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Exclusive interview with World Bank’s senior economist, Diego J. Rodriguez, PhD on the water-energy nexus

Diego“The water-energy nexus is complex and wide-ranging. Water and energy affect all other sectors, are critical to the economy and human wellbeing.”

Exclusive interview with Diego J. Rodriguez, Senior Economist, PhD, World Bank, USA. He returns as a featured water-energy nexus expert to African Utility Week’s water conference as speaker and moderator.

You addressed African Utility Week a few years ago when you launched the Thirsty Energy Initiative. How has the campaign done so far?

After Thirsty Energy’s launch in January 2014, at the World Futures Energy Summit Conference in Abu Dhabi, the team has been implementing the work of the initiative to promote sustainable water and energy resource management by working with governments and partners globally. We are currently working in South Africa, China and Morocco to integrate water constraints into the energy sector and better address water and energy challenges to ensure a sustainable development of energy resources.

In the past couple years, we’ve participated in many global initiatives including the energy and water themed 2014 World Water Week, the UN’s World Water Day 2014, the Clean Energy Ministerial, and the Sustainable Energy for All. We have also created a private reference group to allow us to share experiences and knowledge with key partners such as Alstom (currently GE), Abengoa, Electricite de France and Veolia. The team has also been very busy working with the energy sector by drafting chapters, articles, technical documents on the nexus. As such, we’ve been collaborating with groups such as IRENA, the Water-Energy Nexus Initiative of the United States Department of Energy, the Water for Energy Framework led by Electricite de France and the World Water Council (WWC), just to mention a few.

Did you have to adapt anything along the way as things have changed, or not?

Adaptation is an essential part of the process when addressing something as complex as this in which there is limited experience in actual implementation. The nexus is something relatively new and by now, we are comfortable talking on what is the nexus, but how to move to real implementation reflected in governance changes, policy shifts, integrated investments, and more, is quite challenging. But, one thing is clear: there is no one size fits all formula. Understanding the local contexts, the political economy, institutional barriers, and local capacities is essential. Hence, we adapt our approach to every country and situation to ensure that it provides realistic solutions and meets the needs of our client country.

With regards to the Thirsty Energy Initiative, what have you been involved with in Africa and what have been the outcomes so far?

We have been working on analytical work in South Africa and have had many interesting results that will be featured in a forthcoming report. Our work in South Africa incorporated water constraints into an existing energy model and examined the tradeoffs with other water users. The exercise revealed many interesting results. One finding is that major inter-basin transfers support water for power in South Africa. These transfers play a critical role in the power sector in the country and you see that water from different basins can end up supplying the water needs of a particular energy area. A second is that once the true costs of water supply are incorporated into the energy model, the model chooses dry cooling for most coal power plants. Therefore, dry cooling makes economic sense in South Africa even if it decreases the efficiency of the power plant. Bringing the true costs of supply water to the sector increases the costs of the system.

What is your vision when it comes to the energy-water nexus?

The water-energy nexus is complex and wide-ranging. Water and energy affect all other sectors, are critical to the economy and human wellbeing. In order to ensure water and energy access for all, the resources will have to be managed in an integrated manner to capitalise on efficiencies and synergies. Coordinating management will increase sustainability in the future and reduce vulnerability to resource scarcity or price fluctuations.

Solutions should be grounded in country-specific contexts instead of remaining at global level so that they account for important nuances in politics, economics, and governance. We have to acknowledge the complexity of the issue at stake and how tackling the problem through collaborative approaches can help us all achieve water, energy and food security. So bringing the food angle in a more systematic way is critical as the agricultural sector is the major consumer of water and a very large user of electricity -and this adds a new layer of complexity that will need to be addressed.

You are addressing the African Utility Week in May in 2016 again – what will be your message?

I look forward to discussing the findings from Thirsty Energy’s work in South Africa; and how integrating water into energy modeling reveals profound connections between the resources, and changes the energy outcomes and operational decisions. In addition, there are some key messages that are worth presenting and discussing:

  1. we have been discussing conceptual issues on the nexus for quite some time. The challenge is on the how to implement these principles in a manner that affects institutions, policy, regulation, planning, and investment decisions;
  2. being able to anticipate potential tradeoffs is critical and can only be done through integrated planning efforts;
  3. the nexus is about water, food and energy security hence, we must not forget that we are aiming to improve access for the poor;
  4. the value of the nexus lies in demonstrating the efficiency gains and cost savings from integrated planning and investments; and
  5. the process is as valuable as the analysis.

What are you most looking forward to at African Utility Week (AUW)?

Water and energy utilities are, and will play, a critical role if we expect the nexus principles to be implemented. There is a dearth of interesting innovations stemming from service delivery and AUW provides an excellent opportunity for knowledge exchange and for establishing new partnerships with utilities that are willing to go the extra mile in bringing this concept to implementation. I also look forward to learning from those utilities that are champions in the region to understand what are the critical elements that enable success and what are the barriers that needed to be overcome.