Water stresses in developing countries threaten to derail a massive build-out of coal capacity, according to a new analysis from the World Resources Institute (WRI).

The WRI estimates that about 1,400 GW of new coal capacity is being proposed worldwide, and of that, three-quarters of it are in China and India. Unfortunately, much of this capacity is planned for areas already under significant water stress. Most of China’s coal resources, for example, are located in the northern regions of the country, and about 60% of the planned new capacity will be located there to reduce transportation costs. Unfortunately, this portion of China has only 5% of the nation’s water resources, and power needs face steep competition from agricultural, industrial, and residential demands.

“If China builds all the plants now in the planning stages, China’s coal industry—including mining, chemical production, and power generation . . . could withdraw as much as 10 billion [cubic meters] of water annually by 2015,” the report notes. That total represents more than 25% of the water available for annual withdrawal from the Yellow River, a resource that is already under substantial stress.

China’s government recognizes the problem and is developing policy intended to increase water use efficiency and limit withdrawals to manageable levels. Still, the actions fall short of what is necessary, the report notes. More intensive measures to promote water recycling and wastewater treatment will need to be implemented.

India also faces significant problems. The country is proposing more than 500 GW of new coal capacity, though it is already one of the most water-stressed nations in the world. “Stressed water resources are already impacting power projects in India, causing delays and operational losses,” the report says. “For example, inadequate water supplies in the state of Chhattisgarh shut down the National Thermal Power Corporation’s Sipat plant in 2008.”

The risks are not limited to developing countries. Japan, South Korea, and numerous areas in the U.S. also face threats to generation from water shortages. Though Japan and South Korea are not arid countries, high freshwater consumption from agricultural and residential users can make power plants dependent on costly alternatives. Plants in the U.S. have also been forced to shut down or curtail operations during periods of severe water shortages.

The report calls for more intensive government action to manage the water-energy nexus, as well as better industry attention to the issue, to ensure that unmanaged water risks do not threaten generation. “A range of actions is available, including innovative technology and public policy engagement to collectively reduce shared water risks, all on the path to advanced water stewardship,” it says. While these measures will increase costs and slow development, inaction will be worse over the long term. The coal sector “should pursue advanced water risk management at power plants while understanding the value in consistent, carefully crafted legislation. The combination will ensure that energy production can grow within natural resource limits.”

Thomas W. Overton, JD, associate editor (@thomas_overton, @POWERmagazine)