Freshwater is becoming a limited resource in some parts of the world as a result of increasing demands (due to population growth and urbanization) and decreasing water resources (due to climate change and pollution). There is increasing competition for this limited resource between the agriculture, residential, industrial and energy sectors. Therefore, there is a need for an integrated analysis of some of these sectors to achieve efficient allocations of these resources. This paper provides an integrated analysis of the impacts of climateinduced water scarcity on the Spanish energy sector. An existing energy model is modified by including water consumption by energy technologies and regional water constraints. The effects on energy technology investments, operation schedules, foreign dependence and distribution are analyzed. The results show that ignoring water constraints can lead to sub-optimal decisions in energy investments, operation and import decisions.
Keywords: Energy, water, economic impact
Published: February 2015.