March 17, 2016 | By Barbara Vergetis Lundin

According to a 2016 research paper in the Journal Nature, a 40 percent shortfall of available water across the globe by 2030 could affect not just water for drinking, food production, and public health, but 98 percent of global electric power generation.

Credit: Pixtawan/ freedigitalphotos.net

A new World Energy Council report, "The road to resilience – managing the risks of the energy-water-food nexus," is calling for immediate action in order to secure resilient energy infrastructure through improving understanding of the water footprint of energy technologies in order to mitigate the risks of stranded assets; accounting for the "price" of water, particularly in areas of water stress; considering a wider range of financial and insurance instruments to hedge short term risks, such as adverse weather incidents and associated electricity price volatility; giving investors the confidence to invest by providing them a full risk assessment that includes different climate and hydrological scenarios in financial analyses; and providing a reliable and transparent regulatory and legal framework that takes into account water issues and competing stakeholders' interest.

"The energy-water-food nexus poses a systemic risk which could impact the robustness of the energy supply and demand over many years to come. Power plants across the world could be affected by changes in precipitation patterns, which are combining with increasing competition between water users to adversely affect the resilience of energy services," Christoph Frei, secretary general, World Energy Council, said. "Clear coordination and integrated planning needs to take place now, or we will start to see the effects of water scarcity on energy supplies in the very near future. Assuming a water price during project planning is one way to trigger the right signals."

Cross border cooperation is also key, Frei contends.

"We should be taking full advantage of the 261 international trans-boundary basins that cover 45 percent of the earth's land surface. Energy resilience can only be achieved by moving from individual to joint efforts," Frei said. "An important issue to tackle is the lack of knowledge about water issues and limited modelling tools, making long term energy infrastructure investment decisions difficult to make. To promote infrastructure resilience, policymakers and investors need to create a framework which provides the incentives for adapted infrastructure design and needed financing mechanisms."

The report is the second in a series that assesses the financing of resilient energy infrastructure and identifies the investment and systemic changes required to combat new emerging risks, including extreme weather, the energy-water-food nexus and cyber risks.

For more:
- see this report