White paper details the substantial role California's water sector can play in achieving the state's ambitious energy goals

By shifting its timing and use of electricity, California’s water sector can help avoid the need to build new power plants, a new white paper, California’s Water-Energy Nexus: Pathways to Implementation, has determined.  Written by GEI Consultants on behalf of the Water-Energy Team of the Governor’s Climate Action Team (WET-CAT), the paper hopes to stimulate discussion between regulators and policymakers about how the water sector can make substantial contributions to the state’s aggressive renewable resource and energy goals.

With water-related energy uses accounting for nearly one-fifth of all electricity and one-third of  non-power plant natural gas used statewide, California’s water sector could potentially play a key role in helping the state meet its ambitious renewable energy, distributed energy generation and greenhouse gas emission reduction goals.  However, if these benefits are to be realized, regulatory barriers will need to be removed, and economic incentives and state initiatives will need to be better leveraged to address the water-energy nexus, the paper concludes.

Every year, the state’s water and wastewater agencies invest billions of dollars in system repairs, improvements and expansions. Every day, opportunities to affect water sector investment decisions are being missed. For each missed opportunity, there is a corresponding loss of energy savings and related reductions of greenhouse gas emissions,” the report states.

But just how much of a difference can the water sector make? A California Energy Commission study in 2005 determined that water-related energy uses account for 19% of all electricity and 30% of non-power plant natural gas used within the state. Subsequent studies found that 40% of the water-related electricity, or about 8% of statewide annual consumption, is used by the water sector itself. While 8% may not sound like much, the water sector has unique characteristics that could be leveraged to provide significant benefits to the State’s electric system.

Consider the following:

Groundwater Pumping:

A CPUC study determined that during the summer months, energy used for groundwater pumping exceeds that of the State Water Project, Central Valley Project, and the Colorado River Aqueduct – combined. The study determined that if just half of this water-related electric demand is shifted to non-peak periods or seasons, this could potentially reduce the need for up to four 500MW electric generation plants. If the water sector’s electric use could either be deferred or replaced with non-electric solutions during just the 50 highest demand hours of every year, there would be substantial benefits. And faced with the prospect of an extended outage of the San Onofre Nuclear Generating Station through the summer of 2013, there is perhaps no other sector with the potential to help assist with reducing summer peak demand within energy-challenged Southern California.

There are several ways the water sector can reduce the electric load of groundwater pumping during the summer. Increasing storage capacity in reservoirs and tanks at critical points in the water agency’s system can enable groundwater pumping to be deferred to non-peak periods. Dual fuel pumps can be installed that will allow switching to natural gas when groundwater pumping cannot be deferred. Summer groundwater supplies can be replaced with lower energy-intensive local supplies, such as conserved water or recycled water.

Changing Water Supply Portfolios:

Given the distance and the extent that water is conveyed around the state, it should come as no surprise that water supply and conveyance accounts for 83% of all water consumed by the water sector. Oftentimes, energy is input in one region while the water is consumed in another. The primary drivers of energy use are the distance and the elevation that the water must be delivered; and/or the amount of energy needed to make an undrinkable source usable (ex. desalination); therefore, electric use is directly related to decisions about which water supplies will be used to meet customer demand, and these decisions can have significant statewide electrical impacts.

The ability of an agency to change its water supply portfolio depends upon many factors, including water rights, prices and available alternative supplies. However, water conservation and efficiency is still the most cost-effective, lowest energy-intensive and highest priority water resource with the potential to bring substantial energy savings.

Reducing water losses:

Pilot studies by the CPUC determined that one of the most cost-effective means for saving energy by saving water may be through reducing losses within the water distribution system on both sides of the water meter, for every unit of water that is lost in the system must be replaced with additional water supply resources. Even if the water is lost to seepage and is returned to water supplies through groundwater recharge, from an energy perspective, surface water supplies that become groundwater supplies have an accompanying energy impact.


A CEC paper in 2005 found that “although energy efficiency reduction programs already target reductions of hot water, the state could potentially save energy more cost-effectively than traditional energy efficiency methods by saving cold water.” The key to recognizing the energy value of cold water savings is the concept of ‘energy embedded in water’, defined as “the sum of energy input into water along the various segments of the water use cycle, from point of collection or production, to point of use, and from point of use to ultimate disposal back into the system (post treatment).” Although the concept is simple, implementing it in California’s energy efficiency programs has proven to be much more difficult.

California’s water and energy sectors are separately regulated and funded, making it difficult to track the energy inputs by multiple power providers, which is sometimes a mix of water agencies (ex: hydropower) and energy providers. Further complicating matters, the State Water Project self-provides much of its power and is not subject to the CPUC’s jurisdiction. Currently, California’s energy programs and current regulatory protocols do not allow the energy savings to be calculated across these multiple entities, creating barriers to integrated optimization and hindering investments in cross-cutting programs. In order to reap the fully reap the benefits, the report asserts that changes will need to be made to the state’s policies, rules, regulations and legislation that will allow and encourage integration of the water and energy sectors.


Besides being users of electricity, water and wastewater agencies are uniquely positioned to become major generators of renewable energy, creating the opportunity for the water-sector to play a major role in helping the state reach its ambitious renewable energy goals.

Water and wastewater agencies typically own or have rights to extensive facilities, lands, and rights of way that could be used to develop renewable electric generation facilities, not only to meet their own needs for electricity, but to potentially become exporters of electricity to the grid.  However, the water sector is naturally risk-averse and won’t be likely to develop excess energy unless a reasonable return on investments with minimal risks can be assured.

In order to encourage the water sector to develop excess energy, the report recommends that the state streamline and simplify the state’s many renewable and distributed energy programs, and make the terms and conditions of power sales agreements less confusing and less risky from a financial perspective.


California’s water and wastewater agencies spend $10 billion every year for system improvements and expansions, and this is likely to continue for the foreseeable future. Each project undertaken by the water sector presents an opportunity to integrate energy efficiency, demand response and distributed generation into their systems. However, in order for these benefits to be realized, the systems must be designed with operational flexibility and energy efficiency in mind.

The report points out that “absent any meaningful intervention, the water sector will continue expending billions of dollars every year on critical water and wastewater infrastructure that has not been optimized from a statewide energy perspective. … [A]accelerating water sector investments in recycled water and other critical water resources and infrastructure can yield incremental energy savings and associated reductions of GHGs that would otherwise be forever lost.”


The water sector is uniquely positioned to assist in meeting the state’s energy goals, but new policy frameworks and investment mechanisms will be needed. As the state moves forward, the state should shift its focus to answering the following fundamental questions:

  1. What types of water-energy measures and strategies will produce the highest benefits for the state overall?
  2. What barriers and hurdles will need to be overcome to implement those measures and strategies?
  3. Who are the key stakeholders whose support will be needed to overcome those barriers, and what are their respective roles in paving the way to statewide implementation?

Martha Davis and Grant Davis of ACWA’s Energy Committee, note in the report’s preface: “not all water and wastewater agencies have the same options, opportunities, or flexibility to consider feasible changes for when and how they use energy. From operational to fiscal to staffing concerns, a “one size fits all” approach to the State’s water-energy programs and policies won’t work.” However, Ms. Davis and Mr. Davis note “It is rare to have so much opportunity for making such a positive and powerful impact – improvements in energy efficiency, renewable energy generation and reduction in greenhouse gases – concentrated into one sector. It is an opportunity that cannot be ignored.”

An open dialogue between the water and energy sectors needs to occur, the paper concludes, and it will be important to start with a clean slate:

By first setting aside all known barriers and hurdles, the water-energy nexus can provide a basis for establishing a new framework for optimizing the state’s limited investments across multiple resources, programs, and markets. The new decision-making frameworks, metrics, methods and tools developed for water-energy programs and measures can set the stage for additional cross-cutting programs that have not yet even begun to be formulated. The ultimate goal is to find the points of intersection and overlaps, leverage the points of synergy, and close the gaps, with the aim of achieving the state’s resource and environmental goals as cost-effectively as possible.”

  • To read this white paper from GEI Consultants, click here.
  • To read coverage of this paper from ACWA’s Water News, click here.
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