Climate Compass Blog

The interdependence of water and energy

Have you ever thought that by leaving a light on, you’re wasting water, or that a leaky faucet wastes energy? It’s odd, but accurate.

That’s because water and energy are interrelated. Water is used in all phases of energy production, and energy is required to extract, pump, and move water for human consumption. Energy is also needed to treat wastewater so it can be safely returned to the environment.

C2ES recently hosted a series of webinars (video and slides here) on the intersection between water and energy (sometimes referred to as the “nexus”). The series was co-sponsored by the Association of Metropolitan Water Agencies and the Water Information Sharing and Analysis Center. Participants discussed how the water and energy sectors depend on each other and how they can work together to conserve resources.

How much energy does it take to provide people with safe drinking water and safely treat wastewater? Kristen Averyt, director of the University of Colorado’s Western Water Assessment, says the water sector uses about 13 percent of the nation’s electricity. In some areas, like the Mountain West and Southwest, it’s even higher.

In California, the East Bay Municipal Utility District reports that water-related energy use consumes 19 percent of the state’s electricity – enough to power 4.8 million homes. It also accounts for 30 percent of the state’s natural gas use, and consumption of 88 million gallons of diesel fuel.

On the other side of the equation, large amounts of water are needed to produce electricity. Averyt says a nuclear power plant with a once-through cooling cycle can withdraw up to 60,000 gallons of water from its cooling water source for every megawatt hour, the amount of electricity used by about 330 homes for one hour. A coal-fired power plant with a cooling pond consumes about 35,000 gallons per megawatt hour.

The production of natural gas, an important fuel for generating electricity, also requires a lot of water. According to the U.S. Department of Energy’s report The Water-Energy Nexus: Challenges and Opportunities, it takes 2 million to 9 million gallons of water to fracture one horizontal well in a shale formation.

So what are energy producers and water utilities doing to conserve?

In some cases, they’re forming partnerships to save resources. The Orange Water and Sewer Authority in North Carolina is working with Duke Energy to review use, rates, and service contracts. Together, they have saved money on energy use by a wastewater treatment plant and on standby power generation.

In San Antonio, Texas, CPS Energy and the San Antonio Water System, which are both city-owned but independently managed, are also working together. Each utility is largest customer of the other. Since the 1960s, they have cooled the city’s power plants using wastewater, rather than drinking water. CPS Energy’s Doris Cooksey says as a result, the city has had enough water for power generation even in times of drought.

Other companies are also taking steps to cut water and energy use. American Water, which provides drinking water and wastewater treatment to about 14 million people in 30 states and parts of Canada, is cutting its energy use by replacing aging motors and pipes. The company is also installing solar panels, which likely use less water to generate electricity. American Water’s Suzanne Chiavari says the solar applications produce about 3.7 million kilowatt hours per year, avoiding 2,500 metric tons of carbon dioxide emissions annually in the process.

Learning about the relationship between energy and water helps us to understand how our own daily activities affect these important resources. By using water wisely, we can save energy – and vice versa.

CCS projects see progress

Three recent announcements signal important progress toward greater deployment of technology to capture and store carbon emissions that would otherwise escape into the atmosphere. CCS technology can capture up to 90 percent of emissions from power plants and industrial facilities and is critical to reducing climate-changing emissions while fossil fuels remain part of our energy mix.

One piece of good news came when NRG Energy announced it has begun construction on the Petra Nova Project in Texas, where an existing coal-fired power plant will be retrofitted with carbon capture equipment. The Petra Nova Project will be the world’s third commercial-scale CCS power project, following the nearly-completed SaskPower Boundary Dam project in Saskatchewan, Canada, and Southern Company’s Kemper County Energy Facility in Mississippi opening in 2015.

Once it starts operations in 2016, Petra Nova will capture up to 1.6 million tons of carbon dioxide (CO2) per year, 90 percent of its total emissions. The CO2 will be sold for use in enhanced oil recovery. Revenue from using captured CO2 to coax additional production from declining oil fields provides an important financial incentive for carbon capture, and results in the eventual permanent storage of the CO2 underground.

Petra Nova’s investors include JX Nippon, a Japanese oil and gas company; the Japan Bank for International Cooperation, and Mizuho Bank. In 2010, the U.S. Department of Energy (DOE) awarded the project a $167 million grant through the American Recovery and Reinvestment Act.

It was also encouraging news when the United States and China announced this month that partners from both countries have agreed to collaborate on several CCS projects. Under one agreement, Seattle-based Summit Power and Huaneng Group, China’s largest power generator, will share lessons learned from developing two commercial-scale CCS power projects. These include Summit’s Texas Clean Energy Project (TCEP), a proposed coal-fired CCS power plant in West Texas that DOE also selected for Recovery Act funding, and a similar project Huaneng is building in China.

Coal currently provides 39 percent of electricity in the United States and 78 percent in China, where its use is expected to grow. U.S. and Chinese leaders hope these partnerships will help both nations further CCS deployment.

Finally, the White Rose CCS Project, a coal-fired CCS power plant in the United Kingdom, is set to begin construction after receiving a €300 million grant (approximately $400 million) from the European Commission’s New Entrants’ Reserve (NER) 300 program. NER 300 funds clean energy projects, and White Rose is the first CCS project recipient.

White Rose’s project partners, including National Grid, Alstom, BOC, and Drax, envision the facility laying the groundwork for a much larger effort. White Rose will capture up to 2 million tons of carbon dioxide per year, but pipelines and storage infrastructure will be designed to accommodate 17 million tons of carbon dioxide per year from other capture projects in the region.

These projects are important milestones, and will be instructive to future projects. The involvement of multiple nations, private companies and investors in these projects underscores the importance of CCS in reducing global greenhouse gas emissions. Cost remains one of the major barriers to deployment, but as more commercial-scale CCS projects are completed, costs will fall, allowing the technology to become more widely adopted.


Energy efficiency financing models for buildings could work for natural gas vehicles

Owners of large buildings who want to save money by improving energy efficiency first have to overcome a huge hurdle – the upfront costs of getting the work done. A similar hurdle exists for fleet managers considering switching to natural gas vehicles to save on fuel costs – high initial expenses for vehicles and infrastructure.

What if the same method being used to pay for more energy-efficient buildings could also be used to get cleaner alternative fuel vehicles on the road? A new report by C2ES makes the connection between a commonly used business arrangement in the building sector and its potential use in the deployment of natural gas in public and private vehicle fleets.

A proven way to increase energy efficiency in buildings, including the iconic Empire State Building, is with the help of a business known as an energy service company (ESCO). Typically, an ESCO helps arrange financing for the building upgrade and receives compensation over time as the building owner realizes the energy savings from the efficiency improvements.

An ESCO not only facilitates access to needed capital, but also helps building owners manage the risks of using new, unfamiliar technologies. ESCOs can help building owners identify opportunities and can provide performance guarantees that give building owners assurance of future energy savings.

So, what would an ESCO for natural gas vehicles and fueling infrastructure look like? A little different than an ESCO for buildings. For example, the savings for an ESCO in buildings is often measured in units of energy while an ESCO-like arrangement for a vehicle fleet would base its savings on the differential between natural gas and gasoline/diesel prices. The savings are based on fuel consumption, which fleet managers have experience predicting.

This idea is just now being explored by the natural gas and energy service industries. Our report, part of a two-year project funded by the U.S. Department of Energy’s Clean Cities Program in partnership with the National Association of State Energy Officials and others, details three case studies of ESCO-like arrangements for natural gas vehicles. These early experiences are promising, particularly for fleet managers who need turnkey solutions that can provide net savings from day one.

Among the services companies experienced with natural gas vehicles could provide to fleet managers are:

  • Identifying and evaluating project opportunities,
  • Providing performance guarantees that reduce project risk,
  • Managing the technology transition,
  • Providing alternatives to ownership of vehicles and refueling equipment,
  • Bundling vehicle projects into a broader energy project portfolio, and
  • Facilitating needed partnerships.

Applying the ESCO model to transportation projects can help break through market barriers, increase deployment of alternative fuel vehicles, and diversify the U.S. transportation fuel supply.



Good progress on Climate Action Plan, but further to go

A year after President Obama announced a comprehensive plan to address climate change, clear progress is being made.

A C2ES status report on the president’s Climate Action Plan notes at least some progress on most of the plan’s 75 goals. In several key areas, the administration has taken important first steps, but it is too early to gauge their success or ultimate impact. With much more work still to be done, continued presidential leadership will be essential.

The plan, announced June 25, 2013, outlines goals in three areas: cutting carbon pollution, preparing for climate impacts, and leading international efforts to address climate change. With Congress unlikely to enact major climate legislation, the plan relies almost entirely on steps the administration can take on its own. And the nature, scope and ambition of the plan’s many elements vary widely.

A major goal is reducing carbon pollution from power plants, the largest source of U.S. greenhouse gas emissions. The Environmental Protection Agency (EPA) has met its deadlines for proposing regulations for both new and existing power plants, but the rules are not yet final, and implementation will likely take years.

Risky Business report shows need to act on climate change

You expect a business leader to keep a close eye on the bottom line and to act when a threat is clear. As C2ES and others have noted, it is increasingly clear to many business leaders that climate change is a here-and-now threat that we all -- businesses, government and individuals -- must address.

Today’s “Risky Business” report lays out in stark numerical terms the likely economic impact of climate change on U.S. businesses and the U.S. economy. The initiative – co-chaired by former New York City Mayor Michael Bloomberg, former Treasury Secretary Henry Paulson, and former hedge fund manager Tom Steyer – brings high-profile attention to this issue in the hopes that highlighting the risks and potential costs will help spur action to manage the impacts and curb climate-altering emissions.

The report’s outline of the many costs of climate impacts is likely an underestimate. For example, the impacts of diminishing groundwater are difficult to calculate and are not included.