Three things the water security community should know about the energy sector

Transcription

1 Three things the water security community should know about the energy sector Walter Reinhardt, Karen Hussey and Nicole Carter Presentation at Oxford Water Security, Risk and Society Conference April , St Hugh s College, Oxford Walter Reinhardt Fenner School of Environment and Society The Australian National University, Canberra * Walter.Reinhardt@anu.edu.au

2 Water is a critical input into energy production processes Historically, currently, and into the future Watermill, Reading, UK Tarong Coal Powerstation, Australia Solar thermal, planned Rio Mesa plant, USA Starting premise: Water is used, consumed, and occasionally produced in conjunction with energy production Oxford Water Security, Risk and Society Conference 2

3 Feature 1: THE TRANSFORMATION IN THE ENERGY SECTOR Oxford Water Security, Risk and Society Conference 3

4 The transformation in the energy sector Rapid growth in energy development Rapid change in energy sources Rapid change in location of energy production Oxford Water Security, Risk and Society Conference 4

5 Rapid growth in energy development NB estimates courtesy of BP (2012) and IEA (2011). As published in Moriarty & Honnery (2012), the 2020 and 2030 high and low ranges represent the average of IEA (2010), EIA (2010), EC(2006), BP (2012), Shell (2008), IAEA (2009), IIASA (2007), WEC (2008) and Tellus Institute (2010) forecasts Oxford Water Security, Risk and Society Conference 5

6 Rapid change in energy sources toe: tonnes of oil equivalent Global primary energy sources. From: BP Energy Outlook 2030 (2012). Oxford Water Security, Risk and Society Conference 6

7 Rapid change in location of energy production Source EIA 2011 Oxford Water Security, Risk and Society Conference 7

8 Water implications for energy sources ~3.8 kl/mwh ~1.3 kl/mwh Source: CRS, 2011 Oxford Water Security, Risk and Society Conference 8

9 Managing the water implications The energy sector is changing how it uses, consumes and produces water. Is the water sector ready? Laws, regulations and markets for managing water allocation between new and existing users Protocols and systems for monitoring and managing water use Capacity and knowledge of government and agencies Take home message: Where and how energy is produced is changing rapidly with serious implications for water security Oxford Water Security, Risk and Society Conference 9

10 Feature 2: GOVERNANCE AND (DIS)INCENTIVES FOR WATER EFFICIENCY IN THE ENERGY SECTOR Oxford Water Security, Risk and Society Conference 10

11 Governance and economic incentives Governance arrangements, including economic incentives, give little inducement for water efficiency in the energy sector, particularly with electricity supply: Ability to trade water: On-selling water savings is not possible under many water allocation regimes Economic gains from efficiency: Limited or negative incentive when additional energy costs outweigh the value of water savings Timing and location of demand: Peak energy demand in hottest, driest times or climes when water is most scarce Oxford Water Security, Risk and Society Conference 11

12 Conflicting incentives Government policies and corporate incentives may directly conflict with water efficiency Regulatory burden: a panoply of government regulations already exist in the energy sector and fulfilling the regulatory obligations supersedes voluntary action on other fronts (such as water efficiency) Competing policy priorities: water quality, emissions mitigation and energy security priorities Oxford Water Security, Risk and Society Conference 12

13

14 Aligned incentives Not all incentives conflict with water efficiency Business risk: if water insecurity can cause business disruption then efficiency may be perceived as a solution Take home message: Existing governance arrangements do not promote water efficiency, but water security has become a business risk for the energy sector Oxford Water Security, Risk and Society Conference 14

15 Feature 3: THE SIZE AND RESPONSIVENESS OF THE ENERGY SECTOR Oxford Water Security, Risk and Society Conference 15

16 Economic size in perspective: annual capital investment 2012 Forecast global water and waste water capital expenditure (capex) Global water plus estimated annual costs of MDGs and climate change adaptation 2012 Forecast global oil and gas capex IEA forecast average capex in primary energy $230bn $310bn $1,030bn $1,500bn Rubbery data courtesy of IEA 2011 World Energy Outlook, UNESCO Third World Water Development Report 2009, GWI 2009, BusinessWire 2012 Oxford Water Security, Risk and Society Conference 16

17 Responsiveness: Lessons from the climate change lobby The energy sector and governments have responded to pressure from climate change mitigation lobby What are the lessons for the water sector here? Focused targets for transformation Uniform treatment of goods Well organised and coordinated action Take home message: The energy sector is large, but not beyond influence Oxford Water Security, Risk and Society Conference 17

18 Three key features of the energy sector for the water security community 1. The transformation in the energy sector 2. The governance and (dis)incentives for water efficiency in the energy sector 3. The size and responsiveness of the energy sector Oxford Water Security, Risk and Society Conference 18

19 Three things the water security community should know about the energy sector Walter Reinhardt Fenner School of Environment and Society The Australian National University, Canberra * Walter.Reinhardt@anu.edu.au Oxford Water Security, Risk and Society Conference, April

20 References Transformation in energy: Moriarty, P, & Honnery, D, 2011, What is the global potential for renewable energy? Renewable and Sustainable Energy Reviews, 16: BP World Energy Outlook 2030 (2012) Energy Information Administration gas and oil shale maps Carter, N, 2011, Energy s water demands: Trends, Vulnerabilities, and Management, Congressional Research Service, Washington DC Conflicting incentives: McKinsey cost curve, v2.0 The energy sector not beyond influence: IEA World Energy Outlook 2011 UNESCO WWDR 3 and 4 BusinessWire, 2012, Oil and Gas Capital Expenditure Outlook 2012 Global Water Intelligence, 2009, Global Capital Expenditure on Water and Waste Water Oxford Water Security, Risk and Society Conference 20