South Africa’s power organisation Eskom has put forward loan proposals to several loan and aid agencies including a proposal to the World Bank for a $3.75 billion loan of which $3bn would go towards financing a coal-fired plant.
The power plant is scheduled to operate in Medupi, in the ecologically sensitive area of Waterberg. It would be the world’s fourth more carbon intensive coal fired plant, with plans to supply 4,800 megawatts of electricity.
Eskom and the leaders of South Africa say they need energy and a coal fired plant is the most sensible route to filling the gap between need and availability. NGOs and other countries, like the US & the UK, have urged the World Bank to disapprove the proposal on the grounds of environmental harm and possible debt problems. This real-live story quintessentially illustrates the chasm between energy poverty experienced in many developing countries and the low carbon goals of developed countries. It shows why it is so difficult to come to an international agreement regarding carbon reduction; why developing countries are hesitant to sign over their freedom to develop energy cheaply and why developed countries are reluctant to leave developing countries out of the deal.
The Situation in the eyes of Eskom and the South African Government.
Today the South African economy is two-thirds larger than it was in 1994. As with most growth, with it has come an increased demand for electricity. Supply has not met demand - about 30% of South Africans have no access to energy. A lot of this growth has been centred on mines and factories, which themselves need electricity. If there is no access to energy, prospects for growth will be undermined. Eskom projects that by 2028 there will be a demand of 80,000 megawatts of electricity that they will not be able to meet if they do not have access to the coal.
The finance minister of South Africa, Pravin Gordhan, believes that energy from coal is the “only responsible way forward”. It’s abundant, it’s affordable. South Africa has large deposits of coal – why shouldn’t they use a natural resource they have? In addition, he argues that developing countries need to get themselves on sustainable growth tracks in order to be in a position to play a part in preserving the environment. In the same light, “You cannot have poverty alleviation without economic growth…and you cannot have economic growth without access to energy” (World Bank 2010).
Eskom is the only electricity supplier in South Africa. It also supplies 60% of Sub-Saharan Africa with electricity including Botswana, Lesotho and Namibia. If Eskom cannot provide energy, a lot of Sub-Saharan countries will suffer.
As the critics see it.
There are three basic arguments against Eskom’s proposal: one is that the coal-fired plant is environmentally harmful to the point where it’s detrimental to the economy and of course to our Planet; two, the loan and the debt are likely to lead to a currency crash and lead the public towards more energy poverty; and finally there are doubts about Eskom, their management skills and their projections.
This coal fired plant is projected to emit 25 million tonnes of carbon a year. 200 local organisations have signed up to protest against the plant. It is expected that the coal plant will lead to complete degradation of water sources, air pollution and a rise in mercury.
A typical 500 megawatt coal-fired plant draws about 2.2 billion gallons of water every year from nearby water sources including rivers, lakes and oceans in order to create steam. This would be enough water for 250,000 people. This Eskom coal plant is a lot larger than the typical coal-fired plant, almost 10 times larger.
By borrowing another $3.75 billion, South Africa is putting itself in a fragile situation. Their currency has crashed 5 times since 1996; even more loans are likely to increase the likelihood of another crash. There is also going to be a price increase of electricity for South Africans. Eskom originally requested a 45% increase of price each year over the next three years. The government didn’t allow this, but they did allow a 25% increase in price for the next three years. Eskom has been and is catering significantly to the major energy intensive industrial users whom they have been giving dirt cheap energy prices to in order to keep the mining companies and others in the country. It offers the world’s cheapest electricity to export-orientated metals and mining multi-national corporations.
Last year Eskom lost US$1.3 billion, highlighting its problems with management. Also, Eskom would not be able to get such a large loan from the World Bank if they did not have such high projections of energy demand in the future. Some, including the World Resource Institute, say it’s debatable whether there is an 80,000 megawatt projection for 2028 is realistic. Projected electricity demand may be unrealistically high to justify the huge capital investment.
So what do you think? If you take away the questions about mismanagement, exaggerated demand projection and strip this issue down to its bare bones – does moving a country out of energy poverty using an abundant and affordable energy source override the need for a healthy environment and a low-carbon future? Do you think that we have no right to tell a country that they shouldn’t use their natural resource because developed countries have already done that and have already ruined the environment? Or do you think that regardless of what happened in the past we need to be future and forward looking despite the present circumstances? Maybe Brown, Stern and the others meeting in London this week in the attempt to come up with a way to raise $100 billion a year to help developing countries move towards a low-carbon economy should set their already high aims higher.
The International Finance Corporation (IFC) has just released news that they are to invest $1billion into India this year. The organisation which is a member of the World Bank and more commonly known for its involvement in poverty alleviation through private sector investment, has recognised the importance of investing in climate change in India.
Today India is one of the world’s major agriculture and forestry producers, employing 60% of the total workforce and accounting for 16.6% of the GDP (2007). With a growing population (now approximately 1.2billion), India no longer has the capacity to produce sufficient rice and wheat to feed itself, increasingly purchasing grain from overseas. Changes in weather patterns and decreasing ground water levels (mainly from poorly regulated/allocated ground water irrigation) could further impact on food security, expected to reduce agricultural output by a 30% by 2080.
Responding to this, the Government of India recently proposed a $1.2billion water distribution project which would link 37 Himalayan and Peninsular rivers to transport water through an additional 12,500km of canals. This is expected to generate 34Gigawatts of hydropower, add 35million ha to India’s irrgigatable areas and generate a large network of inland navigation potential. A paper written by S. Verma, D.A. Kampman, A.Y. Hoekstra, P. van der Zaag and M.S. Krol of the Water Footprint Network proposed an alternative to this in 2008. They identified that the current flow of virtual water was actually exacerbating water scarcity with crops grown in water scarce areas and transported to water rich regions. Greater efficiencies were possible when growing crops in areas where water is available, however, as a result of externalities such as; government policies and land prices, water has not to date been an influencing parameter.
IFC will invest almost $60million into a water footprinting project with Jain Irrigation, an Indian company which assists local farmers in increasing productivity of crops and developing efficient water systems.
This move demonstrates the importance that IFC is placing on effective management of natural resources, emphasising the benefits of water conservation to the sustainability of farms. This will be the first Indian company to measure the water footprint of operations and should provide the environment for water footprinting to be used as both a localised water management tool and also influence national agricultural policy.
The approaching food shortage has reached such urgency that the India Prime Minister, Monmohan Singh has called for a second green revolution, with the Chatham House Research Institute calling for it “to be more efficient in its use of water, in its use of energy, in its use of fertilizer and land.”
The US Geological Survey has released statistics which show that personal water use in America has decreased in the 5-year period from2000 to 2005, with the total fresh water use per capita below that of the 1950’s.
Water savings are a result of increased efficiencies, principally in industry and agriculture. Alarmingly, however, water use for the provision of energy is growing. With increased population and demand for energy, water use is set to increase, placing more stress on limited water resources.
According to the USGS, the single largest use of water in the United States goes towards the cooling of power plants, accounting for 49% of all freshwater withdrawals, surprisingly beating agricultural irrigation at 37%. In the water footprinting world there has been a great deal of dialogue on the water footprint of biofuels. However, little has been said about the large water footprint of other forms of energy production.
Dr. Peter Gleick, president of the Pacific Institute said, “in terms of energy, far more water is required for nuclear and fossil-fuel energy systems than for most renewable energy systems. Water availability will increasingly limit our energy choices as climate change accelerates and population continues to grow.”
Reviewing environmental data from a large UK energy producer, average water use varied dramatically depending on the power station type. Rough calculations comparing the water use per kwh produced showed that coal power stations used the least water per kwh, while peat power stations use the most. This data does not take into account the treated wastewater returned to the hydrological cycle and requires more information from the energy producer (tackling the E.ON switchboard is needless to say a Herculean task).
Looking at renewables, an article in the New York Times this week shared information that Pacific Gas and Electric (provider for northern and central California) had just announced that it would buy 500 megawatts of electricity from two solar power plant projects in the California desert. The plants use solar trough technology (solar power tech that uses parabolic mirrors to heat water, create steam and drive a turbine) with the ‘wet cooling’ technique (hot water flows through a cooling tower, where the excess heat is released to the atmosphere, and system water is lost to evaporation, requiring constant replacement) as opposed to ‘dry cooling’ (which uses fans and heat exchangers to reduce the temperature. Much less water is used (approx 90% less water) but the capital costs are greater and efficiencies are reduced.
The wet cooling is expected to use in the region of 4.9 billion litres of water a year, using between 5 and 20 percent (varies depending on the source of information) of this desert’s available water, posing a huge threat to water resources.
Solar trough plants are most effective in areas where the weather is hot but water is often scarce. For the plant operator, it makes neither environmental nor economical sense (in the long run) to wastewater, however the present day capital and operational costs of water cooling appear in many cases to exceed the price of water, and without supporting economics may restrict the use of closed loop or dry cooling systems.
According to the World Business Council of Sustainable Development, recent Californian Legislation has changed which allows renewable energy plants to use drinking water for cooling providing that certain conditions are met. This appears to be a step in the wrong direction, and according to Terry O’Brien, a California Energy Commission deputy director, removes incentives to minimise water use.
Water districts in California are starting to become more aware of to the heavy water use and are forcing energy companies to adopt water efficient technologies (as in the case of the Solar Millennium project in Ridgecrest, California which was refused the supply of 815 million gallons of water required by the plant). The price of water is generally low throughout the world, which does not reflect the true costs of water, and as a result does not act as a strong incentive to reduce consumption. Permits to operate and government restrictions do, however.
Power plants, whether fuelled by fossil fuels or renewables, will have to review water consumption as dependency becomes more critical and demand pressures increase.
A recent report published by Luxe Research “Global Energy: Unshackling Carbon from Water” has mapped out conventional and alternative energy sources against their water and CO2 intensity. This shows that many of the new energy sources and extraction methods may reduce carbon but are water heavy. The conclusions from the report found that;
- ‘Crude oil, diesel and gasoline are carbon-intensive but do not require much water
- Alternative fossil fuel sources, such as shale bed natural gas, coal to liquids and bitumen from tar sands perform worse on carbon, water or both
- Renewable fuels also have their demons, specifically biofuels derived from crops and other forms of biomass, which have low carbon impact but exact a much greater demand for water’
As renewables energies address the need for alternatives to fossil fuels, and go some way to reducing global warming, the thirst of this power production has the ability to increase water usage if policies and best practices do not demand water to be taken into account.
Efforts are being made in the industrial and agricultural sectors to increase efficiencies, reduce wastage, and implement more efficient plant engineering and technologies such as drip irrigation. However, the Pacific Institute recognises that there are sectors such as the power industry that continue to use water at the same volumes as 10 years ago. Households also play an important role in reducing water consumption.
At the household level, approximately 150litres of water is used per person per day. The carbon emissions associated with this, occur mainly within the house (89%) where water is heated, in comparison water treatment and distribution which in comparison is minimal (abstraction 0.4%, treatment 2% and distribution 1.6%).
The energy used to heat water, as above is made using ( in many cases), substantial quantities of water, which needs to be properly measured, and seen in light of the water availability in the area of production. Therefore, water reductions can be made through the installation of low flow taps etc. behaviour change (shorter showers, turning the tap of when brushing your teeth etc.) but also with energy efficiency.
What is currently lacking from the energy sector is detailed water measurement and sharing of information on water consumption with reference to the water availability in the region of energy production, in a transparent and accountable way. Water footprinting offers this opportunity and needs to be extended beyond the agricultural sector.
Looking ahead, water usage will become an increasingly important factor for consideration in the production of clean energy. The link between carbon emissions and water is inextricably linked, from the creation of energy and the water resources required, to impacts of climate change on the hydrological cycle expressed in droughts, floods, intense storms and sea level rise.