23 Jul 2009

Water IS Energy

A guest post by Christian von Hirschhausen*

Out of the ~300 papers presented at the recent Conference of the International Association of Energy Economics (IAEE) in San Francisco, only one dealt with the relation between energy production and water (I recommend you to look at Sandia National Lab’s website on the “energy-water-nexus”).

Energy economists hardly ever think of water as an important input into the production process. Just having met David I thought I need to correct this: Water is not only essential for energy production, WATER IS ENERGY !!!
  • 20 percent of worldwide electricity production comes from hydropower. Currently many countries, in particular emerging and developing countries, consider the expansion of their hydroelectricity capacities to meet increasing demand in an environmental-friendly way;

  • Water is needed in many conventional thermal power plants for cooling. Remember the hot summer in 2005, when French nuclear power plants had to shut down due to insufficient cooling water? In the South-West of the U.S., the choice of electricity generation technology is likewise often determined by the availability of cooling water;

  • This is not to talk about the “virtual water” contained in the raw materials going into the production of many industrial goods, and even more so in metal, concrete, and steel;

  • Last but not least, there are tremendous amounts of water required for the production of conventional hydrocarbons, and even larger amounts for producing unconventional oil and gas for shale, for example. Thus, the shale gas-rush in Barnett (TX) and elsewhere is only possible using large amount of water for cracking the shale and thus releasing the CH4.
Who owns the water that is used for energy production? Do users pay the appropriate price? Are there external effects involved, such that the user of water upstream impacts the utility of a downstream user? Is there is enough water available to sustain the current pattern of energy production and consumption?

Bottom Line: In times of climate change and increasing awareness of the value of water, we cannot ignore these essential questions on the connection between water and energy.
* Chair of Energy Economics and Public Sector Management, Faculty of Business and Economics, Dresden University of Technology


  1. "More than X% of worldwide electricity production comes from hydropower."

    Is this a typo?

  2. I understand that areas in Minnesota that have ethanol plants consume far more water than was previously used just to grow the corns.

  3. Which energy economists hardly ever think of water as an important input in energy production? Far as I can tell, they all do. But I'm all ears.

    The general population, on the other hand, hardly ever thinks so.

    You forgot the water requirements for oil sands.


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