This FactBook explores the global and local interconnectedness of energy and water. It is one of a series of academically reviewed publications by the Kearney Energy Transition Institute, a non-profit energy transition research organization established in 2011.

Key insights of the report:

Freshwater supply will not meet forecast demand, requiring compromises
Water shortages are already affecting energy supply
Location-specific solutions will be required

The FactBook provides:

A global picture of the main water resources
An overview of the current and forecasted mismatch between supply and demand, and its likely consequences if left unaddressed
A summary of water risks and their multidimensional nature

The FactBook also provides in-depth expert analysis on energy technologies:

Describes the water industry’s principal value chains, market trends, and promising solutions
Compares water consumption for different energy-production pathways
Illustrates the impact water constraints have already had, and continue to have, on the development of conventional and unconventional resources

Freshwater supply will not meet forecasted global demand, requiring location-specific solutions

The total volume of freshwater is finite, and exists largely in the form of unusable glaciers and groundwater. Freshwater that is accessible, reliable, sustainable, and usable is unevenly distributed and only amounts to ~0.0003% of total water reserves.

Water-resource inequality is predominantly a local challenge that is not simply a function of physical availability. It is more complex and should be examined in its many dimensions: freshwater availability; freshwater stress; freshwater/improved drinking-water access (this can be limited, even in countries with sufficient supply); water footprint; and virtual water (indirect trade in water via trade of goods/services).

At the sector level, agriculture withdraws 70% of freshwater globally, but industrial withdrawal dominates in Europe and North America. On a per capita basis, stark water-usage differences exist between developed and developing countries, highlighting disparities in industrialization and domestic water use levels.

Freshwater withdrawal (i.e. demand) is expected to surpass reliable accessible supply by ~40% globally by 2030, both as a result of falling supply and rising demand.

Supply is falling largely because of excessive use and pollution. This is expected to remain the case, exacerbated by rising temperatures and atmospheric concentrations of CO₂, both of which will affect the quantity of water available and its quality.
Rising water demand is the result of population and economic growth, urbanization, and increases in the production of food, animal feed, fiber, and biofuels (Africa and Asia, already facing severe water challenges, will account for 90% of the 2.59 billion population growth forecast by 2050).

By 2030, about 60% of the mismatch may remain unaddressed, leading to depletion of fossil (non-renewable) reserves, drainage of water vital for the environment, and/or unmet demand.

Water risks constitute environmental, social, and economic constraints that will require global and local compromises

Water challenges are local. Competition for water resources among economic sectors, domestic/international geographies, and between rural and urban environments will intensify. There is therefore no single freshwater crisis, as different regions/countries face very different water constraints (and will continue to do so). These are local in nature and should be treated as such. Generalizations should be treated with caution.

Water risks are often considered purely in terms of water quantity or quality. However, they exist in numerous other dimensions, such as geographic location, fluctuations in availability, reliability, and price. Societal, cultural, regulatory, and reputational dimensions must also be considered in order to build a complete picture of the magnitude of water risks and their potential consequences.

Water and energy are highly interconnected and their relationship is, and will remain, under stress. The close links between water, energy, and land resources means strong demand for one can limit demand for another. Challenging compromises will need to be made globally and locally.

The water value chain is complex and fragmented among various industries but shared technologies exist across the water, wastewater treatment, and desalination sectors. Energy is also a key requirement in water systems (mainly for water treatment and pumping) and water (mostly hydropower) is also an important source of electricity.

Water challenges will require location-specific combinations of solutions aimed at reducing demand and/or increasing supply

Reductions in water demand can be achieved in agriculture (via increases in yields, utilization of best available seed types, crop-stress management, and advanced irrigation techniques) and both industry and domestic supply, as a result of efficiency, conservation/reuse/recycling, regulation, substitution (economic activities switch, virtual water import), and/or increases in water prices (water prices often do not reflect the real value/cost of producing and supplying water, encouraging wastefulness).

Water supply can be increased by improving existing infrastructure, alternative supply (desalination, wastewater treatment), long-distance transportation, and storage. Water reuse and desalination both have a large potential for growth, but, combined, still supply less than 1% of freshwater withdrawal globally.

Cost estimates for solutions to increase supply and reduce demand vary significantly in the literature. The costs of various solutions will be specific to local settings and the chosen technology. Generally, efficiency measures are cheaper than improvements to traditional water-supply infrastructure, which is itself much cheaper than desalination, even with expected efficiency improvements.

The mix of solutions required to fill the 2030 supply-demand gap will vary significantly from one location to another.

The constraints imposed by water supply (vital for energy production) have already affected the development of conventional and unconventional resources and continue to do so

Water and energy flows are complex and interconnected. In the US, thermoelectric cooling withdraws the largest volume of freshwater (43% of total withdrawal) while agriculture accounts for 80% of total U.S. freshwater consumption. The petroleum sector consumes a small fraction only (1%); this includes water used in water flooding and enhanced oil recovery operations, and in hydraulic fracturing (0.2%).

Water is used (withdrawn and/or consumed) at different stages of the oil and gas, nuclear, coal, and concentrating solar power (CSP) energy-production pathways: extraction and production, processing, and thermal electricity generation (mostly cooling). Thermoelectric cooling is by far the largest fraction of total life-cycle water consumption (per unit of energy produced). For the scenarios considered, conventional and unconventional gas, on average, consume a smaller ratio of water per unit of energy produced than CSP, nuclear, and coal. When used for transport and heating, conventional and unconventional oil consume the least water per unit of energy because they do not involve a cooling stage.

Water constraints have already had a critical impact on the energy sector globally, and continue to do so. Over the past 10 years, numerous events have demonstrated the significant impact water constraints have on energy production: high-temperature freshwater, a scarcity of freshwater, or an excess of it frequently impose constraints on energy production. This affects all energy systems and economic regions.