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IEA World Energy Outlook 2016 // A delicate balance between water demand and the low-carbon energy transition

Energy and water have always been closely intertwined. Water is essential for all phases of energy production, from fossil fuels to biofuels and power plants. Likewise, energy is critical to water supply, wastewater treatment and desalination. This critical nexus between water and energy is examined in the forthcoming World Energy Outlook 2016, the International Energy Agency’s flagship publication, which looks at how the complex interdependencies between water and energy will deepen in the next decades.

The report, released on 16 November, finds that almost all of the weaknesses in the global energy system, whether they are related to energy access, energy security or the response to climate change, can be exacerbated by changes in water availability. And almost all of the fault lines in global water supply can be widened by failures on the energy side.

The WEO-2016 analysis provides the first systematic global estimate for the amount of energy used to provide water services to consumers. It shows that over the next 25 years, the amount of energy used in the water sector will more than double, mostly because of desalination projects. By 2040, these desalination projects will account for 20% of water-related electricity demand. Large-scale water transfer projects and increasing demand for wastewater treatment (and higher levels of treatment) also contribute to the water sector’s rising energy needs.

The water sector’s share of global electricity consumption remains around 4% by 2040, according to WEO-2016, but the figure hides some large regional differences. In the United States and the European Union, the water sector’s share of total electricity consumption is around 3%. In the Middle East, on the other hand, the share increases from 9% in 2015 to 16% by 2040, due to a rise in desalination capacity.

The energy sector is also set to become thirstier over the next decades, with energy-related water consumption increasing by nearly 60% between 2014 and 2040. Some technologies, such as wind and solar PV, require very little water, but others like biofuels production, concentrating solar power, carbon capture and storage (CCS) and nuclear power can have more significant water demands. As such, switching to a lower carbon pathway could exacerbate water stress or be limited by it if it is not properly managed, according to WEO-2016.

The availability of water, particularly for emerging economies, could become an increasingly important issue. For instance, demand for water from many end users is increasing in China and India, which both rely on nuclear and coal-fired power plants, many of which are located in areas of water stress.

Policies and technologies already exist that can help reduce water and energy demand, and ease potential chokepoints in the water-energy nexus. These include integrating energy and water policymaking, co-locating energy and water infrastructure, utilising the energy embedded in wastewater, using alternative sources of water for energy and improving the efficiency of both sectors.

More information is available in WEO-2016.

A summary of the World Energy Outlook 2016 is available here.

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