Water-Energy Nexus in China A study on a national scale

Executive Summary

Mind the Nexus 

Almost all forms of energy development require water—to clean coal, cool thermal power plants, move hydropower turbines, frack gas, and grow biofuel crops. China’s water availability is far below global average, yet the country continues to expand energy development rapidly from new coal mines and power plants the arid north, shale gas operations in the dry west to the world’s most extensive hydropower boom in the southwest and more nuclear power inland. This intensifying energy development adds more pressure to China’s water ecosystem that must also provide water to growing urban centers, agriculture, and industry. Chinese policymakers need more systemic understanding and reliable data on the interlinked water-energy trends at both the micro and macro levels so they can better protect the country’s constrained water and manage the ambitious energy agenda.

In response to these challenges, Lawrence Berkeley National Lab (LBNL) and China Institute of Water Resources and Hydropower Research (IWHR) recently completed one of the most comprehensive national-level water-energy nexus model. This modeling work was not an academic exercise, rather an attempt to help Chinese policymakers understand more precisely how energy development at the national and regional level is using the country’s limited water resources, and examining how much electricity the country is using to move, pump, clean, heat, and desalinate water. 

This modeling work is part of the bilateral Clean Energy Research Center on Water-Energy Technologies (CERC-WET), co-led by UC Berkeley and China’s Research Institute of Petroleum Exploration & Development (RIPED).

Data and governance Gaps                                                             

Managing water and energy together represents a major governance challenge in many countries. China’s fragmented authoritarianism presents particular difficulties for water and energy policy coordination. Besides the inconsistent and often competing policy priorities among sectors, at the most basic level both bureaucratic spheres lack the data and insights into the big impacts water-energy confrontations are causing. The current dominant design for water-energy information gathering and regulation in China has focused on the facility-level. For example, how much water used to clean coal at one mine or cool one coal-fired power plant provides insights into how local water resources are impacted. Correspondingly, the CERC-WET project provides a system-level mapping of water and energy development and how they interact at the macro level. The model highlights the water energy integrated model methodology, the state-of-the-art data review, and governance and policy frameworks, enabling us to create regional water-energy research in the future, which will help China’s central and local governments more accurately invest in technologies and create policies to mitigate water-energy challenges.

China’s Thirsty Energy and Increasingly Energy Intense Water Sector

So how thirsty is China’s energy sector? Most thermal energy plants need to use significant quantities of water for cooling. Case in point, in 2014, Chinese energy production and energy conversion sector withdrew three times more water for cooling/processing (79km³) than they actually consumed (17.7 km³), which is about 56% of the industrial total water consumption in 2014.  If the current trend continues, the water consumption for energy could peak between 2033-2034, an increase of 30% from the current level, while the water withdrawal for energy peak at 127.5 km³ in 2036. By comparison, the water withdrawal for agriculture is 387 km³ in 2014. Although the Ministry of Water Resources regulates how much water energy projects can consume, there are not yet specific regulations to limit the impact of water withdrawal, which can be severe. Moreover, available water limit standards focus on coal mining and washing, thermal coal power, and coking, but they do not address the macro-level impacts the energy development on water resources.

The CERC-WET modeling also dug into data around the energy footprint of water in China. Historically between 2005 and 2014, China’s water supplied for agriculture, industry, residential and ecological use has increased 8%, but the corresponding energy demand to move, pump, clean and heat water has grown 25% due mainly to increases in groundwater pumping and inter-basin water transfer. The modelling results showed the energy use in the water sector will likely increase dramatically from its current level of 210.7 TWh (about 2% of China’s electricity consumption). As urbanization continues, by 2050 the nation’s water demand will require 23% more energy, and the wastewater treatment sector will need 29% more energy than today. Despite this trend, water’s energy use does not garner much attention from government agencies, NGOs or researchers except for indicating the economic concerns at the project or city level.

Low carbon doesn’t always save water

Increasing the renewable and alternative energy supply can not only mitigate climate change, but also save water resources depending on the type of renewable energy that is developed. The CERC-WET team ran a clean/alternative energy scenario^[1] that indicated a shift to 68%  renewable energy sources by 2050 would lead the energy sector to consume 33% less water, and withdraw 61% less from rivers and groundwater. However, while shifting towards using inland nuclear power plants offers climate benefits, it could potentially increase water consumption by 44% (1.9 km³) by 2050. As an already controversial alternative energy to coal, this significant water footprint poses further challenges for inland nuclear development. Current proposals often seek to use reclaimed water as an alternative source to freshwater, but this is an area where more research is needed to evaluate the sustainability of these projects. Overall, this proves further disincentives to increasing primary coal production and coal thermal power generation in China, pointing towards renewable energy that also integrates a water perspective into its planning.

Keeping a local perspective

CERC WET showed the water-energy-nexus picture at the aggregated national level, but it is important to note that water-energy conflicts can be exacerbated at the regional level. Arid western provinces are fossil fuel rich, meaning that they are both abundant and lacking in the necessary resources for energy production—in order to utilize their fossil fuel resources, they have to further over tap their already diminishing water resources. Even eastern regions are facing challenges in supplying sufficient water and clean energy to their growing urban populations—the Beijing-Tianjin-Hebei region provides such an example. In addition to these technical challenges, local communities often perceive these issues differently than policy makers, further complicating the research design to address nexus problems.

Each region faces its own unique set of problems such that a “one size fits all” solution will not work in addressing the diversity of water-energy nexus issues at the local level. It would be useful to develop a research approach to take specific local issues into account and ask research/policy questions in an inclusive and adaptive process. For instance, Endo etc (2015) laid out some groundwork as an effort to applying different research approaches and methodologies in response to the varying local policy and technical contexts.

The challenge of policy coherence

In addition to the modeling work mentioned above, this report also laid out the groundwork for understanding necessary characteristics of governance structure for this nexus, as there is currently very little social science research on water-energy nexus issues. We unveiled the governance differences revolve around issues such as policy priorities, scale, regulatory and market structure, and actors involved. In order to address the policy coherence/coordination issues, for the short term it is imperative to develop a common dialogue and vision between two sectors that have very different policy goals. Future research needs to continue to work to develop knowledge on bridging the institutional, organizational and behavioral gaps between these two sectors.

Finally, nexus issues require interdisciplinary efforts—before formulating research questions, it is necessary to engage with a diverse set of actors, including scientists from varying disciplines, policy makers, and community members. Through an inclusive and adaptive process, nexus research can hopefully avoid “a hammer looking for a nail” situation.

[1] The clean/alternative energy scenario assumes the renewable energy share to be increased to 36% in 2030 and 68% in 2050, while share gas production is projected to grow from 1.2 Mtoe/year in 2014 to 180 Mtoe/year by 2050. The coal conversion processes are assumed to be the same as the reference scenario.