Is the shale gas revolution a brake on progress towards faster adoption of renewable energy? Many argue that it is, but there is also persuasive evidence that it could also boost integration of renewable energy into power grids, by providing a complement to intermittent sources of electricity.
The theme of this year’s #worldwaterday focuses on water and energy. And for good reasons.
For the last six years, a power plant in San Luis Potosi, Mexico has bought water from a nearby wastewater treatment plant to use in its cooling towers (instead of using freshwater). This operation, Project Tenorio, a public-private partnership, continues today and has already resulted in the reduction of groundwater extraction of at least 48 million cubic meters (equivalent to 19,000 Olympic size pools) and increased aquifer sustainability.
This is a good example of the water and energy nexus in practice: the wastewater treatment plant covers almost all of its operating costs from this additional revenue stream and the power plant gets a more reliable water source that is also 33% cheaper than groundwater in that area.
Treated wastewater has been used to reduce the water requirements of power plants in several other countries as well, as water supply becomes more variable or disappears. In the US, for example, around 50 power plants are using treated wastewater for cooling in order to adapt to water shortages. However, innovative integrated approaches like these are still more of an exception than the norm.
“Kaatiyabaaz” is a compelling documentary film that highlights the power crisis in Kanpur, a city of three million people in north India.
It has all the elements of a steamy Hindi movie: 45-degree Celsius heat, power outages that last 12-15 hours, and illegal connections that come up every night and disappear in the morning. The everyday characters are gripping too. There’s a Robin-Hood-like street electrician who “provides power” by hooking to transmission lines. An upright bureaucrat (a woman, imagine that!) trying to get people to pay their bills and prevent theft. A city full of tired, angry citizens fed up with poor service provided. The film underlines how people will do whatever it takes to get some juice in their wires so that they can get lights, fans, water…the basic necessities of 20th century life.
Mussarat Farida Begum runs a small teahouse in Garjon Bunia Bazaar, a rural community in Bangladesh. As part of a program which has helped Bangladesh reach more than 2 million low-income rural households and shops with electricity, she bought a solar home system for $457, initially paying $57, and borrowing the rest. She repays the loan in weekly installments with money she earns by keeping her now-lighted chai shop open after dark. Her business is booming and her family lives much more comfortably with their increased income. They now have electricity at home and their children can study at night.
Women like Mussarat are at the forefront of our efforts to secure development by tackling climate change. On the one hand, they are disproportionately vulnerable to the impacts of extreme events. But it is also women who can make a difference to change entrenched behaviors. It is their decisions as entrepreneurs, investors, consumers, farmers, and heads of households that can put our planet on a greener, more inclusive development trajectory.
After an intense and exciting week in Stockholm for World Water Week, it is time to look back at some conclusions of the conference and the way forward for next year. I was in Stockholm as a “Lead Rapporteur” and reported in the closing plenary session on “Cooperation to achieve equity by balancing competing demands”; other teams reported on “Managing waters across borders,” “Responding to Global Change,” and “Closing the science-policy-practice loop” (see closing plenary here). This is my attempt to summarize over 100 sessions, you can find all the sessions in the WWW website.
In July, the U.S. Department of Energy and the Union of Concerned Scientists (UCS) released reports (see U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather and Water-Smart Power: Strengthening the U.S. Electricity System in a Warming World) highlighting the energy sector’s vulnerability to future water constraints. The reports’ findings paint a worrisome picture: currently, 60% of coal power plants in the U.S. are experiencing water stress; hydropower is threatened due to more frequent and severe droughts; and energy infrastructure is endangered by water variability due to climate change.
Water is critical for producing power, and vice versa. Almost all energy generation processes require significant amounts of water, and the treatment and transport of water requires energy, mainly in the form of electricity. Even though the interdependency between water and energy is gaining wider recognition worldwide, water and energy planning often remain distinct. The tradeoffs involved in balancing one need against the other in this “energy-water nexus,” as it is called, are often not clearly identified or taken into account, complicating possible solutions.
Next week as thousands of practitioners gather at annual World Water Week in Sweden the focus is on cooperation, echoing the UN’s declaration of 2013 as the International Year of Water Cooperation.
According to the International Energy Agency (IEA), global energy demand is likely to grow by more than one-third between now and 2035. Mobilizing investment capital is one major task. Additionally, energy infrastructure such as electric power facilities has a long time span – up to 40 or 50 years in the case of base-load nuclear or coal plants. As the new Growing Green report, released by the World Bank’s Europe and Central Asia Region, points out, with such a long time span and the enormous amount of capital at stake, power sector investments need to consider at least three types of uncertainties—changing regulations, changing technology, and changing climatic conditions.
Regulatory uncertainty persists in countries without formal greenhouse gas emission restrictions. Even in the EU, the emissions trading system is still evolving and future prices for carbon emissions will in large part depend on political decisions. Such schemes may spread to other parts of Europe and Central Asia as the implications of climate change become more apparent and support for climate action rises. A price on carbon, either through a cap-and-trade sys¬tem or a tax, can profoundly alter the comparative economics of different power generation technologies. With a price on carbon emissions, the cost differential between fossil-fuel plants and low-carbon alternatives shrinks and in some cases disappears.
Many international firms and banks already incorporate an assumed carbon price into their financial investment feasibility calculations. Expectations of future carbon pricing have already altered investment decisions favoring natural gas over coal-fired power plants in the U.S. (although more recently the drop in gas prices has been a larger factor). Conversely, regulatory uncertainty also hinders investments in low-carbon generation. The IEA estimates (pdf) that uncertainty in climate change policy might add a risk premium of up to 40 percent to such investments, driving up consumer prices by 10 percent.