Managing the Urban Water-Energy Nexus

Alvar Escriva-Bou, Research FellowCo-authors: Manuel Pulido-Velazquez (UPV, Spain) and Jay Lund (UC Davis, USA)

12th Annual Meeting of the International Water Resource Economics Consortium

The World Bank, Washington DC, September 12, 2016

The Water-Energy Nexus

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In California, 19% of all electricity and 30% of all natural gas is used to extract, move, treat and heat water.

California’s water-energy relationship. California Energy Commission (2005)

Most of the Water-Related Energy is Used in Cities, Especially Heating Water

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Energy Used by the Water Sector

in California (175,950 GWh)

The Urban Water-Energy Nexus

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Residential Industrial Commercial Institutional

Local, State and Federal Policies

Water Utility

Energy Utility

High variability in hourly costs

Some variability in hourly costs

No variability in hourly costs

Main Goal: Assess How Management Decisions Affect all the Elements of the Urban W-E Nexus

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Research questions

– How much energy and GHG emissions are embedded in the urban water cycle?

– What are the “unintended consequences” of water DSMP on water and energy utilities?

– Are there incentives to change the time patterns of water use?

Main Goal: Assess How Management Decisions Affect all the Elements of the Urban W-E Nexus

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Approach

– Develop an hourly model to estimate water and energy flows, and GHG emissions

– Simulate scenarios to assess the benefits of joint management

– Assess changes in supply costs and GHG emission reductions of water DSMP

The Urban Water Cycle in EBMUD

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WTPWWTP

PP

PP

PP

LelandPop. ≈ 130,0006,391 MG/year

Elevation:150 feet – 45 m

Danville Pop. ≈ 75,0003661 MG/year

Elevation:350 feet – 107 m

San RamonPop. ≈ 150,0007553 MG/year

Elevation:550 feet – 168 m

Total Supply:17604 MG/year

(out of 64868 MG/year)

Pardee and Camanche Reservoirs

Assembling the Urban Water-Energy Model

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Water utilityWater users

Total AnnualWater Use

Hourly water demand

Hourly water supply

Water-related energy

Shares of use by customer category

Indoor vs. Outdoor

Hourly distribution of end uses

Irrigation Necessities (P-ET)

Pumping and treatment patterns

Water regulation

Water treatment

Pumping and distribution

Wastewater treatment

Water-related energy

Energy Intensity (from regressions and pumping

patterns)

Energy Intensity

(from end-uses)

Electricity Market (Hourly Prices)

GHG emissions

Natural Gas Utility

Electricity price (TOU Tariff)

Electric Utility

Social Cost of GHG Emissions

Some Preliminary Results: Most Water-Related Energy Use is from Water End-Uses

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> $12 million /year (in EBMUD)

SOURCE: Managing the urban water-energy nexus (Escriva-Bou, forthcoming).

Urban water cycle

Total emissions per capita: 406 kg CO2/year

4.5% total emissions per capita in CA

Water and Energy Utilities Have Incentives to Displace Water Peaks to Energy Off-Peak Hours

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0

20

40

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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22Wa

ter-

rela

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En

erg

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in

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[M

Wh

]

Hour

23

WWTP

Pumping

WTP

Industrial

end-uses

Commercial

end-uses

Multi-family

end-uses

Single-family

end-uses

Water and Energy Utilities Have Incentives to Displace Water Peaks to Energy Off-Peak Hours

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0

20

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0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Ave

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rgy P

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[$/M

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] W

ate

r-re

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nerg

y U

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rban W

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[M

Wh

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Hour

WWTP

Pumping

WTP

Industrial

end-uses

Commercial

end-uses

Multi-family

end-uses

Single-family

end-uses

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Scenario Analysis

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3 different scenarios:

– Business as usual

– Water Conservation: 11% in SF homes and 6% in MF homes

– Demand Response: displacing outdoor, dishwasher and clothes washer uses to off-peak hours

With 2 alternative cases:

– The California Case:90% gas-fired water heaters and 10% electric water heaters

– The Florida Case:10% gas-fired water heaters and 90% electric water heaters

Water Conservation Translates Into Similar Reductions in Energy Use and GHG Emissions

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-8.0%

-7.0%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

Water Use Energy Use Electricity Demand CO2

Conservation and Demand Response Programs Would Benefit Both Utilities (and the Environment)

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$- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000

Conservation CA

Demand Response CA

Conservation FL

Demand Response FL

Environmental Benefit Energy Utility Benefit Water Utility Benefit

Conservation and Demand Response Programs Would Benefit Both Utilities (and the Environment)

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$- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000

Conservation CA

Demand Response CA

Conservation FL

Demand Response FL

Environmental Benefit Energy Utility Benefit Water Utility Benefit

$0.42 / capita·year

$0.42 / capita·year

$0.29 / capita·year

$0.29 / capita·year

Conservation and Demand Response Programs Would Benefit Both Utilities (and the Environment)

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$- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000

Conservation CA

Demand Response CA

Conservation FL

Demand Response FL

Environmental Benefit Energy Utility Benefit Water Utility Benefit

$0.42 / capita·year

$0.42 / capita·year

$0.29 / capita·year

$0.29 / capita·year

$0.50 / capita·year

$0.28 / capita·year

$3.52 / capita·year

$1.39 / capita·year

Conservation and Demand Response Programs Would Benefit Both Utilities (and the Environment)

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$- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000

Conservation CA

Demand Response CA

Conservation FL

Demand Response FL

Environmental Benefit Energy Utility Benefit Water Utility Benefit

$0.42 / capita·year

$0.42 / capita·year

$0.29 / capita·year

$0.29 / capita·year

$0.50 / capita·year

$0.28 / capita·year

$3.52 / capita·year

$1.39 / capita·year

$0.74 / capita·year

$0.92 / capita·year

Take-Home Messages

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Saving urban water is an effective way to reduce energy use and GHG emissions in the water cycle

There are synergies for water and energy utilities by working together on demand-side management policies

Changing temporal patterns of water use can provide economic benefits for water and energy utilities, but not so to customers

Some Policy Questions & Implications

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Who burdens the costs of conservation?

Who benefits from water savings?

Social cost of carbon can incentivize water-related energy conservation

Reducing dependence in fossil fuels will increase electrification of water-related uses, and so the link between urban water and energy use

Thanks!

Alvar Escriva-Bou, Research FellowCo-authors: Manuel Pulido-Velazquez (UPV, Spain) and Jay Lund (UC Davis, USA)

12th Annual Meeting of the International Water Resource Economics Consortium

The World Bank, Washington DC, September 12, 2016