The Ties between Water and Energy

Tuesday, May 10, 2016

Most consumers may not give it a thought when they turn on a tap or switch on a light, but water and energy are highly interdependent. It takes water—lots of it—to produce most types of energy, and it takes energy to extract, pump, treat, and transport water. As demand for both grows, citizens and governments are becoming more aware of the need to better manage the relationship between these vital resources. A conference later this month in Panama will continue a regional dialogue on the “water-energy nexus” that will help shape so many critical decisions in the future.

The connection between water and energy is crystal clear in Latin America, which generates much of its electricity from hydropower. Taken together, the Latin American countries produce 57 percent of their energy from water, compared with 16 percent globally, and some countries are almost completely dependent on hydroelectricity, according to Ariel Yépez, who heads the Energy Division at the Inter-American Development Bank (IDB). Brazil, for example, uses water to generate 87 percent of its electricity needs.

While hydropower certainly has its pluses—Latin America is one of the greenest regions in the world, with relatively low fossil fuel emissions—it also makes countries particularly susceptible to variations in the water supply.

“That blessing, that great advantage for the region, can turn into a matter of considerable vulnerability,” Yépez said.

Nowhere is the water-energy nexus clearer at this moment than in Venezuela, where a severe drought exacerbated by El Niño has resulted in perilously low water levels at the country’s massive Guri Dam, leading the government to institute a range of measures to ration water and electricity. The same climate phenomenon has also brought drought conditions to Colombia and several Central American and Caribbean countries this year.

The region stands to become even more vulnerable to these types of problems as the effects of climate change intensify, according to Yépez, one of the speakers scheduled to participate in the Regional Dialogue on the Water-Energy Nexus, which will take place in Panama City on May 24-25. The conference, which is being organized by the Organization of American States (OAS) and the IDB, will focus on the Latin American region; a similar event later this year will look at the issue from a Caribbean perspective.

The conference in Panama will cover some of the challenges and problems inherent in the water-energy nexus, look at examples from the region, and discuss ways to manage these resources in ways that recognize the connection between them. The event will close with a dialogue between public officials and leaders from the region’s private sector.

“Countries are still addressing these issues very separately,” said Max Campos, chief of the Integrated Water Resources Management Division in the OAS Department of Sustainable Development. One challenge, he said, is to identify ways that countries can take a more integrated approach to water and energy decisions—not necessarily by creating additional government ministries, but by finding “points of convergence” in which state institutions can work together more fluidly and effectively.

In some cases, Campos said, this may involve rethinking infrastructure projects from a “multiuse” perspective that provides a better balance between water and energy needs. Countries may also need to develop a legal framework for ongoing collaboration between these sectors. It’s also important to get civil society involved in the discussion about energy and water—not just nongovernmental organizations but academic institutions, the private sector, and the region’s youth, who tend to be energized about environmental concerns and want to find ways to help solve problems, Campos said.

Panama at the Nexus

Panama is a fitting place to hold a dialogue on these issues, according to Isaac Castillo, the country’s deputy secretary of energy. “If there’s a country that depends mainly on water it is Panama, because our primary economic resource, the canal, depends on water,” he said in an interview.

In fact, in March the Panama Canal imposed temporary draft restrictions on vessels going through the waterway, because the drought caused by El Niño had lowered water levels in the canal’s lakes—a situation Castillo said has now stabilized. “Fortunately, it’s started to rain,” he said.

Castillo stressed the need for more cooperation, both within and among countries, to address the interconnected challenges involving water, energy, and food production. “This is an issue that will become increasingly relevant in the future, from the point of view of climate change,” he said.

One place where water and energy interests often clash in Latin America is in the hydroelectric sector, given the region’s hydro-intensive energy mix. Panama, like many other countries in the region, has seen strong public opposition to dam projects, Castillo said, and one complaint has been a lack of overall watershed management.

Water projects can address multiple needs—energy production, crop irrigation, and human consumption—but they have to be managed “intelligently, integrally,” Castillo stressed. He said that Panama’s National Energy Secretariat and the Ministry of Environment have been working together to design a mechanism to improve water use management and adjudicate disputes within each watershed. The two agencies also cooperated closely on the National Energy Plan 2015-2050, which was approved several weeks ago by Panama’s Cabinet Council.

“We as governments need to improve coordination among our entities so that we’re moving in the same direction,” Castillo said.

Increased cooperation is also important at the international level, he said. For example, the Central American Electrical Interconnection System (SIEPAC for its initials in Spanish) will help stabilize the region’s power supply and mitigate variations in rainfall from one country to the other.

“Nowadays all these issues are interconnected,” Castillo said, adding that the upcoming conference will provide the opportunity for different countries to share ideas and solutions.

The idea for such a dialogue grew out of last year’s ministerial meeting of the Energy and Climate Partnership of the Americas (ECPA), where three government ministers—Mexican Energy Secretary Pedro Joaquín Coldwell, U.S. Energy Secretary Ernest Moniz, and Panamanian Energy Secretary Víctor Urrutia—held a panel discussion on the water-energy nexus.

Growing Complexity

Food production is another important element in discussions about energy and water, since agriculture is by far the leading source of water use in the world, followed by energy. (Of course, agriculture can even be used to produce energy, as in the case of some biofuels.)

The IDB’s Ariel Yépez said that governments still tend to consider these resources in “silos”—“energy over here, water over there, food over there. What we have yet to come to perceive is the high degree of interaction between these concepts.”

One trend that significantly influences the water-energy-food nexus is growing urbanization, according to Yépez. Currently, he said, about 80 percent of Latin Americans live in cities, a number expected to rise to 90 percent by 2050. That adds another level of complexity to ensuring that countries can efficiently supply and distribute enough energy, food, and water to meet growing demand.

These are not just “engineering” issues, Yépez said, noting that many factors—demographic, historical, socioeconomic, cultural, geographical, political—come into play in decisions that involve these basic resources. By way of an example, he talked about an IDB project in Haiti that involved temporarily emptying a reservoir to refurbish a hydroelectric plant. The timing had to take into account effects on farmers downstream; otherwise, crops could be ruined, the food chain disrupted, and livelihoods and cultural practices threatened.

For his part, Campos said he hoped the upcoming conference in Panama would raise awareness about the many interconnected challenges and start a broader conversation in the region about how best to address them going forward.

As the region’s nexus for political dialogue, the OAS has the potential to tap into the expertise of many other regional agencies—whether the Inter-American Commission on Human Rights or the Pan American Health Organization or the Inter-American Institute for Cooperation on Agriculture, to name a few—when concerns about water, energy, and food intersect, Campos said. “It’s important for the OAS to be proactive and to open up the opportunity for dialogue on these issues that are so critical to our future.”