By Dominic Waughray, Head of Public Private Cooperation, World Economic Forum, and Visiting Scholar, Stanford University Woods Institute for the Environment
Global energy consumption is forecast to increase by nearly 50% by 2040 according to the International Energy Agency (IEA) 2016 Global Energy Forecast, with energy-related CO2 emissions rising by 34% from 2012 levels. Emerging economies like China and India will drive most of this, as they continue to rely heavily on fossil fuels to meet demands from their expanding industry and cities. India will need to quadruple its present installed capacity of about 270GW by then, creating another United States in terms of energy use.
On top of this there is, of course, the urgent need for more energy access for rural and poorer people. At present more than three billion people in developing countries still rely on traditional “biomass” for heating and cooking: 1.5 billion lack access to electricity. India alone has 240 million, mostly rural, people without such access and rightly seeks to move them out of energy poverty as quickly as possible. It submitted a bold target of achieving a 40% share of non-fossil fuels in its energy mix by 2030 to last year’s climate negotiations in Paris. But it also plans to expand its coal capacity to 400GW of coal fired electricity, over 40% of the mix, by 2035. Its greenhouse gas emissions will grow rapidly to around 5 gigatonnes by 2030, about as big as those of the United States today.
So here is wicked problem number one in protecting our global commons: how do we get millions of people out of energy poverty without significantly increasing greenhouse gas emissions?
Electricity production can also be surprisingly thirsty. A megawatt hour of electricity generated from sub-critical coal-fired power stations can require up to 2,000 litres of water. The US Geological Survey estimates that to produce and burn the around 900m tons of coal the United States uses each year to provide about 34% its electricity, requires between 55-75tn gallons of water annually; about equal to the amount that pours over Niagara Falls in five months!
India, the IEA estimates, will need up to 60bn cubic metres of water a year for its coal-fired electricity plans by 2035. Its expansion of coal will push the water requirements of its industry and energy sectors up from 2-8% as a share of overall withdrawals.
This extra water equates to about 37m3 – more than an oil-tanker truckload – for every person in India just to meet India’s coal fired electricity plans by 2035 (assuming its population is then about 1.6 billion). Or, to put it another way, it would mean accessing some 12% of the Ganges average historic annual flow of 500bn metres cubed of water, including in non-monsoon seasons when energy is still needed but rivers are low.
As emerging economies urbanise and industrialise, using fossil fuel power, more of their water will need to be allocated to energy. Modelling by the Colombia University Water Group for the World Economic Forum suggests a 76% increase in water demand for energy and industry will be required across Asia by 2030. And 70% of the continent’s river and groundwater is on average already being used for agriculture.
So here is wicked problem number two in protecting our global commons: how can the competing needs of water for agriculture and fossil-fuel energy be squared off? Without radical changes in agricultural or energy production, it is not clear how well the future water needs for India’s coal sector will go down with the country’s farmers.
And here’s the third wicked problem: India’s coal fired power stations will have to be built somewhere.
More than 70% of India’s power plants are located in areas that are already water stressed or water scarce, and most of the new coal-fired ones will be required where it is scarcest. The country’s warm temperatures and the poor quality coal used in most of its power plants will increase their cooling water requirements. The high levels of pollution in rivers and waterways won’t help either; nor will the seasonality of river flow. Power plant costs can rise 40-400% as you try to improve water use efficiency, without much benefit in wider efficiency ratios, as Eskom in South Africa has experienced – making coal no longer cheap.
Yet without water there can be no coal fired electricity production, making energy security a problem. In March, the flagship 2,300MW coal plant at Farakka town in West Bengal had to suspend its generation due to low water in the canal that feeds it. India’s 91 reservoirs are at an average 29% of storage capacity according to the Central Water Commission. Historic levels of over-abstraction combined with forecast climate change will add extra stress on future water availability, making an already wicked problem super wicked.
These interrelated challenges of energy, agriculture, water and climate change are what we would call a “systems” challenge. The United States and India are by no means alone in facing it. Who is working with the power sector to place their investment programmes into the context of basin wide hydrological risk maps assessing who will need what water (including for the environment)? Answer: no one. Who is agreeing on adjustments to the cost benefit analysis of investment appraisals to take proper account of these risks? Answer: no one. Who is overlaying these investment analyses with different climate scenarios for water scarcity? Answer: again, no one.
Someone will have to do all this, and soon, or these wicked problems will come home to roost, and we will never properly address the competing challenges of managing our global commons and ensuring needed economic development. Then, as ever, it is likely to be the poorest people who will lose out.