Ahead of World Water Day: Let’s Talk about … Energy?
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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.
Integrating wastewater treatment plants and water reuse is just one approach to addressing water and energy challenges. This year, the United Nations has dedicated World Water Day 2014 to Water and Energy in order to draw attention to this challenge: today, more than 1.3 billion people lack access to electricity, over 768 million people lack access to potable water and 2.8 billion live in areas of high water stress.
Developing countries will be the most vulnerable to increased pressure on water and energy resources, and the impacts of climate change, as they often lack the regulatory framework and infrastructure to mitigate increasingly variable water supply. World Water Day also highlights the importance of integrated planning through concerted policies and infrastructure, as in the case of Project Tenorio, and improved resource efficiency across all sectors.
This day also builds momentum on the growing recognition from companies that water risks may compromise future energy production. Global leaders are becoming more aware of the magnitude of water and energy challenges, and the need to balance these tradeoffs. It is clear that all approaches are context-specific and the tradeoffs between water and energy must be considered carefully.
At the World Bank Group, we are working to highlight the challenges presented by water and energy through the Thirsty Energy initiative. We have already been blogging on the 
challenges here and here. However, one of Thirsty Energy’s goals is to work with countries to identify and promote solutions and synergies like the ones described above. As regions of the world continue to experience water constraints, and pressures mount due to climate change and increasing population, innovative solutions will be crucial to ensure sustainable development of water and energy resources.
March 22 is World Water Day. For more information, visit unwater.org/worldwaterday
@Diego -- thank you for your comment. I worry that an emphasis on energy will result in a bias towards "energy" solutions. I further worry that a "quantification" of social and economic uses of water will result in a different bias due to mis-calibration. My comment ("leave water to take care of itself") is based on local management of water among competing uses based on local notions of sustainability and social-economic value that can neither be modeled or observed at the national, aggregated or Bank level. I agree that the Bank can help client countries, but why not work on the ground up issue of local (watershed) water balance?
Water is used for many activities besides energy, so it's deceptive to call attention to water-energy without without considering other tradeoffs. That's why I prefer to discuss sustainable water management for ALL uses. I wish that the Bank would make those other factors more visible. Even better, I wish the Bank would pay attention to good water management and leave energy to take care of itself. (Oh, and please do not use "the nexus" as an excuse for more dams, unless the dam-environmental nexus is discussed...)
The Bank's Thirsty Energy initiative focuses on water and energy, in response to demands from our client countries, and we analyze all water uses as part of our work. This also includes the use of economic tools to quantify economic and social trade-offs among all competing uses. The issue of sustainable water management is fundamental to our discussion and fundamental to the work of the Bank. This is just one of the many programs, projects, and activities through which the Bank assists our client countries in water.
You might be aware of the huge efforts at the Bank to help our clients meet water resource development challenges -- including water for agriculture, energy, climate change, water supply, etc. In this particular initiative, we are focusing our efforts on water and energy, working closely with governments, utilities and other stakeholders, to develop additional approaches that are refined for the context-specific situation of each country. Thirsty Energy works in partnership with countries to identify primary opportunities and constraints to water and energy development in an integrated fashion, thus also indicating priorities for further and more detailed analysis, as well as providing first-cut characterization of alternative sequences of investment in both sectors.
Regarding the last comment on hydropower, and as you have read in our website, Thirsty Energy's focus so far is on thermal power and upstream. Hydropower has always been part of the water conversation, but not upstream (oil and gas, mining, etc) and thermal power. However, thermal power plants, for example, account for 40% of freshwater withdrawals in developed countries. Thus, we are focusing on those to raise awareness on the issue and to ensure that energy planners take water resources into account to ensure sustainable water management. We are also using our initiative to raise awareness to the energy sector of the tradeoffs across all competing uses. Leaving "energy to take care of itself" as you say, will lead to unwanted and irreversible scenarios in the near future.
-Diego J. Rodriguez, Senior Economist, The World Bank