energy Russia energy china flag

World Energy Outlook

Water for Energy

Water drops

Energy production depends on water. It is used in power generation, primarily for cooling thermal power plants; in the extraction, transport and processing of fuels; and, increasingly, in irrigation to grow biomass feedstock crops. Energy is also vital to providing freshwater, needed to power systems that collect, transport, distribute and treat it. Each resource faces rising demands and constraints in many regions as a consequence of economic and population growth and climate change, which will amplify their vulnerability to one another.

For the energy sector, constraints on water can challenge the reliability of existing operations as well as the physical, economic and environmental viability of future projects. Water constraints can occur naturally, as in the case of droughts and heat waves, or be human-induced, as a result of growing competition among users or regulations that limit access to water. Equally important to water-related risks confronted by the energy sector, the use of water for energy production can impact freshwater resources, affecting both their availability (the amount downstream) and quality (their physical and chemical properties).

The IEA first assessed the water-energy nexus in the World Energy Outlook 2012, dedicating a chapter to analysis of the water-for-energy relationship (WEO-2012 Chapter 17 - Water for Energy), reviewing water requirements for different energy sources (see primary energy and electricity generation) and estimating total freshwater needs by scenario, energy source and region. In subsequent years, the WEO has addressed various facets of the nexus: the WEO Special Report Redrawing the Energy-Climate Map in 2013 looked at energy infrastructure and climate resiliency; while the World Energy Outlook 2015 assessed the impact of water scarcity on coal-fired power plants in India and China as well as water requirements of unconventional gas production.

This year, the forthcoming World Energy Outlook 2016 will once again have a dedicated chapter covering the energy-water nexus. This analysis will build on the work already done in 2012 and assess current and future freshwater requirements for energy production, highlighting potential vulnerabilities and key stress points. In addition, for the first time, the World Energy Outlook will look at the energy-for-water relationship. The energy requirements for different processes in the water industry, including water supply, water distribution, wastewater treatment and desalination, will be analysed.

Below are key findings from the World Energy Outlooks previous work on the water-energy nexus:

World Energy Outlook 2012

The findings show that the scale of water use for energy production is tremendous. Some 580 billion cubic metres of freshwater are withdrawn for energy production every year (see the methodology). At about 15% of the world’s total water withdrawal, the figure is second only to agriculture. The vast majority of water used in the energy sector is for cooling at thermal power plants, as water is the most effective medium for carrying away its huge quantities of waste heat. Though the amount used for biofuels and fossil fuels may appear minor on a global level, this must be viewed in the context of local water resources and potential risks posed to water quality. Water withdrawal by the energy sector is expected to rise by one-fifth through 2035, while the amount consumed (not returned directly to the environment) increases by a more dramatic 85%.

Figure 1: Global water use for energy production in the New Policies Scenario by fuel and power generation type.

Source: World Energy Outlook 2012

WEO Special Report Redrawing the Energy-Climate Map 2013

The energy sector is not immune from the physical impacts of climate change and must adapt. In mapping energy system vulnerabilities, we identify sudden and destructive impacts (caused by extreme weather events) that pose risks to power plants and grids, oil and gas installations, wind farms and other infrastructure. Other impacts are more gradual, such as changes to heating and cooling demand, sea level rise on coastal infrastructure, shifting weather patterns on hydropower and water scarcity on power plants.

Water stress, and an increase in water temperature, can have a profound impact on power generation. In China, water scarcity has meant that some power plants have turned to dry cooling systems, which cut water consumption sharply but also reduce plant efficiency. Water temperature not only impacts directly on power plant efficiency but, in many countries, may also constrain operation because the temperature of cooling water discharged into rivers exceeds an authorised level. Constraints due to these effects are expected to increase in the future (Table 1.)

Table 1: Review of the regional impact of water temperature and water scarcity on thermal power

 ‌Water table

Source: WEO Special Report Redrawing the Energy-Climate Map 2013

 World Energy Outlook 2015

Following up on the analysis from 2012 and 2013, we looked in depth at what constraints on water availability could mean for the thermal power generation of an individual country – we chose coal-fired generation in China and India.  Our analysis of China and India shows that when considering future sites of coal-fired power generation, the choice of optimal locations will have to consider factors beyond just coal transportation cost and transmission cost to load centres, but also water availability and the additional capital cost for cooling systems that may come with the choice of the site.

China accounts for 45% of the world’s installed capacity of coal-fired power plants in 2014 and 35% of expected coal-fired capacity additions to 2040 in our central scenario. China is already experiencing water scarcity in several regions and adaptation to water stress is already apparent. In our New Policies Scenario that allows for changes in water availability, increased water stress has a material impact on the cooling technologies (and related costs) deployed across China’s coal-fired power fleet. The power sector is expected to need to undertake major efforts to address water shortages.  

Figure 2: Installed coal-fired power generation capacity in China by cooling technology in the New Policies Scenario.

Figure 2a

 Source: World Energy Outlook 2015

In India, more than 80% of total coal-fired generation in India in 2040 comes from plants that have yet to be built. In the New Policies Scenario, we project a significant increase in the use of dry-cooling in arid areas in Northern India and in the south. Unlike China, coal mines in India are located mainly in areas which do not experience water stress today (and not expected to experience stress in 2040). Therefore, in areas where demand centers are relatively close, significant amounts of coal-fired power generation capacity using wet-tower cooling systems are built in relative proximity to the coal mines to reduce transportation costs.


Photo © Shutterstock