event 18 Nov 2013

Water-Energy Nexus // thirsty energy: Making the Energy-Water Nexus work for us

This new global initiative is led jointly by the Water and Energy Units in the World Bank and will officially be launched at the World Future Energy Summit in January 2014. thirsty energy aims to support client countries in addressing the challenges in energy and water resources development, avoid unsustainable scenarios and break disciplinary silos that prevent cross-sectoral planning.

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This blog by Diego Juan Rodriguez and Marcelino Madrigal was first published by the World Bank.

"thirsty energy" will contribute to the Sustainable Energy for All (SE4All) initiative by evaluating trade-offs and synergies between water and energy planning. It will also identify potential constraints resulting from their interdependency.

In July, the U.S. Department of Energy and the Union of Concerned Scientists (UCS) released reports (see U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather and Water-Smart Power: Strengthening the U.S. Electricity System in a Warming World) highlighting the energy sector's vulnerability to future water constraints. The reports' findings paint a worrisome picture: currently, 60% of coal power plants in the U.S. are experiencing water stress; hydropower is threatened due to more frequent and severe droughts; and energy infrastructure is endangered by water variability due to climate change.

Water is critical for producing power, and vice versa. Almost all energy generation processes require significant amounts of water, and the treatment and transport of water requires energy, mainly in the form of electricity. Even though the interdependency between water and energy is gaining wider recognition worldwide, water and energy planning often remain distinct. The tradeoffs involved in balancing one need against the other in this "energy-water nexus," as it is called, are often not clearly identified or taken into account, complicating possible solutions.

Population and economic growth, urbanization, and increasing demand for food and energy place competing pressures on water. According to the IEA's {http://www.worldenergyoutlook.org/resources/water-energynexus/|World Energy Outlook 2012}, water consumption for energy generation will increase by 85% over 2010 to 2035, posing a serious challenge to many countries around the world.

In the U.S. several power plants were affected by low water flows or high water temperatures. In India, in February 2013, a thermal power plant with installed capacity of 1130 MW shut down due to a severe water shortage in the Marathwada region. France was forced to reduce or halt production in nuclear power plants in the past, due to high water temperatures threatening cooling processes during heatwaves. Recurring and prolonged droughts are threatening hydropower capacity in many countries, such as Sri Lanka, China and Brazil. These stresses will mount as emerging economies, like China, will double their energy consumption in the next 40 years.

To mitigate the challenges of the nexus, the World Bank Group will launch thirsty energy, a global initiative in partnership with the World Bank's water and energy departments and supported by the {http://www.esmap.org/|Energy Sector Management Assistance Program (ESMAP)}. Thirsty Energy will contribute to the Sustainable Energy for All (SE4All) initiative by evaluating trade-offs and synergies between water and energy planning. It will also identify potential constraints resulting from their interdependency, and develop evidence-based operational tools to assist developing countries assess the economic and social implications of water constraints in energy security and power expansion plans. See Thirsty Energy, the first paper in a series of working papers.

One of the pilot countries selected for Thirsty Energy is South Africa, a country with important water issues and large energy expansion plans. The Bank is working with partners there to incorporate water allocation quantities by catchment area and marginal costs in energy optimization tools and plans. This enables planners to assess, using economic tools, whether or not, or to what extent, cross-sectoral competition will impact the technology mix in energy generation. Through case studies such as this, the Bank aims to reduce energy projects' vulnerability to water constraints, and encourage water and energy to be planned in an integrated manner to maximize benefits. Through Thirsty Energy, the Bank and its partners will work to break disciplinary silos that prevent cross-sectoral planning and learning and to ensure the "sustainability" factor in Sustainable Energy for All.

About the authors

Diego Rodriguez is currently a Senior Economist at the Water Unit of the Department of Transport, Water and Information and Communication Technology of the Sustainable Development Vice-Presidency of the World Bank. He is the task team leader of the new World Bank initiative on the quantification of the tradeoffs of the energy-water nexus and the Program Manager of the Water Partnership Program. He is also the provided technical support to operational teams on the use of economic analysis in large water infrastructure investments under deep uncertainty. Prior to joining the World Bank he worked at the Danish Hydraulic Institute and the Inter American Development Bank. He has more than 20 years of experience in sectoral, operational, policy and strategy development in water supply, sanitation, and water resources management.

Marcelino Madrigal is a Senior Energy Specialist at the Energy Anchor Unit, specializing in technical and economic operations of power systems and electricity markets. Prior to joining the Bank in 2008, he worked for the Inter-American Development Bank as a team lead for a number of transmission, distribution, and regional energy integration projects. Prior to this, he worked with the Energy Regulatory Commission in Mexico as deputy general manager for research and regulatory development, and at the Energy Ministry as chief of staff for Electricity were he led efforts towards electricity tariff regulation, investment decision making, and electricity reform. He has extensively published on topics related to operations and planning of power systems and markets, and has delivered training in related fields in different countries. He holds a B.Sc, M.Sc., and Ph.D degrees in electrical engineering.


Cecilia Vey


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