- Industry: Energy & Utilities
From a global perspective, agriculture is the largest user of water accounting for approximately 70%.
In the US, more water is used to cool power plants (~41%) than to grow food (~37%), or used in urban centers (~11%). The dependence of electricity generation on thermal electric generation requires vast volumes of water. Fig 1 shows that ~72 percent of our electricity is generated by thermal processes (coal, natural gas, petroleum). Fig 2 shows that natural gas requires far less water per Kwh than coal, and that renewables requires far less than natural gas.
There is significant risk to energy utilities that water use will become more restricted as environmental regulations tighten. For example, the Vermont Yankee nuclear plant was forced to reduce its power production due to high water temperatures and low flow in the Connecticut River. Similarly, the Millstone nuclear plant, in Connecticut, was forced to shut down when Long Island Sound water temperatures rose. Likewise, in Illinois, four coal plants and four nuclear plants each sought and received “thermal variances” from the state to let them discharge hotter water than their permits allow. The operational and business risks resulting from water scarcity will increase as population density increases, our waters warm with changes in climate, and stronger environmental limits are established.
Knowing that electricity generation is a major water use in the US, and combustion processes are a primary driver, it is clear that water scarcity and water quality pose significant risks to the utilities. There are two distinct and critical opportunities that energy utilities can take advantage of to mitigate these risks.
A first opportunity for the energy sector to improve watersheds is the planning processes that govern the use of water. Many states have drought plans that describe how the scarce resources will be allocated. Energy utilities need to be at that table when such governance structures are being crafted. But the value of participation is not to fight for greater allocation but to gain an appreciation of the demands on water. Everyone at the table must have an understanding, and respect for agriculture, industry, ecological representatives, and water utility demands, so that each can understand and mitigate the risks associated with water scarcity. This appreciation of risks will open the doors to better collaboration and preventative solutions.
If energy utilities engage in the governance setting processes of managing water, they will have the opportunity to become better prepared for the future of water scarcity. It is critical that we not view times of water scarcity as pitting one use against the other, but that we realize, agriculture, energy, ecology are all trying to serve the same society. Competing to maximize your own water is counterproductive to the larger whole.
A second opportunity is to promote a future of renewable energy with associated distribution system upgrades. The move towards renewables is the fastest growing generation sector driven by a number of factors, from incentives, to carbon reductions, to economics, but watershed health is rarely mentioned as a driver. Yet, everyday water-cooled power plants in the United States withdraw 60 billion to 170 billion of freshwater from rivers, lakes, streams, and aquifers, and consume 2.8 billion to 5.9 billion gallons of that water in the United States alone. It is time for energy utilities to bring this story into the discussion of renewable investments. It is the fastest way to resolve many of the natural resource conflicts while preserving the watershed for ecology, food production and other economic uses.
The Clean Power Plan (CPP) encourages the water and energy sectors to collaborate to drive lower carbon-based electricity generation. As we see in figure 2, a shift toward wind and solar will have dramatic impacts on water resource use.
EPA’s Clean Power Plan encourages natural gas use (lower water- /- KWh) , wind, solar and demand reductions. As managing water is a significant demand (nationally, water utilities are X% of total energy consumption), with some states such as California, spending over 20% of their energy combustion on managing water, there has never been more alignment between water and electric utilities, which are seeking lower operational costs, and energy is typically just behind labor and debt service costs.
These opportunities to work together on (1) planning and (2) investing in renewables is consistent with the CPP, as well as the expectations of or citizens who expect public and IOU utilities to collaborate on holistic solutions. But for Energy Utilities to lead, they have to be at the table, where water policies are set; and they have to embrace wind and solar and associated grid modernization.
As a byproduct of this new paradigm we will also create a healthier watershed. While not the deliberate mission of a power plant, a healthy watershed is fundamental to a healthy society and economy, the very customer base of utilities. Many societies have failed to consider the health of watersheds, and they are not here to tell us about it, we have to read the stories in their dust. Today, cities such as Sao Paulo, Beijing, Jakarta, have reduced economies as a result of poor water planning. Here, California, Arizona, Oregon have beginning to appreciate the economic impact of a water constrained environment. Although it may be easy to think water utilities are going to manage the watershed, consider that the energy sector uses more than four times the water than our water utilities, that drinking water is less than 2 percent of our consumption, and the water utilities have much smaller scale, often no larger than a single municipality. The real opportunity here is for energy utilities to lead the way.
 UCS. Freshwater report. 2011.