World Bank Initiative Moves Talk On Water Energy Nexus To Action

13 August 2014 | Thirsty energy is a catchy phrase that encompasses the water for energy aspect of the water-energy-food nexus. It’s also the name of the World Bank’s relatively new initiative that aims to help governments face a resource constrained future by implementing integrated planning methods. The methods will address the limitations and opportunities of both water and energy.

The Thirsty Energy initiative intends to do this through policy guidance and the development of technical tools as well as spreading general awareness about the linkages between water and energy. It aims to inform the private and public sector alike on the water intensive activities of energy production.

Most importantly, the initiative seeks to gain an understanding of the water-energy nexus that goes beyond traditional connections, says Diego Rodriguez, a Senior Economist in the World Bank’s Water Unit. Ecosystem Marketplace’s Genevieve Bennett spoke with him about Thirsty Energy and all it entails.

GB: What is the story of Thirsty Energy’s genesis within the World Bank?

DR: Basically it’s an initiative that started as an internal dialogue a couple of years ago. It comes more from the energy sector than from the water side but is trying to assess all forms of water use in energy processes. We want to really understand how different forms of energy and their technologies require water. There are many functions for water in energy productions. It isn’t just an issue of quantity, but also of quality, for example. Changing temperatures of water can impact ecosystems.

So the water unit started a discussion with our energy colleagues to find real cases where water was constraining development in the energy sector.

GB: How is Thirsty Energy working to implement integrated management and nexus thinking?

DR: Basically we work in countries where a) there is enough of a problem and b) enough of a clearly-stated demand from the energy sector. The initiative helps them understand the complexities of water. Our focus is more on the macro side. We look at long-term planning and ask questions like: are the energy plans feasible with current technologies and how does water fit into the plan? If there isn’t enough water, what measures do you take to curb water use and demand?

Initially we saw energy and low carbon plans taking a very simplistic view of the complexities of hydrological cycles, of potential competition and other risks that may arise. Based on this, we started engaging with countries where we think their perspective of water resources could cause problems in the very near future.

Right now we’re working in South Africa, China, and Morocco. In Morocco there’s a lot of interest it has a very large and ambitious renewable energy expansion plan. However, there isn’t a lot of consideration on if water will be available or how competition from other sectors like agriculture or urban/municipal use will affect this expansion.

GB: It’s interesting that the initiative is seeking better understanding and management of water for energy as opposed to energy for water but is sounds like it was a strategic decision. What made you start with this aspect of the nexus?

DR: Yes. It took probably a year to define that. We were looking at the water-energy-food nexus as a whole. For us, the main challenge is how do you look at this problem, and actually try to influence major economic sectors in the way that they’re planning and investing? The more you add the more complex it is to tackle. So we said, okay, we need an entry point. And that entry point for us is the energy sector. We’re trying to ensure that we can influence the way the energy sector thinks about water. And then we also have a component in which we try to look at trade-offs across different sectors.

So we don’t ignore food and industry and other uses, but you have to have an entry point where you develop and implement analytical tools. From here, we can assess the supply and demand side of both water and energy. But as said, it’s very complex. We analyze the water and energy sectors and reach outcomes based on the assessments. If conclusions drawn from an assessment is something like the irrigation practices aren’t using a lot of water, then the analysis is finished. But if instead, the assessment brings to light increasing demands on the side of energy that may impact other sectors’ water allocations, then we implement techniques and examine trade-offs looking for a solution.

But even trying to get the energy and water actors to talk to each other is quite complex. So we’re trying to be very pragmatic and operational about our approaches.

GB: What would the ideal planning process look like? Who is involved, what factors are considered, how are decisions being made?

DR: What we’ve seen is that in most of the energy planning frameworks, there’s usually an assumption that the water that may be required by the sector is there. ‘We’ll be able to get it somehow’ is the line of thought. You get an average mean flow of water and make allocation decisions based on the assumption this supply won’t change.

What we’re trying to do slowly is change that, and say, ‘the availability of water can fluctuate based on resource flows every year causing supply to vary’. In some cases you will have water in certain basins that have been fully allocated. In certain years you might have extreme events a severe drought or flood. It becomes an issue of being much more realistic about the costs and the physical constraints of the resource for a major economic sector like energy.

GB: Do you have any examples of that approach working in practice?

DR: Very few countries have done this. We’re actually very limited in actual practice. The closest that you get is South Africa’s integrated resource planning framework about 10 years ago. The framework was limited in how it approached water resources. Basically, it included water as a necessary piece of energy production but didn’t account for water scarcity or stress that may occur and impact development. What we’re doing in South Africa is altering the energy model to incorporate the constraints of water at the basin level.

GB: I assume you’re working with both the public and the private sector. How does the private sector approach these issues and in what way are you engaging with them?

DR: We have a private sector reference group. We have partners like Electricite, Alstom and Veolia in France and Abengoa in Spain-all keen on examining the nexus. Obviously they look at it from a perspective of potential investment risk. What they are realizing also is that nowadays it’s very important for them to understand the broader context. If you decide to invest in a particular plant, you have to go way beyond what happens to that particular site. The private sector understands how you have to look larger. Potential problems within the basin, like effluent discharge, could impose additional costs even if it isn’t happening at the plant site.

And at the same time the private sector does have very good experience in building and operating plants and businesses. The idea is that with this collaboration, they can help us understand how the efficiency and consumption patterns of technologies are determined by location and climate conditions among other factors. They also have a clear understanding of existing and future challenges regarding resource constraints.

GB: So what are your plans in the coming year or two? What can we expect to see happening?

DR: The initiative was launched in January so we’re fairly new. And in the next year, we’ll be focusing on delivering results from the countries we’re working in. We started the work in South Africa we talked about. We’re starting work in China with the national energy agency to incorporate water constraints into the new national five-year energy plan for 2016-2020.

We’re also starting to provide assistance in Morocco with a water and energy utility there, which is a new merger of institutions. It’s very interesting. Our role is to present analytical tools that demonstrate the benefits-including financial gains- of integrated management.

Essentially, we’re meant to provide an array of processes and methods that can move the nexus approach from “blah blah blah” at the global level to real implementation that affects resource management and investment decisions.