Water is an important part of the energy balance

This image, taken in August 2022, shows a stretch of the Rhine in Germany that plays a key role in the transport of commodities such as coal.

Christoph Reichwein | Photo Alliance | Getty Images

The link between energy production and water is critical, and we should value the latter resource much more in the future, according to the CEO of a leading gas infrastructure company.

Snam CEO Stefano Venier’s comments come at a time when the relationship between water and energy security has increased dramatically following a period of high temperatures and severe drought in Europe.

For a long time water was considered [as being] free, like something that is completely available in any quantity,” Venier told CNBC’s Steve Sedgwick at the Ambrosetti Forum in Italy.

“Now we are discovering that with climate change … water can become scarce,” added Venier, who spoke late last week.

“And we must restore the perception of importance and value [that] … water is also related to … energy production.”

Expanding on his point, Venier noted that “we found that without water, enough water, we can’t produce the energy we need, or we can’t deliver fuel to fill power plants.”

Falling water levels in some major European rivers have raised concerns in recent months about how this will affect the supply of energy sources such as coal and fossil fuels.

Earlier in August, for example, Uniper, through the European Energy Exchange’s transparency platform, said that “there may be intermittent operation” at its two coal-fired solid fuel plants, Datteln 4 and Staudinger 5.

This was reportedly “due to the limitation of on-site coal volumes caused by low water levels in the river Rhine”.

Water energy connection

Venier’s remarks speak to a wider discussion around the relationship between water and energy, a phrase referring to the close relationship between water and energy.

As major economies around the world develop plans to phase out fossil fuels in favor of renewables, we are likely to see more discussion on this topic, in particular the relationship between energy, water and climate.

As the International Energy Agency puts it down: “Energy depends on water. Water supply depends on energy.”

“In the coming years, the interdependence of water and energy will increase, with serious implications for both energy and water security,” he adds.

“Every resource is facing growing demands and constraints in many regions due to economic and population growth and climate change.”

This link has been highlighted in recent months, especially in Europe.

Earlier this summer, for example, a Swiss nuclear power plant slashed power to keep its cooling river from reaching temperatures dangerous to marine life.

At that time, the international division of the Swiss Broadcasting Corporation with reference to the state broadcaster SRF, said the Beznau nuclear power plant has “temporarily reduced operations” to prevent the temperature of the Aare River from rising “to levels dangerous to fish”. These restrictions have since been lifted.

Elsewhere, government ministers in Norway, which is heavily dependent on hydropower domestically, have spoken of limiting exports due to lower water levels in reservoirs. according to Reuters.

All of the above is happening at a time when many major European economies are struggling to find new sources of energy in the wake of Russia’s unprovoked invasion of Ukraine.

Back at the Ambrosetti Forum, Snam’s Venier was asked about Europe’s energy security and whether we will see Italy and Europe in general draw on gas resources from other parts of the world.

“This is the direction that the government has set, the EU has set… REPower EU and what we are implementing at Snam,” he said.

“Over the past couple of months, we have bought two floating LNG carriers,” he added. “These two vessels will enter service – one next year and the other in 2024.”

This, according to Venier, “will open, of course … new markets, such as West Africa or other parts of the world, that can supply gas.”

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