The Water Energy Nexus: Benefits & Innovations

Sponsored by James Jenkins, Vice President, Regulatory & Public Policy, American Water. Written by Loyd “Aldie” Warnock, Senior Vice President, External Affairs, Communications, & Public Policy – American Water.   

Loyd "Aldie" Warnock

Loyd “Aldie” Warnock

The Water Energy Nexus is a topic of much discussion lately. You may have been wondering what exactly it is. Well, a nexus is simply a relationship, and the relationship between water and energy is deeply intertwined. In the simplest terms, you can’t produce energy without an abundance of water, and you can’t deliver water and wastewater service without consuming lots of energy.

A few numbers help to illustrate this:

  • Water for Energy:
    • Approximately 40% of all fresh water withdrawn from the environment in the United States is withdrawn to cool thermoelectric power plants1
  • Energy for Water:
    • Nationally, between 2 and 4% of all power produced in the United States is for the operation of water and wastewater systems.2, 3
    • It is estimated that the water and wastewater industry can realistically achieve an 8% baseline energy savings by 2030.2
    • It is estimated that efforts by the water and wastewater industry can deliver on 1-2% of the nations’ total amount of realistic, achievable energy efficiency savings by 2030.2

The interdependent nature of water and energy thus provides many opportunities for synergy and greater efficiency.

The Nexus: A Win-Win-Win

Nearly everyone can “win” when water – energy efficiencies are achieved.

  • Customers benefit from lower utility costs and more efficient services.
  • Utility companies benefit from energy savings and becoming more efficient utilities.
  • State policymakers benefit by facilitating delivery of better and more affordable service.
  • Current and future generations benefit from the improved stewardship of water, air, and fossil fuel resources.
  • Communities benefit from growth in jobs and increases in tax base. Indeed, when investments are made in water and wastewater infrastructure, as many as 27,000 jobs are created for every $1 billion spent.4 These include not only jobs in construction, but also jobs in supporting fields such as architecture, engineering, industrial machinery, and truck transport.4

The Means: Investment and Innovation

There are many ways the water and wastewater industries can be more energy efficient. Investing in the replacement of aging infrastructure is one key way. Examples include:

  • Aging Pipe Replacement:
    • Nearly 1 of every 4 gallons of treated water is lost in the distribution system due to leaks, meaning 25% of the water industry’s energy use is likewise “lost” due to leaks. The American Society of Civil Engineers states that pipe replacement needs in the coming decades “could reach more than $1 trillion.”5 Completing this work can translate not only into energy efficiency gains but also a tremendous number of jobs.
    • Replacement or refurbishment of aging pumps:
      • It is estimated that improving water pump efficiency by 55-80% across the entire sector will yield a savings of 10 million megawatt-hours per year. That’s enough electricity to light a city the size of Chicago for over 2 years.

Beyond these efforts, there are many other cutting-edge ways that the water and wastewater industry can achieve energy efficiency. These include:

  • Demand Side Management & “Intelligent” Customer Communication:
    • Advance Meter Infrastructure (“AMI”) & “Intelligent” Communications: American Water’s affiliate in Monterey, California, is just beginning an AMI pilot program. Participating customers will be able to request text or email alerts if they have a likely leak, if they are about to break into the next rate block, or if their total bill is approaching a certain dollar value. This pilot is especially well-suited to the Monterey area, where revenue stabilization policies are used in conjunction with steeply inclining rate block as a way to manage critical water supply issues. The AMI program allows the company to help customers keep their bills low and limit unwanted usage, which is what every stakeholder in the area wants.
    • ENBALA Partnership: American Water is the first U.S. water utility to use the Smart Grid technology of ENBALA Power Networks. The technology manages the way American Water’s treatment plants and pumps use electrical power, and it allows us to offer capacity to the electric regulation market.
    • New Treatment Methods:
      • NPXpress: American Water has developed energy efficient NPXpress technology, which reduces aeration energy consumption in the wastewater treatment process by up to 50 percent. The process has been implemented at seven full-scale wastewater treatment plants in New Jersey and New York.
      • Alternative energy sources:
        • Solar: A solar electric system at New Jersey’s Canal Road Water Treatment Plant is used to supplement up to 20% of peak usage.
        • Wind: Pennsylvania’s Yardley Water Treatment Plant Facility runs entirely on wind-generated energy, purchased from local electricity service provider PECO.

The Support: Policies and the Nexus

State and federal legislators and regulators are key players in helping to unlock further progress towards realizing the many benefits of the water energy nexus. A recent resolution adopted by NARUC, for example, provides a forward-looking framework for state regulators looking to “proactively explore the water-energy nexus and pursue regulatory reforms that might be needed to unlock further progress toward enhanced water and energy efficiency.”6 At the federal level, policymakers can leverage the water-energy nexus by taking a holistic approach to policies. For example, if the EPA adopts its proposed rule limiting greenhouse gas emissions from existing generation units, having clarity that states may account for measures taken across industries would be important. If this were done, it would allow the water and wastewater sectors to help states fulfill their Clean Air Act Section 111(d) plans. Reduction of energy usage in the water sector could have a measurable and lasting impact on carbon output. American Water has submitted comment to the EPA suggesting this flexibility.

At American Water, we support pursuing water energy nexus opportunities to achieve energy security and environmental sustainability. We look forward to working with customers, partners in other industries, policymakers, and other key stakeholders in order to find innovative solutions.


1 “The Water Energy Nexus: Challenges and Opportunities”, U.S. Department of Energy, June 2014, p. 1
2 “Electricity Use in the Municipal Water Supply and Wastewater Industries”, Water Research Foundation and Electric Power Research Institute, November 2013, page 8-1, page 6-4
3 “Strategies for Saving Energy at Public Water Systems”, U.S. Environmental Protection Agency, July 2013, page 1
4 “Sudden Impact: An Assessment of Short Term Economic Impacts of Water and Wastewater Construction Projects in the United States”, Clean Water Council, 2009.
5 “2013 Report Card for America’s Infrastructure”, American Society of Civil Engineers, March 2013, p. 5
6 “Resolution Regarding the Water-Energy Nexus”, NARUC, November 2014,