78923 Water Papers Water Papers June 2013 THIRSTY ENERGY Diego J. Rodriguez, Anna Delgado, Pat DeLaquil, Antonia Sohns Water Papers are published by the Water Unit, Transport, Water and ICT Department, Sustainable Development Vice Presidency. Water Papers are available online at www.worldbank.org/water. Comments should be e-mailed to the authors. Approving Manager Julia Bucknall Contact Information This paper is available online at www.worldbank.org/water. Authors may also be contacted through the Water Help Desk at whelpdesk@worldbank.org Disclaimer – World Bank © 2013 the World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This document is a product of the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the executive directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribu- tion to this work is given. Any queries on rights or licenses, including subsidiary rights, should be addressed to the Office of the Pub- lisher, The World Bank, 1818 H Street NW, Washington DC 20433, USA; fax: 202-522-02422; email: pubrights@ worldbank.org Acknowledgements This document was prepared by Diego J. Rodriguez, Anna Delgado, Pat DeLaquil and Antonia Sohns. Research assistance was provided by Meleesa Naughton. The authors would like to thank the following for their con- tributions: Christophe de Gouvello and Bekele Debele for their constructive feedback in peer reviewing the document; Julia Bucknall for her support and approval; Graciela Testa for editing; and The Word Express, Inc. for document layout and design. This work was made possible by the financial contribution of the Water Partnership Program (WPP) – http://water.worldbank.org/water/wpp. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v 1.  The Global Challenges in Energy and Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Energy-Water Nexus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Existing Efforts in the Energy-Water Nexus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.  Water Demands of Power Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Thermal Power Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Hydropower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Present and Future Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.  Towards Potential Solutions: Improved Management of the Nexus . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Opportunities for Synergies in Water and Energy Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Technical Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Alternative Cooling Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Decreasing Waste Heat in Power Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Alternative Water Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Institutional Reform and Integrating Models for Planning and Design of Investments . . . . . . . . 20 The Conventional Approach in Water and Energy Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Integrated Energy-Water Planning Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.  Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 5.  References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 6.  Annexes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 1. Water Withdrawal and Consumption by Power Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 2. Carbon Capture and Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 3. Assessment of Energy Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 4. Requirements for Integrated Energy-Water Modeling Framework . . . . . . . . . . . . . . . . . . . . . . . . 57 Introduction T he tradeoffs between energy and water have been gaining international attention in recent years as demand for both resources mount and governments continue to struggle to ensure reliable supply to meet sectoral needs. As almost all energy generation processes require significant amounts of water, and water requires energy for treatment and transport, these two resources are inextricably linked. This relationship is the energy-water nexus. As population and economies grow many regions of the world experience water and energy security challenges that must be addressed now. During the next 20 years, cities in developing countries will have to meet the demand of 70 million more people each year. Recent FAO estimates show that by 2050, feeding a planet of 9 billion people will require a 60 percent increase in agricultural production and a 6 percent increase in already-strained water withdrawals (FAO, 2012). Further, over 1.3 billion people worldwide still lack access to electricity; most of them reside in sub-Saharan Africa and East-Asia (IEA, 2012). About 2.8 billion people live in areas of high water stress and 1.2 billion live in areas of physical scarcity. It is estimated that by 2030, nearly half of the world’s population will be living in areas of high water stress affecting energy and food security (WWAP, 2012). According to recent estimates from the World Energy Council, emerging economies like China, India, and Brazil will double their energy consumption in the next 40 years. By 2050, Africa’s electricity generation will be seven times as high as it is today. Similarly, in Asia, primary energy production will almost double, and electricity generation will more than triple by 2050. And in Latin America, increased production will come from non-conventional oil, thermal, and gas sources and the amount of electricity generated is expected to increase fivefold, tripling the amount of water needed (World Energy Council, 2010). The increased demand for energy will put additional pressure on already constrained water resources. Mitigating the challenges presented by the nexus will be made more difficult by climate variability and related extreme weather, which are already causing major floods and droughts and putting populations, livelihoods, and assets in danger. Climate change will increase the vulner- ability of countries as rising temperatures accelerate evaporation and precipitation. In addition, rain patterns will shift and intensify, thereby enhancing uncertainty in energy development. In some cases future water scarcity will threaten the viability of projects and hinder development. The power sector is vulnerable to increased water temperature and diminished water availability. Several power plants vi THIRSTY ENERGY have already been forced to shut down in the entitled “Quantifying the Tradeoffs of the United States, India, France, and other countries Water and Energy Nexus” that is a joint effort due to lack of water or high water temperatures of the energy and the water groups. The goal of compromising cooling processes. Thermal the initiative is to generate innovative approaches power plant projects are being re-examined and evidence-based operational tools to assist due to their impact on regional water resources developing countries to assess and quantify the and their vulnerability to climate impacts. More economic, environmental, and social tradeoffs of recurrent and longer droughts are threatening water constraints in energy security and power the hydropower capacity of many countries, expansion plans. In addition, the initiative will such as Sri Lanka, China, and Brazil. demonstrate the importance of integrated plan- Those involved in the energy sector rec- ning of energy and water investments to sustain- ognize the magnitude of this issue. Last year able economic growth. As part of this initiative, (and for the first time since it was first published the World Bank will produce technical and policy- in 1994), the International Energy Agency’s World oriented material to support its client countries Energy Outlook report included a special section as they address this challenge. This document on the water needs and the possible future water is the first report in this series and focuses on an constraints of the energy sector. The report con- introduction of the nexus (in particular on water cluded that “constraints on water can challenge for energy) and examines the water requirements the reliability of existing operations and the via- of power generation. As such, it is not meant to bility of proposed projects, imposing additional be a technical piece, but rather, its aim is to raise costs for necessary adaptive measures.” Most awareness in both the energy and water sectors recently, General Electric’s Director for Global of the linkages and complexities of the challenge. Strategy and Planning stated that expansion Section 1 of this paper examines the existing plans for coal power plants in China and India models, literature, and management frameworks could become unfeasible due to water scarcity. on the nexus, as it seeks to determine what gaps A World Resources Institute report assessed exist. Section 2 describes the water demands of existing and planned power plants in India and power generation in order to identify potential Southeast Asia and concluded that more than areas of future uncertainty and delineate areas half are in areas that will likely face water short- where integrated energy-water management ages in the future. The 2012 UN Water Report may improve the reliability of operating power surveyed more than 125 countries on this topic plants and the viability of proposed schemes. and found that the problem of water for energy Section 3 describes possible solutions that was high or very high on the list of priorities in 48 may alleviate challenges resulting from the link percent of the countries surveyed. between energy and water by improving energy To address these challenges, the World efficiency and integrating water resources man- Bank has launched a new global initiative agement into energy planning. Section 1 . The Global Challenges in Energy and Water The Energy-Water Nexus The interdependence between water and energy is growing in importance as demand for both water and energy increases. 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). This tradeoff between energy and water resources is the energy-water nexus. Integrated planning is vital to ensure future social, political, and economic stability and to avoid unwanted and unsustainable sce- narios (IAEA, 2011; Olsson, 2012; Sandia Labs, 2011; WEF, 2008). As shown in figure 1, water resources greatly determine food and energy security. Continued investment and research into interactions Figure 1:  The Nexus Framework (SEI, 2011) Action Fields Finance Governance Innovation Enabling factors/ Society incentives Accelerating access, integrating the To promote: bottom of the Water Food Water/energy/ pyramid supply security food security security Available for all water Economy resources Equitable & Creating more with less sustainable growth Resilient, Environment productive Investing to sustain Energy environment ecosystem services Nexus security perspective Urbanisation Population growth Climate change Global trends 2 THIRSTY ENERGY within the nexus are critical for smart climate and Global energy consumption will increase infrastructure planning and to ensure a sustain- by nearly 35 percent by 2035 (IEA, 2012) and able future. most of this increase will happen in non-OECD Population and economic growth are countries (see figure 2). According to recent esti- expected to increase demand for food, mates from the World Energy Council, emerging energy, and water. Global economic growth is economies like China, India, and Brazil will double being driven largely by emerging markets. Over their energy consumption in the next 40 years. the medium term, it is estimated that economic By 2050, Africa’s electricity generation will be growth will average 6 percent in the developing seven times as high as it is today. In Asia, primary countries compared to 2.7 percent in higher- energy production will almost double, and elec- income countries (World Bank, 2011). Yet, cur- tricity generation will more than triple by 2050. rently 783 million people lack access to clean And in Latin America, increased production will drinking water and 2.5 billion people remain with- come from non-conventional oil, thermal, and out sanitation. Growing stresses such as rapid gas sources and the amount of electricity gener- urbanization and climate change are affect- ated is expected to increase fivefold in the next ing all water uses. During the next 20 years, cit- 40 years, tripling the amount of water needed ies in developing countries will have to meet the (World Energy Council, 2010). The increased demand of 70 million more people each year. demand for energy will put additional pressure Recent FAO estimates show that by 2050, feed- on already constrained water resources. ing a planet of 9 billion people will require a 60 percent increase in agricultural production and a 15 percent increase in already-strained water Non-OECD primary energy Figure 2.   withdrawals (FAO, 2012). Further, over 1.3 bil- demand by region; Mtoe lion people worldwide still lack access to elec- stands for million tons of oil tricity with most of them residing in sub-Saha- equivalent (IEA, 2012) ran Africa and East-Asia (IEA, 2012). Closing the Rest of non-OECD Indonesia Brazil Africa Middle East India China energy gap could have negative implications on 10,000 water resources because water is needed for fuel extraction, cooling thermal power plants, 9,000 and to turn hydropower turbines. 8,000 Water scarcity is increasing. About 2.8 billion people live in areas of high water stress 7,000 and 1.2 billion live in areas of physical scarcity. 6,000 It is estimated that by 2030, nearly half of the Mtoe world’s population will be living in areas of high 5,000 water stress affecting energy and food security 4,000 (WWAP, 2012). Worldwide, decreasing water quality also impacts growth as it degrades eco- 3,000 systems; causes health-related diseases; con- 2,000 strains economic activities such as agriculture, 1,000 energy generation, industrial production, and tourism; affects the value of property and assets, 0 1990 2000 2010 2020 2030 2035 and increases wastewater treatment costs. The Global Challenges in Energy and Water   3 Climate change is exacerbating energy well as demand for motorized transportation and water insecurity, due to extreme weather are hallmarks of the transition to higher-value- conditions, such as prolonged drought periods added, more diversified and integrated eco- and major floods, which will put populations, nomic activity. Similarly, as economies grow livelihoods, and assets in danger. The number and diversify, competing demands for water of people affected by climate-related disasters broaden to include more intensive municipal and doubled every decade in the last 40 years. The industrial uses, as well as increased demands for effects and intensity of climate change will vary agriculture. Environmental considerations also regionally, as populations experience a change come into play: increased demands for potable in average precipitation, surface runoff, and water and air pollution control increase energy stream flow, deviation from rainfall averages, and use; expansion of renewable energy utilization increased probability of extreme events, such as increases the need to consider the water require- intense storms, floods and droughts. Altered ments of diverse technologies from traditional precipitation and evapotranspiration patterns hydropower, to renewable thermal power, to are predicted to reduce runoff in southern Africa, biofuel feedstock production. the Mediterranean basin, Central America, Water is needed in almost all energy gen- the southwestern United States and Australia, eration processes. Most thermal power plants among other places (FAO, 2008). This is likely to require large quantities of water, primarily for increase competition for water across sectors, cooling purposes. Water drives energy produc- such as agriculture, energy, water supply and the tion in hydropower generation and is also critical environment. in energy development (such as coal, oil, and The combined effects of population gas extraction and refining). Only wind (which growth, climate change, and increasing hydro- requires virtually no water) and photovoltaic logical variability will result in a heightened (which requires a small quantity of water to wash reliance on energy-intensive water supply the panels) have negligible impacts on the water options, such as water transport or desalina- and energy nexus. Both energy and water are tion plants to supplement urban water supply. used in the production of crops and some crops Moreover, as temperatures rise, more water will are used to generate energy through biofuels. be needed by the energy sector to meet both Determining energy-water tradeoffs its own demand for water for cooling per unit of is a complex matter. Energy development energy produced, and also to meet increased requires varying quantities of water by energy demands for the cooling of houses, resource and defining water use by the energy offices, and factories. Climate change will also sector is challenging because not all uses are impact the energy sector through changes in the same. Water and energy managers must energy demand, and through the need to transi- consider the water requirements in energy devel- tion to energy supply options involving low or opment in order to ensure the long-term viability zero greenhouse gas emissions. of operations. In such an analysis, the water As economic development at the house- requirements are usually broken down into water hold level depends on access to basic energy withdrawal, water consumption, and discharge. and water services, economy-wide growth Withdrawal is defined as the amount of water and poverty reduction depend on water and taken from a water source (lake, river, ocean, energy systems to provide reliable and afford- aquifer, etc.). Consumption is the water that is Section 1 able services. Growth in electricity demand, as lost from the total water withdrawn. Discharge is 4 THIRSTY ENERGY the amount of water that is returned to the water figure 3). Conversely, while mining and energy source in a different state. Therefore, the water development do not require large volumes of consumed is equal to the water withdrawn minus water at the national level (see figure 3), resource the water discharged to the environment. development requires large volumes during These requirements can differ dra- extraction, transportation, and processing. As a matically depending on the type of process result, it can dramatically affect water availability or technology employed. For example, hydro- regionally, both in time and place. The vast dif- power requires the availability of large quantities ferences in water demand in the energy sector, of water, but the water is only diverted and can imposes an important challenge when analyzing be used downstream by other sectors, such and quantifying potential water constraints. as agriculture. In biofuels, most of the water Visualization tools, such as the one is consumed through irrigation and a reduced depicted in figure 3 allow resource managers amount is returned to the system. In thermal to better project water and energy needs and power plants, large quantities of water are determine if supplies will be adequate. Using withdrawn for cooling purposes, but most of the data from the United States, figure 3 illustrates water is returned to the freshwater source (see how water resources are withdrawn, discharged Estimated Water Flow in the United States in 2005 Figure 3:                                                                                                 Source: LLNL 2011. Data is based on USGS Circular 1344, October 2009. If this information or a reproduction of it is used, credit  must be given to the Lawrence Livermore National Laboratory and the Department of Energy, under whose auspices the work was performed. All quantities are rounded to 2 significant digits and annual flows of less than 0.05 MGal/day are not included. Totals may not equal sum of flows due to independent rounding. Further detail on how all flows are calculated can be found at http://flowcharts. llnl.gov. LLNL-TR-475772. The Global Challenges in Energy and Water   5 and consumed by different sectors. In the United biomass. Nuclear energy has also been advo- States, the withdrawal rate for thermal power cated for in many countries. Most of these solu- plant cooling processes is almost as much as tions are thermal power plants, and due to their the withdrawals for agriculture, which consumes lower efficiency compared to conventional fos- water for food and biofuel production. While sil fuel power plants, they usually require larger most of the water in the energy sector is not con- amounts of water for cooling purposes. Non- sumed and is returned to the source, the large thermal renewable generation technologies such volume of water withdrawn by the power sector as wind and photovoltaics consume negligible greatly impacts the ecosystem and the water amounts of water. However, they provide inter- resources of a region. mittent service. Thus, without the existence of In 2010, water withdrawals for energy large scale electricity storage, it seems inevitable production were estimated at 583 billion that thermal power plants will continue to be used cubic meters (bcm), of which 66 bcm were as base-load and dispatchable power. Pressures not returned to the water body (IEA 2012). for adoption of low carbon sources of energy can Water withdrawal is predicted to increase by 20 be expected to increase the demand for invest- percent by 2035, with consumption increasing ment in the development of hydropower in ways by 85 percent. This increase in consumption is that may change the timing and delivery of water mostly due to a shift from once through cooling to other users. Policy choices are further com- to closed loop cooling systems, which withdraw plicating addressing the energy-water nexus as less water, but consume most of it, and also due people select more water-intensive energy and to the expansion of crop production for biofuels. more energy-intensive water sources to meet Water withdrawals are typically greater than demand (WWAP, 2012). consumptive use and are, therefore, considered The competition between water and the limiting factor for energy production in loca- energy is asymmetrical. Water scarcity threat- tions where water is a constrained resource. ens energy production, and energy is also Even if water use for electricity generation is needed for water production, yet water availabil- non-consumptive, the timing of water releases ity is not threatened by energy scarcity. Water and water quality issues can have material consumption for energy generation contrib- impacts on other sectors, giving rise to trad- utes to water scarcity; as more energy is gen- eoffs and potential conflicts with other water erated significantly less water may be available. uses, particularly in water scarce regions and On the other side of the equation, the energy basins. use for the treatment, transport and pumping of Expansion of many forms of renew- water can be significant, but it is not seen as a able energy could increase accompanying major determinant of energy scarcity. This study demands for water (e.g., in solar thermal, bio- focuses on addressing this imbalance; in partic- fuels feed stocks, geothermal, and hydro- ular, the tradeoffs between these resources, by power). In the coming decades the energy proposing solutions that emphasize their com- demand and greenhouse gas emissions are esti- mon dependence given that they are inextrica- mated to triple under a business-as-usual sce- bly linked. This interdependence is already crit- nario (IAEA, 2011). One of the proposed solu- ical in many regions, and the resulting stresses tions is the substitution of fossil energy sources are compounded as demand grows from emerg- with renewable low-carbon sources, such as ing economies and “graduating” countries. The hydropower, wind, solar-thermal, geothermal or impact of climate change on water and energy Section 1 6 THIRSTY ENERGY resources is also a factor. Projected conse- into account possible changes in water avail- quences of these factors are alarming enough ability due to climate change or other competing to require the urgent development of more accu- uses. Water resources planning rarely takes into rate integrated planning tools. account the energy used to pump, treat, and desalinate the water, which in turn has an impact on the water used by the power sector. Assess- Existing Efforts in the ment of a large hydropower project for electricity Energy-Water Nexus generation may not sufficiently consider that the agricultural value-added of using that water for A review of the literature shows a consistent irrigation may be greater than using alternative theme of water stress and scarcity as well as groundwater sources for food production. the expectation that these will increase over Currently, the majority of integrated time. The impact of cross-sector competition energy-water planning efforts are specific to on the energy-water nexus highlights the need the United States and many of the programs for a more integrated approach to energy- are in pilot and research stages. Developing water planning. There are several components countries have limited literature on energy pro- of integrated energy-water planning that should jections and associated water consumption. Late be addressed, both systematically and over long last year, and in an effort to quantify the chal- planning horizons. The major planning aspects lenges facing the nexus, the IEA World Energy relate to technical, policy, and socioeconomic Outlook included a section on the possible future factors. Specifically, there are political and insti- water constraints in the energy sector for the tutional barriers that affect energy-water plan- first time in its 19-year history (IEA, 2012). ning because these resources are very profitable. The issue of water scarcity at the basin Thus, entrenched political and economic inter- level is less well understood and illustrates ests may prefer that resources and data sharing one of the gaps in planning in the energy- remain separate. The literature also reveals that water nexus. Water scarcity is typically ana- while many organizations examine the water and lyzed on a high-level conceptual approach that energy nexus, most of the existing analysis deals is supported by the data that is available. This primarily with physical and technical variables. gap illustrates an area where the conceptual pro- Few analysts are trying to quantify the tradeoffs. gramming of energy-water tradeoffs could be Despite growing concerns over these applied to provide real-time data and feedback trends, decision makers are often ill-informed through a basin study focused on a region with about what drives the trends, their possible electricity generation needs that may compete outcomes, and the merits of different techni- for water resources with other sectors, such cal options. The study of growing water and as industry, municipalities, agriculture, and the energy needs often occurs in isolation from plans environment. for expanding the provision of these resources. Energy and water policies are disjointed, For example, research on siting for a solar ther- with many federal, state, and local decision mal plant may take into account the availability makers but few mechanisms to coordinate of water for cooling at specific sites, but the action. This lack of integrated planning, manage- systemic implications of solar thermal versus ment, and regulation has already had an impact other technology choices receives less attention. in the power sector. In the United States, power Energy planning is often made without taking plant permits have been rejected due to water The Global Challenges in Energy and Water   7 concerns (US Department of Energy, 2006). Yet, oped to support an assessment of energy sector there are technologies and policy approaches development under different economic and envi- that could be adopted that would improve a ronmental policy conditions, and to support inte- country’s position with regard to energy, water, grated resource development in the water sec- and climate security, if only the means of coordi- tor. The water models take into account water use nation were in place. for hydroelectricity expansion versus other uses; Water allocation modeling does not ade- and some energy models include calculations quately address scale and time in energy of water requirements for different technology modeling from planning to operation. Water investments. Typically, however, the models are supply planning generally uses a fairly broad designed for different purposes and the linkages spatial scale (river basin) and a fairly coarse time between energy and water sector development scale (months or weeks). Energy operational are limited. Moreover, the level of technical detail models generally run on a more refined time and complexity in the models can preclude their scale (minutes or hours) that are not necessarily application for upstream sector strategy devel- concerned with the spatial component or supply opment, a crucial analytical need in development limitations evidenced with the underlying hydro- planning. The converse is also true for the needs logic systems. at the river basin or sub-basin level, when models A better understanding of the cross-sec- are too general and do not include the necessary toral implications and the potential magnitude level of detail. of water and energy stresses for the energy Despite the importance of energy and sector is needed for climate-smart and inclu- water, and their interconnectedness, funding, sive green growth planning. The need to under- policy making, and oversight are scattered stand the interactions between energy and water among many agencies. Practitioners also often use is growing, and in addition to energy and water, manage these resources broadly, including land planning and development challenges are likely to and food in their management approach. The involve land use, food production, urbanization, current internal incentives system still favors demographics, and environmental protection. A independent sectoral outcomes over cross- number of modeling platforms have been devel- sectoral results. Section 2 Section 2 . Water Demands of Power Generation Introduction Water is required in almost all types of electricity generation. The most obvious and well-known is hydropower. However, most thermal power plants, which produce most of the electricity in many regions of the world, also require large quantities of water for their operation. Thermoelectric power plants account for 39 percent of annual freshwater withdrawal in the United States (USGS, 2005) and 43 percent in Europe (Rubbelke and Vogele, 2011). Only open cycle power plants, which require no water for cooling, and energy from wind and photovoltaics have a negligible impact on the water and energy nexus. Thermal Power Plants Thermal power plants generate around 75 percent of the electricity produced in the world (IEA, 2012). Most of these plants require large quantities of water, mainly for cooling purposes. Thermal power plants convert heat into power in the form of electricity. The heat is generated from a diverse range of sources, including pulver- ized coal, natural gas, uranium, solar energy, and geothermal energy. Most of these thermal power Simplified Visualization of Figure 4.   Heat Balance of a Fossil Fuel plants, including coal power plants, geothermal, Power Plant solar thermal, biomass, nuclear, and in part, natu- Flue Gas ral gas combined cycle power plants use steam as the prime mover. In these plants water is heated Other heat losses and turned into steam. The steam spins a turbine which drives an electric generator. After passing through the turbine the steam is cooled down and Heat to condensed to start the cycle again (closing the Cooling Heat so-called steam cycle). In other words, all the heat input put into the plant that is not converted into elec- tricity is “waste heat” and has to be dissipated into Electricity the environment. Most of this heat (blue arrow in figure 4) is rejected to the environment through Source: Delgado, 2012. 10 THIRSTY ENERGY the cooling system, which usually uses water as the water is used in the cooling system and the the heat transfer medium (UCS, 2011). other 10 percent is used in other processes (DOE, As power plants become more efficient, less 2009). Therefore, the choice of cooling system waste heat needs to be rejected (yellow arrow should take water requirements into account in becomes bigger and blue arrow smaller), which order to minimize environmental impacts. diminishes the cooling requirements per kWh There are four types of cooling systems, produced. Therefore, more efficient new natural and water withdrawn and consumed is highly gas combined cycle power plants (around 50 variable depending on the system implemented: percent efficient) require less water than a new once-through cooling systems, closed-loop or coal power plant (38 percent) or a solar thermal wet-recirculating systems, dry cooling systems, power plant (25 to 40 percent) and much less and hybrid cooling systems. than an old coal power plant (efficiencies could be as low as 25 percent) or new coal power ●● Once-through cooling systems are the plants with carbon capture (33 percent). On the 1 simplest method of cooling steam that is other hand, open-cycle gas turbines, which are exhausted from the turbine. This system usually used as peaking power plants, have no requires withdrawing large quantities of steam cycle and thus do not require water for water from a water body, but returns all cooling. the water to the source once it has passed The amount of water required for cooling through the heat exchanger and con- is highly dependent on the type of cooling densed the steam (see figure 5). Although system used in the plant. Although water is also the power station does not consume used in smaller quantities for steam generation any water, the increased temperature of and in other processes, such as ash handling the returned water means that a small and flue gas desulfurization, most of the water is used for cooling purposes. In a coal plant with 1  See Annex 2 for a discussion of the effects of carbon cooling towers, it is estimated that 90 percent of capture and storage on water resources. Diagram of Once-Through Cooling System Figure 5:    Steam Energy Turbine Steam Process water Condenser Steam condenses Warm cooling into water water Process water Cold cooling water River River Source: FAO, 2011. Water Demands of Power Generation   11 percentage (around 1 percent) of it evapo- 85 percent of the water withdrawn is rates downstream. Moreover, the warm consumed. water may cause thermal pollution of the ●● Dry cooling systems use air instead environment and have an adverse impact of water to cool the steam leaving the on ecosystems. turbine, and therefore can decrease ●● Closed-loop or wet-recirculating sys- the power plant’s water consumption tems include wet cooling towers and by more than 90 percent. (UCS, 2010). cooling ponds. Both cooling systems use Compared to the other cooling systems, a recirculating loop of water. Wet cool- dry cooling systems have minimal envi- ing towers are the most common sys- ronmental impacts. However, since air is tems used. After the water goes through not as efficient as water in heat transfer, the steam condenser and removes the dry cooling systems require a greater waste heat, it is sprayed down the cool- surface area to dissipate waste heat to ing tower while air comes up from the the environment. Therefore, dry cool- bottom of the tower and goes out into the ing is two to four times more expensive environment. This process exchanges than an equivalent wet tower cooling heat from the water to the air, cooling the system. Moreover, since dry cooling is water. Some water is lost due to evapo- less efficient than water cooled systems, ration. The remaining water is then col- it affects the efficiency of the plant, so lected at the bottom of the cooling tower these systems are used in extreme situa- and reused in the steam condenser of tions of water scarcity, although in ambi- the power plant, closing the recirculating ent temperatures of above 100 degrees loop (see figure 6). Although this cool- Fahrenheit, it is much less effective than ing system withdraws far less water than other systems. (UCS, 2010). once-through systems, water consump- ●● Hybrid cooling systems combine wet tion is higher due to evaporation; around and dry cooling approaches. Although Figure 6.  Diagram of Closed-Loop Cooling with Cooling Towers Steam Turbine Evaporation Energy Steam Condenser Warm cooling Steam Cooling water condenses Tower into water Cold cooling water Make-up water Process water River Section 2 Source: FAO, 2011. 12 THIRSTY ENERGY there are different types of systems, they pended solids. These streams of water contain still fall between wet and dry in terms of several pollutants and should be treated before cost, performance, and water use. being returned to the water source or sent to hold- ing ponds. Fossil fuel power plants also require The cooling system employed by the greater volumes of water for processes, such as power plant has an impact on power plant flue-gas desulfurization, coal washing, and dust efficiency, capital and operation costs, water removal. This water must be treated before it is consumption, water withdrawal, and total discharged because it could pollute surrounding environmental impacts. Therefore, tradeoffs water resources with toxic chemicals. must be evaluated case-by-case, taking into consideration regional and ambient conditions, and existing regulations. It is also important to Hydropower note that there is a wide range of operational consumption for the same type of system, While there is abundant potential hydropower reflecting local conditions in particular areas in developing countries, it has not yet been and countries and depending on the efficiency of harnessed. Unexploited hydropower potential the power plant (see annex 1). Any assessment amounts to 93 percent in Africa, 82 percent in must clearly identify and quantify the tradeoffs East Asia and the Pacific, 79 percent in the Middle between cooling systems in terms of water use, East and North Africa, 78 percent in Europe and costs, and efficiency (see table 2). Central Asia, 75 percent in South Asia, and 62 Thermal electric power plants can also percent in Latin America and the Caribbean have an adverse effect on water quality. (WBG, 2009). Once-through cooling discharges alter the water Hydropower is also a water intensive temperature and cause thermal pollution and source of energy, although there are different changes in oxygen levels in the surrounding envi- water concerns in the electrical generation ronment. Air emissions from fuel combustion in processes. In hydropower plants, most of the thermal power plants can contain mercury, sul- water is not consumed but diverted to generate fur, and nitrogen oxides, among other chemicals, electricity. As a result, it can be used downstream which can have an impact on the water quality of the dam for other purposes, such as irrigation and aquatic ecosystems downwind. In wet cool- and for urban use. In a world of severe energy ing towers, smaller amounts of water, known as shortages and increasing water variability, hydro- “blowdown,” are purged from the cooling water power and its multipurpose water infrastructure circuit to avoid the buildup of harmful contam- will play an expanding role in providing electricity inants and concentration of dissolved and sus- and allocating scarce water resources. Table 2:  Cooling System Tradeoffs Water Water Plant Ecological Cooling Type Withdrawal Consumption Capital Cost Efficiency Impact Once-Through intense moderate low most efficient intense Wet Cooling Towers moderate intense moderate efficient moderate Dry Cooling none none high less efficient low Source: modified from Delgado, 2012. Water Demands of Power Generation   13 Hydropower plants consume water through for energy as a high or very high problem, while evaporative losses from the reservoir and only 9 percent of the countries surveyed did not through seepage. Consumption varies greatly view it as a problem (UN 2012). A recent World depending on site location and design. In an arid Resources Institute report assessed existing and environment, where reservoir storage is very large, planned power plants in India and southeast Asia evaporative losses can be significant compared to and concluded that over half are located in areas run-of-the-river hydropower plants, which store that will likely face water shortages in the future little water, and therefore have evaporative losses (Sauer, 2010). near zero. However, a run-of-the-river site cannot Climate change will increase the vul- be used for water storage, nor can it control the nerability of countries, as rising tempera- efficient generation of the electricity when needed tures accelerate evaporation and precipita- (for peak loads, for example). tion. Also, rain patterns will shift and inten- Hydropower plants impact the land and sify, thereby increasing uncertainty in energy water. Hydropower plants change the hydrogeol- development. Power generation faces two main ogy of an area because they convert a free-flowing risks: increased water temperatures for cool- river into a reservoir, thus altering the timing and ing (van Vliet, 2012), and decreased water avail- flow of the water. This impounded water affects ability. There have already been some reper- water quality and aquatic life, as rivers and lakes cussions on the energy sector (USC, 2011) as can fill with sediment and baseline nutrient power plants have been forced to shut down due levels can be altered. Water rushing through the to lack of water for cooling purposes or due to turbines can increase the presence of dissolved high water temperature. In addition, questions oxygen in the water, affecting aquatic life. Eco- are being raised about solar thermal power plant systems and water quality are further affected by projects because of their impact on the water the dam because hydropower plants may slow resources of particular regions. Moreover, sea the river’s flow, thus potentially increasing the level rise could adversely impact coastal energy temperature stratification of the water body. infrastructure and power plant operations, and climate change will also affect the energy sec- tor through varied energy demand, especially for Present and Future Challenges cooling homes, offices and factories as temper- ature increases. Integrated planning will serve as Although the water-energy nexus varies by adaptation and mitigation measures to improve region, challenges in securing enough water resilience to climate change impacts. for energy and energy for water will increase Future water scarcity can threaten the with population and economic growth. In viability of projects and hinder development. addition, competition for water resources will Market analysts are predicting that energy intensify and climate change will compromise supplies may be threatened by water scarcity. solutions. Recently, General Electric’s director A recent report by the IEA (2012) concluded that of global strategy and planning stated that water water constraints might compromise existing scarcity made expansion plans for coal power operations and proposed projects, and increase plants in China and India unfeasible (Business- operational costs when adaptive measures have Week, 2012). The 2012 UN Water Report sur- to be put into place. veyed more than 125 countries and found that 48 Thermal power plants can become Section 2 percent of nations rank the importance of water stressed in regions with low water availability 14 THIRSTY ENERGY due to their large water requirements. In order high” baseline water stress, and that by 2025 to reduce vulnerability to water scarcity, power (map on the right), 55 percent of these plants will plants will most likely employ closed-loop cool- have “significantly worse,”5 “extremely worse,” ing systems. While this may reduce water with- or “exceptionally worse” water stress. As climate drawals, water consumption could significantly change impacts manifest themselves and global increase (IEA, 2012). There are many alterna- resources are placed under additional pressure, tives to address the water-energy nexus in it is critical that governments prepare to ensure power generation, such as better cooling system the security and stability of their countries. technologies. However, many current options A changing climate and increasing water are less efficient and more costly, so operators variability will also affect hydropower as flows prefer conventional systems until regulation or shift due to changing precipitation. In addi- pricing dictates otherwise. tion, glaciers that feed hydropower plants Thermal power plant operations can also may disappear, thus jeopardizing the ability be threatened by increased water tempera- of nations to generate power. Compounded tures. Increased water temperatures are corre- uncertainty due to changes in surface water lated with rising air temperatures (Stewart et al., temperature, flows, and availability are forcing 2013) and can prevent power plants from cooling companies to develop more sustainable prac- properly, causing them to shut down. These tices to ensure the long-term viability of their concerns will become increasingly important operations and infrastructure. as companies consider alternative technologies (such as dry cooling), and governments study the placement of power plants along rivers, ensuring the plant’s sustainable future operation under increased energy demand and potentially warmer climate. Due to these risks, govern- ments must re-examine where thermal power 2  The baselines water stress is defined as the ratio of total annual freshwater withdrawals for the year 2000, plant projects are located. Figure 6 depicts the relative to expected annual renewable freshwater supply risks assessed by a study done by the World based on 1950–1990 climatic norms. This ratio provides an assessment of the demand for freshwater from Resources Institute (WRI) for Southeast Asia. The households, industry, and irrigation agriculture relative impact of climate change and population growth to freshwater availability in a typical year. 3  In this study, water stress is defined as the ratio of in the region will increase water stress on power water withdrawal to renewable supply. plant operations. The map at the top reveals the 4  ‘Medium-high’ corresponds to a ratio of 20 to 40 per- cent of available freshwater used; ‘high’ corresponds to baseline2 water stress3 conditions in Southeast a ratio of 40 to 80 percent of available freshwater used; Asia, and the map at the bottom depicts water and ‘extremely-high’ corresponds to a ratio of more than 80 percent of available water used. stress power plants will face in 2025. The maps 5  WRI defines “significantly worse” as 2 to 2.8 times show that 19 percent of the design capacity worse than baseline conditions; “extremely worse” means 2.8 to 8 times worse than baseline conditions; of power plants in southeast Asia is located in and “exceptionally worse” means more than 8 times areas of “medium-high,4” “high,” or “extremely worse than baseline conditions. Water Demands of Power Generation   15 Southeast Asia, Baseline Water Stress and Power Plants (top) and Long Term Figure 7:   Change in Water Stress and Power Plants, 2025 (bottom) (WRI, 2011) Section 2 Section 3 . Towards Potential Solutions: Improved Management of the Nexus Opportunities for Synergies in Water and Energy Infrastructure Although the link between water and energy is now evident, these two sectors have historically been regulated and managed separately. The complexity of the system requires a more systematic approach that takes into account all the existing interactions and relationships between sectors and explores the strategic complementarities and potential synergies among infrastructure sectors, as well as with other sectors. Energy and water planning must be integrated in order to optimize invest- ments and avoid inefficiencies. Similarly, cross-sectoral implications need to be better understood. In addition to taking water constraints in the energy sector into account when undertaking power expansion plans, there are also many opportunities for the joint development and management of water and energy infrastructure and technologies, maximizing co-benefits and minimizing negative tradeoffs. When assessing the needs of the energy sector, water planners and decision makers must fully understand the requirements of electricity generation technologies and their potential impact on the resource. Similarly, energy planners and investors must take into account the complexities of the hydrological cycle and other competing uses when assessing plans and investments. One way of ensuring robust planning efforts is by implementing technical approaches and reforming governing institutions. Specifically, technical approaches may include employing co-production synergies, such as developing combined power and desalination plants, and using alternative sources of water for thermal power plant cooling processes. Institutional reform will require integrated planning and cross- sectoral communication to bolster efforts to mitigate the energy-water nexus, and must be achieved before technical solutions can be successfully adapted. An integrated energy and water planning approach can ensure that both resources are developed sustainably as well as explore synergies more effectively. It is important to create inno- vative approaches that encourage cross-sectoral cooperation and assess water and energy tradeoffs at the regional and national levels, thereby ensuring that future demands will be met. Technical Opportunities There is an array of opportunities and technical solutions to reduce water use in power plants and to exploit the benefits of possible synergies in water and energy. Given the different uses of dams, hydro- power sustainability can be improved through integrated water and energy planning and management 18 THIRSTY ENERGY (see next section). For other power technologies, improving the efficiency of the fleet or by reusing the shift towards those that require no water, such some of the heat that is being lost. Some options as wind and solar photovoltaic, could reduce both for reusing the waste heat are: combined power water requirements and greenhouse gas (GHG) and desalination plants, and combined heat and emissions by the power sector. Since most of the power plants. water used by thermal power plants is for cooling purposes, the focus there should be on technical Combined Power and Desalination Plants solutions that decrease freshwater needs. This Combined power and desalination plants, or can be achieved by a) using cooling systems that hybrid desalination plants, can simultane- require none or very limited amounts of water, ously produce drinking water and electricity. b) decreasing the waste heat of the plant and, as a This solution is especially suited for extreme arid result, decreasing the cooling needs, and c) using areas such as the Middle East, where there is alternative water sources, therefore displacing almost no water available and where desalination freshwater needs. These options are described in will likely be implemented. Desalination is more the sections that follow. energy intensive than traditional water treatment. However, in some regions of the world it might be Alternative Cooling Systems the only alternative available to meet the growing Since the amount of water required depends on demand for water. Hybrid desalination plants use the cooling system used in the power plant, the an innovative process to integrate desalination use of alternative cooling technologies, such as with thermal power generation, which improves dry cooling or hybrid cooling systems, can sig- the efficiency and lowers the electricity cost of nificantly reduce the power sector’s water needs. desalination processes. The waste heat from the Dry cooling uses air instead of water as the main power plant is used as the heat source for the heat transfer, and therefore does not consume desalination process. nor withdraw water. This type of cooling system Integrated water and energy production is suited for water scarce regions and is currently has several benefits: a) the waste heat becomes being used in South Africa as well as in several a resource, thus decreasing the volume of water solar thermal power plant projects in arid areas. required for cooling purposes, b) the cost of Hybrid cooling uses a combination of dry and wet desalinating water decreases, so the option cooling systems, thus consuming and withdrawing becomes more economically attractive,6 and less water than conventional systems. However, c) the integrated system is more efficient than the regulations or policies are needed to encourage stand-alone option (a separate power plant and alternative cooling systems because they are a separate desalination plant). The disadvantage often more expensive and less efficient than is that the integrated system is harder to operate conventional ones. These systems allow for the due to seasonal variability. During winter, demand location of power plants away from water sources for electricity can decrease; however, demand but could result in more costly investments. for water can remain constant all year long. This demand variability can be managed, but implies Decreasing Waste Heat in Power that when the two demands are not constant, the Plants Another way to minimize water use in power plants is by reducing the amount of heat that is dissipated 6  Some studies argue that this is the most feasible way to meet both electricity and water demand in arid areas through the cooling system. This can be done by (Pechtl, 2003). Towards Potential Solutions: Improved Management of the Nexus   19 system is running below its possible efficiency. Sankey Diagram of CHP and Figure 8.   There are different hybrid desalination plants in Conventional Power Plants the world. Examples include the Fujairah hybrid CHP Conventional plant in United Arab Emirates and the Shoaiba Methods Losses Losses power and desalination plant in Saudi Arabia. Heat Combined Heat and Power (CHP) Plants Demand Boiler CHP plants (or cogeneration plants) integrate power and usable heat production in a single Power process. Whereas in conventional power plants, Demand half or more of the heat produced gets lost as waste heat (dissipated into the environment through the Power cooling system), in CHP plants the heat is used for Station Losses district heating as steam or hot water (see figure Source: UK Department for Environment, Food and 8). Therefore, the amount of cooling water required Rural Affairs. by the power plant decreases substantially and the efficiency of the overall process increases. CHP plants can be implemented with any fuel source, to the energy savings, the payback time is usu- but efficiency of the plants will vary. ally quite long. As with combined desalination An important advantage of CHP plants and power plants, another disadvantage of CHP is that an integrated power and heat gen- is the seasonal variations that affect the perfor- eration process is more efficient than the mance of the plant. Meeting the demand for heat two stand-alone processes, thus decreasing and power adds additional complexity to plant greenhouse gas emissions and diminishing operations. During the summer, it can become water requirements. The combined efficiency challenging to deal with the extra heat. of the heat and power processes (total energy output by energy input) can reach as high as 90 Alternative Water Sources percent (IEA, 2008). CHP plants rely on existing Alternative, non-freshwater sources, such technologies and are in use in many parts of the as brackish water or seawater may be used world. In Denmark about 50 percent of the total as cooling water for thermal power plants. power generated is produced in CHP plants (IEA, Although using alternative water sources can 2008). CHP plants are more efficient when they be challenging, and costs vary depending on the are located near the demand for heat and power, location of the source and water quality, alterna- such as a city or industrial complex. If the heat has tive sources may reduce freshwater demands to be transported far from the production site, a and use. One solution widely employed in some significant percentage gets lost and the efficiency parts of the world is the use of sea water. How- of the process drops considerably, and costs can ever, this is only feasible if the power plant is also be higher. Thus, CHP plants are often well located near the coast. suited as decentralized forms of energy supply. Treated wastewater can be an attractive On the other hand, CHP plants require cooling water alternative. However, there are higher initial capital investments compared several issues that must be addressed. Waste- to conventional power plants. Although CHP water usually contains polluting substances. As a Section 3 plants are more economical in the long term due result, the water must be treated in order to avoid 20 THIRSTY ENERGY corrosion and other undesired effects in the cool- nexus, what the merits of different technical ing system, which can be expensive. Moreover, options are, or the possible outcomes. Exist- in most countries the use of treated wastewater ing publicly available models7 lack the capacity requires that power plant operators obtain to address issues surrounding the value of differ- additional permits, resulting in higher adminis- ent energy investments given likely or potential trative costs. However, in those same countries, future water constraints and competing trends. wastewater treatment plants are often required Available models also lack the ability to address to pre-treat municipal water to at least secondary the wider social, economic, and environmental treatment standards before discharging it back impacts of the energy-water nexus, and are to the source. unable to identify the implications of potential A major advantage of wastewater is water and energy policies and investments that it is a source available in mostly every intended to address water constraints. These country, particularly in large cities. Securing challenges and complexities can no longer be wastewater from a nearby wastewater treat- addressed in the conventional way, with each ment plant could reduce future uncertainty and sector taking decisions independently, with ensure a reliable and continuous water source separate regulations, and different goals. for the power plant. This integrated solution is already being employed in some countries; in The Conventional Approach in the United States, wastewater is used for cooling Water and Energy Models purposes in 50 power plants. Perhaps one of the Currently, the primary concern in managing best-known cases is Palo Verde in Arizona, which water resources is the distribution of water is the largest nuclear power plant in the United over space and time in order to meet specific States. This plant uses wastewater as the sole objectives or demands. Most water allocation source for cooling. The wastewater is piped in and modeling often assumes adequate energy sup- re-treated onsite before it is used. Once it runs plies will be available to divert, pump, and treat the through the cooling system, it is transported to water. Few, if any, of the water allocation models a pond where it evaporates. The power plant has quantify the energy consumed in different water recently secured 26 billion gallons of wastewater demand scenarios. This isolated assessment of a year until 2050 (UCS, 2011). An important water resources does not reflect the dynamic barrier to implementing this solution worldwide interplay between energy and water, especially is that many developing countries lack sanitation due to the large energy demands required to infrastructure. However, this option presents a transport and treat water to meet an end use. great opportunity to plan integrated water and Water models typically require a high level energy infrastructure in the future and avoid the of hydrologic detail on a particular watershed, lock-in inefficiencies of developed countries. making them data-intensive as well as complex. Models can provide great detail of information Institutional Reform and Integrating Models for Planning 7  There are several private and commercial models available that are more sophisticated. However in order and Design of Investments for them to be useful for support developing countries, models and tools must be available at no/low cost. At Decision makers are often ill-informed about current prices, the models are not able to provide a sound basis for national energy and water policy and the source of problems in the water-energy investments. Towards Potential Solutions: Improved Management of the Nexus   21 on water circulation in the watershed, such as manner. A wide range of models are available, stream flows, evapotranspiration, return flows, from fairly basic electricity capacity expansion exchange between surface and ground water. models to detailed electricity network models to Yet, scaling up models to assess national water economy-wide general equilibrium models with budgets is data intensive and often too detailed representations of various types of energy sup- for first level resource assessments. In addition, ply and demand. However, the energy models while economic parameters can be combined do not address total water availability and its with hydrological modeling to analyze the costs dynamic nature or tradeoffs among water uses. and value of output for a new hydroelectric invest- In some advanced models water availability and ment, economic analysis of water allocation at a variability are taken into account mainly as they national level requires more economic detail on affect hydropower production. The links between competition among alternative water uses. water availability and variability and other sec- Similarly, energy planning is primarily tors are usually handled by incorporating exog- concerned with siting and cost requirements enous constraints or parameters into the energy for energy generation in the context of models (e.g. minimum environmental or naviga- transmitting the produced energy to popula- tion outflows, quotas for irrigations, among tion centers. Except for systems dominated others). The Long Range Energy Alternatives by hydropower, the supply of water necessary Planning system (LEAP) is a widely used energy for power generation at the upstream plan- model because it provides a simple accounting ning stage is typically assumed to exist and is framework, although it has limited optimizing often not considered to be a limiting factor in capabilities. Other more sophisticated models, operations (although it is accepted that potential such as MESSAGE and MARKAL/TIMES, apply constraints will be an important factor). Models least-cost optimization that addresses the com- do not consider dynamically the use of water plexity of all technology options, especially for to generate the energy required by water infra- full-sector models that include end-use technol- structure. In these situations, there is an inherent ogy options. These models allow for the assess- multiplier on both energy and water demands ment of a wide variety of policies and technology that may be overlooked when employing the options, and provide a consistent framework for traditional approach to modeling and analysis. assessing their costs and benefits (annex 3 pro- While this effect may be quite marginal in regions vides a detailed assessment of different publicly with ample supplies of both water and energy, it available models). could become a central cross-sector constraint Projected climate change and impacts in regions with resource scarcity and will require on water availability are not commonly fac- accurate evaluation and analysis. tored into conventional energy planning and Although energy models mainly focus operations. Global warming will likely cause on generation, they have advanced signifi- increased competition for water resources from cantly over the last 40 years, incorporating sectors such as agriculture and water recreation. estimates of water demand for energy pro- The usual methodological approach to assess duction through simple coefficients of water climate impacts on hydropower resource endow- utilization per unit of output. Several energy 8 ments consists of translating long-term climate systems models have been specifically devel- oped to assist resource managers to develop 8  Mainly for electricity, but can include water for biofuels, Section 3 water and energy resources in a sustainable mining, and refining as well. 22 THIRSTY ENERGY variables into runoff, although this involves great eling frameworks, b) incorporate energy pro- uncertainty. duction and uses into existing water resource modeling frameworks, or c) build a new inte- Integrated Energy-Water Planning grated framework. Of the existing modeling Approach frameworks and current approaches to model- The tendency for traditional planning is to be ing energy and water, it appears that the most narrowly focused and exclusionary (Grigg, promising model is a nested approach that incor- 2008). Risk avoidance and control of resources porates water resources and uses into existing is a paramount consideration in traditional plan- energy modeling frameworks. This conclusion is ning for electrical utilities and water resources, further supported by the fact that energy system but successful planning requires that govern- planning models currently exist in many develop- ment agencies and stakeholders participate in ing and emerging economies. making decision through a coordinated process There are several publicly available mod- that includes conflict resolution. Integrated eling frameworks under development that resource planning of the energy-water nexus aim to provide an integrated energy-water often emphasizes the importance of establishing planning capability. One such model is the inte- a more open and participatory decision-making grated LEAP-WEAP model. The linkages between process and coordinating the many institutions the two models allows planners to track water that govern water resources. Therefore, the demands for the energy sector as defined by energy-water planning approach encourages LEAP, and allows LEAP to track energy demands the development of new institutional roles and for various water processes (drinking water, agri- processes in addition to strengthening existing culture, etc.) as outlined in WEAP. The priority for planning and analytical tools. It also promotes water lies within WEAP, which will “inform” LEAP consensus building and alternative dispute reso- when water availability is not sufficient for LEAP’s lution over conflict and litigation. proposed energy pathway. The program will then Due to the lack of integrated planning have to iterate until a balance is reached. While around energy-water management, an inte- the combined WEAP-LEAP model represents grated energy-water modeling framework each sector in detail, the model must overcome needs to address the shared needs of energy several differences in order for the systems to be and water producers, resource managers, dynamically linked. First, LEAP must be modified regulators, and decision makers at the fed- to include water demands for energy processes, eral, state, and local levels. Ideally, the frame- and WEAP must be modified to include energy work should provide an interactive environment demands for water processes. Secondly, WEAP to explore tradeoffs and potential synergies, and and LEAP must produce results for identical time also evaluate alternative energy/water options steps. To achieve this LEAP was recently updated and objectives. In particular, the modeling to include daily, weekly, monthly, and seasonal framework needs to be flexible in order to facili- time slices. Additionally, WEAP and LEAP must tate tailored analyses over different geographical agree on the spatial boundary for the model. regions and scales (e.g., national, state, county, WEAP applies primarily to watershed boundaries, watershed, interconnection region).9 while LEAP deals mainly with political boundaries. There are three possible approaches to address the nexus: a) incorporate water Annex 3 discusses the requirements of an energy- 9  resources and uses into existing energy mod- water integrated model in more detail. Towards Potential Solutions: Improved Management of the Nexus   23 WEAP also deals with specific power plants at a of risk and uncertainty. Resource cost and avail- specific location (i.e., a point along a river), while ability are typically defined by supply-cost curves, LEAP deals generally with “types” of power plants. which are inputs to the model. Uncertainty in When the differences between the two the cost or availability of specific resources is models are resolved, the combined model will traditionally handled through scenario or sensi- allow integrated energy-water policy analysis tivity analyses that can determine different model for a broad range of energy-water options. results when these parameters are changed. Potential applications of the model include Examples of when it is important to investigate evaluating water needs for hydropower, cooling uncertainty in this area include situations where systems for thermal plants, tar sands mining, the energy system is dependent on a significant and biofuel production, as well as tracking energy amount of imported fuels, or where environmental requirements for water pumping, treatment, and or technological concerns may significantly alter other water processes. The main drawback of the the cost or availability of extracting or processing WEAP-LEAP combined model for policy analysis certain resources, and where weather/climate is that the user must specify the development unpredictability may have extreme impacts on pathways of the energy and water systems, water for power generation. requiring iterations to evaluate alternative scenar- Uncertainty in demand projections is ios until the desired outcome is produced. There typically only investigated through scenario is no least cost optimization capability. However, analyses, where specific changes in future the level of detail supported for the water system energy demands are postulated based on provided by WEAP and the lower initial data specific changes in underlying assumptions requirements are strengths that makes the model behind the original demand projection, such flexible and readily available. Other models are as a change in gross domestic product (GDP) being developed that will provide planners with a or population growth rates. The introduction complete view of energy and water demand from of water into energy models introduces new resource extraction to end use, across sectors. areas of uncertainty. The biggest of these is Case studies are needed to demonstrate the variable nature of the underlying weather the importance of, and apply the existing data projection and its correlation to the energy tools to, an integrated energy-water planning service demand projection. Energy system process. The water and energy nexus is a very models do not normally deal with this kind broad topic. As a result, case studies or pilot of variability. Water models are often used to projects are required to illustrate different types determine the resilience of the water system of situations that are most relevant for client to weather extremes. Energy system models countries. There are many potential typolo- are more often used to identify economically gies for cases. Examples include a case where optimal investments out of a large variety of thermal generation will increase the demand on possible options. Integrating water systems water resources; a case where renewable energy plans could be hindered by the need for water for 10  Other examples are: a case where existing thermal new technologies, and where perhaps combin- capacity could be facing challenges resulting from climate change impacts and where the future plans in ing energy production and water could be the the sector need to consider that effect; and a case where best strategy, and so on.10 the impacts of climate change could radically change the expectations regarding hydropower production and Strengthening modeling framework and where alternative designs or adaptation strategies need Section 3 capacities will require a more robust treatment be pursued, and so on. 24 THIRSTY ENERGY into energy optimization models will require energy investments given the potential future careful design of the input data sets to avoid or constraints and the wider social, environmen- minimize inconsistencies. Precipitation levels tal, and economic implications of potential and temperature data are primary drivers of water and energy policies, including invest- water availability, and they also directly affect ments intended to address water constraints. the levels of energy services required for space Existing models do not provide the capacity to heating and cooling as well as many other address these questions, and so are not able to energy services. Integrated models will require provide a sound basis for national energy and the development of a coherent set of weather water policy and investments. This is of par- and energy demand projections. ticular concern for countries with strong energy The proposed modeling framework must demand growth, or significant declines in per incorporate the long-term effects of climate capita water supply. change. Climate change has an impact on both Addressing these shortcomings is not the energy and the water sector. Moreover, simply a matter of integrating physical water some mitigation policies may exacerbate chal- use into energy models. Economic analysis is lenges presented by the nexus in the future. necessary when assessing tradeoffs. Water and Increased energy demand may occur with energy are crucial inputs into economic produc- decreasing water resources (due to climate tion. Tightening constraints may introduce the change and other social and environmental potential for reductions in economic activities. pressures). In combination, this may be a seri- Increasing water demand and scarcity may ous problem that planners are not adequately increase market prices for water and energy considering today. There is a need to explore and lead to the redistribution of these increas- the potential technological, social, political, and ingly scarce resources. In the case of water, economic shifts involved in achieving different increasing scarcity in one area is likely to result global climate trajectories and account for the in the increased purchase of food products potential impacts of climate change in the water from another area. When this occurs, significant and energy sectors. structural adjustments can take place. These The issue of agriculture, in particular food adjustments need to be managed with sensitiv- production is an integral part of the nexus. ity in order to forestall short-term increases Water and energy are required in the agriculture in overall economic activity and employment. sector, and some crops are used for the produc- Actual outcomes will depend on the capacity of tion of biofuels, which compete with food crops a community to adjust; the rates of technological for water and land. However, bringing food into progress in water efficiency in energy and food the mix adds several complexities to the model- production; and knowledge provision, institu- ing framework (e.g., modeling biofuels), which tional, governance, and planning arrangements make such an approach extremely difficult to to facilitate efficient investment and synergies address. One possibility is to incorporate agri- in water and energy planning. One of the more culture indirectly by adding the water demand of difficult issues to manage is the fact that the the sector (and other competing uses of water) economic value of water to the energy sector, into the modeling exercise. at the margin, will generally be greater than its Addressing the water and energy nexus economic value to agriculture, while the implicit will require the capacity and modeling tools political power of the agricultural sector can to understand the advantages of different sometimes be greater than that of the energy Towards Potential Solutions: Improved Management of the Nexus   25 sector. This implies that the energy sector will as by portraying the energy sector as damaging generally be willing and able to pay more for agricultural interests and threatening food secu- water than competing agricultural uses. The risk rity. The output from the different energy and associated with this is that some agricultural water planning models will be then incorporated groups may seek to use their political power to into an economic model that will make it possible redress this difference in economic power, such to look at different policy options. Section 3 Section 4 . Conclusions and Recommendations I ntegrated energy-water modeling allows resource planners to consider whether water supply today and in the future will be sufficient to meet the cooling requirements of different power plants. Today, most of the energy- water planning efforts are specific to the United States, and the initiatives are in their pilot and research stages. Developing countries lack detailed energy studies and projections, limiting their capacity to fully assess energy-water impacts. There is scant literature regarding energy projections and associated water consumption for developing countries. If an analytical modeling framework is to be employed, several additional steps must be taken, including data collection, model(s) development and verification, and stakeholder involvement. The tools must be reviewed by stakehold- ers and need to clearly identify the tradeoffs associated with different operational and policy decisions. Finally, a decision making process must be developed that incorporates all of the above in order to have practical, real-world applications. Modeling for integrated energy-water planning and water allocation must have a solid basis for identifying current and future levels of water availability. The models must incorporate accurate projections for water demands and consumptive use for all sectors: energy, agriculture (including biomass), public water supply, and the environment. Accurate projections for water supply (not availability, but natural water supply) are also needed. The models must address variability in scale to ensure results are congruent with respective water basin and the corresponding political/ administrative control of the basin/region. Climate change’s impact on supply and demand should also be considered. Improved modeling will ensure that power plants are more strategically located and that they implement technologies that increase energy efficiency. Examples include hybrid desalina- tion plants, which produce drinking water while generating electricity; combined heat and power plants that integrate power and usable heat production into one process; and water energy recovery from sewerage that captures methane and carbon dioxide in the waste to generate energy. Such inte- grated technologies have several benefits, including that they turn waste products, such as heat, into an input for another process. Moreover, energy and water planning that optimizes both resources will result in a more diversified energy mix, including renewables that consume almost no water, such as 28 THIRSTY ENERGY wind and solar photovoltaics. Also, shifting from nexus may be made more manageable. If not, old (coal) power plants to newer, more efficient then they will be forced to address scenarios plants, such as natural gas combined cycle with policies that have cross purposes and power plants would significantly reduce water deal with crises that could have been mitigated use in the power sector. (Faeth, 2012). Comprehensive approaches that con- Sustainable solutions require that issues sider the diverse set of factors that influence not be addressed in isolation but through a energy and water demand and incorporate systems approach of integrated solutions. those issues into solutions will provide a Such solutions can only be achieved if there robust management framework for the is communication between engineers and energy-water nexus. Management capacities scientists in different disciplines as well as with will be strengthened by integrated modeling technical experts and professionals in the social approaches that allow governments to adapt sciences, and economic and political decisions to change, such as population and economic makers (Olsson, 2012). Cooperation is also a key growth. This will enhance a nation’s resiliency in element in integration, whether by formal or by the face of uncertainties brought on by climate informal means. change. It is critically important to involve the Integrated planning will require regula- public affected by the development and tory and political reform. Currently, laws and maintenance of a project. Therefore, the regulations governing water use vary, some recording and collection of data, and the are quite complex, while others are vague and development and application of models at the inconsistent. Determining what laws govern basin level are needed to illustrate the benefits water can be expensive and time consuming, of bottom-up (versus top-down) approaches thus preventing certain stakeholders from to integrating energy and water resources acquiring all the information they need or planning. Focusing on smaller basins will help understanding their full implication. In addi- member states benefit from understanding tion, laws determining water rights may further the impact of their planning and actions at the complicate matters as some may govern an local level. The lessons learned from energy- entire region, while others are basin specific. nexus planning and implementation will carry Certain groups hold special privileges of prior these efforts forward on larger scales, such as appropriation, recognizing their “first right” to regions. water withdrawals. Thus, in basins where water To enhance these efforts and provide rights are fully allocated, transferring water additional solutions and recommendations, rights could be difficult or expensive. the World Bank will continue to work with The energy-water nexus will be addressed client countries to develop integrated water more effectively through enhanced stake- and energy management strategies through holder collaboration. Integrating policy to a series of case studies. Different tools and respond to challenges presented by the energy- approaches will be developed and implemented water nexus will be a difficult. Through the incor- that will enable countries to address and quan- poration of energy and water policy, existing tify the impacts of water constraints on the synergies may be exploited more effectively. If energy sector and the potential tradeoffs with policymakers improve coordination, the uncer- other economic sectors. Thus, the initiative will tainties brought on by climate change and the demonstrate the breadth of benefits that the Conclusions and Recommendations   29 integrated planning of energy and water invest- case studies will be disseminated to promote ments has on a nation’s long-term economic best practices in integrated water and energy stability and well-being. This is the first introduc- planning, and means of mitigating pressures tory report of the initiative. Findings from the brought on by the nexus. Section 4 References AACM and Centre for Water Policy Research. com/news/science/articles/2011/02/02/ 1995. 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Current Debates on Infra- World Water Assessment Program (WWAP). structure Policy, Commission on Growth 2012. The United Nations World Water De- and Development. Estache A. and Fay M., velopment Report 4. Paris, UNESCO. 2009 from World Bank Infrastructure Strat- Yepes, Tito. 2008. “Investment Needs for Infra- egy Update, 2011. structure in Developing Countries 2008– World Bank. 2009. “Directions in Hydropower.” 2015.” Latin America and Caribbean Region, 2009, International Bank for Reconstruction World Bank. Unpublished. ANNEXES Annex 1 . Water Withdrawal and Consumption by Power Plants11 T o understand the order of magnitude of the water requirements of power plants, figures 1.1, 1.2, and 1.3 summarize the current knowledge that describes water withdrawals and consumption for different types of power plants and cooling systems. These figures exclude hydropower. However, it should be noted that given a type of cooling system, the amount of water required will mostly depend on the efficiency of the power plant (and not so much on the fuel type) and to a lesser extent on other factors such as climatic conditions. This also accounts for the disparity in outcomes among the same power plant technologies and using the same cooling system as seen in the graph below. For example, in the category “coal generic” there is a large range due to different power plant efficien- cies: older coal power plants can have efficiencies as low as 25 percent whereas newer power plants can reach 40 percent efficiency. Once-through cooling technologies withdraw 10 to 100 times more water per unit of electric gen- eration than cooling tower technologies, yet the latter usually consume at least twice the volume of water as once-through cooling technologies, depending on climatic conditions. Water consumption for power plants using dry cooling is an order of magnitude less than for those same plants using recirculating cooling. Water consumption factors for renewable and non-renewable electricity generating technologies vary substantially within and across technology categories, mostly due to their difference in efficiency. The highest water consumption factors for all technologies result from the use of evaporative cooling towers. Less efficient power plants such as pulverized coal with carbon capture and CSP technologies utilizing a cooling tower represent the upper bound of water consumption, at approximately 1,000 gal/MWh of electricity produced. The lowest operational water consumption factors result from wind energy, PV, and CSP Stirling solar technologies because none of them require water for cooling, and all the technologies using dry cooling systems. It should be noticed that natural gas combined cycle power plants have low rates of consumption and withdrawals in all types of cooling systems. Water 11  This annex is based on the work done by Macknick, J., Newmark, R., Heath, G. and Hallet, KC. 2011. “A Review of Operational Water Consumption and Withdrawal Factors for Electricity Generating Technologies,” Technical Report No. NREL/TP-6A20-50900. U.S. DOE National Renewable Energy Laboratory, Boulder, CO.. 40 THIRSTY ENERGY withdrawal factors for electricity generating cooling to dry cooling results in reductions in out- technologies show a similar variability within and put of 2 to 5 percent and increases the levelized across technology categories. It is important to cost of electricity by 3 to 8 percent (depending on note that it is the efficiency of the technology local climatic conditions). In addition to the losses that is the metric that must be assessed. in efficiencies and the increases in costs of pro- Taking the example of CSPs, Macknick et al. duction, the choice of cooling system can have (2011) conclude that switching facilities from wet environmental impacts on the water resources. Operational water consumption factors for electricity generating technologies Figure Annex 1.1.   CSP Biopower Nuclear Natural Gas Coal PV Wind 1,400 Recirculating Cooling Once-through Cooling Pond Cooling Dry Hybrid No Cooling Cooling Cooling Operational Water Consumption (gallons/MWh) Required 1,200 1,000 800 600 400 200 0 PV CSP Trough CSP Tower CSP Fresnel Biopower Steam Biopower Biogas Nuclear Natural Gas Steam Natural Gas Combined Cycle Natural Gas Combined Cycle with CCS Coal Generic Coal Subcritical Coal Supercritical Coal IGCC Coal Supercritical ith CSS Coal Subcritical with CSS Coal IGCC with CCS Biopower Steam Nuclear Natural Gas Combined Cycle Natural Gas Steam Coal Generic Coal Subcritical Coal Supercritical Coal Fluidized Bed Biopower Steam Nuclear Natural Gas Combined Cycle Coal Generic Coal Subcritical Coal Supercritical CSP Trough CSP Tower Biopower Biogas Natural Gas Combined Cycle CSP Trough CSP Tower Natural Gas Steam CSP Dish Stirling Wind Source: Macknick et al., 2011. Operational Water Withdrawals (gallons/MWh) 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Biopower Biogas Nuclear Natural Gas Steam Natural Gas Combined Cycle Source: Macknick et al., 2011. Natural Gas Combined Cycle with CCS Coal Generic Coal Subcritical Recirculating Cooling Coal Supercritical Coal IGCC Coal Subcritical with CSS Coal Supercritical ith CSS Coal IGCC with CCS Biopower Steam Nuclear Natural Gas Combined Cycle Natural Gas Steam Coal Generic Coal Once-through Cooling Coal Subcritical Coal Supercritical Biopower Steam Nuclear Natural Gas Natural Gas Combined Cycle Coal Generic Figure Annex 1.2.  Operational water withdrawals for electricity generating technologies Pond Cooling Nuclear Coal Subcritical Coal Supercritical WATER WITHDRAWAL AND CONSUMPTION BY POWER PLANTS Natural Gas Combined Cycle Other Natural Gas Steam Cooling Biopower 41 42 Operational Water Withdrawals (gallons/MWh) 0 500 1,000 1,500 2,000 2,500 3,000 THIRSTY ENERGY Biopower Biogas Nuclear Figure Annex 1.3.   Source: Macknick et al., 2011. Natural Gas Steam Natural Gas Combined Cycle Natural Gas Combined Cycle with CCS Coal Generic Coal Subcritical Coal Coal Supercritical technologies (zoom-in from previous figure) Coal IGCC Natural Gas Coal Subcritical with CSS Nuclear Coal Supercritical ith CSS Operational water withdrawal factors for recirculating cooling Coal IGCC with CCS Biopower Annex 2 . Carbon Capture and Storage C arbon capture and storage (CCS) involves capturing carbon dioxide from large point sources (e.g., fossil fuelled power plants or other industrial sources) before they are emitted to the atmosphere, transporting it to the injection site and injecting it into deep geological formations for storage. There has been considerable interest in CCS as a supply-side management tool to dramati- cally reduce greenhouse gas emissions with the continued use of fossil fuels (IPCC, 2005; IEA, 2008). In fact, the EIA suggests that the power sector must rapidly adopt CCS over the next 30 years to achieve a 50 percent reduction in GHG emis- sions by 2050. Although carbon capture technology is commercially available today (IEA, 2009), there are currently no large-scale commercial CCS power plants projects in operation. This is, in part, due to the high capital costs of the technology and sustained operating costs. However, as of January 2013, sixteen large-scale integrated CCS projects are considered “active,” that is, they are being implemented or have secured a positive financial decision to proceed to construction. Of these, 12 percent are in the power sector and 88 percent are in industrial applications (Global CCS Institute, 2013). There are 75 projects identified around the world, of which seventeen are in developing countries (Global CCS Institute, 2013).12 The first two commercial large-scale CCS-fitted power stations will begin operating in Canada and the United States in 2014 (Sweet, 2012). However, CCS presents new water challenges, both in the electricity generation process and in the injection of CO2 . Understanding these potential impacts and the conditions under which they arise is important to ensure the sustainable development of these projects. There are three categories of carbon dioxide capture processes from power production: (1) flue gas separation; (2) oxy-fuel combustion in power plants; and (3) pre-combustion separation. Each technology has energy and economic costs (Herzog and Golomb, 2004), and affects water resources. 12  Eleven projects are in China: seven power plants and four industrial projects. 44 THIRSTY ENERGY Water Usage Analyses of the performance of power sta- tions with CCS have been frequently overlooked Current forms of conventional thermal electric- water use. Nevertheless, some detailed estimates ity generation with fossil fuels use water for fuel of the water withdrawal and consumption needs extraction, generation, and cooling. Adding CCS of electricity generation with CCS have been technology to power stations increases water prodbuced, notably by the US Department of requirements, qualified by capture and power Energy and the National Energy Technology Labo- station specifications (DOE, 2009). Power plants ratory (DOE/NETL, 2009). Figure 2.2 compares with CCS necessitate additional water for the car- water withdrawal requirements for power genera- bon capture processes, especially in IGCC plants. tion with and without CCS (with cooling towers). However, most of the increased water require- It can be observed that water requirements ments are for cooling purposes. Carbon capture increase substantially with CCS, more than reduces substantially the efficiency of the power doubling in some cases. Moreover, this graph plant (heat rate increases: see figure 2.1). In post- also shows the relationship between heat rate combustion carbon capture, efficiency is affected and water needs. The more efficient is the plant as a result of the extracted heat from the steam (lower heat rate), the less waste heat and the less electric cycle that is used to heat the solvent water it requires (amine) and release the captured CO 2 . In addition, The use of water in electricity generation efficiency suffers when electricity is used to run with CCS varies according to the efficiency of the auxiliary equipment such as pumps, fans, and power station, its cooling system, and the CCS compressors for the CO 2 capture stream. Thus, technology in place. However, most of the water more fuel inputs are required to achieve the same requirements are for cooling purposes, which electricity output, resulting in additional amounts accounts for 71 to 99 percent of the total water of cooling water per kWh generated. This increase in water needs could more than double water Comparison of Water Figure Annex 2.2.   requirements for CCS power plants compared to withdrawn of CCS the non-CCS ones with the same cooling system. vs. non-CCS power plants with wet Figure Annex 2.1.   Comparison of Heat cooling towers Rates (HHV) with and Water Withdrawal (L/MWh) without CC 6,000 Heat Rate (kJ/kWh) 5,000 14,000 4,000 12,000 3,000 10,000 2,000 8,000 1,000 6,000 4,000 0 0 5,000 10,000 15,000 20,000 2,000 Heat Rate (kJ/kWh) 0 PC IGCC GE IGCC Shell NGCC PC FGD PC w/o FGD PC CCS NGCC wo/CCS w/CCS NGCC CCS IGCC IGCC CCS Source: DOE/NETL, 2010. Source: Delgado, 2012. Carbon Capture and Storage   45 Leakage of CO2 from storage reservoirs into potable aquifers and its Figure Annex 2.3.   impact on the water quality is a potential concern. Concern for Groundwater Resources CO2 Injection Well Increased acidity may Drinking Water mobilize hazardous metals Aquifier Dissolved CO2 CO2 Leakage Caprock Storage Reservoir Injection of Supercritical CO2 Source: Xu et al., 2007. needs of the plant with CCS (Newmark, 2010). Water Quality The type of cooling system used will determine most of the water requirements of the plant. Carbon dioxide leakage is a particular concern The Tenaska Trailblazer Post-Combustion CCS with CCS (see figure annex 2.3), which is exac- Power Plant being developed in Texas will use erbated due to higher withdrawal and consump- dry cooling systems to reduce the water require- tion rates. The primary concern regarding the ments of the plant by 90 percent (Tenaska leakage of CO2 -rich fluids into groundwater is the Trailblazer Partners, 2011). potential mobilization of hazardous inorganic Adding CCS to a power plant can increase constituents (including lead and arsenic) due the water requirements per kWh up to 100 to the increased acidity these fluids generate, percent in some cases (depending on the cool- which could exceed maximum concentration ing system used). This could be an issue for limits under some conditions (Newmark et al., local water resources, especially in areas where 2010). However, there is general agreement that the impacts of climate change could decrease the operational risks of CO 2 leakage due to CCS water availability or increase water temperature would be no greater (and likely lower) than the (Naughton, 2012). This impact could be mitigated oil and gas equivalents because CO 2 is not flam- through the installation of a dry cooling system, mable or explosive. The wealth of experience but these systems are more capital intense than accumulated by the natural gas storage and oil the wet counterparts and affect the efficiency of industries can be harnessed for CO 2 storage and the plant. In order to ensure sustainable growth, risk mitigation. The inherent risks associated the water aspects of CCS cannot be overlooked with CO 2 injection and storage can be managed. and must be incorporated into decision-making A crucial element is assessing and identifying an processes. appropriate injection site based on criteria for 46 THIRSTY ENERGY capacity, injectivity, and effectiveness. Appropri- age. Available on detect and mitigate any potential leakages. Ikeda. 2007. Technical Performance of Electric Power Generation Systems. Technology As- sesment report 63. Volume 1 of 2. Selected References: Flowsheets adapted to Australian Coal and Conditions. Ikeda, E., Lowe, A., Spero and C. Delgado, Anna. 2012. “Water Footprint of Elec- Stubington, J. Cooperative Research Center tric Power Generation: Modeling its use and for Coal in Sustainable Development. Aus- analyzing options for a water-scarce future,” tralia. 2007. Massachusetts Institute of Technology, Intergovernmental Panel on Climate Change June 2012. (IPCC). 2005. Carbon Dioxide Capture and DOE/NETL. 2010. Cost and Performance Base- Storage. Available on U.S. DOE National Energy Technology Labo- Moore, S. 2010. The Water Cost of Carbon Cap- ratory, Pittsburgh, PA. ture. http://spectrum.ieee.org/energy/en- DOE/NETL. 2009. Estimating freshwater needs vironment/the-water-cost-of-carbon-cap- to meet future thermoelectric generation ture/0 requirements, 2008 update. Available on Naughton et al. 2012. Could climate change limit UK case study. Energy and the Environment, DOE. 2010. Water Vulnerabilities for Existing Energy & Environment, 23(2–3): 265–282. Coal-fired Power Plants. August 2010 DOE/ Newmark et.al. 2010. Water Challenges for Geo- NETL-2010/1429 logic Carbon Capture and Sequestration. EPRI. 2010. Cooling Requirements and Water Newmark, R. L.; Friedmann, S. J.; Carroll, S. Use Impacts of Advanced Coal-fired Power A. Environ. Manage. 2010, 45 (4), 651–661. Plants with CO 2 Capture and Storage. Inter- Sweet, Bill. 2012. Carbon Capture Is Dead, Long im Results. Live Carbon Capture http://spectrum.ieee. Global CCS Institute. 2013. http://www.glo- org/energywise/green-tech/clean-coal/ balccsinstitute.com/projects/browse carbon-capture-is-dead-long-live-carbon- Herzog and Golomb. 2004. http://sequestra- capture. tion.mit.edu/pdf/enclyclopedia_of_energy_ Tenaska Trailblazer Partners. 2011. Report to the article.pdf Global CCS Institute. Cooling Alternatives International Energy Agency (IEA). 2009. Tech- Evaluation for a New Pulverized Coal Power nology Roadmap, Carbon capture and stor- Plant with Carbon Capture. Annex 3 . Assessment of Energy Models Review of Energy Models While there are many energy models available, particularly in the private power sector (such as SDDP, Ventys, Promod, which are used for investment planning), this section focuses on only those models that are publicly available. All the models discussed in this section are built on the principle of the Reference Energy System (RES), which identifies technologies and process as nodes in a network connected by energy flows. The models also include material flows that meet demands for energy (and material) services, while tracking emissions and other commodities based upon how the RES configured over time. This entire class of models is considered “bottom-up” technology-rich frameworks. LEAP The Long Range Energy Alternatives Planning system (LEAP) is an accounting and simulation-based framework in which the user defines the evolution of an energy system under various policies. It is developed and maintained by the Stockholm Energy Institute (SEI). The analyst must provide the allocations at each point in the energy system, indicating the levels of competing technologies and thereby the flow of energy throughout the system. The user must continually refine these assumptions until the desired results are reached. An intuitive user-friendly interface makes the model relatively easy to use. However, since it is an accounting framework, the user must provide “the answer” at each decision point in the model. Hence, LEAP currently cannot be used to determine the least-cost optimization of an energy system across policy goals. In addition, LEAP is not meant to handle very large, complex energy systems. In attempting to address these shortcomings, an experimental optimization feature was introduced in the 2011 version of the model, which calculates the least-cost reduced form power sector capacity expansion scenario, with or without emissions constraints. This feature works with the Open Source Energy Modeling System (OseMOSYS) developed by SEI, IAEA, and others. The OseMOSYS project has resulted in a usable but limited representation of the power sector that can be subject to optimization. Comprehensive full sector (multi-objective) optimization could be brought to LEAP by constructing a bridge to TIMES. This would result in a way to introduce full sector optimization to LEAP users. LEAP is the most widely available energy planning tool and thousands of users have been exposed to it. All components of LEAP and OseMOSYS are provided 48 THIRSTY ENERGY at no cost to nonprofit organizations, nonprofit and either MARKAL/TIMES or LEAP consis- governmental agencies, and universities based tently prefer the latter alternatives. Therefore, in developing countries. it is not as widely used as the other modeling platforms. ENPEP (BALANCE) The Energy and Power Evaluation Program13 MARKAL/TIMES (ENPEP) is a data intensive, complex energy MARKAL/TIMES is the product of over 30 years modeling framework. It is an equilibrium simula- of development and use under the auspices tion model that requires the placement of elas- of the International Energy Agency’s Energy ticities at every node in the network. The energy Technology Systems Analysis Programme15 sector is treated as consisting of autonomous (IEA-ETSAP). The modeling framework enables producers and consumers of energy, each seek- a wide range of users to employ least-cost ing to optimize their own profits (or reduce costs). optimization as an integral part of their plan- This approach is different from that of optimiza- ning process. It is a well-established model in tion models such as MESSAGE and MARKAL/ use in over 70 countries and 200 institutions TIMES (see below), which aim to optimize the world-wide. The MARKAL/TIMES modeling entire energy system while achieving a set of framework allows users to specify policy and user-defined policy goals. Policy analysis is diffi- resource constraints as an input, and the model cult when using ENPEP because there is no easy determines the optimal make-up of the energy way to formulate and evaluate alternative sce- system to meet that outcome (as is the case with narios. The model is difficult to use because of MESSAGE). A typical national model can solve in a bulky user interface that is made more com- seconds to a couple of minutes. In addition to its plex because of the numerous model compo- long-standing track record and ongoing develop- nents required. Thus ENPEP is a complete, com- ment and support by IEA-ETSAP, a major advan- prehensive energy system model but one that is tage of MARKAL/TIMES is the very powerful very difficult to use and maintain. ENPEP used to model support systems available that oversee be provided by the International Atomic Energy seamless management of all aspects of working Agency (IAEA) to member countries. However, with the model. Another advantage is the ability due to the complexity of working with the model, to link input and output data to Excel workbooks, the agency no longer promotes its use. resulting in a “report ready” format. Only LEAP can boast similar capacities. MESSAGE MARKAL/TIMES is available through the The Model for Energy Supply Strategy Alterna- IEA-ETSAP at no cost. The GAMS programming tives and their General Environmental Impacts 14 and model management software systems (MESSAGE) is an energy systems optimization essential to effectively work with the tool are model capable of scenario and policy analysis. It available from their developers, at a cost depen- was developed and is used by the International dent upon the nature of the institution (e.g., Institute for Applied Systems Analysis (IIASA). It academic, donor/research, commercial). is similar to MARKAL/TIMES, but has some dis- advantages. Most notably there is a very weak user interface and it uses a general purpose 13  See http://www.dis.anl.gov/projects/Enpepwin.html. 14  See http:/ /www.iiasa.ac.at/Research/ENE/model/ solver that can take hours to solve, particularly message.html. for large systems. Users familiar with MESSAGE 15  See www.etsap.org. Assessment of Energy Models   49 Typical Inputs and Outputs of using it. However, LEAP is primarily an accounting Energy System Models framework with limited optimization capability, and the user must provide “the answer” at each The energy system models described above uti- decision point in the model. Therefore, LEAP lize information about both the current and pos- is not suitable to handle large, complex energy sible future components of the energy system as systems. well as demographic and economic information MESSAGE is an energy systems optimiza- on resources and energy utilization needed to tion model capable of scenario and policy analy- forecast future supplies and demands. The key sis. It has a very weak user interface and uses types of inputs and outputs for an energy system a general purpose solver that can take hours model are summarized in figure 3.1. longer to solve large models than MARKAL/ TIMES. Therefore, it is not as widely used as the other modeling platforms. Summary of Energy System MARKAL/TIMES is used widely by agencies Models that employ least-cost optimization as an inte- gral part of their planning process. MARKAL/ LEAP is a strong entry-level modeling framework TIMES has a very powerful user interface that that works well in developing countries with supports data entry, scenario management, and relatively simple energy systems. It is available results analysis. The IEA-ETSAP operating agree- at no charge and many developing countries are ment sponsors the ongoing development of the Figure Annex 3.1.  Typical Energy System Model Inputs and Outputs INPUTS OUTPUTS • Characterization of the current stock of existing • Total Discounted Energy System Cost technologies • Resources levels and marginal costs, if • Resource supply (step) curves, and cumulative constrained resource limits • Technology • Characterization of future technology options   • Level of total installed capacity   • Fuels in/out, efficiency, availability, technical life   • Annual investments in new capacity and duration expenditure   • Investment, fixed and variable O&M costs, and   • Annual fixed and variable operating and fuel “hurdle” rates costs   • Emission rates   • Annual and season/time-of-day (for power   • Limits on technical potential plants) utilization   • Performance degradation (e.g., efficiency,   • Marginal cost, if constrained maintenance costs) • Energy consumed by each technology (sector), • Demand breakdown by end-use and marginal price (by season/time-of-day for   • Demand for useful energy electricity)   • Own price (and income) elasticities • Demand marginal costs and change in levels, if   • “Simplified” load curve using elastic MARKAL • Emission level by resource/sector/technology for • Discount rate, reserve margin each period, and marginal costs, if limited 50 THIRSTY ENERGY framework and supports a broad user commu- calculating thermoelectric power demand and nity. MARKAL/TIMES is available through the related water use, water demand from competing IEA-ETSAP at no cost, but the GAMS program- use sectors, surface and groundwater availability, ming and model management software sys- and an energy for water calculator. tems are available at a cost from their develop- An ongoing project being conducted by ers. Because of its complexity, the IAEA no lon- Sandia and partners aims to expand upon the ger promotes ENPEP. existing modules and develop additional ones Least-cost optimization is a modeling meth- that would be able of providing planners in the odology often used in the energy sector because Texas and western interconnects with a decision it can handle the complexity of the possible support system to analyze the potential impacts options, particularly in the case of full-sector of water stress on transmission and resource models that include end-use technology options. planning. Among the new modules envisioned is It allows for the assessment of a wide variety of an environmental controls model, climate change policies and technology options, and provides a calculator, water cost calculator, and a “water consistent framework for assessing their costs stress” calculator. The new and expanded mod- and benefits. However, energy sector actors do ules will provide a complete view of the power and not always make decisions based on least cost water systems, from resource extraction to end principles, and a variety of modeling approaches use, and will allow the user to explore how the two are used to compensate for this fact. Most systems interact and are affected by economic models are not intended to predict the future. and environmental uncertainties (such as climate Instead, they provide a consistent framework for change and population growth). The model allows examining the costs and benefits of alternative for a flexible definition of the “water stress” indi- policies, strategies, technology options, and cator, which is calculated by taking into account environmental constraints relative to a refer- factors such as water availability, water demand, ence scenario, which represents a likely future water cost, and institutional controls (water projection of the energy system under current rights). The user chooses how to weight these fac- business-as-usual practices and policies. tors. This “water stress” indicator is then factored into future investment decisions. An optimization feature is anticipated that Review of Energy-Water Models will tell the user the optimal sites for future power in Development plants, when to construct them, as well as the optimal energy portfolio. These calculations will EPWsim take into account cost, water availability, emis- This section explores efforts to develop model- sions, and so on. For example, the model may ing frameworks that better integrate energy and decide that a future power plant should be sited in water issues into planning models. EPWsim San- an area with less stringent institutional controls in dia National Laboratories developed the Energy order to reduce cost. To determine this, the model Power Water simulation16 (EPWsim) tool in 2009 as has two ways of defining water availability. “Wet” a product of the Energy-Water Roadmap exercise. water is water that is physically available in the This prototype model has a modular architecture region, while “paper” water is water which is avail- and is based on the commercial systems dynamic able after institutional controls have been applied. platform, PowerSim Studio Expert. The model currently supports several prototype modules for 16  See http://energy.sandia.gov/?page_id=4458. Assessment of Energy Models   51 The goal of the model is to explore the on defining the energy needs of the water and shared needs of energy and water producers, wastewater sectors, while still tracking water and managers, regulators, and government decision wastewater flows to evaluate the impact of water makers to determine the “best alternatives” conservation initiatives. from a wide range of power-water options. The The study determined that a decision- analysis can be tailored to different geographic support tool could most easily be created by boundaries and scales (national, state, county, expanding upon MARKAL, which is the existing watershed, interconnection) and can model energy modeling framework. In the pilot study, results from a year to decades in the future. This an existing MARKAL model of the NYC energy spatial flexibility allows the model the potential system was expanded to include the water to be applied in many different countries and system, creating a Reference Energy Water regions around the world. System (REWS). The REWS models water and The challenges involved in expanding the wastewater (impaired water) from the source EPWsim model stem from the integration of a (freshwater, groundwater) to processing (treat- wide array of data sets and modeling tools that all ment), transmission (conveyance systems), and are based on different software platforms. The through to end-use. The three water service current project will create an overarching model demands included in the preliminary model architecture that integrates all of the compo- were those for agricultural, drinking water, and nents together into one user-friendly interface. processed water. Water flows for thermoelectric The model will also have extensive reporting power production and steam generation are also capabilities, creating customized charts, tables, tracked. The simplified REWS from this study is and maps using GoogleEarth. shown in figure 3.2. While the current state of EPWsim is not yet Each node in the REWS represents an energy suitable for final policy analysis, Sandia’s proj- or water technology with associated energy ect is expected to result in a decision-support and material flows. As with a typical MARKAL system that provides full sector representation model, the parameters of each energy and water of the energy and water systems and can opti- technology are the inputs (e.g., investment cost, mize future pathways of development to ensure operating cost, lifetime, efficiency). The level of adequate water and energy supplies for all. detail for the water technologies were limited compared to the energy technologies for this MARKAL-Water preliminary model. The costs for every compo- Another result of Sandia’s Energy-Water Nexus nent are evaluated because the demand for both Roadmap was a pilot study undertaken by energy and water are optimized simultaneously the Brookhaven National Laboratory (BNL) to to configure the least-cost REWS, subject to develop and demonstrate an integrated energy- resource limits and policy constraints. water decision support tool for planning in New The ultimate goal of the MARKAL-Water York City (NYC). Although 57 percent of NYC’s model is to provide a widely available, user- freshwater withdrawals are for thermoelectric friendly integrated decision support tool. power production, water supply for energy pro- However, the modeling of the system at the duction is less of a concern to the city than its watershed level was not included beyond basic ability to provide adequate energy for future water and wastewater processes.17 As such, the devel- 17  Brookhaven National Laboratory, 2008. http://www. opment of the model placed greater emphasis bnl.gov/isd/documents/43878.pdf 52 THIRSTY ENERGY Figure Annex 3.2.  Example Reference Energy-Water System Resource Refining & Transport Generation Transmission Utilization End-use Extraction Conversion Other Air-conditioning Sources Crude Oil Refined Products Space Heating Water Heating Renewables Office Equipments Electricity Coal Misc. Elec. Misc. Elec. Industrial Natural Gas Nuclear Process Heat Electrolysis Petro/Biochemicals Hydrogen Stationary Fuel-Cell Water- Other Transportation Filtration Fuel-Cell Vehicles Passenger Travel Water-Impaired Electricity Recycling Water- Agriculture Drinking Water Desalination Process Water Electricity resource supply curves (a series of quantities WEAP-LEAP of water at incremental costs), and will require The Stockholm Environment Institute (SEI) is further development or linking to other modeling working on an integrated energy-water decision programs. The impact of climate change scenar- support system that integrates their WEAP and ios on the water supply system was not captured LEAP modeling frameworks.18 This combined in the model but could be handled by means of model matches the energy system planning sensitivity analysis (on assumed supply and capabilities of LEAP with the water system demand levels). The effect on hydropower, which detail and planning capabilities of WEAP. Both of presents unique energy-water-climate chal- these programs are well-established, account- lenges, can be addressed in MARKAL by apply- ing and simulation-based models suitable for ing stochastics to the reservoir and water supply. policy analysis in their respective sectors. Both The NYC MARKAL-water model demonstrates models have a wide user base and friendly user that the integrated platform is viable. Yet, further interface, and both come with extensive default work is still needed to improve the dynamics of water supply, perhaps by linking to a water basin See http:/ 18  /www.sei-us.org/media/SEI-Symposium- model for a particular area of study. 2010_Heaps_Sieber.pdf Assessment of Energy Models   53 datasets to lower the initial data requirements. a broad range of energy-water options. Potential To date, WEAP-LEAP integration is still in the applications of the model include evaluating beta testing stage, and data exchange has to be water needs for hydropower, cooling systems for performed manually. However, SEI is developing solar thermal plants, tar sands mining, and bio- a new version to allow for the two programs to fuels production, and tracking energy require- run in concert, in an iterative manner. ments for water pumping, treatment, and other The linkage between the two models will water processes. allow WEAP to track water demands for the The main drawback of the WEAP-LEAP com- energy sector as defined by LEAP, and LEAP bined model for policy analysis is that the user to track energy demands for various water must specify the development pathways of the processes (drinking water, agriculture, etc.) as energy and water systems, requiring their itera- outlined in WEAP. The priority for water will lie tion to evaluate alternative scenarios until the within WEAP, which will “inform” LEAP when the desired outcome is produced. There is no least availability of water is insufficient for LEAP’s pro- cost optimization capability. However, the level of posed energy pathway. The program will have to detail supported for the water system provided iterate until a balance is reached. by WEAP and the lower initial data requirements The advantage of the combined WEAP-LEAP are strengths that makes the model flexible and model is that each one represents its respec- readily available. tive sectors in detail. However, in order to link A WEAP-LEAP beta test project is currently them dynamically, several differences between underway at Lawrence Berkeley National Labora- the models must be overcome. First, LEAP tory to model energy water use in the Sacramento, must be modified to include water demands for California, area.19 Energy-water sector linkages energy processes, and WEAP must be modi- include power generation, water utilities, cooling fied to include energy demands for water pro- and water heating for residential, commercial cesses. Secondly, WEAP and LEAP must pro- and government buildings, agriculture irrigation duce results for identical time steps. To this and water pumping, and industrial heating and end, LEAP was recently updated to include daily, cooling. The study is focused on understanding weekly, monthly, and seasonal time slices. Addi- potential climate change impacts and the effec- tionally, WEAP and LEAP must agree on the spa- tiveness of adaptive management strategies. tial boundary for the model. WEAP applies pri- A WEAP-LEAP model was developed for the marily to watershed boundaries, while LEAP American River basin and Sacramento Municipal deals mainly with political boundaries. WEAP Utility District. The study is still ongoing. also deals with specific power plants at a specific location (i.e., a point along a river), while LEAP deals generally with “types” of power plants. When the differences between the two models are resolved, the combined model will SEI, 2010. http://sei-us.org/media/SEI-Symposium- 19  allow integrated energy-water policy analysis for 2010_Dale.pdf. 54 THIRSTY ENERGY Summary of Characteristics of Existing Energy Modeling Frameworks Characteristic LEAP2011 ENPEP-BALANCE MESSAGE MARKAL/TIMES Developer/ SEI Argonne/IAEA IIASA/IAEA IEA/ETSAP Support Group Home Page www.energycomunity.org www.dis.anl.gov www.iiasa.org / www.etsap.org www.iaea.org Methodology • Accounting/Simulation • Equilibrium • Optimization • Optimization • Model Type • Limited optimization solver Simulation • Linear • Linear • Solution added late 2011 • Non-Linear Programming Programming Algorithm • Not Applicable Programming, • Perfect or Myopic • Perfect or Myopic • Foresight Iterative • Myopic Solution Goal • Simulate effects of • Simulate response Minimize total Maximize user-defined expansion of various segments system costs consumer/ pathways by adding flows of the energy under constraints producer surplus through a rigid network system to changes imposed on the while minimizing • Optimization tool will allow in energy prices and energy system overall total system option to calculate least demand levels costs cost energy system over • Calculates entire time period. equilibrium price for intersection of supply and demand Data Medium: Typically 1 to 6 Medium-High: Medium-High: Medium-High: Requirements months of effort depending Typically 6 to 12 Typically 6 to 12 Typically 3 to 9 on the size and complexity of months of effort months of effort months of effort the energy system depending on the size depending on the depending on the and complexity of the size and complexity size and complexity energy system of the energy of the energy system system Default data • Technology Energy • IPCC Emissions • CO 2 DB with Global models from included Database (TED) with Factors ranged values for the IEA, EIA, and costs, performance, and • Technology cost technologies ETSAP provide emissions factors (IPCC) and performance • IPCC emissions a repository of • National Level “Starter” Data data factors existing data for Sets for 104 developing technologies and countries: IEA energy emissions balance data, IPCC emissions factors, UN Population projections, WB development indicators, non-energy sector GHG sources/sinks from (WRI), energy resource data (WEC). Time Horizon User Controlled Up to 75 years. Up to 120 years. User controlled, any Annual Results Annual Results 5 to 10 year time number of years steps Other model New optimization tool links Links with MAED • Links with Integrated features to OSeMOSYS to calculate demand services MACRO model MACRO nonlinear least cost energy system. Not projection module, to determine programming suitable for final reports or plus WASP power impact of policies version allows for analysis. expansion module, on energy costs, coupling with the and impacts, requiring GDP, and energy economy, without additional information demand. iteration (continued on next page) Assessment of Energy Models   55 Summary of Characteristics of Existing Energy Modeling Frameworks (continued) Characteristic LEAP2011 ENPEP-BALANCE MESSAGE MARKAL/TIMES Other model • Expanded features to include (continued) endogenous learning of technologies and include all six Kyoto GHG’s Current Water requirements can Water consumption Water use Water can be Representation be externally specified for can be entered as is externally modeled as a of Water Use each technology as a form of an “environmental estimated. Exact material flow linked environmental loading. In the parameter” such as mechanism is to the energy same way that emissions are gal/kWh or gal/kBOE. unknown. system, and can be specified as kg/GJ of energy This information is calculated and used consumed, water can be entered into each as constraints on specified as liters/GJ. node in the network. the energy system A price may be placed solution on the water ($/gal), however, there is no overall constraint for an environmental parameter Data/Results Full importing and exporting Manual data input/ ASCII tables and Integrated “smart” Handling to Microsoft Excel, Word, and Analysis module manual input. Excel input PowerPoint. Flexible reporting supporting reporting Standard set of workbooks. Allows in charts, tables, and maps. graphs, tables results tables and full customization graphs. of analysis tables, and intelligently links to Excel to automatically update presentation tables/graphs Representation Policy analysts must create Policy analysts Policies can be Policies can be of policies and then simulate alternative must create and tried by means of introduced by scenarios to determine adjust assertions as constraints in the means of flexible marginal effects of new to how the system form of: user-defined policies, or combined effects will develop over • emissions targets constraints in the of multiple policies over time time and review the on the overall form of: horizon. results, tweaking the system • emissions targets Optimization tool will allow assumptions until the • Fuel (on plant types, policies to be represented in desired results are • Export sectors, system) form of constraints: reached. • shares for • energy security • Max annual emissions renewable energy goals • Min, Max capacities for • shares for certain plant types renewable energy • imposing efficiency standards (continued on next page) 56 THIRSTY ENERGY Summary of Characteristics of Existing Energy Modeling Frameworks (continued) Characteristic LEAP2011 ENPEP-BALANCE MESSAGE MARKAL/TIMES Expertise Low: Default data sets High: Limited default High: Limited Medium: Limited Required available, no optimization data sets, limited default data sets, default data and relatively intuitive user elasticity data, difficult poor user interface sets, clear and interface. user interface with lots of manual friendly user data handling interface, Smart spreadsheets and results analysis tools. Level of training Low-Medium: One to 2 weeks High: 2 to 6 months High: 2 to 6 months Medium-High: 1 to 3 required of training and most energy of training and of training and months of training experts are able to build/use familiarization before familiarization and familiarization a simple model most energy experts before most energy before most energy are able to build/use a experts are able to experts are able to model build/use a model build/use a model How Intuitive? High, owing to its flexible Low, owing to its bulky Low, owing to its Medium, owing (matching graphical user interface nature and complex very poor user to its powerful analyst’s user interface interface user interface mental model) with embedded modeling assistance features, as well as its dynamic linkage with Excel Reporting Advanced Basic Basic Advanced Capabilities Data Advanced Basic Basic Advanced management capabilities Software Windows, executable Windows, executable Windows, Windows, model requirements executable. source code, GAMS/solver, MESSAGE IV uses user interface UNIX operating executable system Software cost Free to NGO’s, government Free to Everyone Free for academic $8,500-$15,000 and researchers in developing purposes. Free to (including GAMS, countries NPT states through solver & VEDA IAEA interface) Typical training Phone, email, or web forum. 5 day training session, 2 week session, free 8 days, support & cost Regional workshops $10,000 to NPT states $16,500–$22,500 Technical Phone, email, or web forum. IAEA no longer Phone, email. Free Phone or email. support & cost Free limited support. promotes ENPEP limited support to NPT $500-$2,500 for one year Reference Manual & training materials Manual available to Manual provided Manual available materials free on web site. registered users with training free on website Languages English, Spanish, Chinese, English English English, French, Portuguese, Italian, customizable Indonesian Annex 4 . Requirements for Integrated Energy-Water Modeling Framework O ne of the main challenges to integrating energy and water system planning models is their fundamental differences. Watershed models are primarily dynamic simulations of a natural watershed and its interaction with man-made systems over an extended period given actual (and projected) precipita- tion and weather patterns. These models are driven by physical principles, such as soil permeability, to track the interactions between surface water and groundwater. They track water additions, with- drawals, and consumption across multiple interconnected basins from the system entry to the system exit. Simulation models are used because the objective is to meet water demands (physical and legal/institutional) under the most extreme conditions expected. The models determine the impact on future water availability and quality based on investment and management options. Energy system models are also based on physical principles such as conservation of energy and materials, conversion efficiencies, and operational limitations. However, energy systems are driven by societal demands for energy services, which are related to standards of living and overall economic activity and growth. Within energy systems there are usually multiple energy carriers and technolo- gies that compete to provide the many requirements. Therefore, optimization models are most often used, and most energy system models look to compare the optimal investment strategies for new energy technologies under a business as usual scenario and under alternative scenarios representing policy or technology options and choices. The models provide a quantitative measure of the relative costs and benefits for each option or choice. Geographic and Temporal Requirements The geographic nature of water and energy systems differ in that energy systems are typically delin- eated along political boundaries or interconnect regions, while water systems are generally outlined by watersheds and river basins. Location is more critical to water, as the majority of the resource supply is local. However, in order for an integrated energy-water model to be effective, the capability must exist to model the water system along boundaries typical to energy system models. Most energy models currently constructed were created to model geopolitical boundaries, and range from single nation to multinational and even global models. One approach to creating common assumptions on study 58 THIRSTY ENERGY area boundaries is to construct an overlapping However, when water is added to energy models, water model inside an existing energy model, the link between the projected future precipita- such as in the BNL MARKAL-Water study for New tion/weather patterns could be correlated with York City. In this approach, the processes of the the energy service demands to better model the energy model would have to be spatially linked synergies. to the water supply locations from which they withdraw water. In addition to agreeing on the spatial bound- Data Requirements for ary of the model, an integrated energy-water Incorporating Water into Energy model must also produce results for each Planning Models system in identical time steps. Currently, many energy models produce results on time incre- After defining the model structure, one of the ments of one to five years, and analyze policies biggest challenges to creating an integrated and options with model planning horizons of energy-water model is gathering all of the data 20 to 50 years or more. Water models such as required to incorporate the water system into the WEAP are able to generate sub-annual results model. The data collection may be time inten- (i.e. monthly), with WEAP being able to model sive, particularly in developing countries where time steps as small as one day. Since seasonal it is not as readily available. There may also be variability can have a large impact on water sup- legal and proprietary obstacles that require ply, it is important that the energy system can additional time to overcome. Sufficient lead time be modeled in sub-annual time steps. LEAP, in should be allowed to establish data sources and the ongoing effort to link it to WEAP, has been compile the required information. The types of given the capability to model time slices of data required for an integrated model include days, weeks, months, and seasons. MARKAL/ water consumption and withdrawal data from TIMES also contains the ability to model these the energy sector, non-energy water demands, time slices, and both models provide additional and water availability data, including knowledge differentiation between day and night and of the local regulations and controls governing weekday versus weeknight. With an integrated water use. energy-water tool that models each system across identical time steps and planning hori- zons, the analyst will be able to evaluate the Water Consumption Data for temporal aspect of how the two systems inter- the Energy Sector act with each other. Another difference between energy models Water consumption is present in virtually every and water models is that water models use stage of the energy system, from resource variable time series data on precipitation, which extraction, transportation and processing, to is their main driver. However, energy models final conversion. Water intensity differs in each of usually assume relatively smooth changes in these stages depending on the type of fuel and energy service demands and resource supply the technologies and methods used. The term costs. Because most energy models are used “water intensity” is used to define the volume of to analyze relative changes from a reference water required per unit of energy produced (or scenario, weather-induced and other variability potential energy in terms of resource extrac- in these inputs does not add to the analysis. tion). This becomes useful when comparing the Requirements for Integrated Energy-Water Modeling Framework   59 water requirements for different technologies agricultural, and industrial (including water for and methods with the same output goal (i.e., the power plant cooling) uses.20 As the goal is to difference in gallons of water consumed/MWh track energy-related water use separately from of electricity produced between a coal plant with competing demands, water demands for energy open-loop cooling and one with closed-loop). should be removed from the industrial or any While region-specific data should be used when- other sector of which it is a part. Depending on ever available, there are numerous publications the level of data available, additional non-energy that contain averaged water use statistics for a demand sectors, such as mining and livestock, variety of energy system processes. A number could be defined separately from agriculture. Fur- of agencies in the United States, including the ther definition of the non-energy water demand Department of Energy and several national sectors should be determined in accordance with laboratories, have produced scientific reports the design and objective of the model. on the water use of the U.S. energy system. One The integrated model should be able to study from the Belfer Center for Science and evaluate the impacts of end-use water conserva- International Affairs at Harvard University builds tion measures in the non-energy sectors. Data on work done by the USDOE, USGS, and multiple needed to accomplish this include information independent studies to create a detailed look on the current stock of end-use water technolo- at the use of water in each stage of the energy gies as well as the costs, performance, and avail- system. That information is a good data source ability of future technology options. One way to for modeling water consumption. model end-use conservation in the water sector is to establish water-independent parameters that separate the service demands from the Non-Energy Water Demand Data technologies used to meet them. Parameters for the domestic sector may include “minutes per Reliable projections of non-energy-related water shower” or “flushes per year”, while the tech- demands, such as agricultural and municipal nologies meeting these demands (showerheads, uses, are essential for incorporating the entire toilets) would require parameters such “gallons water system into the model. For each study per minute” or “gallons per flush.” Conservation area, the key indicators of future water use will initiatives may then be modeled by evaluating be its population growth, GDP growth, and the impacts of incorporating more water- historical water use trends. Data for population efficient technologies into the system. Additional and GDP growth projections are widely available examples might include the introduction of more through international agencies such as the IMF water-efficient irrigation technologies in the and UN. The availability and reliability of data on agriculture sector. historical water use trends vary by country. How- ever, agencies such as the UN FAO provide water profiles by country that detail water withdrawals Water Availability Data per sector as well per source type. Data concerning the breakdown of non- Data on water resources by type (surface water, energy water sector demands is critical to groundwater, non-potable) for the present modeling of future demand trends and to model- ing of possible conservation measures. The UN 20  UN-FAO. http://www.fao.org/nr/water/aquastat/main FAO breaks down these sectors into domestic, /index.stm. 60 THIRSTY ENERGY and the future will need to be generated in a patibility with different cooling systems and watershed model and aggregated for use in the other technologies should also be investigated energy model. The energy system model may to determine the need for additional treatment. span a single water basin or include two or more Data on wastewater effluent quality and quan- basins. Each water basin will have its own set of tity should be obtained from local wastewater water supplies, withdrawals for energy and non- treatment plants. Information on other non- energy uses, and water reclamation. The data potable water sources may not be as widely must be region-specific, and the availability available and may require consulting industry and accuracy of the data may vary widely by owners, farm owners, and other sources. Water country. availability is affected not only by the total sup- Average annual rainfall values provide a ply of water, but also by local regulatory issues picture of the mean freshwater input to the that determine how the water can be used. system per year. Data on surface water entering Acquiring knowledge of the local regulations the system may be obtained from stream gage regarding water use can be accomplished by measurements translated into historical average consulting the local government. This informa- daily and yearly flows. Knowledge of locations of tion will allow the model to represent the true these measurements is important to determine volume of water that is actually available for the the effects of upstream activities on future flows. energy sector. In addition to average flows, data on extreme years of low flow will be needed to determine how the system is affected by periods of diminished User-friendly Interface supplies. Groundwater availability modeling requires a tremendous amount of detailed infor- The user interface of the integrated model must mation about the aquifers in the region. Each be flexible and easy to use to allow for a wide aquifer will first need to be defined by its hydro- range of users. A graphical, GIS-based interface geological characteristics, water quality, and its is desirable to make it easy to enter region-spe- connection to the environment and existing river cific data into the model. This allows for things systems. Then extensive amounts of data will be such as the actual physical placement of not only required concerning water levels, pumping rates, the water sources, but the water and energy pro- recharge rates, and other hydraulic properties. cesses that utilize those sources. Links can then This data is likely to come from a wide variety of be made between the various processes in their sources such as well owners/operators, regional respective locations. The model should have an planning groups, local water utilities, and gov- interactive interface which allows direct control ernmental agencies. of the model and access to results displayed in Finally, defining the supply of non-potable charts, tables, and geospatial maps that are water resources will require examining the “report ready.” A scenario generator is also potential uses of reclaimed wastewater, agri- needed to allow the user to create and evaluate cultural runoff, saline groundwater, produced multiple scenarios, and should allow clear con- water, and other industrial waste streams. Data trol of the scenario make-up and criteria. Should regarding water quality, quantity, acquisition the model be of modular architecture or require costs, and regulatory issues will be needed linking to other models, the user-interface should to determine the available supplies of these provide the seamless integration of all necessary resources. The required water quality for com- models. Requirements for Integrated Energy-Water Modeling Framework   61 Impact of Water Constraints on must be known in order to determine the best Energy Sector Investment investment decision. Resource extraction operations such as coal Even in developed countries such as the mining and shale gas extraction are also affected United States, water constraints have already by water constraints. Unlike new power plants, caused disruptions to energy investment plans. however, the locations of resource deposits can- Recently, Idaho placed a 2-year moratorium not be changed and water availability and costs on new coal-fired power plant construction will be dependent on the location of the resource. because of concerns over the impacts to Investments regarding the development of new water supplies. And in other areas of the world, mines and wells will have to take into account such as Latin America, worry over decreased the consumptive water use required per unit of precipitation levels and retreating glaciers due potential energy recovered. Should the proposed to climate change have caused concern over resource be located in an area with low water production from hydropower plants. Glacier availability or high costs, possible solutions may retreat has already affected the output of involve changing extraction methods, develop- hydropower plants in areas of Bolivia and Peru. ing alternative locations, or extracting alternative As these trends continue, water availability and resource types with lower water requirements. costs will act as constraints that affect the way Each of these options must be evaluated on the investment decisions are made for many energy basis of cost and production impacts. system processes, such as power plant selec- Energy crop production relies most heav- tion, resource extraction, biofuels production, ily on water resources and therefore may be and resource processing. most affected by water constraints. Irrigation of In an integrated energy-water model, selec- energy crops requires access to a steady sup- tion of the type and location of new power plant ply of freshwater. Constraints on water avail- construction must factor in the consumptive ability may have an impact on crop selection water use requirements for cooling systems. and location, and may require investments to Water requirements must then be compared to improve irrigation efficiency. Water constraints the available water supply in the area the plant will play a role in shaping investment decisions is to be sited. If water availability is a constraint, in the various processing operations required several alternatives may be evaluated based on for biofuels and fossil fuels after the extraction the severity of the supply shortfall. Changing stage. If water availability is low, there may not the proposed cooling system to a dry cooling be enough supply to perform the processing technology or hybrid technology will alleviate operations required. The location of the pro- the requirements for water but will decrease cessing operations may be moved to areas with plant efficiency. Utilizing different fuel types and higher accessibility to water. However, this may generation technologies may also decrease the cause increases in the costs to transport the need for water, but will have an impact on plant fuel to the processing site. Choosing less water- performance as well as costs. Finally, relocat- intensive processing methods may also be an ing the power plant to an area without water option, but will affect costs as well. The costs constraints or constructing alternative supply and impacts to production output must be infrastructure may prove to be cost-effective. viewed together to determine the best invest- The costs and availabilities of all of these options ment decision. 62 THIRSTY ENERGY Dealing with Regulatory and framework will allow several levels of water Management Issues quality to be modeled. These levels will need to be defined with specific quality characteristics, In many areas of the world, laws and regulations and with each water process withdrawing water governing water use are complex and difficult of one quality and discharging water of a differ- to navigate. In other areas, laws are vague and ent quality. Treatment plants would be defined unreliable due to a lack of adjudication. The as required to clean water from one quality process of determining the possible regulatory level to another. These water qualities could be obstacles in obtaining new water withdrawals high organic return flows from municipal uses, may be expensive and time consuming. Dealing waste water from industry, agricultural return with the various regulatory and management flows, and wastewater from hydro-fracking issues will require a thorough knowledge of processes. Water temperature changes could the laws and the locations to which they apply. also be modeled as a quality change if treatment Water rights laws in a region may apply to the were required to cool the water, but an energy entire region, but there may be basin-specific system model would not be able to determine laws as well. Certain groups may also hold the environmental impacts of heated water. The special privileges for water use, giving them BNL-NYC study modeled water from freshwater “first rights” to water withdrawals. Where water and groundwater sources, wastewater (impaired basins are fully appropriated, the only way to water) from processing (treatment) plants, and provide water for new projects will be through three water service demands: agricultural, drink- the transfer of existing water rights. Restrictions ing water and process water, which includes to water transfers and the costs associated with water flows for power production. The level it vary by region, and the process of acquiring of water quality data tracked in the integrated the transfer may become lengthy and expen- model will need to be driven by the model and sive with no guaranteed result. Where there is study objectives. uncertainty over the validity of water rights laws, the risk of potential changes to the law should also be taken into consideration. Knowing the Dealing with Uncertainty and local regulations, costs, and time constraints Risk that will be encountered for acquiring new water withdrawals will be vital to selecting the optimal Resource costs and availability are typically location for a new project. defined by supply-cost curves, which are inputs to the model. Uncertainty in the cost or availabil- ity of specific resources is traditionally handled Accounting for Externalities through scenario or sensitivity analyses that can determine how much the model results change Energy system models regularly report a variety when these parameters are changed. Examples of pollutants, including CO 2 , SO 2 , NOx, particu- of when it is important to investigate uncertainty lates, and VOCs. Some models provide output in this area include situations where the energy to dispersion models to determine atmospheric system is dependent on a significant amount of concentrations, which are then used as inputs imported fuels, or where environmental or tech- to health and environmental impact models. nological concerns may significantly alter the Modeling water quality in an energy system cost or availability of extracting or processing Requirements for Integrated Energy-Water Modeling Framework   63 certain resources, and where weather/climate tiple overlapping time series results. New tech- unpredictability may have extreme impacts niques are emerging for organizing and display- on water for power generation. Uncertainty in ing information from these large data sets. demand projections is typically only investigated New areas of uncertainty are introduced through scenario analyses, where specific with the introduction of water into energy mod- changes in future energy demands are postu- els. The biggest of these is the variable nature of lated based on specific changes in underlying the underlying weather data projection and its assumptions behind the original demand pro- correlation to the energy service demand pro- jection, such as a change in GDP or population jection. Energy system models do not normally growth rates. deal with this kind of variability. Water models Technology characteristics are the area of are often used to determine the resilience of the uncertainty in energy models that typically gets water system to extremes of weather. Energy the most attention, with the greatest uncer- system models are more often used to identify tainties perceived to exist in the future invest- economically optimal investments out of a large ment cost and efficiency for the various conver- variety of possible options. sion devices (power plants, refineries, etc.) and Integrating water systems into energy opti- end-use devices (furnaces, air conditioners, pro- mization models will require careful design of the cess heat boilers, automobiles, etc.). Sensitiv- input data sets to avoid or minimize inconsisten- ity analyses are a common tool used to exam- cies. Precipitation levels and temperature data ine the robustness of the model results when are primary drivers of water availability, and they different assumptions are made regarding the also directly drive the levels of energy services future development of what are often new tech- required for space heating, space cooling and nologies. However, given the large number of many other energy services. Integrated models these devices and their complicated interac- will require development of a coherent set of tion within the model, this approach provides weather and energy demand projections. Multi- limited (although useful) insights. To deal with stage stochastic is a modeling feature available technology uncertainty in a more comprehen- in MARKAL/TIMES models that presents a more sive matter, it is necessary to use Monte Carlo dynamic way of dealing with uncertainty. A point techniques to determine the distribution of in the future is defining at which time there is a likely results given the likely distributions in the resolution of uncertainty in a critical parameter cost and performance of each technology in the (e.g., emission reduction target, price of oil or model. Managing the amount of information in a water, availability of a technology, etc.). The single energy system model runs is already chal- probability that this critical parameter will take a lenging, but when considering hundreds or thou- particular value is also specified, and the model sands of model runs, the challenge becomes will then identify a hedging strategy for the period interpreting and gaining insights from the mul- up to the point the uncertainty is resolved. WORLD BANK 1818 H Street, NW Washington, DC 20433