Water-Energy Nexus

World Energy Outlook Special Report
In this report

This excerpt from the World Energy Outlook 2016 looks at the critical interplay between water and energy, with an emphasis on the stress points that arise as the linkages between these two sectors intensify. The analysis assesses the current and future freshwater requirements for energy production, highlighting potential vulnerabilities and key stress points. In addition, for the first time, the World Energy Outlook looks at the energy-for-water relationship, providing a first systematic global estimate of the energy requirements for different processes in the water sector, including water supply, wastewater treatment and desalination.

Energy supply depends on water. Water supply depends on energy. The interdependency of water and energy is set to intensify in the coming years, with significant implications for both energy and water security. Each resource faces rising demands and constraints in many regions as a consequence of economic and population growth and climate change.

Key findings

Water is essential for all phases of energy production, from fossil fuels to biofuels and power generation. Energy is also vital for a range of water processes, including water distribution, wastewater treatment and desalination.

Almost all the weaknesses in the global energy system, whether related to energy access, energy security or the response to climate change, can be exacerbated by changes in water availability. Almost all of the fault lines in global water supply can be widened by failures on the energy side.

For the energy sector, constraints on water can challenge the reliability of existing operations as well as the physical, economic and environmental viability of future projects. Equally important, the use of water for energy production can impact freshwater resources, affecting both their availability and quality. And the dependence of water services on the availability of energy can impact the ability to provide clean drinking water and sanitation services.

WEO analysis found that the energy sector accounts for roughly 10% of total water withdrawals (the amount of water removed from a source) and 3% of total water consumption (the volume of water withdrawn but not returned to the source) worldwide. Over the period to 2040, water withdrawals for the energy sector rise by less than 2% to reach over 400 billion cubic metres (bcm). The amount of water consumed increases by almost 60% to over 75 bcm, in part due to a switch to advanced cooling technologies in the power sector that withdraw less water, but consume more. A rise in biofuels demand pushes up water use and greater deployment of nuclear power increases both withdrawal and consumption levels.

On the other side of the energy-water equation, the WEO found that energy consumption by the water sector is roughly equal to all energy used by Australia today. Most of this is in the form of electricity; in 2014 some 4% of global electricity consumption was used to extract, distribute and treat water and wastewater, along with 50 million tonnes of oil equivalent of thermal energy, mostly diesel used for irrigation pumps and gas in desalination plants. Over the period to 2040, the amount of energy used in the water sector is projected to more than double. The largest increase comes from desalination, followed by large-scale water transfer and increasing demand for wastewater treatment (and higher levels of treatment).

In addition to its outlooks, the IEA has also produced deep dives into various facets of the water-energy nexus. In 2018, the WEO 2018 Outlook for Producer Economies assessed the energy implications of the Middle East’s reliance on desalination to meet the region’s water needs. The Future of Petrochemicals included a detailed look at water withdrawals and consumption for primary chemical production today and over the period to 2050 as well as the impact that water stress might have on key chemical-producing regions.

WEO 2018 took an in-depth look at the implications for the energy sector of ensuring clean water and sanitation for all (SDG 6), and what policymakers need to do to hit multiple goals with an integrated and coherent policy approach.

The challenge is significant. Today, more than 2.1 billion people lack access to safe drinking water. More than half the global population lacks access to proper sanitation services. More than a third of the global population is affected by water scarcity. Roughly 80% of wastewater is discharged untreated, adding to already problematic levels of water pollution.

Energy is an essential part of the solution, and WEO analysis shows that achieving universal access to clean water and sanitation would add less than 1% to global energy demand in the Sustainable Development Scenario by 2030. It also highlights a range of potential synergies between SDG 6 on water and SDG 7 (ensuring access to affordable, reliable, sustainable and modern energy for all). For instance, taking water supply needs into account when planning electricity provisions in rural areas can open different pathways for both, which in turn can bring down the cost of electricity for households. Another example: producing biogas from waste can facilitate cleaner cooking in households that currently rely on wood and charcoal for cooking.

Share of population without access to electricity or water in rural areas in selected countries, 2018


Providing access to safely managed sanitation and halving the amount of wastewater released without being treated in the Sustainable Development Scenario are other key aspects of the sustainable development agenda. This is both a rural and an urban challenge.

Technology choices can play a major role in determining the additional demand for electricity. Following today’s standard blueprint for wastewater management could increase electricity consumption for urban municipal wastewater treatment by over 600 TWh over the period to 2030. Around 30% of this could be covered by the electricity generated from energy recovery. However, if all new capacity for SDG 6 were built to be energy neutral or positive, by capturing and using more of the energy contained within wastewater, the urban municipal wastewater sector could even become a net energy producer.

"Business as usual" equals the amount of electricity consumed (less 60 TWh from energy recovery) from municipal wastewater treatment excluding SDG 6 in 2030 in the SDS. "Sustainable Development Scenario" equals the total electricity consumption from urban municipal wastewater treatment plants in the SDS if SDG 6 were achieved. "Energy neutral/positive case" is equal to the total electricity consumption from urban municipal wastewater treatment plants in the SDS if all new capacity built to achieve SDG 6 was energy neutral or energy-positive. The negative values indicate that more energy is generated than needed and can be sold.

SDG 6 is not just about supplying water and sanitation, it is also about ensuring that water is used more efficiently. Significant quantities of water are lost each day through pipe leaks, bursts and theft. Losses, theft and inaccurate metering plague developed and developing nations. Tackling these losses, and improving water use through the application of more efficient technologies, is an important aspect of sustainable development.

If all countries reduced water losses to 6% of throughput, a level seen in the most advanced countries such as Denmark and Japan, then 130 TWh could be saved today worldwide (this includes avoided energy use in water extraction, treatment and distribution). This is equivalent to the entire annual electricity consumption of a country the size of Poland.

Different pathways towards a low-emissions energy system can also have significant implications for water use.

Energy production is vulnerable to having insufficient water either from natural or man-made reasons (i.e. regulation). Water scarcity is already having an impact on energy production and reliability and there is increased uncertainty about future water availability and the impact that climate change will have on water resources. It is expected that climate change will alter the intensity, frequency, seasonality and amount of rainfall as well as the temperature of the resource, which could impact energy infrastructure.

Low-carbon technologies are not immune to potential disruptions from water scarcity. In fact, while a lower carbon pathway offers significant environmental benefits, the suit of technologies and fuels used to achieve this pathway could, if not properly managed, exacerbate water stress or be limited by it.

Some technologies, such as wind and solar PV require very little water; but the more a decarbonisation pathway relies on biofuels production, the deployment of concentrating solar power, carbon capture or nuclear power, the more water it consumes. WEO 2016 showed that in a scenario consistent with holding the global average temperature rise to 2 degrees Celsius, water withdrawals are 12% lower in 2040 relative to our main scenario but consumption is 2% higher.

Global water use for energy production by scenario, 2014-2040


WEO 2018 found that shifting the emphasis towards an integrated approach focused on delivering three energy-related Sustainable Development Goals - energy for all, reducing the impacts of air pollution and tackling climate change (our Sustainable Development Scenario), results in significantly lower water withdrawals. This makes this pathway the best option of those assessed by WEO for achieving the SDG 6 target on water use efficiency and for reducing the energy sector’s vulnerability to potential water disruptions such as drought or the effects of climate change on water availability.

The WEO has also looked in-depth at what constraints on water availability could mean for the thermal power generation of an individual country, with a focus on coal-fired generation in China and India in World Energy Outlook 2015. The analysis of China and India shows that when considering future sites of coal-fired power generation, the choice of optimal locations will have to consider factors beyond just coal transportation cost and transmission cost to load centres, but also water availability and the additional capital cost for cooling systems that may come with the choice of the site.

China accounted for 45% of the world’s installed capacity of coal-fired power plants in 2014 and 35% of expected coal-fired capacity additions to 2040 in our central scenario. China is already experiencing water scarcity in several regions and adaptation to water stress is already apparent. In the central scenario that allows for changes in water availability, increased water stress has a material impact on the cooling technologies (and related costs) deployed across China’s coal-fired power fleet. The power sector is expected to need to undertake major efforts to address water shortages.

In India, more than 80% of total coal-fired generation in India in 2040 comes from plants that have yet to be built. The central scenario shows a significant increase in the use of dry-cooling in arid areas in Northern India and in the south. Unlike China, coal mines in India are located mainly in areas which do not experience water stress today (and not expected to experience stress in 2040). Therefore, in areas where demand centers are relatively close, significant amounts of coal-fired power generation capacity using wet-tower cooling systems are built in relative proximity to the coal mines to reduce transportation costs.