Presented by Mike Nasi of Jackson Walker L.L.P. at the Texas Water Conservation Association Conference in The Woodlands, Texas - March 2014

1. Water-Energy Nexus
TEXAS WATER CONSERVATION ASSOCIATION
The Woodlands, Texas
March 6, 2014
Mike Nasi
Jackson Walker L.L.P.
mnasi@jw.com
512.236.2216

2. Presentation Outline
• Water-Energy Nexus
• Energy for Water
• Water for Energy
• Using the Nexus FOR Texas
2

3. Presentation Outline
• Water-Energy Nexus
• Energy for Water
• Water for Energy
• Using the Nexus FOR Texas
3

4. TEXAS NEEDS WATER TO MAKE ELECTRICITY
(2-3% of Texas water consumption)
TEXAS NEEDS ELECTRICITY TO PROVIDE WATER
(~ 1-3% of Texas electricity consumption)
Source: H2O4Tx & Freese & Nichols

5. Presentation Outline
• Water-Energy Nexus
• Energy for Water
• Water for Energy
• Using the Nexus FOR Texas
5

6. WATER SYSTEM ELECTRICITY
NEEDS
WATER
SOURCE
CONVEYANCE
WATER
TREATMENT
DISTRIBUTION
END
USERS
WASTEWATER
COLLECTION
WASTEWATER
TREATMENT
RECYCLED
WATER
TREATMENT
WATER
SOURCE
EXTRACTION
Based on model shown in Analysis of the Energy Intensity of Water Supplies for West Basin Municipal Water District, authored by Robert C.
Wilkinson, Ph.D.
Source: H2O4Tx & Freese & Nichols

7. Energy Penalty of Treatment
•Conventional water treatment = 0.1-1.0 kwh/1000g
•Desal of brackish groundwater = 2.5-7.0 kwh/1000g
•Desal of seawater = 7.6-13.6 kwh /1000g

8. Presentation Outline
• Water-Energy Nexus
• Energy for Water
• Water for Energy
• Using the Nexus FOR Texas
8

9. Consumption v. Use
• Key distinction between use and consumption.
• Water “used” can be reused.
• Water “consumed” is not available for another use.
• Example: Water use includes a power plant
withdrawing water from a supply, using it as cooling
water in the plant’s operation, and then
reintroducing it back into a water supply. Water
“consumed” is the water that is evaporated in the
process and not directly reintroduced into the water
supply.
9

10. Condenser
“Once-Through” Reservoir Cooling System
Cooling Reservoir
Recirculated Cooling Water
As Needed
Makeup Water
Evaporation, Radiation, &
Convection Cool Water Generator
ELECTRICITY
Turbine
Process
Steam
Process Steam
from Boiler
Process Water
to Boiler
Warmed Water
Condenser
Cooled Water
10
Source: AEP

11. Condenser
Evaporative Cooling Tower System
Turbine
Process
Steam
Recirculated
Cooling Water
Generator
As Needed
Makeup Water
Reuse in other
Plant
Processes
Treatment
Discharge
Blowdown
Evaporation
Cools Water
ELECTRICITY
Process Water
to Boiler
Process Steam
from Boiler
Cooled Water
Warmed Water
11
Source: AEP

12. Typical Dry Cooling System
Turbine
Fans
Air-Cooled
Condenser
Convection
Cools Steam
Process
Steam
Process Steam
from Boiler
Process Water
to Boiler
Generator
ELECTRICITY
12
Source: AEP

13. Presentation Outline
• Water-Energy Nexus
• Energy for Water
• Water for Energy
• Using the Nexus FOR Texas
Not as spin to convince the government
to pick winners & losers.
13

14. The Water-Energy Nexus Needs to
be About Cooperation, not Spin
BUILDING UPTEARING DOWN
14

15. Needless Attack # 1
TEARING DOWN
Power plants
consume “too
much” water
15
REALITY
Power plants are good
stewards and consume
relatively little of the State’s
water resources
BUILDING UP
Texas Fleet
Efficiency and
Cooperation with
Water Providers
Ensures Drought
Tolerance
PERC. Acre-Feet
Irrigation 60% 9,256,426
Steam Electric 3% 412,607
Mining/E&P 1% 228,542
Manufacturing 7% 1,095,789
Municipal 27% 4,158,203
Livestock 2% 308,098
TOTAL 100% 15,459,665

16. Water Consumption in Texas by Sector
16
Source: Kent Zammit, Viability and Impacts of Implementing Various Power Plant Cooling Technologies, 2012 Technical Report,
Electric Power Research Institute (EPRI) (Oct. 2012)

17. Power Plant Stewardship of Water
Thermoelectric, freshwater
Year
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Withdrawal(billiongallonsperday)
0
20
40
60
80
100
120
140
160
Gallons/MW-hour
0
10000
20000
30000
40000
50000
Source: EPRI
17

18. Needless Attack # 2
TEARING DOWN
One of the best
things you can do
to “save” water is
turn your lights off.
18
REALITY
Of all the things
Texans can do to
save water, turning off
the lights is not high
on the list.
BUILDING UP
Energy efficiency
and water
conservation
groups should join
forces in
educational efforts.

19. 19

20. Needless Attack # 3
TEARING DOWN
Texas could “save”
water if it shut down
coal plants and
replaced them with
natural gas plants.
20
REALITY
Allegation of water
“savings” flawed:
• Fleet consumption
rates skewed
• Resource adequacy
realities ignored
BUILDING UP
Let the market work
and newer
technologies will
come on line that
use less water for
every type of fuel.

21. Press Release Graphic of UT BEG Study
Flawed Assumption: assumed the worst consumption rate
for replaced coal units and the best consumption rate for
the gas units that the study alleges would “replace” them
21

22. Comparison of Power Plant
Water Consumption Rates
22
WATER COOLED POWER PLANT WATER CONSUMPTION RATES (gal/kWh)
FUEL
SOURCE
Cooling Tower Once-Through
AVERAGE
RATE OVER
TEXAS FLEET
Coal .60 - .66 .34 - .45 0.51
Natural Gas
(water cooled)
Simple Cycle -.70 -1.03
Combined Cycle-.22-.23
Simple Cycle - .35-.37
Combined Cycle-.22-.23
0.73
Nuclear .60 .60 0.67
Sources: Water Consumption and Withdrawal for Power Generation in Texas, TWDB, 2008, 2012.
Cherry-picking consumption rates when assuming water “savings” is inappropriate.

23. NO MEGAWATTS TO SPARE:
Production & Manufacturing = Rising
Demand for Electricity (& Water)
• Texas uses more energy than any other state in the
nation, almost as much as the next two states
(California and Florida) combined.
• Nearly half of Texas’ electricity
use is for industry and
manufacturing, which includes
the oil & gas and petrochemical
industries (more than next
3 states combined).
23
Source: Energy Consumption by End-Use Sector, Ranked by State, 2010 Rankings, U.S. EIA.

24. 24

25. “Saving” Water By Attacking
Existing Investment / Assets
– an example closer to home
• Closing an existing power plant in Texas under
the theory that a new plant will be more water-
efficient is like. . .
• . . .closing an existing surface water reservoir in
Texas under the theory that a new project will
be more water-efficient (e.g., less evaporation)
NO MEGAWATTS OR ACRE FEET TO SPARE!
25

26. NO MEGAWATTS TO SPARE:
Cloud Computing’s Growing
Electricity Demands
26
The Cloud will
consume more
electricity this year
than all of the
world’s lighting in
1985 & that
consumption will
grow significantly
every year. . .
Source: Mark P. Mills, Big Data, Big Networks,
Big Infrastructure, and Big Power (August 2013)

27. If the Cloud Were A Country. . .
27
Source:
Mills, Big
Data.

28. In Terms We Can All Understand…
28
Source: Mills, Big Data.
= 1 Year
1 Hour/Week/Year
“…using [a phone or
tablet]
to watch an hour of
video weekly consumes
annually more electricity
in the remote networks
than two new refrigerators
use in a year.”

29. And the Cloud is Growing in Texas…
29
Source: The Texas IT Services Industry, Texas Wide Open for Business, 2013.

30. 30
ALL of the
ABOVE !

31. Remember . . .
WATER-ENERGY
NEXUS
FOR
TEXAS
31