Water and Energy Costs: Inextricably Linked

Via The River Network, a short article stating that the connections between water and energy cannot be made clearer.  As the article notes:

“…As the cost of electricity increases, so to does the cost of water. This scenario has been made frighteningly evident in Australia where water prices across the country have soared by 30 percent, on top of inflation, over the last four years. Similar water price spikes are likely to be seen by the world over unless a large move is made away from traditional hard path water and energy solutions toward the soft path.

While water prices are already too cheap and increasing the price to reflect it’s true intrinsic value should be a good thing, having water and electricity prices so closely correlated can potentially send water utilities into financial hardship which may in turn ultimately hurt the consumers.

As recently reported in an Australian publication ‘Money Matters,’ costs of water are drastically spiking, largely in part to massive expansion in the energy-guzzling desalination industry.

The Water Supply Association of Australia – which represents most urban water utilities – warned that for every $1 per megawatt-hour increase in the cost of electricity, the cost of treating and transporting water would rise by $1 million…

Already water prices have increased significantly to fund multi-billion-dollar spending on desalination plants. Sydney Water’s prices are set to rise by $245 a year, or 32.6 per cent, between July 2008 and June 30, 2012, of which $103 is to fund costs of the Kurnell desalination plant.

Traditional hard path approaches to meeting water demands—for example desalination plants or inter-basin water transfer—are inherently energy intensive. Without focusing on soft path solutions such as conservation and efficiency to reduce demand on water, and relying on hugely energy intensive hard path water supplies will inevitably bring about significantly higher water prices, globally.

A second option, which should be pursued in tandem with the lightening of demand on water, is to figure out how to power water supplies with renewable energy. Despite requiring large initial start-up investments, renewable energy sources will ultimately insulate water utilities from electricity price spikes—thus insulating consumers from spikes in water prices—as cost of maintaining the production of electricity through such sources as wind and photovoltaic solar are extremely minimal. As it has been reported that peak oil had already occurred in 2006, and demand for coal continues to rise at a rapid clip, fossil fuel prices will inevitably continue to increase—and so will prices for water, unless we make some drastic infrastructural changes.”

This entry was posted on Sunday, December 12th, 2010 at 6:22 pm and is filed under Uncategorized.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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About This Blog And Its Author
As the scarcity of water and energy continues to grow, the linkage between these two critical resources will become more defined and even more acute in the months ahead.  This blog is committed to analyzing and referencing articles, reports, and interviews that can help unlock the nascent, complex and expanding linkages between water and energy -- The Watergy Nexus -- and will endeavor to provide a central clearinghouse for insightful articles and comments for all to consider.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has held a lifelong interest in environmental and conservation issues, primarily as they relate to freshwater scarcity, renewable energy, and national park policy.  Working from a water-scarce base in Las Vegas with his wife and son, he is the founder of Water Politics, an organization dedicated to the identification and analysis of geopolitical water issues arising from the world’s growing and vast water deficits, and is also a co-founder of SmartMarkets, an eco-preneurial venture that applies web 2.0 technology and online social networking innovations to motivate energy & water conservation.  He previously worked for an independent power producer in Central Asia; co-authored an article appearing in the Summer 2010 issue of the Tulane Environmental Law Journal, titled: “The Water Ethic: The Inexorable Birth Of A Certain Alienable Right”; and authored an article appearing in the inaugural issue of Johns Hopkins University's Global Water Magazine in July 2010 titled: “H2Own: The Water Ethic and an Equitable Market for the Exchange of Individual Water Efficiency Credits.”