because the paper also uses “fresh water” to describe the water that is actually supplied to users. We also sometimes use “fresh water” to distinguish surface and groundwater from brackish groundwater. Most of the time, however, the distinction is implied and should be clear enough.
  7. 7. © Energy Points 2012 DRAFT Last update: 10/11/12 7 We also consider the Electricity EPG (“energy” per gallon)6 : the amount of primary energy required to deliver the electricity to that location. The Electricity EPG is measured in kWhe/EP. By combining scarcity-adjusted energy intensity with the Electricity EPG, we arrive at a ratio that relates sustainable water use to primary energy consumption. That ratio, the Water EPG, is an efficiency measure with units of gallons of water per EP, just like a vehicle’s MPG. It is the keystone of the energy points water sustainability model, because it allows us to express a facility’s or an organization’s water use in units of energy points. And that, in turn, allows managers to compare the amount of energy devoted to water with the amount used for other resources, such as electricity and fuel for heat. When businesses and other organizations7 use the energy points system to measure their use of water as well as other resources, they can choose how best to reduce their primary energy consumption, and thus their overall environmental impact. The energy points system also allows users to visualize their consumption of resources in a way that allows them to balance, optimize and operationalize environmental and financial decisions. The following sections explain the energy points water sustainability model in greater detail: Section 2 provides an overview of today’s most common approaches to evaluating and managing water use, highlighting their strengths and limitations. Section 3 explains how we determine the durable water mix for each location. Section 4 examines the various ways that we use energy to transport and purify water, and how the energy intensity of water use in a given location depends on the sources of that water. Section 5 shows how we calculate scarcity-adjusted energy intensity—and in so doing reframe water scarcity as an energy problem. Section 6 explores the concepts of Electricity EPG and Water EPG, and shows how to use them to convert a facility’s water use into energy points. This section also shows how to apply the energy points approach to scales ranging from homes, to individual facilities owned by companies or other organizations, to entire water management districts run by public agencies. A concluding section explores the implications of our approach for ensuring intelligent water consumption and numbers-based environmental sustainability. 2. Existing Approaches to Measuring Water Use Methods of assessing the sustainability of water use differ greatly. Their accuracy, completeness, and usability are also widely varied. Water prices are typically determined by regulated monopolies (i.e. utilities) and not subject to free market dynamics, which means that they do obey the laws of supply and demand. Given this 6 “EPG” is more precisely defined as resource consumption per unit of primary energy, where resource consumption is expressed in units that are specific to the resource (kgal for water, tons for waste, kWhe for electricity) and primary energy is expressed in units of energy points. The phrase “energy” in the acronym EPG is shown here in quotation marks to emphasize the fact that it is being used as a catch-all that generalizes the concept of primary energy efficiency for any resource. 7 The power and agricultural sectors are major water users who have a substantial impact on water systems worldwide, and which can benefit from location-specific water accounting.
  8. 8. © Energy Points 2012 DRAFT Last update: 10/11/12 8 assumption, prices should be highest where and when water is scarcest. However, the per-gallon price of water often fails to reflect depletion and pollution of local resources such as surface water and groundwater. This is especially troubling because of the strength of price signals in driving action on the part of consumers.8 Local water managers may raise the price of water in a drought-related emergency in order to drive down demand, but in general water prices are determined more by local political constraints and infrastructure investments than efficient long term supply. Consequently, mismatches of water price and water scarcity abound. For example, in Albuquerque, 100,000 gallons of billable water cost only $160, but in Boston that amount of water costs $581. The reason is that Boston has invested $6.8 billion in water collection, purification, delivery and wastewater treatment since 1985 [49]. 8 2030 Water Resources Group’s “Charting Our Water Future: Economic frameworks to inform decision-making” [18] explains the importance of using accurate price signals for water to drive sustainable decisions. It also offers water availability cost curves that highlight the way in which water is underpriced by reveals how the price of supplying water increases as hard-to- reach and degraded sources are tapped. Figure 3. Average annual precipitation versus the price of 100,000 gallons of fresh water in 15 cities
  9. 9. © Energy Points 2012 DRAFT Last update: 10/11/12 9 To pay for that investment, the price of water has risen steadily over the last two decades, which in turn has led to growing efforts to conserve water and rising water levels in the area’s reservoirs. Albuquerque sits at the other end of the spectrum. Despite being in an arid part of the country, it has not made similar investments, opting instead to pump “excess” surface water into its aquifers when it is available, and to draw down groundwater during droughts [50]. That approach is cheaper for ratepayers and the city in the short term. However, it is highly risky for both in the long run, given the lack of infrastructure to ensure a reliable supply to meet human and environmental needs. When the city is forced to obtain lower-quality water from more distant locations, especially given population growth and climate change, prices are likely to rise steeply. Consider these other mismatches: The same 100,000 gallons of water cost only $226 in Denver but $390 in Minneapolis, $251 in El Paso but $501 in Seattle, and $348 in Phoenix versus $409 in San Francisco (Figure 3) [1]. Business owners will find it more financially prudent to operate a water-intensive operation in the first of these pairs rather than the second. However, the price of water is an insufficient indicator of the sustainability of a location’s water supply and the long-term risk of shortages and much higher prices. Priced-based tools are important because they allow individuals as well as managers of companies and other organizations to prioritize their efforts based on values they know and understand, but they do not necessarily lead to significant environmental benefits. For water, market signals are crossed. In Boston, the infrastructure is new and water consumption has a relatively small environmental burden. However, the high prices there continue to reduce consumption. As a result, Boston has six years’ worth (and rising) of stored water. Albuquerque, on the other hand, has old and decentralized water infrastructure, worsening water deficits, and low water prices (i.e., a combination of factors that lead to a worsening water situation). Other methods for measuring the sustainability of water use focus on encouraging businesses and other organizations to “set a good example.” These approaches include voluntary efficiency standards, which companies set for themselves, and labels, which are added to products or processes that meet certain environmental goals. Approach Examples Price of water Hoffman [51], Segerfeldt [52], Water Resource Group [18] Voluntary efficiency standards, labeling, advocacy, and information dissemination LEED [2], WaterSense [3], WELS [4], WaterSMART [7], Alliance for Water Efficiency [9] Benchmarking and consensus- or technology-based industry standards BIER [5], WaterScan [6], ASCE [10], ASME [11] Water stress indices, risk analysis Water Risk Atlas [14], Water Stress Index [15], Water Supply Stress Index [16], Water Supply Sustainability Index [17], Ceres Aqua Gauge [8] Water footprinting, life-cycle assessment Quantis [12], Water Footprint Network [13] Energy intensity Gleick and Cooley [20], Wilkinson [21], Lamberton et al. [22] Context-based allocation Corporate Water Gauge [74, 75] Table 1. Existing approaches to assessing the sustainability of water use.
  10. 10. © Energy Points 2012 DRAFT Last update: 10/11/12 10 The legitimacy, relevance, and efficacy of these approaches depend primarily on the rigor and integrity of the methodology of defining them. Without a quantitative foundation, the signals may be extremely biased in the interpretation of what it means to be “eco-friendly”—to the point where some product labels and informational packets are at best meaningless and at worst very misleading. “Certified organic” labels are a good example of vague and inconsistent standards that lead customers to make decisions based on appearance rather than substance. The type, size, and overall environmental impact of organic farms can vary to such an extent that such labels can become nothing more than marketing tools—far removed from the original purpose (to provide chemical-free food) and common perceptions of “organic” (as something that is good for our health and the environment). Companies may also measure the efficiency of their water use by relying on benchmarking, which entails learning from the best practices of their peers, or measuring their performance compared with a baseline. Similarly, many companies rely on consensus- or technology-based standards to assess the efficiency of their water use. These typically reflect intensive discussions among industry experts who agree on what constitutes “good” performance, or which technologies use water most efficiently. Benchmarking and consensus- or technology-based standards are designed to make sense to the people who are using them, including managers of individual facilities or regional managers. However, they may suffer from the same biases and lack of quantitative context (i.e., subjectivity) of voluntary efficiency standards. Water footprinting and life-cycle analysis measure the amount of water entailed in using a process or creating a product. Many organizations are finding such simple accounting a helpful zero-order approach to reining in water profligacy. However, this approach can suffer from a lack of context, as the water footprint of a process or product lack perspective in terms of its importance relative to other resources such as fuel, electricity and raw materials, and whether the water came from a wet or arid region. Over the past decade, water stress indexes and risk analysis have become popular approaches to evaluating the sustainability of water use. Indexes attempt to capture as many indicators of stress and risk related to water use in a given location as possible, including environmental (withdrawals of surface water, stream flow, air temperature), social (access to water, regulatory constraints), and economic (the price of water). These indexes may focus on the company, regional, national, or global level. However, indexes usually rely on descriptive terms to express the sustainability of water use, and managers who find their meaning opaque can dismiss even the most rigorous ones. Measuring the energy intensity of a water supply is also gaining popularity as a measure of sustainability. Areas with growing population and rising water demand, such as southern California, find they must invest more and more energy to deliver fresh water, especially as water becomes scarcer. The energy intensity of a city’s water supply therefore hints at the scarcity of fresh water in that location, and the lengths to which it will go to get fresh water. However, this is true only in cities that have begun to address those challenges, such as San Diego. As noted, many regions have not yet begun to invest in their water infrastructure to avoid a supply shortfall. To provide a complete indication of the sustainability of water use, scarcity must factor into total energy intensity. A more recent method of demonstrating the sustainability of water use focuses on geographic context, recognizing that certain spaces have natural supply (context based allocation). The Corporate Water Gauge is a tool developed expressly to allow facility managers to see how their water usage compares to a fair share based on their area’s locally available renewable supplies as well as competing demands, such as ecosystem needs and the needs of other end users in their vicinity [74, 75].
  11. 11. © Energy Points 2012 DRAFT Last update: 10/11/12 11 Our approach is based on integrating these existing schools of thought into one number. To do that, we have developed the scarcity adjusted energy intensity rating which we then calibrate to primary energy. The technical idea is to calculate the actual energy intensity of water (i.e., the total energy needed to supply water to end users) and to adjust it to account for the additional energy needed to create and maintain a durable supply. Guided by existing water indexes that capture information about place and time, we use this new information about location-specific primary energy consumption per unit of water withdrawal to compare water to other resources. 3. A Better Approach: Measuring Sustainable Water Use Each city or region needs to provide enough fresh water to meet human needs. Sustainability means that each city or region also needs to withdraw only as much water from its watershed as it can without harming the environment, degrading the quality of the water, or jeopardizing the water supply for future populations. A location’s sustainable yield reflects both of these factors. As society’s water needs grow, that city or region must increase the efficiency with which it uses water, turn to sources outside its watershed, or both. Our model is based on the principle that every location has a durable water mix that solves these problems – although it may be more energy intensive. Figure 4. Northeast Israel can safely withdraw only a limited amount of water from the Kinneret. When the lake is very low, the region must rely on desalinated seawater [47]. Consider a hypothetical scenario in which a city has only two options for obtaining fresh water. The first is withdrawing local surface water. The second, much costlier option is relying on desalinated seawater. As the sustainable yield of local surface water falls—that is, the water supply moves from abundance to scarcity—the city must meet a greater percentage of demand with desalinated seawater. The sustainable yield from local surface water supplies may eventually be zero, and the city may have to rely
  12. 12. © Energy Points 2012 DRAFT Last update: 10/11/12 12 completely on desalinated seawater (Figure 5). Although this scenario may seem imaginary, it closely resembles the situation in northeast Israel9 , which relies on the Kinneret (Sea of Galilee), a major freshwater lake, to supply much of its water.10 Because the Kinneret is such a culturally and economically important lake in Israel, its water levels are carefully monitored [47]. Officials stop pumping water from the lake when it reaches a minimum depth in order to protect ecosystems and prevent saltwater intrusion (Figure 4). The region must then turn to its only alternative: desalinated seawater. It is important to note that in this example depth serves as a proxy for available supply (million gallons per day, MGD). In a later example, the available supply (MGD) is used directly at the geographic level of the local watershed. A city or region that uses water unsustainably assumes that local supplies are more than enough to meet demand. In northeast Israel, that would mean drawing 100 percent of the region’s water supply from the Kinneret, even if its level dropped to dangerous lows—a situation that is unacceptable for environmental and human health. Figure 5. (left) Fraction of water demand met by two different sources as local supplies become scarce, illustrating the features of a durable water mix (DWM) for a city with two water supply options. When local supplies of surface water are abundant, a city can rely on them to meet all demand (1: total abundance). When local supplies are very scarce, the city must rely completely on desalinated seawater (5: extreme scarcity). (right) When a city or region cannot meet demand for water without depleting natural surface supplies it must tap more energy- intensive sources such as desalinated seawater. 9 The Kinneret area is a good example for water awareness, although the Dead Sea region may not be [72]. The water challenges in Israel continue to spur advancements in water treatment and recycling technologies [59]. 10 We ignore groundwater in Israel for the sake of simplicity. Sustainability means that each city or region should withdraw only as much water from its watershed as it can without harming the environment, degrading the quality of the water, or jeopardizing the water supply for future populations.
  13. 13. © Energy Points 2012 DRAFT Last update: 10/11/12 13 Can a city avoid water shortfalls without drastically changing its mix of sources? Precisely where and when should officials supplement the local water supply by tapping more costly—and energy- intensive—sources, with imported desalinated seawater being the most extreme example (Figure 5)? Good water management and the price of water must be sensitive to such realities. Hydrological models reveal that many cities in the United States and elsewhere risk overusing surface water and groundwater supplies. That is, they have an unsustainable water mix. In the following sections, we refer to a case study city that adds complexity to the Kinneret example (e.g. more water sources and a different geography are considered). We use geographic and population information from Phoenix, Arizona, to provide realistic values. Although it is in the middle of a desert and upstream from many other water users, our Phoenix’s per capita water use is roughly two times the national average of 100 gallons per person per day [38]. Like other U.S. cities, it obtains the majority of its water from local supplies: 43 percent from local fresh groundwater, and 21 percent from local fresh surface water. The city also imports 32 percent of its water from a distant river via a major canal. Phoenix meets 4 percent of its fresh water needs by recycling municipal wastewater (Figure 6).11 Phoenix does not rely on brackish groundwater and desalinated seawater to supply fresh water, but they remain potential sources. The availability of brackish groundwater varies from location to location. Even where it is available, few cities rely on it for human use, because it requires intensive treatment, in the form of desalination. Figure 6. (left) The mix of sources now used to provide 210 million gallons of fresh water a day to Phoenix’s “active management area” [41]. (right) A durable water mix for Phoenix, given the current demand of 210 million gallons of fresh water per day. Note that it parallels the previous example in which only two water supply options were available (six are available for Phoenix). Still, desalinating brackish groundwater often requires less energy than desalinating and moving ocean water, especially for locations that are far from the sea, so the former would be less costly. However, as 11 The Palo Verde nuclear power station is a good example of how treated municipal wastewater can replace certain water needs. 26 billion gallons per year were allotted to the facility as part of an historic 2010 agreement that has made Palo Verde the only nuclear power plant in the world to use recycled municipal wastewater.
  14. 14. © Energy Points 2012 DRAFT Last update: 10/11/12 14 with fresh groundwater supplies, the rate at which brackish groundwater can be withdrawn is limited, partly because extensive withdrawals may harm supplies of fresh groundwater. The question is whether the present mix of sources used to supply fresh water to the city is sustainable. Does that mix satisfy present demand without degrading the environment, and therefore diminishing surface water and groundwater supplies over time? Are human health and environmental externalities avoided? In other words, is the current mix the city’s durable water mix? To answer these questions, we should look more closely at the interplay between water demand and supply. Observations and models from the U.S. Geological Survey (USGS), the U.S. Forest Service (USFS), the U.S. Department of Agriculture (USDA), the U.S. Department of Energy (DOE), the Census Bureau, and various others provide detailed information on demand for water for each watershed in the United States (Figure 9).12 Observations and models of the flow of surface water from the USGS, the USFS, NASA’s GRACE satellite program, and the U.S. Drought Mitigation Center provide information on trends in local supplies of fresh water (Figure 8). We use this spatial information to estimate water demand and supply in each local (i.e., HUC-8)13 watershed. The United Nations Environment Programme (UNEP) defines areas which use 20-40 percent of available water as undergoing medium-high water stress [68]. In other words, regions can withdraw up to 40 percent of the surface water in their watershed (i.e., ratio of demand to supply is 0.4 or lower) without widespread negative impacts on ecosystems and human uses. Here it is important to make a distinction between water withdrawals and water consumption. 12 Demand includes withdrawals, such as for the production of electricity. Users return some of this water to the source, although the quality may be degraded. Demand also includes consumption, in which users remove water from surface water or groundwater and do not return any of it. 13 “HUC-8” refers to the 8-digit Hydrologic Unit Code for basins. It was coined by the USGS as part of their standardized watershed classification system. It can be thought of as the “address” of a local watershed [61]. Figure 7. Global water withdrawals by type. A durable water supply plan considers both consumption and total withdrawals. The difference between total withdrawals and consumption is return flow [60].
  15. 15. © Energy Points 2012 DRAFT Last update: 10/11/12 15 Withdrawals include all water that is taken from a water source, used, and either returned to the source or removed from the basin. Consumption is the portion of withdrawals that is not returned to the basin. Return flow is the water withdrawn by a user and then reincorporated into the water supply for downstream watersheds and users, often with some quality impairment (e.g. chemicals, increased temperature) [64].14 We take the average of UNEP’s medium-high water stress ratios (30 percent) to assign available supply values per watershed in units of MGD [46].15 The resulting model sheds light on which areas of the country are using natural fresh water supplies unsustainably. For example, Phoenix and outlying areas are depleting groundwater, and its local rivers are unlikely to sustain their natural flow during extreme drought given present demand. The distant sources from which it imports a significant share of its water are also unlikely to meet the city’s demands during extreme drought conditions.16 What we identify as extreme drought is becoming increasingly common: the baseline is shifting (See Appendix D for a technical description of the spatial demand and supply model). Like many areas of the United States, a city in this state must reduce its reliance on surface water, and reduce its groundwater withdrawals to maintain the depth and quality of those resources. In fact, Phoenix would have to rely on non-traditional sources such as recycled municipal wastewater, deep brackish groundwater, and even desalinated seawater to supply more than half of today’s demand of 210 million gallons of fresh water per day (Figure 6). This would create a durable water mix: the sources it must tap to meet present demand without degrading the environment or diminishing surface water and groundwater supplies over time.17 The need to rely on costly and energy-intensive non-traditional sources to meet more than half the demand for fresh water in Phoenix underscores the seriousness of its water problem. The next section shows how energy points account for the energy intensity of a durable water supply in a given location, to shed light on how businesses and other organizations can determine the most cost-effective investments with the biggest environmental payoff. 14 Although total withdrawals are the focus of the supporting environmental and human health risk models, consumptive use is also accounted for by adding return flow as a supply factor for downstream watersheds. 15 In the earlier example, depth was used as a proxy for available supply. In this example, the supply is estimated directly. 16 This is shown as a reduction of long distance imports from 32 percent of the supply (primarily from the Colorado River) to only 7 percent of the supply. In light of existing data deficiencies on interbasin water transfers in the U.S., the reduction in long distance water imports is assumed to be proportional to the reduction in use of local surface water supplies. 17 The DWM for a specific location depends on water availability and demand figures at the level of city-scale watersheds. In fact, there may be multiple solutions to the idea of the “durable water mix.” Our analysis suggests that the DWM having the least average energy intensity is ideal, because it minimizes the amount of energy needed to supply fresh water in a way that allows for the ongoing provision of water supplies through time, based on present levels of demand.
  16. 16. © Energy Points 2012 DRAFT Last update: 10/11/12 16 4. Measuring the Energy Intensity of a Water Supply Energy is used to transport water from its source to a treatment facility, to treat the water to drinking and environmental standards, to transport the fresh water to users, to collect and transport wastewater, to treat the wastewater, and to transport the treated wastewater to a discharge location (Figure 10). The choice of water supply options and water-efficiency standards affects the amount of energy required to supply an area’s water. More specifically, supplying fresh water entails multiple steps, each of which requires electricity. The energy intensity of these steps varies from location to location.18 18 The energy intensity of the steps also varies by type of use. For instance, some farms use gravity-fed irrigation and local fresh water that requires no treatment to serve their needs. Irrigators also contribute a different waste load to streams than municipal wastewater systems, and therefore would require a different level of treatment in order for run-off to be environmentally benign. Thermoelectric power plants are similar in that they do not need water of drinkable quality to run Figure 8. Factors that affect local supplies of fresh water, including groundwater percentiles [31], stream flow [32], precipitation [33], and drought [34]. We use this information to estimate sustainable fresh water supplies for each U.S. watershed [16]. Groundwater depth Streamflow Precipitation Drought Figure 9. Factors that determine local demand for fresh water, including population changes [35], land use, including agriculture [36], electricity production [37], and withdrawals in each watershed. Population trends Aggregated effects Agriculture and Land cover Power plants
  17. 17. © Energy Points 2012 DRAFT Last update: 10/11/12 17 In situ pumping Pumping water to the surface. The energy intensity of this step depends mainly on the vertical distance that the water must be lifted through a pipe to reach the surface. Conveyance to the purification facility Pumping surface water and groundwater to the utility that treats and distributes it. The energy intensity of this step depends mainly on lift distance and frictional losses, which occur as water moves through a pipe. Purification Treating the water to a level fit for human consumption. The energy intensity of this step depends on the quality of the source water and the technology used to treat it. Conveyance to the storage tower Transporting the water from the purification facility to a storage tower. Distribution (main) Using pressure and gravity to disperse treated water to customers. The energy intensity of this step depends on the topography of the area and the size of its distribution system. and their effluents may require different types of treatment. Municipal water is used as the central example in this text because it demonstrates the overall methodology, and because of its relevance to commercial properties. Figure 10. Energy is consumed at multiple stages during the water supply process. Energy is required for pumping it from multiple sources, treating it, and conveying it to users in different locations. 1 - In situ pumping 2 - Conveyance to purification 3 - Purification 4 - Conveyance to storage 5 - Distribution (main) 6 - Distribution (booster) 7 - Wastewater collection 8 - Wastewater treatment
  18. 18. © Energy Points 2012 DRAFT Last update: 10/11/12 18 Distribution (booster) Adding extra pressure to provide water to customers at a higher elevation than the water storage area or far from the storage area. Wastewater collection Conveying wastewater from a sewage system to a wastewater treatment facility. Wastewater treatment Treating wastewater from the system to a level fit for discharge into sensitive aquatic ecosystems. The energy intensity of this step depends mainly on the treatment technology, such as reverse osmosis. A municipal water supply system also uses electricity indirectly. The energy intensity of these steps usually does not vary with location: Reuse and recycling Internal recirculation or repurposing of used water, also called grey water. This step—not to be confused with recycling municipal wastewater, which requires a significant amount of energy—reduces the overall energy intensity of the water supply. Total system leakage Water lost to leaks or evaporation. Leaky systems are more energy-intensive to maintain and operate. Operations and maintenance Processes required to keep the water infrastructure working. The amount of energy used for this step is often small per unit of water delivered. Production of chemicals and membranes The energy used to manufacture these items, which are used to convey and treat drinking water and wastewater. The chemicals can include chlorine and ozone. Waste disposal Destroying or disposing of waste materials from the process of cleaning water (e.g. saltwater, wastewater), such as brine and membranes from reverse osmosis. The amount of energy used in this step depends on the amount of waste and its toxicity. New infrastructure The energy used to produce material for the water supply infrastructure, such as pipelines and treatment facilities.
  19. 19. © Energy Points 2012 DRAFT Last update: 10/11/12 19 To calculate the total amount of energy used to supply water in a given location, we calculate the energy required for each step and for each source in that location. We express the total in kWhe. But how do we determine how much energy each step requires? As noted, the energy required to convey and purify water depends on the area’s topography, the depth of fresh and brackish groundwater, and the quality of that source water, including its salinity, dissolved solids, and pathogens (Figure 11). To calculate the energy intensity of steps that require knowledge of topography and groundwater and surface water supplies, we rely on information from the USGS and the National Oceanic and Atmospheric Administration (NOAA), which update and publish the information as often as every few days. Wastewater collection and treatment often represent a significant share of the total financial costs of providing fresh water to communities, and may require significant energy inputs. The amount of energy used to discharge environmentally benign water by treating wastewater varies with a municipality’s treatment standards. We assume that each municipality treats water to a level that makes it harmless to people and the environment in order to ensure that we account for externalities such as habitat destruction, contamination of surface water and groundwater, and the spread of water-borne Figure 11. A location’s topography, the depth of its surface water and groundwater, and the quality of those sources help determine the energy intensity of its durable water supply [24–28]. Topography Groundwater depth Brackish groundwater depth Salinity, total dissolved solids, pathogens Material Weight (tons) Embodied energy rate (kWh/ton) Total embodied energy (MWhe) Amortized energy intensity (kWhe/kgal) Concrete 180,000 830 149,400 0.23 Steel, iron 62,000 8,890 551,111 0.86 Table 2. Example of the amount of energy required to produce materials for a large desalination facility [54–56].
  20. 20. © Energy Points 2012 DRAFT Last update: 10/11/12 20 illnesses.19 Therefore assume that the energy intensity of treating municipal wastewater is largely independent of location and requires about 7 kWhe per thousand gallons. The amount of electricity used for operations and maintenance, the production of materials used to convey and treat water, and the environmentally sound disposal of waste materials usually accounts for about 1–2 percent of the total energy consumption. If relying on the durable water mix for a location requires building new infrastructure (such as, in the study area for importing desalinated seawater) we estimate the amount of energy required to produce the materials used to build that infrastructure, based on industry standards (Table 2). We then amortize that value over the lifetime of the facility, based on the amount of water it will treat. This step similarly accounts for only a small fraction of the overall energy intensity of the water supply. Figure 12. The amount of energy required to supply fresh water from local fresh surface sources versus desalinated seawater to end users in Phoenix, when strict drinking water and wastewater treatment standards are followed. These calculations reveal that groundwater and local surface water are the least energy-intensive sources, while desalinated seawater is the most energy intensive. Figure 12 shows the energy required to supply local surface water and desalinated seawater for Phoenix. The amount of energy and cost required to supply fresh water from desalinated seawater provides an upper limit on the lengths to 19 Using a national average energy intensity of wastewater treatment would insufficiently capture these externalities, largely because wastewater treatment is highly imperfect in the U.S. Consider that aquatic habitat destruction continues to occur in many parts of the country, surface and groundwater contamination are an ongoing concern for many municipalities, and water-borne illnesses are a primary concern for the US EPA. Without adjusting for these realities, the total EP associated with using water would be artificially low. Municipalities that do not employ the highest levels of treatment (polluters) are therefore not rewarded for investing less energy than is necessary to ensure safe effluents.
  21. 21. © Energy Points 2012 DRAFT Last update: 10/11/12 21 which a location will go to obtain clean water. This option gives a solution to a municipality facing uncertain surface water and groundwater supplies water security—albeit at a very high energy cost. Figure 13. The energy intensity of various fresh water supply options for Phoenix. Other cities have different energy intensities, but show a similar pattern. As noted, Phoenix does not presently rely on brackish groundwater and desalinated seawater to supply water for human use, but they are essential components of a durable water mix for that municipality, barring extraordinary reductions in water demand, and assuming that the city faces limitations on the amount of water it can take from other watersheds. The next section shows how to calculate the energy intensity of a durable water mix. It expands on the idea of using scarcity-adjusted energy consumption as a measure of water sustainability, and reframes the challenge of water scarcity as an energy problem. 5. Measuring the Energy Intensity of a Durable Water Supply As we have seen, every municipality has a mix of water supply sources that can be calculated such that it can meet both human and environmental needs, given present levels of demand: a durable water mix. We’ve also seen that energy is consumed when water is moved and treated, and that the amount varies by the source of the water. As the previous section showed for Phoenix, the energy intensity of using surface water and groundwater to supply fresh water is only 17 kWhe per thousand gallons (kgal). However, the energy intensity of using desalinated seawater to supply fresh water to Phoenix is 56 kWhe/kgal.20 20 The corresponding values for the Kinneret region are 17 kWhe/kgal for local surface water and 34 kWhe/kgal for desalinated seawater.
  22. 22. © Energy Points 2012 DRAFT Last update: 10/11/12 22 The difference between those two numbers—39 kWhe/kgal—is critical to understanding the scarcity- adjusted energy intensity (SAEI). In the Kinneret region, the SAEI rises and falls with the water level (Figure 14). Although the total supply of fresh water remains the same, the energy intensity of each gallon delivered rises as the region is forced to rely on desalinated seawater. If business managers had observed fluctuations in the region’s SAEI from 2007 to 2010, they would have concluded that using water efficiently is critical, because the region is likely to rely on costly desalinated seawater to meet future demand. (See Appendix C for more on water-related risk.) As we have seen, if the Kinneret region could not draw any surface water or groundwater without harming the environment or risking future supplies, desalinated seawater would account for 100 percent of the city’s durable water mix. In that case, the city’s SAEI would be 34 kWhe/kgal (Figure 14). The city’s actual SAEI depends on its durable water mix. The SAEI shows the true value of water in terms of energy,21 and the degree of water scarcity in a given location, at a time when conserving surface water and groundwater supplies is becoming critical in many regions. Figure 14. Calculating the energy intensity of a durable mix based on local fresh water availability for the Kinneret region. The electrical energy intensity of supply fresh water to the Kinneret region with desalinated seawater is less than it would be for Phoenix (34 vs. 56 kWhe/kgal), largely due to Phoenix’s distance from and height above the ocean. The fact that Phoenix may use six different sources (Figure 13) and not just surface water and desalinated seawater makes the calculation more complex. The data shows that Phoenix uses nearly 4,400 megawatt-hours per day (MWhe/day) of electricity to provide 210 million gallons per day from existing 21 Technically, the scarcity-adjusted energy intensity is a proxy for the avoided future energy costs associated with supplying fresh water to populations when no other option is available. It assumes a negligible discount rate on the value of the future energy supplies.
  23. 23. © Energy Points 2012 DRAFT Last update: 10/11/12 23 sources, assuming that it treats the water to the highest level of quality. If the city relied on a durable mix of sources, it would use about 6,000 MWhe per day to supply fresh water, given the same level of demand (Figure 15). That means that the energy intensity of the present unsustainable water supply is, at most, about 21 kWhe/kgal, while the SAEI is about 29 kWh/kgal. We refer to those two values—the additional energy needed to create a durable water supply (1,600 MWhe/day), and the additional energy needed per unit of water (8 kWhe/kgal)—as the energy gap and the scarcity adjustment, respectively (Figure 15). Framing water scarcity in this way provides a firm foothold for decision makers. With the energy gap and scarcity adjustment in hand, they can accurately and meaningfully answer questions such as, “Where will a water efficiency project that lowers overall water consumption have the greatest environmental benefit?” The answer: wherever the SAEI is highest. And, “Where is it risky to situate water-intensive activities?” The answer: wherever the energy gap is large.22 Figure 15. The difference in the amount of energy needed for an unsustainable water supply (4,400 MWhe/d) and a durable water supply (6,000 MWhe/d) for Phoenix. This shows the energy gap. A large gap indicates that an area faces long-term environmental, health, and financial risks related to its water supply. The area could close this gap by reducing demand. The horizontal axis shows the quantity of water, while the vertical axis shows the amount of electricity. This is akin to a supply curve, showing the points at which there are marginal increases in the amount of energy required to deliver successive gallons of water. 22 Energy gaps are comparable between rather than within watersheds. Intrabasin variation of energy gaps and scarcity- adjusted energy intensities for water are beyond the scope of the present model.
  24. 24. © Energy Points 2012 DRAFT Last update: 10/11/12 24 The next section explains how we use the SAEI to calculate Water EPG, and why it is important. First, however, we need to consider the source of the electricity used to supply the water, and determine Electricity EPG. 6. Calculating Water EPG and Energy Points, and Applying Those Measures in the Real World We can now calculate the scarcity-adjusted energy intensity for a location, based on its durable water mix. However, a critical next step in determining the amount of energy used to supply that water is to consider the source of electricity used to move and treat it, and the primary energy efficiency of that source. Not all kilowatt-hours are created equal, and two locations with an identical SAEI may rely on very different sources of electricity. To account for that, we return to the concept of Energy per Gallon. EPG describes how efficiently a location uses primary energy for its intended purpose, in the same way that fuel efficiency (miles per gallon, MPG) describe how efficiently a vehicle uses gasoline. As a unit with real dimensions, “EPG” is more precisely defined as resource consumption per unit of primary energy, where resource consumption is expressed in units that are specific to the resource (kgal for water, tons for waste, kWhe for electricity) and primary energy is expressed in units of energy points. Figure 16. Primary energy efficiency of using coal as an electricity source, when air emissions and water use are mitigated [65]. 100% 1 Energy Point 42kWhth Carbon capture, sequestration, NOx, SO2, coal ash, particle filtering 25% 8 kWhe 18% Prim ary Energy Shipm ent& Logistics C onversion C ogeneration W aterU se Transm ission and D istribution System Inefficiency Tim e ofD elivery Losses Efficiency Environm entalAdjustm ent End U serEnergy Coal Efficiency Waterfall EPG=8kWh/EP
  25. 25. © Energy Points 2012 DRAFT Last update: 10/11/12 25 Electricity EPG is the ratio of electrical energy available in a location per unit of primary energy consumed to produce it (kWhe/EP). The Electricity EPG in a given location depends primarily on the mix of fuel sources used to produce that electricity (Figure 17). In calculating Electricity EPG, we consider the amount of energy lost when converting each fuel to electricity, and the amount required to make its environmental impact as small as possible. For example, a portion of the primary energy in coal must go to scrubbing the emissions from burning it, so coal delivers less electricity per unit of primary energy than, for instance, natural gas. Water use for energy production is similarly captured as an externality in the model. The complex interactions between energy and water systems (collectively known as the energy-water nexus)23 are encompassed within the model.24 Figure 17. Electricity EPG (kWhe/EP) for various primary fuels sources used in the U.S. A fuller discussion of these and other aspects of the energy points system are discussed in Energy Points: Environmental Math, Not Myth, in preparation [65]. 23 The specifics of interactions are beyond the scope of this document, but they are discussed elsewhere in detail [69-71]. 24 The energy-water nexus is typically divided into two sides: energy-for-water and water-for-energy. Both are significant from the perspective of total resource management. Electricity EPG includes water-related externalities by counting water use according to the scarcity-adjusted energy intensity for the geographic area in which it is occur (i.e., energy use that is over and above the fuel burned to pump water at the plant itself). Water EPG, outlined later, accounts for variation in the quality of fuel sources (Electricity EPG) used to create the electricity that is used to provide a durable water supply. 8 11 16 19 22 29 32 50 75 80 CoalPetroleum W ood and Biom ass OtherGasesNaturalGas Nuclear Geotherm al Hydroelectric Solar W ind
  26. 26. © Energy Points 2012 DRAFT Last update: 10/11/12 26 Taking efficiency and externalities into account, we find, for example, that producing 1 kilowatt-hour from coal and petroleum requires about ten times more primary energy than producing 1 kilowatt-hour from wind and solar energy.25 Figure 18. Electricity EPG—the energy efficiency of the sources used to produce electricity—in each state. In an area with a high Electricity EPG—that is, one that obtains its electricity from wind and solar—and whose durable water mix is composed of sources that do not require much energy, such as local surface water and groundwater, is using primary energy most efficiently. Conversely, an area that relies on coal for its electricity, with a durable water mix composed primarily of desalinated seawater, is using primary energy least efficiently. That, in turn, would mean that a business or other user would do well to reduce its water use in that location. To measure this in energy points—thus providing all resources with a 25 We have developed a database of the Electricity EPG for locations across the country. A white paper explaining in more detail how we calculate Electricity EPG is forthcoming.
  27. 27. © Energy Points 2012 DRAFT Last update: 10/11/12 27 common ground for comparison—we use the SAEI and the Electricity EPG to estimate how much water a durable supply can deliver per unit of primary energy, which we refer to as the Water EPG (kgal/EP). ܹܽ‫ ܩܲܧ ݎ݁ݐ‬ ൬ ݈݇݃ܽ ‫ܲܧ‬ ൰ = ‫ ܩܲܧ ݕݐ݅ܿ݅ݎݐ݈ܿ݁ܧ‬ ቀ ܹ݇ℎ௘ ‫ܲܧ‬ ቁ ܵ‫ ܫܧܣ‬ ൬ ܹ݇ℎ௘ ݈݇݃ܽ ൰ Just as a high MPG means that one can drive farther with less, a municipality with a high Water EPG uses primary energy efficiently to deliver water without degrading surface water or groundwater resources. A municipality with a low Water EPG does not use primary energy efficiently to deliver water supplies sustainably (Figure 19). Figure 19. Water EPG—the energy efficiency of the sources used to produce electricity—in each state. Uses the state average EPG of 15 kWhe/EP for each location in order to highlight water-related geographic variability.
  28. 28. © Energy Points 2012 DRAFT Last update: 10/11/12 28 The final step in the energy points system is to use this information to translate a facility’s water use into energy points. We do that by dividing the number of gallons that facility uses by the efficiency of the water use, or the Water EPG. This method is analogous to finding the total gallons of gasoline that a vehicle uses by dividing the number of miles driven by a vehicle’s fuel efficiency (MPG). For example, if a company uses 100,000 gallons of water per month, and the area’s Water EPG is 500 gallons/EP, the company’s water-related energy points that month equal 10,000/500 = 200 EP. This is equivalent to saying that the company’s owners used 200 gallons of gasoline to provide water for their business. The potential range of Water EPG values is significant enough to influence decisions. For example, if an area has an SAEI of 15 kWhe/kgal and electricity from wind at 90 kWhe/EP, it will have a Water EPG of 6000 gallons/EP. On the other hand, in an area with an SAEI of 60 kgal/EP (typical of a “high and dry” area) and electricity from coal at 8 kWhe/EP, the resulting Water EPG is only 130 gallons/EP. The ratio of 6000:130 reveals a factor of 45 difference in the Water EPG values (greater than an order of magnitude). While these are extreme examples, consider that the difference between the fuel efficiency of a typical hybrid car (45 MPG) and a sport utility vehicle (15 MPG) is only a factor of 3. As the map shows, high and dry cities with substantial populations, such as Cheyenne, Wyo., and Colorado Springs, have a low Water EPG (430 and 380, respectively), while wetter areas such as Burlington, Vt., and Seattle have a higher Water EPG (930 and 900, respectively). Using Energy Points in the Real World Individuals and organizations can compare their water-related energy points to their energy points for other resources, such as electricity, to weigh the relative environmental and financial payoff from reducing water use.26 Such a comparison—based on one measure for all resources27 —can also shed light on which types of water uses and buildings would benefit most from greater efficiency. Consider the following municipal water users.28 These examples show only electricity and water, but individuals and managers could use a similar approach to evaluate and compare the efficiency with which they use other resources. 1. Four-person house (A): An average four-person home in Phoenix, using 4,236 kWhe [43] of electricity and 24 kgal of water per month. 2. University residence hall: An 80-room dorm using 22,625 kWhe of electricity and 488 kgal of water per month. 3. Four-person house (B): A home with below-average electricity use (2,118 kWhe) that obtains 50 percent of its power from solar PV panels, and above-average water use (36 kgal per month). 4. Plant nursery: A one-acre facility that uses 479 kWhe of electricity and 228 kgal of water per month [45]. 26 The importance and utility of this type of direct resource comparison is discussed further in Kulatilaka and Zik, 2012 [42]. 27 Native units of varying resources are not “lost” in the process of generating these values. For example, water can be expressed both in kgal (for reporting or other purposes) as well as energy points (for direct comparisons). 28 The Water EPG of municipal water uses is used here. Agricultural, power, and other industrial sectors which have different water purity and effluent treatment standards have slightly different total primary energy intensities.
  29. 29. © Energy Points 2012 DRAFT Last update: 10/11/12 29 Figure 20. The amount of primary energy—or number of energy points—used for electricity (red) and water (blue) by four types of buildings in Phoenix By converting their electricity and water use to energy points, the managers of these buildings can decide how best to reduce their energy consumption and overall environmental impact (Figure 20). For example, given that electricity accounts for most of the energy points of the four-person house (A), the owners may decide to purchase energy-efficient appliances, such as a new dryer, refrigerator, or air- conditioning system. Because water use accounts for the majority of the Energy Points of the four- person house (B), in contrast, the owners may decide that their first step is to install low-flow fixtures. Because electricity accounts for the majority of the energy points of the university dorm, its managers can feel justified promoting measures that make electricity use more efficient before tackling water use. Finally, owners of the plant nursery may be paying about the same amount for electricity and water bills, but they can use the energy points system to confidently tackle water challenges before installing solar panels. The energy points water sustainability model also provides a rational method for utility managers to design water rates to encourage sustainable water use. Researchers [66, 67] and water conservation advocates [48] have found that thoughtfully crafted tiered rate structures can be highly effective in allocating water resources efficiently and discouraging water waste [48].29 For example, we used the energy-water curve in Figure 15 to devise a tiered rate structure for our Phoenix based on the energy intensity of each source in a durable water mix (Figure 21). This rate structure reflects the fact that the costs of supplying water rise as local sources become scarcer, largely because of energy costs. 29 Types of price schedules include 1) Flat fee, in which consumers pay the same amount regardless of the level of use, 2) Uniform rates, in which the unit price of water remains the same, regardless of the volume purchased, 3) Decreasing block rates, in which the unit price of water decreases as the consumption volume increases, 4) Seasonal rates, in which consumers pay higher prices per unit of water during drier seasons, and 5) Increasing block rates, in which the unit price of water increases as the volume of water consumed increases.
  30. 30. © Energy Points 2012 DRAFT Last update: 10/11/12 30 In this example, the first 2,000 gallons of each ratepayer’s water use would accrue to the groundwater- based Tier 1, with an energy intensity of 17 kWhe/kgal. The next 200 gallons would be charged to the surface water–based Tier 2, which also happens to have an energy intensity of 17 kWhe/kgal. The next 800 gallons would be charged at the Tier 3 rate, which applies to recycled municipal wastewater, with an energy intensity of 21 kWhe/kgal. Every gallon above 5,500 would be charged at the Tier 6 rate, for desalinated seawater, with an energy intensity of 56 kWhe/kgal.30 Figure 21. A model scarcity-based rate schedule for water users in Phoenix. To create this schedule, we calculated average water use per capita (10 kgal/month), which allowed us to allocate an equal share of each source in the area’s durable mix to each user. 30 One subtlety of tier-based pricing is the implication that, for instance, 6 kgal of water used by a single person has a greater primary energy footprint than two individuals who collectively use the same 6 kgal (i.e. 3 kgal and 3 kgal). We set the tiers based on the assumption that the users are blind to each other’s water withdrawals and that the only way to adequately demonstrate the risks of collective overuse are to demonstrate the upper limit of energy consumption to users. In the absence of a highly communicative system of water trading—one that reveals combined impacts—it is one method of guiding customers to reduce their water usage.
  31. 31. © Energy Points 2012 DRAFT Last update: 10/11/12 31 As noted, the retail price of water almost never reflects its true value. However, we can calculate a scarcity-based price for each user based on the energy intensity of different water sources, and the price of electricity (Table 3). Additional revenues are a possible result of scarcity-based pricing, but they may be directed at water efficiency measures, new water source acquisitions, or even rebates for water “misers” [19]. The durable water mix and corresponding scarcity-adjusted energy intensity depend on the level of demand for water. The question for a region’s water managers therefore becomes, “What level of demand can the least-energy-intensive mix of water sources sustain?” In most cases, reducing demand by making water use more efficient makes more financial sense than investing funds and energy to develop non-traditional water supplies. For instance, if one does not have a desalination facility already, the best way to avoid having to build one is through conservation. At very high levels of consumption, such as the 210 million gallons per day that Phoenix now uses, the SAEI is very high. To minimize its SAEI, the area would need to reduce its water use to 50 to 100 million gallons per day. Beyond the limited amount of surface water and groundwater that nature provides at very low cost, water managers would also have to tap new water sources that do not degrade the local or neighboring watersheds and the environment. Thus, above 100 million gallons per day, the area would need to rely on more energy-intensive sources, such as recycled municipal wastewater and water imported long distances (Figure 22). Usage (kgal/month) Actual bill ($) Scarcity-based bill* at 12¢/kWhe ($) Scarcity-based bill* at 30¢/ kWhe ($) Average Price paid ($/kgal) Customer type 3.75 31 17 43 11.46 Residential 7.5 57 37 94 12.53 Residential 15 109 88 220 14.67 Residential 100 664 659 1,648 16.48 Commercial 10,000 65,522 67,187 167,968 16.80 Industrial Table 3. Bills for five levels of water use and different classes of users in Phoenix, based on actual 2010 prices [1] and scarcity-based prices. *These values do not include fixed costs such as employee salaries, which utility managers would add to the total bill.
  32. 32. © Energy Points 2012 DRAFT Last update: 10/11/12 32 Figure 22. Slider for municipal water planning. Vertically consistent water planning of this kind (i.e., from the level of individuals up to regional water planning authorities) provides incentives at multiple levels. Regional water planners have an incentive to minimize their energy gap by creating a durable water mix in order to ensure that present and future populations are well served, as well as to attract businesses that are seeking to minimize their water- related risks. Businesses have an incentive to lower their water consumption in places where it matters most (a boon to regional water planners) and to locate water-intensive activities in areas where water supply risks are minimal. Individuals have an incentive to compete in order to watch their water bills go down—either as a consequence of better planning and infrastructure investment, or as a rebate for saving water, or both. The networked, iterative character of the system also means that these incentives change with time, according to the consumptive choices that society makes.31 7. Conclusion When using water, society behaves in a relatively predictable way. We use the closest, cleanest, and cheapest sources first [68]. When we finally recognize that those supplies can no longer meet demand, we move on to using more degraded sources that are farther away, or distant sources that are clean but become degraded as they are pumped to us. The energy and dollar costs of local sources are often so low that a switch to the most costly alternative occurs only when scarcity is extreme—when there are no other options (e.g. Los Angeles, San Diego). Converting water use to energy points requires a series of steps and realizations. The first is that most cities and regions are not using surface water and groundwater supplies sustainably, and they need to develop a water supply mix that does not deplete those resources. The second is that moving and treating water requires energy, and the farther it must move and the more treatment it needs, the more energy the water supply uses. The third is that the energy intensity of a location’s durable water mix—that is, its scarcity-adjusted energy intensity—is typically higher than the energy intensity of the present mix of water sources. The difference between the present energy intensity and the scarcity-adjusted energy intensity is a measure of the high energy costs and risks entailed in delivering water in a world where scarcity is becoming the 31 For example, the scarcity-adjusted energy intensity of water would increase in areas where water-intensive activities started to multiply, thereby signaling to industries that the location is no longer suitable or that additional infrastructure investments would need to be made in order for water risks to be minimized. SAEI (kWhe/kgal) Demand (MGD) 0 50 100 150 200 250
  33. 33. © Energy Points 2012 DRAFT Last update: 10/11/12 33 new normal. In short, energy points demonstrate the total energy costs of doing the right thing for humans and the environment in an increasingly industrialized world. To protect local resources, San Diego and some other water-stressed cities are shifting to more energy- intensive water sources. These cities recognize that a more durable and secure water mix comes at a significant energy and monetary cost [30]. Other cities have not yet faced these facts, and will be hit hard by long-term water scarcity and its steep economic and energy costs. Given those costs, individuals, business managers, and public officials everywhere face a choice: maintain current levels of water use and invest the funds and energy needed to sustainably deliver fresh water—what the energy points system measures—or reduce water use to minimize energy consumption: where the energy points system leads us. By offering a new, quantitative way of looking at water supply and sustainability, the energy points system can help stakeholders consider these tradeoffs and take essential steps to reduce our society’s total energy consumption and provide the greatest environmental benefit. That is, we can use a location’s Water EPG to make decisions that minimize environmental impact, just as we use a vehicle’s fuel efficiency (MPG) to consider environmental and cost-related tradeoffs. Taking that essential step will enable us to prosper today without jeopardizing tomorrow.
  34. 34. © Energy Points 2012 DRAFT Last update: 10/11/12 34 Citations [1] Black & Veatch. 2010. 2009/2010 50 Largest Cities Water/Wastewater Rate Survey. Online at http://www.reap-ks.org/images/content/files/2010BVstudy.pdf. [2] U.S. Green Building Council. Leadership in Energy and Environmental Design (LEED). Online at www.usgbc.org. [3] U.S. Environmental Protection Agency. WaterSense Label. Online at http://www.epa.gov/watersense/about_us/watersense_label.html. [4] Government of Australia. Water Efficiency Labelling and Standards (WELS) Scheme. Online at http://www.waterrating.gov.au/. [5] Beverage Industry Environmental Roundtable. Online at http://bieroundtable.com. [6] WaterScan. Online at http://www.waterscan.com/. [7] U.S. Bureau of Reclamation. Water: Sustain and Manage America's Resources for Tomorrow (WaterSMART). Online at http://www.usbr.gov/WaterSMART/. [8] Ceres. Ceres Aqua Gauge: A Framework for 21st Century Water Risk Management. Online at http://www.ceres.org/issues/water/aqua-gauge. [9] Alliance for Water Efficiency. Online at http://www.allianceforwaterefficiency.org. [10] American Society of Civil Engineers. Online at http://www.asce.org. [11] American Society of Mechanical Engineers. Online at http://www.asme.org. [12] Quantis. Online at http://www.quantis-intl.com/waterfootprint.php. [13] Water Footprint Network. Online at http://www.waterfootprint.org/?page=files/home. [14] World Resources Institute. Aqueduct Water Risk Atlas. Online at http://insights.wri.org/aqueduct/atlas. [15] Pfister, S., A. Koehler, and S. Hellweg. 2009. “Assessing the Environmental Impacts of Freshwater Consumption in LCA.” Environmental Science & Technology 43 (11):4098–4104. [16] Caldwell, P.V., G. Sun, S.G. McNulty, E.C. Cohen, and J.A. Moore Myers. 2011. “Modeling Impacts of Environmental Change on Ecosystem Services across the Conterminous United States.” In C.N. Medley, G. Patterson, and M.J. Parker, eds. Proceedings of the Fourth Interagency Conference on Research in the Watersheds. U.S. Geological Survey Scientific Investigations Report 2011–5169. Online at http://pubs.usgs.gov /sir/2011/5169/. [17] Roy, S.B., K.V. Summers, and R.A. Goldstein. 2010. “Water Sustainability in the United States and Cooling Water Requirements for Power Generation.” Journal of Contemporary Water Research and Education 127(1):12. [18] 2030 Water Resources Group. 2009. Charting Our Water Future, 2030. McKinsey & Company. Available online: http://www.mckinsey.com/client_service/sustainability/latest_thinking/charting_our_water_future [19] Zetland, D. 2011. The End of Abundance: Economic Solutions to Water Scarcity. Aguanomics Press. [20] Gleick, P.H, and H.S. Cooley. 2009. “Energy Implications of Bottled Water.” Environmental Research Letters 4:014009. [21] Wilkinson, R. 2000. Methodology for Analysis of the Energy Intensity of California’s Water Systems, and an Assessment of Multiple Potential Benefits Through Integrated Water-Energy Efficiency Measures. University of California Santa Barbara, Environmental Studies Program. Online at
  35. 35. © Energy Points 2012 DRAFT Last update: 10/11/12 35 http://sustainca.org/content/methodology_analysis_energy_intensity_californias_water_systems_and_assessme nt_multiple_pote. [22] Melissa, L., D. Newman, S. Eden, and J. Gelt. 2010. The Water-Energy Nexus. University of Arizona, Arroyo Water Resources Research Center. Online at http://ag.arizona.edu/azwater/arroyo/Arroyo_2010.pdf. [23] City of Cambridge, MA. 2011. Surface Water Supply Protection Plan, June 2011. Online at http://www2.cambridgema.gov/CWD/watershed.cfm. [24] U.S. Geological Survey. National Elevation Dataset. Online at http://ned.usgs.gov/. [25] U.S. Geological Survey. Groundwater Watch. Online at, http://groundwaterwatch.usgs.gov/. [26] Alley, W.M. 2003. “Desalination of Ground Water: Earth Science Perspectives.” Reston, VA: U.S. Geological Survey. [27] U.S. Geological Survey. WaterQualityWatch. Online at http://waterwatch.usgs.gov/wqwatch/. [28] U.S. Environmental Protection Agency. WATERS Program. Online at http://www.epa.gov/waters/tools/index.html [29] National Research Council, Committee on Advancing Desalination. 2008. “Desalination: A National Perspective.” Washington, DC: National Academies Press. [30] San Diego County Water Authority. 2012. Planning & Diversifying Our Water Resources. Online at http://www.sdcwa.org/planning-diversifying-our-water-resources. [31] National Drought Mitigation Center. GRACE-Based Ground Water Storage. Online at http://drought.unl.edu/MonitoringTools/NASAGRACEDataAssimilation.aspx. [32] U.S. Geological Survey. Streamstats. Online at http://water.usgs.gov/osw/streamstats/. [33] National Weather Service. Online at http://water.weather.gov/ahps/ via http://www.infoplease.com/ipa/A0762183.html#ixzz1TWokjCYg. [34] National Drought Mitigation Center. U.S. Drought Monitor. Online at http://droughtmonitor.unl.edu/. [35] U.S. Census Bureau. Online at http://www.census.gov/main/www/access.html. [36] U.S. Geological Survey, Land Cover Institute. Online at http://landcover.usgs.gov/. [37] U.S. Energy Information Administration. Online at http://www.eia.gov/. [38] City of Phoenix. Historical Population and Water Use. Online at http://phoenix.gov/waterservices/wrc/yourwater/histuse.html. [39] Image: TerraMetrics and GoogleEarth. 2012. [40] Image: Arizona State University, Enrollment Marketing & Communications. Online at http://www.flickr.com/photos/asupcg/4844939786/. [41] Arizona Department of Water Resources. Active Management Area Water Supply. Online at http://www.azwater.gov/azdwr/StatewidePlanning/WaterAtlas/ActiveManagementAreas/PlanningAreaOverview /WaterSupply.htm. [42] Kulatilaka, N., and O. Zik. 2012. “The Sustainability Babel Fish.” Sustainability. Forthcoming. [43] U.S. Energy Information Administration. How Much Electricity Does an American House Use? Online at
  36. 36. © Energy Points 2012 DRAFT Last update: 10/11/12 36 [45] Masters, M., M. Risse, and S. Wells. Water Use for Georgia's Nurseries and Greenhouses." Online at http://www.nespal.org/sirp/waterinfo/state/awd/AgWaterDemand_NurseryIndustry.htm. [46] Sheldon, S., and O. Zik. 2012. In press. “Water Scarcity: An Energy Problem.” ASME 2012 International Mechanical Engineering Congress & Exposition, Houston, November 9–15. [47] Government of Israel. Lake Basin: Level Fluctuations between the Years 2004 to 2012. Online at http://www.water.gov.il/Hebrew/WaterResources/Kinneret-Basin/Pages/default.aspx. [48] Western Resource Advocates. 2006. Water Rate Structures in New Mexico: How New Mexico Cities Using This Important Water Use Efficiency Tool. Online at http://www.westernresourceadvocates.org/media/pdf/NM%20Water%20Rate%20Analysis%20.pdf. [49] Massachusetts Water Resources Authority. Online at http://www.mwra.state.ma.us/finance/ratefacts.htm. [50] Albuquerque Bernalillo County Water Utility Authority. Online at http://www.abcwua.org/pdfs/dms2012.pdf. [51] Hoffman, S. 2009. Planet Water: Investing in the World’s Most Valuable Resource. Wiley. [52] Segerfeldt, F. 2005. Water for Sale: How Business and the Market Can Resolve the World’s Water Crisis. Cato Institute. [53] City of Cambridge. Water Department. Online at http://www2.cambridgema.gov/CWD/about.cfm. [54] Peterson, PF, Zhao, H., and R. Petroski. 2005. Metal and Concrete Inputs For Several Nuclear Power Plants. University of California Berkeley. Report UCBTH-050-001. Online at http://pb-ahtr.nuc.berkeley.edu/papers/05- 001-A_Material_input.pdf [55] GreenSpec. Online at http://www.greenspec.co.uk/embodied-energy.php. [56] White, S.W., and G.L. Kulcinski. 1998. Energy Payback Ratios and CO2 Emissions Associated with UWMAK-I and ARIES-RS DT-Fusion Power Plants. Online at http://fti.neep.wisc.edu/pdf/fdm1085.pdf. [57] City of Cambridge. Online at http://www2.cambridgema.gov/CWD/about.cfm. [58] Atlantic Council. 2012. Fueling America and the Energy Water Nexus: How and Why It Impacts the Nexus and What Next. Online at http://www.acus.org/files/EnergyEnvironment/062212_EEP_FuelingAmericaEnergyWaterNexus.pdf. [59] Rabinovitch, A. 2010. Reuters. “Arid Israel recycles waste water on grand scale. http://www.reuters.com/article/2010/11/14/us-climate-israel-idUSTRE6AD1CG20101114 [60] Shiklomanov, I. State Hydrological Institute (SHI) and UNESCO. 1999. [61] U.S. Geological Survey. “How can my watershed address help me find USGS data?”. Available online: http://nwis.waterdata.usgs.gov/tutorial/huc_def.html [62] Beecher, J. 2012. Trends in Consumer Prices (CPI) for Utilities Through 2011 and Consumer Expenditures on Utilities in 2010, Insitute of Public Utilities, Michigan State University. Available online: www.ipu.msu.edu [63] Global Water Intelligence's Global Water Market 2011 report. http://www.globalwaterintel.com/publications-guide/market-intelligence-reports/global-water-market- 2011/ . Reprinted in GP Bullhound's Nov. 2011 Water Sector Report (pg. 7) [64] Caldwell, P. V., Sun, G., McNulty, S. G., Cohen, E. C., and Moore Myers, J. A.: Impacts of impervious cover, water withdrawals, and climate change on river flows in the conterminous US, Hydrol. Earth Syst. Sci., 16, 2839- 2857, doi:10.5194/hess-16-2839-2012, 2012. [65] Zik, O. Energy Points: Environmental Math, not Myth. In preparation.
  37. 37. © Energy Points 2012 DRAFT Last update: 10/11/12 37 [66] Beecher, J.A., Mann, P.C., Hegazy, Y., and J.D. Stanford. 1994. “Revenue Effect of Water Conservation and Conservation Pricing: Issues and Practices. National Regulatory Research Institute, The Ohio State University. Available online: http://www.ipu.msu.edu/research/pdfs/NRRI%20Revenue%20Effects%20of%20Water%20Conservation.pdf [67] Whitcomb, J. 2005. “Florida Water Rates Evaluation of Single-Family Homes.” Southwest Florida Water Management District. Available online: http://www.swfwmd.state.fl.us/documents/reports/water_rate_report.pdf [68] UNEP, Comprehensive assessment of freshwater resources of the world http://jzjz.tripod.com/freshwat.html [69] U.S. Department of Energy (DOE). 2006. “Energy Demands on Water Resources: Report to Congress on the Interdependency of Energy and Water.” Available online: http://www.sandia.gov/energy-water/docs/121- RptToCongress-EWwEIAcomments-FINAL.pdf [70] Fisher, J. and F. Ackerman. 2011. “Water-Energy Nexus in the Western States: Projections to 2100.” Synapse Energy Economics and Stockholm Environment Institute. Available online: http://sei-us.org/Publications_PDF/SEI- WesternWater-Energy-0211.pdf [71] Atlantic Council. 2012. “Fueling America and the Energy Water Nexus: How and Why it Impacts the Nexus and What Next.” Available online: http://www.acus.org/files/EnergyEnvironment/062212_EEP_FuelingAmericaEnergyWaterNexus.pdf [72] Springer Science+Business Media. 5 March 2009. Is The Dead Sea Dying? Levels Dropping At Alarming Rate. ScienceDaily. Retrieved October 2, 2012, from http://www.sciencedaily.com- /releases/2009/03/090304091514.htm [73] Quan, N. 2010. “Historic Water Agreement Ensure Electric Power, Wastewater Treatment in Valley Through 2050.” Arizona Power Service. Available online: http://www.aps.com/main/news/releases/release_586.html [74] Directions Magazine. 2009. “Corporate Water Gauge: Using GIS to Measure Sustainable Water Use. Available online: http://www.directionsmag.com/articles/corporate-water-gauge-using-gis-to-measure-sustainable-water- use/122587 [75] McElroy, M., van Engelen, J. 2012. Corporate Sustainability Management: The Art and Science of Measuring Non-Financial Performance. Earthscan. New York, NY.
  38. 38. © Energy Points 2012 DRAFT Last update: 10/11/12 38 Appendix A: Key Definitions Durable water mix The combination of water sources that enables a location to meet present and future demand without depleting surface water or groundwater resources. Electricity EPG The ratio of electricity used per unit of primary energy consumed (kWhe/EP). Consumption Water that is withdrawn and then removed from the watershed in which it originated, either by diversion or evaporation. Energy gap The difference between the amount of energy required to provide water from a durable supply mix and the energy required to provide water from a fragile supply mix. This gap measures risk. Energy intensity The amount of energy required to supply a unit of water, expressed in kWh/kgal. Energy Points A measure of primary energy. 1 EP = the amount of primary energy associated with 1 gallon of gasoline: 42 kWhth Energy per Gallon (EPG) A measure of the efficiency of using a resource such as water per unit of primary energy consumed. The EPG of water is based on gallons/EP. Return flow Water that is withdrawn from a source and then returned to the source after being used. It is equal to total withdrawal minus consumption. Scarcity adjustment The energy intensity of a water supply in a given area that accounts for water scarcity, measured as kWh/kgal. Scarcity-adjusted energy intensity (SAEI) The energy intensity of a location’s durable water mix. Unsustainable water mix A mix of water sources in a given location that meets current demand by risking future surface water and groundwater supplies. Water EPG The ratio of water used per unit of primary energy consumed, adjusted for scarcity, measured in gallons/EP or kgal/EP. Withdrawal Water that is diverted from its source and used. After being used, a fraction of the water is consumed and the rest is returned to the watershed.
  39. 39. © Energy Points 2012 DRAFT Last update: 10/11/12 39 Appendix B: Simplifying Assumptions For simplification, we make the following assumptions: • The HUC-8 watersheds designated by the USGS are an appropriate spatial scale for estimating water supply and demand (neither too large nor too small). • The U.S. water supply relies heavily on long-distance transport of surface water and groundwater from one location to another. These movements, which are not well tracked, are becoming controversial, because they shift water shortages from one watershed to another. They are a poor alternative to the sustainable use of local surface and groundwater supplies. • A location can recycle up to 30 percent of the water it uses. Treating and conveying recycled water usually requires more energy than simply tapping fresh local resources. However, users can reduce the energy intensity of their water supply by reusing and recycling their own water. • No U.S. watershed now obtains a significant percentage of its water supply from recycled wastewater and desalinated brackish groundwater and seawater. • Farmers and manufacturers that pump their own surface water and groundwater can apply the energy intensity of the municipal water supply to calculate their energy points. • We use an extreme-drought scenario to estimate a shortfall in a watershed’s water supply, equal to 25 percent of the minimum annual surface water supply from 2001 to 2010. • The depletion, or net loss, of fresh groundwater is a risky and unnecessary strategy. To determine sustainable withdrawals in a location, we compare the current depth of groundwater with its historical depths. • We cap the supply of brackish groundwater in each area at the level of sustainable fresh groundwater withdrawals in that area, as a conservative estimate. • We assume that seawater for desalination originates only from the U.S. coastline, for security and ease of access. For Phoenix, desalinated seawater would come from the nearest coastal city, which is San Diego. • We do not allow depletion of reservoirs, no matter how big. We therefore allocate to watersheds along the Great Lakes only the amount of water that flows over their catchment area. This assumption will change as new data becomes available. • We use the nearest reservoirs, as listed by the USGS, to calculate the distance surface water must travel to a given location. • We assume that the cumulative lift of water varies with the distance it travels, based on the U.S. average of 0.5 meter of lift per 1 kilometer traveled, or net lift, whichever is greater. • We assume a high 20 percent leakage rate for the total water system. • We assume that water comes from sources of average to below-average quality, that it is treated to a very high level of quality, and that it is returned to the environment at a very high quality.
  40. 40. © Energy Points 2012 DRAFT Last update: 10/11/12 40 Appendix C. How Businesses Can Use the Energy Gap to Weigh Water-Related Risk This section introduces a whiteboard-level discussion of the practical use of our energy-water analysis. As noted, business leaders must weigh risks when making strategic decisions such as whether to invest in improving the efficiency of the company’s water use, or where to locate new water-intensive facilities. It does not make sense to invest in a water-efficiency project where water is inexpensive and will remain inexpensive. Nor does it make sense to build a water-intensive facility in an area where water prices are low today but will be high tomorrow. We know that the present prices of water reflect, more than anything else, the past infrastructure investment and rate of return of this investment. We also know that water investments are done in large quantum steps (e.g. Boston’s aggressive investment in infrastructure). After such steps, the price of water increases sharply. The main risk for a water-intensive corporation is to incur additional costs associated with rising water prices and/or regulations that limit their operations. The best proxy for this risk is whether the company’s service area is at Point A (low risk, after infrastructure investments have been made) or Point B (high risk, before investment). However, scarcity-related risks are not always obvious, especially if the only information a CFO has at her disposal is the price of water and opaque indexes of water stress for various locations. Consider “What Drives MWRA’s Rates?” on the Massachusetts Water Resource Authority website. Most of the page outlines the MWRA’s substantial debt service on bonds used to finance large-scale capital improvement projects. A brief section on “Budget Impacts Beyond MWRA’s Control” appears at the bottom of the page [57]: “A number of economic and regulatory forces can add to the burden on ratepayers, including: - Rising energy and utility costs - Rising interest rates - Rising health insurance costs - Changes in public health and environmental requirements that increase overall spending costs” Much of the MWRA’s work in improving Boston’s water infrastructure has aimed at insulating ratepayers from risks beyond the MWRA’s control. The agency has done this by reducing leakage throughout the system, launching aggressive campaigns to promote water use efficiency, relying on careful watershed management to avoid the need for energy-intensive water sources, and exceeding national standards for drinking water and waste effluent quality. The near-term result of these improvements has been higher prices for ratepayers.
  41. 41. © Energy Points 2012 DRAFT Last update: 10/11/12 41 When managers consider the risks of water scarcity from a rising population and a warming climate, several facts become clear: 1. Less water will be available for human use in the future. 2. Clean water will be more difficult to obtain and will therefore require more energy per gallon. 3. Waste streams will require more treatment to meet public health and environmental standards. 4. Water systems will require more energy, which will be more expensive than it is today. Quantifying the energy gap between today’s low-cost, low-energy water systems and tomorrow’s high- cost, high-energy water systems is central to identifying financial and health-related risks. To measure that gap, managers can consider an area’s current water supply mix. The vast majority of U.S. water supplies come from surface water or groundwater sources. If these sources are being used unsustainably, groundwater levels drop over time, and environmental degradation occurs because ecosystems do not have enough water. Thus the present water mix cannot endure the test of time. Existing sources provide more water per unit of energy than new sources by putting long-term water supplies at risk.
  42. 42. © Energy Points 2012 DRAFT Last update: 10/11/12 42 Two options are available for creating a more durable water supply mix: reducing demand so existing supplies do not fall over time, and introducing new sources, which require more energy per gallon than local water supplies. If demand for water is not expected to fall, the cost of the second option provides the nearest approximation of the true value of water—its shadow price. The unit cost of water should reflect not only the capital costs of existing infrastructure, but also the increase in the per-unit cost of supplying water sustainably.
  43. 43. © Energy Points 2012 DRAFT Last update: 10/11/12 43 The difference between the amount of energy needed to supply water at varying levels of demand, and the amount of energy needed to provide a sustainable water supply, is the energy gap. This gap is the water-related risk the manager of a company or water utility faces. The energy gap between the actual water supply and the durable/sustainable water supply grows as total water demands grow.
  44. 44. 1 Copyright © 2012 by ASME Proceedings of the ASME 2012 International Mechanical Engineering Congress & Exposition IMECE2012 November 9-15, 2012, Houston, Texas, USA Appendix D IMECE2012-88241 WATER SCARCITY: AN ENERGY PROBLEM Seth Sheldon Energy Points, Inc. Cambridge, MA, USA Ory Zik Energy Points, Inc. Cambridge, MA, USA ABSTRACT Using the connection between water and energy as a case study, we present a model that uses the effects of geospatial and temporal context on embedded energy to approximate resource sustainability for water. First, the basic steps of calculating the energy intensity for a given location are discussed. Intensity is presented in units of energy per volume of water. In the case of supplying fresh water, energy intensity depends upon the quality of the original resource, its location relative to the end use location, and the type of technology in use to move and treat the water. Pumping, and conveyance, purification, distribution, wastewater treatment, and system inefficiencies (e.g. evaporative losses, leaks) increase the total energy investment, while water recycling decreases the total investment. Lift and purification are typically the greatest contributors to the overall energy intensity of a fresh water supply, but system inefficiencies can have a substantial impact as well. Over time, growing cities tend to progress from using their least energy intensive water resources (e.g. untreated surface water) to their most energy intensive (e.g. long distance transfers, desalinated water lifted to high elevations) as water demands begin to outstrip supplies. As a function of water availability, we assign each location an intensity value that approaches the intensity of its next “best” (i.e., least energy intensive) source of water. Hence, an area which is depleting its available surface and groundwater may have desalinated surface or groundwater as its next (and last) resort. The area would be characterized as undergoing water stress, and relatively less sustainable than areas which use their local fresh water supplies with no perceivable negative impact. An operating principle of this research is that with enough energy, it is possible to supply any location with fresh water. Desalinated ocean water, moved over long distances and lifted to great heights represents that upper limit. Working backwards from this extreme scenario, it is possible to not only move away from the paradigm of unitless or vague sustainability indices, but to quantify resource scarcity in a way that is both intuitive and actionable. The model is also self-correcting: areas may reduce the energy intensity of a sustainable water supply through better management of existing fresh water resources or through technological innovations that produce fresh water from degraded sources in an energy efficient manner. A major conclusion of this research is that the amount of energy necessary to maintain a reliable supply of fresh water greatly varies by location and technology choice. Further, many areas of the country overuse their local fresh water sources. To create a durable water supply, such areas can 1) reduce their use of local fresh water to sustainable levels and invest in alternative water sources—at a high financial and energy cost, or 2) aggressively pursue water efficiency measures so that they can both reduce their reliance on local fresh water sources and avoid the high costs associated with alternative water supplies. Additionally, by converting water use to energy consumption as a function of scarcity, it is possible to weigh the relative importance of water use efficiency to conservation in other areas (e.g. electricity, direct heating, waste disposal). INTRODUCTION There are numerous indices which identify water “stressed” areas [1-3]. Typically, water stressed areas are those in which present fresh surface water use is significant enough to impair aquatic ecosystems; groundwater use happens at such a rate to cause land subsidence and/or aquifer degradation; water demand quickly approaches or exceeds available supply during years of drought; and reliance on increasingly volatile fresh water supplies presents a potential risk to future populations. Most of these indices incorporate fresh water supply and demand parameters into their calculus.