Elsevier

Energy Policy

Volume 132, September 2019, Pages 1101-1109
Energy Policy

Water security implications of coal-fired power plants financed through China's Belt and Road Initiative

https://doi.org/10.1016/j.enpol.2019.06.044Get rights and content

Highlights

  • China's Belt and Road Initiative (BRI) will have major global environmental impacts.

  • Coal-fired power plants built under BRI embody environmental tradeoffs.

  • BRI projects facilitated in a changing environment must be guided by robust sustainability policy.

Abstract

As the world's largest proposed infrastructure program, China's Belt and Road Initiative will have significant implications for water security, sustainability, and the future of energy generation in Asia. Pakistan, a keystone of the Belt and Road Initiative, presents an ideal case for assessing the impacts of the Initiative's energy financing. We estimate the future water demands of seven new Chinese-financed, coal-fired power plants in Pakistan with a total capacity of 6600 MW. While these facilities may help address Pakistan's energy shortages, our results indicate that by 2055, climate change-induced water stress in Pakistan will increase by 36–92% compared to current levels, and the power plants' new water demands will amount to ∼79.68 million m3. Our findings highlight the need for China and the Belt and Road Initiative's destination countries to integrate resilience and sustainability efforts into energy infrastructure planning. Policy recommendations are offered to permit both sustainable development and responsible water resource management.

Introduction

Chinese financing of energy infrastructure through the Belt and Road Initiative (BRI) will significantly influence the energy mix for much of Asia in the coming century. Initially proposed in 2013 and currently in its early stages, BRI seeks to establish both a land-based “Silk Road Economic Belt” and a “Maritime Silk Road,” prioritizing economic development and international partnership (Swaine, 2015) while promoting energy cooperation (Duan et al., 2018). Siting and planning new power plants will create large fixed investments, having serious implications for both global carbon emissions and the feasibility of sustainable development in the approximately 70 destination countries which are expected to participate; these countries account for 65% of the world's population.

BRI offers tremendous opportunities for economic growth and poverty elimination, the latter of which is prioritized by the Sustainable Development Goals (SDGs) put forth by the United Nations (Cohen, 2006; Huang, 2016; United Nations, 2018). However, this economic benefit may come at the expense of other SDGs. For instance, BRI projects involving the establishment of new energy facilities, particularly coal-fired power plants, should be evaluated on the basis of their sustainability and climate resilience implications. Many of these coal-fired plants will be constructed in arid and semi-arid regions of southern Asia and Africa, including countries like Pakistan, which are considered water-insecure (Mekonnen and Hoekstra, 2016).

In this study, we focus on Pakistan for analytical tractability. However, we note that there are seven other countries that, like Pakistan, have committed BRI investments in coal-fired power exceeding US $1 billion, as well as 22 other countries with proposed capacity installation of over 500 MW (Shearer et al., 2019). Coal-fired power plants simultaneously increase greenhouse gas emissions and use large quantities of water, mainly for cooling purposes (Feeley et al., 2008; Sims et al., 2003). As such, construction of these energy facilities may contradict at least three SDGs which seek to (A) reduce water scarcity, (B) increase the incorporation of renewable energy sources, and (C) otherwise address climate change (United Nations, 2018).

The potentially adverse impacts of BRI-related energy infrastructure have a global reach. Chinese financing of energy facilities has influenced infrastructure investment decisions and shaped the global power mix even before the initiation of BRI (Gallagher, 2017). Chinese financing provides both competition and alternative sources of capital, influencing the actions of other multilateral lenders in the power sector (Hannam, 2016; Hannam et al., 2015). From a global perspective, China financed energy projects in 121 countries from 2000 to 2013, with coal-fired power plants making up nearly a third of this investment (Gallagher, 2017). Under BRI, this investment increased and involved China in 240 coal-fired power projects across 25 countries by the end of 2016 (Ren et al., 2017). Considering their potential to influence the future of energy infrastructure around the world, it is critical to understand how these coal-fired power plants will impact sustainability and water security.

Here, using scenario-based simulations, we provide a novel framework for quantitative assessment of the water stress related to coal-fired power plants in BRI destination countries. While focusing on Pakistan as a case study, our framework can be broadly applied to other BRI countries, providing insights for future sustainable planning in the energy sector. Specifically, we ask: (1) will BRI-affiliated coal-fired power plants in Pakistan require substantial quantities of water for cooling purposes? If so, (2) will this cooling water withdrawal and consumption exacerbate existing water scarcity in Pakistan, especially given future climate changes?

To address these questions, we use a large-scale hydrological and water resources model to estimate past, present, and future projections of water stress in Pakistan. Modeling is performed with a multi-model ensemble framework to account for inherent model uncertainties. We then calculate the cooling water demand of seven Chinese-financed coal-fired power plants in Pakistan. Our results show that the installation of new facilities in Pakistan will increase local water scarcity due to the combination of climate change-induced water stress and heightened water demands for power generation. This research provides the first precise, quantitative evaluation of BRI-based investment in Pakistan's power sector. Policy actions are suggested that permit economic development, within the framework of the BRI, while ensuring water and other resource sustainability.

Pakistan is selected as a case study because energy financing through the China-Pakistan Economic Corridor (CPEC) is amongst the most prominent and widespread of BRI projects. Chronic power shortages are a severe issue in Pakistan, lowering annual GDP by 7% (Feng and Saha, 2018). These shortages could be partially alleviated by CPEC projects which designate $62 billion for developing infrastructure in Pakistan, two-thirds of which will be directed towards the energy sector. At the same time, Pakistan faces many challenges to sustainable development—common to many developing nations—and has historically treaded a fine line between water use and socioeconomic development (Satoh et al., 2017). The nation's water challenges are primarily driven by overexploitation of groundwater, saltwater intrusion, low-efficiency irrigation, and poor infrastructure for water treatment and storage (Kahlown and Majeed, 2003). In Pakistan, 95% of the water supply is consumed by agriculture, which, as a sector, involves around 60% of the population and generates 80% of national exports annually (Kundi, 2017). Domestic and industrial water uses (i.e., the remaining ∼5%) continue to compete with agricultural demands (Kahlown and Majeed, 2003). All told, Pakistan has the fourth-highest rate of water consumption in the world (Huang et al., 2017).

As such, water is a commodity whose use in Pakistan and other nations must be carefully managed. Even so, Chinese-financed energy infrastructure development under BRI includes the establishment of water-intensive coal-fired power plants. In this study, we examine the water demands introduced by BRI's seven continental coal-fired power plants in Pakistan (lettered A–G; see Table A1 for details) having a total generating capacity of 6600 MW and estimated cost of at least US $11 billion; all seven plants require freshwater for cooling purposes. The seven plants of interest are selected because they are either currently operational or expected to be operational by the year 2022. Importantly, this means that their cooling systems are fixed and will not be impacted, at least in the near future, by advances in cooling technology. The plants are located near densely populated load centers including Karachi, which neighbors two of CPEC's Special Economic Zones, and the Sindh and Punjab provinces. The power plants will therefore provide vital electricity for domestic and industrial use. However, the plant locations also coincide with regions of existing water stress. Considering the lifetime of power plants (∼40 years), these facilities will likely operate until 2055 or beyond, during which time they will influence Pakistan's water security, already worsening due to climate and socioeconomic changes.

Water-related concerns associated with coal-fired power plants stem from the fact that water is used in multiple steps of the energy generation process. A small amount of water is heated to produce steam needed to rotate a turbine, thereby generating electricity, and some may also be used to treat environmental emissions (Hasibeck et al., 2010). However, a much larger quantity of water is required to cool the steam back to liquid water, allowing the steam source to be recycled. The cooling water makes up the bulk of the water supply required in coal-fired power generation. Specifically, cooling water withdrawals per MWh of generated electricity range from 34–182 m3 for once-through cooling systems and 0.02–9.8 m3 for recirculating cooling towers (Macknick et al., 2012). Variations in cooling water demand depend on the thermal efficiency of the power plant, temperature of the intake water, design of the cooling system, and meteorological conditions (Bartos and Chester, 2015). In water-insecure areas, the demands of coal-fired power stations can compete with alternative demands made by agriculture, health, and other socioeconomic applications requiring adequate water access (Luo et al., 2018).

In this study, we use the ratio of water withdrawal to availability as a representation of the Water Stress Index (WSI, see Methods for details) to assess the past, present, and projected water stress conditions in Pakistan. WSI is obtained based on the multi-model and multi-scenario assessments of the Water Futures and Solutions (WFaS) Initiative (Wada et al., 2016) with a focus on Asia (Satoh et al., 2017) from 1971 to 2055 at 50-km spatial resolution. As water stress is jointly influenced by climate change (Schewe et al., 2014) and socioeconomic development (Arnell, 2004; Gosling and Arnell, 2016; Vörösmarty et al., 2000), the conventional Representative Concentration Pathways (RCPs) and Shared Socioeconomic Pathways (SSPs, O'Neill et al., 2014) should be combined to drive the global hydrological models for more accurate and comprehensive assessment. Therefore, WFaS extends the original SSP scenario beyond its typical focus on key climate policy drivers (O'Neill et al., 2014) by emphasizing water use and availability across sectors based on country-level hydro-economic classification (Hasibeck et al., 2010; Satoh et al., 2017).

According to this classification, Pakistan is a region characterized by both water stress and low coping capacity, which may introduce a series of challenges for sustainable development. Following Wada et al. (2016) and Satoh et al. (2017), we use a combination of SSP2 (i.e., middle-of-the-road scenario indicating a medium level of adaptation and mitigation) and RCP6.0 (i.e., medium emissions scenario) to approximate middle-of-the-road projections for future climate and socioeconomic changes. Because hydrological responses to meteorological forcings are inherently uncertain, we use bias-corrected projections from five different Global Climate Models (GCMs; see model details in Table A2) to add robustness to our findings. We then calculate the cooling water demand of seven Chinese-financed coal-fired power plants in Pakistan using a heat and water balance model (Bartos and Chester, 2015) driven by projected meteorological data, water temperature, and mean historical capacity factor (see Methods for details).

Section snippets

Calculation of Water Stress Index

In this study, the Water Stress Index (WSI) is defined as the ratio of water withdrawal to total available surface water, which is often employed in the literature to characterize local water stress situations (Alcamo et al., 2003; Satoh et al., 2017; Zhang et al., 2016). We calculate WSI based on the simulated water withdrawal and availability from three previously validated global hydrological models (GHMs), including H08 (Hanasaki et al., 2008), PCR-GLOBWB (He et al., 2017; Sutanudjaja et

Current water stress situation

To determine the water demands imposed by power plants A–G relative to Pakistan's freshwater supply, it is first necessary to understand the nation's current and future water availability, the latter of which may be impacted by climate stresses. The 10-year averaged WSI from 2006 to 2015, shown in Fig. 1, serves as a measure of the current water availability and indicates that the central and southern regions of Pakistan are now experiencing severe water stress. In contrast, northern Pakistan

Discussion

The energy infrastructure proposed and established by BRI could reasonably impact sustainability and water security across much of Asia. In countries with an inadequate electric power supply, coal-fired power plants could promote SDGs related to enhancing livelihoods and eliminating poverty. In Pakistan, the total nameplate capacity of the seven coal-fired power plants studied here is 6600 MW, a significant contribution to nationwide power generation when considering the 4734–7053 MW deficit in

Conclusions and policy recommendations

While the economic opportunities provided by BRI could be instrumental in lifting participating low-income nations out of poverty, the long-term impact of its energy projects deployed now or in the future may irreparably damage both local and global climate security. BRI is poised to inform the construction of new and refurbishment of existing infrastructure in many developing regions, multiplying its influence over environmental outcomes and the future of global sustainability (Ascensao et

Author contributions

M.A., X.H., A.R.P., W.L, and T.H. conceived the research and drafted the manuscript. X.H. performed the analysis with help from Y.W. N.W. provided streamflow temperature data. All authors discussed the results and contributed to the final written product.

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Acknowledgements

This study was supported by the Princeton Energy and Climate Scholars (PECS) program within the Princeton Environmental Institute, Princeton University. We thank Dr. Yusuke Satoh at International Institute for Applied Systems Analysis for providing the water stress data. We also acknowledge Phil Hannam of the World Bank, Johannes Urpelainen of Johns Hopkins SAIS, and Audrye Wong of Princeton University for helpful comments. Niko Wanders is supported by NWO 016.Veni.181.049. Codes for

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    These authors contributed equally to this work; co-first authors listed in alphabetical order.

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