Water and energy are two highly interconnected sectors. Water is essential to producing energy, from hydropower to water cooling in power stations; conversely, energy is needed throughout the water system, from supplying water to its various users, to collecting and treating wastewater.

Energy for water

Agricultural irrigation, groundwater pumping, urban water supply and sanitation systems, and interbasin transfers are major electricity users. Improving water use efficiency and introducing water conservation measures can therefore significantly reduce energy use.

Energy can account for 60%-80% of water transportation and treatment costs and up to 14% of total water utility costs. Because energy prices are increasingly volatile, it will be important to consider how future changes in energy prices and markets will affect the production patterns and costs of water. 

Water for energy

Cooling in the energy sector is one of the main industrial water uses, with final consumption (evaporation) estimated at around 5% of withdrawals.

Water use efficiency in the energy sector varies based on the power generation technology used (geothermal, solar, gas, nuclear, coal, fossil steam). Hydropower supplies about 20% of the world’s electricity and continues to be the most important and economic source of commercial renewable energy worldwide; its popularity has only increased with the recent surge of interest in clean energy. Emerging challenges will affect both water resources and the energy sector. The most obvious instigator is climate change. Though the Energy Agency’s World Energy Outlook 2007 forecasts that fossil fuels will continue to provide a majority of the increased energy demand, hydropower development may also increase as part of efforts to mitigate climate change.

Precedents have shown that the simultaneous analysis of water and energy use at the policy level significantly increases productivity in the use of both resources. Taking full account of approaches to energy efficiency during water policy decisions can lead to substantial energy savings, and vice versa.