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Win-win: Reducing Water Use and Greenhouse Gas Emissions in China’s Power Sector

China’s power sector is the nation’s largest source of greenhouse gas emissions and its biggest industrial water user. To meet increasing energy demand, the country may double its installed generation capacity by 2030. As a result, decisions about electricity generation will have profound impacts on both global climate and domestic water resources.

To help inform decision-making, WRI evaluated the climate-water implications of more than 20 generation technologies either currently in use or proposed, and found several win-win solutions for the country’s power sector to reduce water impacts and emissions.

Water Use and Emissions Implications of Generation Technologies

When considered from a lifecycle perspective, all power generation technologies consume water and emit greenhouse gases, particularly thermoelectric power plants, but at varying levels.

WRI’s Water-Climate Impacts Analysis charts the three dimensions of power generation technology: water impacts, emissions and capital costs. The graphic below compares freshwater withdrawal with GHG emissions per megawatt-hour (MWh) of power generation, highlights potential electricity produced or saved over each technology’s lifetime and ranks them according to capital costs (using 2010 Chinese technology costs). For example, nuclear power requires large volumes of water for cooling, emits negligible greenhouse gases and produces roughly 160 million MWh of electricity in its lifespan per $1 billion invested.

Under this comparison, most power generation technologies lie in the upper right-hand quadrant, where the connection between water use and emissions is most acute. However, the technologies with low water and climate impacts falling into the center and the bottom left-hand quadrant―the “win-win” quadrant – show investments with a positive impact on emissions and water use.

Energy Efficiency, Renewables Are the Best Win-Win Options for China

Based on this analysis, our main observations are:

  • Demand-side energy efficiency is the most effective strategy for net reductions on emissions and water consumption. By reducing energy demand and subsequently avoiding water use for power generation, efficiency frees up scarce water resources for other critical purposes and creates a virtuous cycle of further reduced water and energy demand. Moreover, efficiency investments are among the most cost-effective approaches.

  • Among renewable technologies, run-of-river hydroelectric stands out for its low cost and low environmental impact. Meanwhile, wind and solar photovoltaic have clear advantages in China’s water-constrained environment, as neither technology requires much water or releases greenhouse gases during power generation.

  • Carbon capture and storage (CCS) can cut greenhouse gas emissions per MWh 80 to 90 percent, but deploying this technology incurs a 90 percent increase in total capital costs and doubles water demand. Therefore, policymakers should carefully evaluate water availability when designing new coal-based plants with CCS.

  • Closed-loop or dry cooling systems should be the future of China’s thermoelectric power plants. Around 80 percent of China’s electricity is produced by thermoelectric units, which rely heavily on water for cooling. Shifting from outdated open-loop cooling to closed-loop cooling technology would reduce water withdrawals up to 98 percent, with further potential reductions from dry cooling.

5 Recommendations to Reduce Water Use and Emissions in Power Generation

China has established strict water-resource management requirements, including mandatory limits on water quantity usage, water efficiency and water quality. Water demand for energy should therefore be carefully factored into China’s decision-making process.

Based on our study, we offer several recommendations to help policy makers manage water-emissions impacts of China’s power sector:

  • Emphasize energy efficiency among electricity end users as a primary, cost-effective way to meet demand and reduce emissions and water consumption.

  • Devise specific policies to regulate water use in power generation by establishing sector-specific water withdrawal quotas at the national, regional and local levels.

  • Pursue renewables (excluding hydropower) as the best choice for China’s water-scarce areas, while exploiting run-of-river hydropower where water is available.

  • Shift future thermoelectric power plants to closed-loop or dry-cooling systems.

  • Consider water requirements and avoid placing water-intensive power generation technologies (such as concentrated solar power and CCS) in water-stressed areas.

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