Industry Focus: How the Power Industry is Evolving and What it Means for Your Wastewater Management Strategy
It’s no secret that the power industry is undergoing a transformational moment. We’re already starting to see how the current energy transition is having far-reaching impacts across other industrial sectors, particularly in regards to water use.
Water use and energy production share a complex, intertwined relationship, and profound changes in the power industry are having a number of direct and indirect impacts on water use and wastewater treatment. Here, we’ll take a look at three major trends in energy transformation—decarbonization, digitalization, and decentralization—and explore how they are expected to impact wastewater management strategies for plant operators both within the energy sector and across other industries as well.
Decarbonization
Decarbonization is the reduction or removal of carbon from the atmosphere. This trend is marked by a number of key activities aimed at curbing carbon emissions, including building new infrastructure to support renewable energy sources, like solar, wind, or hydropower. Another important element is electrification, which refers to the process of converting gas-powered buildings, appliances, and vehicles to electric. While you’ve no doubt heard a lot about the clean energy transition over the past several years, action has been somewhat slow. According to the US Energy Information Administration (US EIA), as of 2021, only 20% of total energy produced in the US comes from renewables, while over 60% is still derived from fossil fuels.
Despite a slow start, decarbonization is expected to gather steam in the coming years. Exactly how aggressively energy producers pursue decarbonization will be determined by a number of considerations, including consumer support, developments in energy storage technologies, and fluctuations in natural gas prices, among other factors. In the US, actions by the federal government and regulatory agencies will play a large role in determining how the decarbonization trend plays out in both the short term and long term. As of early 2022, for example, the Federal Energy Regulatory Commission (FERC) is considering a variety of new regulations that prioritize sustainability as part of the national energy strategy. Similarly, the federal government is also working to encourage decarbonization efforts by offering tax credits and other incentives to energy producers looking to build renewable infrastructure, develop energy storage technologies, or undertake other such projects. There are a number of such incentive programs contained in the Build Back Better Act (BBBA). If passed, the BBBA would likely ramp up decarbonization activity, both in the energy sector and more widely across industry.
How decarbonization affects water use
The US energy mix has evolved over time—and so have water consumption patterns within the power industry. During the past several decades, the share of energy derived from oil and coal has shrunk substantially, replaced largely by significant increases in natural gas use, as well as incremental growth in the use of renewables. This trend is significant because natural gas is a far less water-intensive energy source compared both to other fossil fuels and nuclear energy sources, while renewables like solar and wind have the least water consumption of all energy sources. Thus, as natural gas and renewables account for bigger shares of the energy mix, it’s no surprise that there has been a downward trend in water use within the energy sector. According to US EIA data from 2015 to 2020, thermoelectric power plants dramatically reduced water consumption from 60 trillion gallons down to 47.5 trillion gallons—a reduction of over 20% in just five years.
The US EIA also attributes this decrease in water consumption to efficient cooling systems, reporting that the percentage of thermoelectric plants using once-through cooling systems shrank from 27% to 23% during 2015 to 2020, while use of more efficient closed-loop cooling systems and dry or hybrid cooling systems are on the rise. Whether motivated by cost savings, changing environmental regulations, or incentive programs, energy producers are expected to continue to adopt water reuse strategies as part of the larger decarbonization trend.
The energy transformation will have impacts far beyond the power industry too. The shift toward renewables will likely mean a decline in the power industry’s water use, but water demand is expected to increase in other sectors. Driven by a growing demand for products such as batteries and electric cars, projected growth in the rare earth mining and automotive industries is expected to come with increased water use across these and other sectors in coming years. As such, industrial facilities both within and outside of the energy sector may do well to evaluate their water consumption and look at ways to build efficiencies into their processes to stay ahead of potential future changes, such as stricter environmental regulations, and increasing source water or wastewater discharge costs.
Digitalization
Digitalization is the trend of using technology to optimize the production and use of energy. As data collection and analysis technologies have improved in recent years, more and more utilities are implementing them as part of a so-called “smart grid.” This can include devices such as smart meters and sensors that offer improved data collection, as well as AI and predictive analytics that help utilities to better understand usage patterns and anticipate demand. Energy producers are also increasingly using digital twinning to model different scenarios for better energy infrastructure planning. The digitalization trend also includes the growing popularity of Internet of Things (IoT) devices to help consumers reduce energy use, such as smart thermostats.
Equipped with better data and analysis afforded by these types of new technologies, energy producers are increasingly adopting flexible load programs to improve efficiency and resiliency on the grid. In fact, Deloitte reports that 90% of surveyed energy producers adopted flexible load programs as part of their strategy. Rapid growth in grid digitization is expected to continue into future years, especially if governments continue incentivize or mandate energy efficiency on the part of energy producers and consumers.
How digitalization affects water use
The current digitalization trend isn’t just limited to the energy sector. The same technologies used by energy producers is also being adopted for wastewater treatment applications, including smart sensors and controls, as well as digital twinning and simulation technologies. These innovations can deliver a number of benefits, helping wastewater treatment plants minimize energy use, reduce process variability, and stabilize operations through round-the-clock monitoring and automated operation, as well as helping to forecast future operational needs based on collected data. In so doing, digitalization can help facilities to make more efficient use of resources like water and energy, while also reducing operator demand—benefits that can go a long way in helping drinking water and wastewater treatment facilities lower costs, meet growing demand, and reduce energy consumption.
Decentralization
Current energy grids are highly centralized, often with large geographic regions served by a single provider. Decentralization is a trend towards localized, distributed energy production systems instead of a singular provider. Sometimes called microgrids, distributed energy production systems often take the form of residential solar panel installations, although rooftop wind farms and other renewable energy technologies are emerging all the time.
Decentralization is also an important strategy in responding to another big challenge for today’s energy sector: resiliency. As extreme weather events grow in frequency and intensity, energy producers are implementing changes to help protect the electrical grids from future disruption. This can entail investment in microgrids, as well as other tactics, like building underground infrastructure. For these reasons, decentralization is expected to persist as a trend in coming years, and may very well accelerate with additional incentive programs at either the state or federal level, such as with passage of the BBBA.
How decentralization affects water use
Decentralization is often linked to decarbonization because it usually means incorporating more renewables into the energy mix. For this reason, decentralization initiatives have some of the same impacts, including net reductions in water consumption on the part of energy producers. But another interesting development is a growing emphasis on strategies to build more efficiency into the relationship between energy producers and water utilities. The US Environmental Protection Agency (US EPA) estimates that water utilities are responsible 2% of total energy consumption in the US, so it’s clear that there are indeed opportunities to improve efficiency in this arena.
The US Department of Energy (US DOE) has already begun researching the potential for water and wastewater utilities to coordinate use and/or production of energy with energy providers, with the goal being to smooth out demand on the grid and make better overall use of energy resources. In one such report, US DOE researchers lay out several strategies for water utilities to consider, with ideas ranging from relatively low-lift implementation of smart devices, to major capital investments in renewable energy infrastructure.
To be sure, there are opportunities for value creation, cost reduction, and energy efficiency in many of the water-energy collaborative strategies being proposed today. Water utilities could, for instance, use their own solar infrastructure to power their operations and sell excess energy back to the grid. Even where solar may not be practical due to space or exposure constraints, wastewater treatment plants may still have the ability to produce energy by leveraging MFCs or other emerging technologies. Another potential strategy calls for cost incentives to encourage water utilities to schedule pumping activities during non-peak periods or periods of excess solar production in order to leverage hydraulic storage as a means of not only limiting demand on the grid, but of storing excess energy. These types of collaborative strategies are fairly new, but it is likely that they will continue as research into their efficacy continues to surface.
How can SAMCO help?
SAMCO has over 40 years’ experience custom-designing and manufacturing water treatment systems designed to conserve water and energy resources, so please feel free to reach out to us with your questions.
For more information or to get in touch, contact us here to set up a consultation with an engineer or request a quote. We can walk you through the steps for developing the proper solution and realistic cost for optimizing water use at your electrical generation facility.
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