Analysis of the Impacts of Water Constraints on China's Power Sector

AbstractEnergy and water are inextricably linked. The limited endowments, uneven spatial distribution, and low utilization efficiency of energy and water pose great challenges to China's sustainable development. In this paper, a partial equilibrium model (China TIMES-Water) was developed to integrate Chinese water system and energy system, to project the future water demand, and to evaluate the impacts of water constraints on the water demand and generation portfolio of power sector out to the year 2050. We find that without any further water or energy policies, China's water demand will increase from 602 billion m3 in 2010 to 688 billion m3 in 2030, and then decrease to 650 billion m3 in 2050. We also find that water fee has limit impact in the short-term, while significant impact in the long-run of power sector, in terms of the water demand and generation portfolio