Policy Paper Series - The University of Sydney

CHINA STUDIES
CENTRE
悉尼大学中国研究中心
Policy Paper Series
PAPER 7
October 2013
Overcoming geographies of scarcity:
the water-energy nexus in Inner Mongolia and South Gobi, Mongolia
Jesper Svensson
Jesper Svensson
Preface
Inner Mongolia Autonomous Region is a unique area in China, stretching
across the northwest to the north east, ranging from the deserts in the Amen
region close to Gansu and Xinjiang, and grasslands running from Xilinghaote
right up to Ordos. Since intense settlement of the area by Han Chinese which
started over a century ago, adding to the number of ethnic native Mongolians,
it has been a region whose ecosystem is under enormous stress.
Desertification because of inappropriate use of grazing land for farming from
the late Qing period onwards means that large swathes of the Autonomous
Region are today barren. Those travelling from Beijing north to the border
with Mongolia can see the contrast in the different intensity of land use. They
cross from a land largely bereft of any kind of vegetation to one which has
rich, green pasturage.
The plight of Inner Mongolia is exacerbated by the rich mineral and coal
deposits it has. These have been exhaustively exploited in recent year.
Closeness to the capital Beijing, and then to the great port of Tianjin mean the
area Is perfect for supply of the energy hungry economies in North East Asia.
This has caused dramatic change socially and economically. Inner Mongolia
was an economically undeveloped and impoverished area up until the 1980s.
But from the late 1990s in particular onwards it has posted staggering GDP
rises, producing a new generation of super-rich, and a boom in the cities the
Autonomous Region contains.
The crucial issue addressed in Jesper Svensson’s paper is how water figures in
all of this. Water is a critical issue for all of China, with cities like Beijing
suffering from massive shortages, and water contamination being sufficiently
worrying for the State Council to have produced a key document on its
management in 2012. For Inner Mongolia, a place with very modest rainfall
even in good years, these issues are magnified by the huge use of water
resources in mining. As mining activity has shot up, so has diversion of the
water into this area, at the cost of local communities. Droughts have
increased, and the environment deteriorated, with policy makers trying to
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work out ways of preserving the benefits that coal exploitation brings, but also
answering the immense environmental issues that come with it.
This paper sets out, with a large amount of new data, where the water
challenges are, what the impact of coal extraction has been, and what sort of
responses the government needs to make. Inner Mongolia is just one area of
China, but the challenges here, while extreme, are repeated throughout the
rest of the country as the balance between growth and sustainability is sought
for. There is plenty of food for thought here about a problem that is pressing,
and will take great policy focus and skill to sort out. And as the conclusion
shows, if China cannot solve this issue, then it can grow as rich as it likes in
the knowledge it is doing so with the ticking time bomb of environmental
backlash.
Professor Kerry Brown
Executive Director, China Studies Centre, and Professor of Chinese Politics
University of Sydney
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Jesper Svensson
Overcoming geographies of scarcity: the water-energy
nexus in Inner Mongolia and South Gobi, Mongolia
Introduction:
At a time when mineral and coal mining has put Mongolia among the world’s
fastest growing economies, with 17.3% growth rate in 2011 and 12.3% in 2012
(Kohn: 2013), its abundant supplies of resources are seen as an emerging new
source to meet the energy demands of a number of northeast Asian countries
(Campi 2013: 1). However, in an increasingly water-stressed country, the
long-term risks related to the water-intensive mining economy have largely
been ignored. As water becomes scarcer, the water issues are set to become
more and more serious constraints for the large-scale development of
Southern Mongolia’s coal and mineral deposits in a way that mirrors similar
challenges facing dry and coal-rich Inner Mongolia, China. In this light, this
paper tries to advance understanding of the water-energy nexus by
demonstrating how these resources are coupled in the cases of South Gobi and
Inner Mongolia. It argues that an energy policy is more robust for regional
adaptation strategies for South Gobi-Inner Mongolia than a water policy due
to its transmutability and that water issues will remain localized (Scott et al.,
2011; Pasqualetti 2010). Thus, by jointly tapping their abundant wind
resources, the South Gobi and Inner Mongolian regions could reap double
benefits by reducing CO2 emissions while also saving water.
This paper is organized in three sections. The first section will start with
explaining China’s geographical resource divide before moving on to explore
the water and environmental impacts of coal development in Inner Mongolia.
Next, the paper turns attention to the growing water-energy confrontation in
Mongolia, particularly in the mining industry of South Gobi. The final section
focuses on a discussion of barriers and opportunities for a cross-boundary
wind-energy project between South Gobi-Inner Mongolia, which has the
potential to reduce water requirements for electricity generation in a region
which is short of freshwater but has vast wind resources.
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1. The case of Inner Mongolia: the coal-water (scarcity) nexus
In China, coal is king, representing 77% of China’s primary energy production
and fueling almost 80% of its electricity (Carnegie 2012: 1). Driven by its high
reliance on coal for electricity generation to sustain its juggernaut growth,
China became a net coal importer in 2009 and overtook Japan as the world
largest coal importer in 2011 (WRI 2012: 12). Considering the depleting
coking coal reserves and the importance of coal for China’s industrial
processes, such as iron and steel production, Mongolia now plays an
increasingly important role as a coal supplier for China. While Indonesia and
Australia are the largest coal exporters to China, with over 50% of the market
share of imports in 2011 (Alencastro Larios 2013: 81), Mongolia supplies
China with 43 % of its coking coal (News.mn: 2011). Yet construction of more
coal power bases is expected to meet growing energy demand.
According to its 12th Five-Year Plan (2011–2015), the country aims to add 363
coal-fired plants to fuel 16 giant coal-power generation bases, mainly in the
provinces of Inner Mongolia, Xinjiang, Shanxi and Shaanxi with a combined
capacity exceeding 557,938 MW (WRI 2012: 5). Discussion about China’s coal
has focused on the threat to air quality and its contribution to an increase in
CO2 emissions. One critical issue, however, usually escapes attention: coal
development is highly water intensive. As of 2008, the water consumption in
China was 591 billion m3; 23.7% was for industrial use with more than half of
it consumed in the coal mining and preparation, coal-fired power generation
and coal chemical industry. While water quantity issues throw up a range of
risks in the energy sector, the coal industry also poses a potential threat to the
quality of water resources by discharging large quantities of waste water
containing pollutants. In 2008, coal mining and washing, and heat and power
production accounted for 12% of industrial waste water (Pan et al., 2012: 93).
Conversely, to treat, secure and distribute this water demands large amounts
of energy. As an energy source that makes large demands on water resources,
the uneven distribution of water resources is adding further risks and
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challenges: the Northern China Plain has nearly 35% of China’s population
and almost 40 % of its arable land but has to make do with less than 8% of its
water resources. To make things worse, roughly 70% of the country’s 15,000
coal mines are located in water-scarce regions and 40% are estimated to have
severe water shortages (Chan 2013). This is of particular concern for China’s
resource hub Inner Mongolia, which is blessed with 26% of the country’s coal
reserves but only 1.6% of its water resources. Moreover, a recent study
conducted by Greenpeace and China’s Academy of Sciences has shown that by
the end of the 12th Five Year Plan, the coal power bases in Inner Mongolia,
Shaanxi, Shanxi and Ningxia will increase the entire area’s industrial demand
for water by 94.1% to 140.8% from 2010 to 2015 (Greenpeace 2012: 2). The
water demand from these coal industries will reach at least 9.975 billion m3 in
2015, which is more than a quarter of the water volume that the Yellow River
allocates to the 9 provinces in a normal year – 37 billion m3. Thus, meeting
the water resources pressure and energy demand in Inner Mongolia is
becoming increasingly challenging.
In Inner Mongolia, coal power represented 92% of total power production in
2010 (see table 1). As of 2010, 248.9 TWh were produced and 38% of the
electricity was exported to other regions in China, mainly to feed the growing
electricity needs of the eastern provinces as part of the “Send Western
Electricity East Project” 西电东送 (Xi Dian Dong Song).
Tabel 1. Water and Energy in Inner Mongolia and Ningxia
Total production of Energy
Inner Mongolia
Ningxia
92
99
248,9
58,7
% Electricity Exported
38
7
Agriculture Water Use as % of Total Water Supply
74
90
5,86
4
% for coal
2010 Electricity Production TWh
Yellow River Water allocation (billion m3)
Source: China Statistical Yearbook (2010), China Environment Forum (2013)
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However, this interdependence between Inner Mongolia as a source region for
electricity export and the eastern coastal provinces as demand centres for
energyis different from source and demand links for water. The imbalance of
coal resource distribution and consumption has necessitated long-distance
electricity transmission systems because it is cheaper than coal transportation
via railways, roads and waterways. Thus, a major target for the State Grid
Corporation of China is to increase the electricity transmission to coal
transportation ratio from 1:20 in 2006 to 1:4 in 2020. This resource-coupling
dimension of the water-energy nexus creates what Scott et al. (2011) call
“externalization of impacts”. Consumers who benefit from the “emission free”
electricity in the east don’t perceive water impacts from power generation that
local residents in Inner Mongolia have to bear. At a deeper level, the water
and energy linkages are coupled at multiple levels and jurisdictions, especially
local and state governments, that often have competing goals (provincial
energy gain versus local water quality). This resource coupling of energy
development and water quantity and quality can be demonstrated by looking
at the case of China’s largest Coal miner, China Shenhua Group. To meet
regional energy demand through coal extraction, this state-owned company
has, according to Greenpeace, been overexploiting groundwater and
discharging high levels of toxic wastewater in Inner Mongolia (Greenpeace
2013). Moreover, China Shenhua Group has been selected as one of the
stakeholders to develop Mongolia’s Tavan Tolgoi, one of the world’s largest
untapped coking coal deposits located in South Gobi. As demand for
electricity on the eastern coastline increases, so too will the volume of water
needed for coal mining, preparation, and coal-power generation in Inner
Mongolia. There are at least 4 options to meet this water need.
First, it could come from the South to North Water Diversion Project 南水北调
工程 (Nanshui beidiao gongcheng), a $62-billion project designed to transfer
some 45 billion m3 annually from the south via three routes, and designed to
deliver water to the dry Yellow river and meet urban water demand in the
Beijing-Tianjin region. Although the project will ease the imbalance between
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supply and demand for water in the Northern China plain, the SNWTP carries
significant costs and risks. A fundamental vulnerability is the energy-intensive
water delivery, as longer distances for conveying water mean greater energy
use and cost. In this case, water pollution may also hamper its planned utility
as much energy is needed to treat and move surface water.
Apart from the project’s energy intensity, financial costs and environmental
impacts, the current engineering supply-side paradigm is vulnerable to a
multi-year widespread drought. In mid 2011, Inner Mongolia had a serious
drought with 2.33 million people facing water shortages and 660 thousand
hectares of farmland providing no harvest (Xin et al., 2012: 447). Given that in
2011 the Yangtze River – which is supposed to transfer water northward along
three routes – suffered the worst drought in 50 years, it raises a key question:
What if the south and the north of China suffer drought at the same time?
There could be a conflict between water and energy needs where the Yangtze
delta needs hydroelectricity from its dams while the north needs water to be
transferred from the Yangtze River. On the other hand, the receiving areas for
water transfer in the Northern China plain are under the semi-humid
monsoon climate zone. If the dry period, which has lasted more than 28 years
(since 1980) ends and the wet season returns, then there would be little need
for water transfer, thereby pushing the price of transferred water up while
users look for demand management alternatives.
Second, desalination offers a pathway to mitigate the water-energy
confrontation. To meet the energy demand and water scarcity in Inner
Mongolia, Chinese researchers have proposed a “Bohai Sea Diversion Project”.
It aims to drop a pipe into the Bohai Sea to draw seawater into a complex of
desalination plants, and then to pump water 1,400 metres uphill for more
than 600 kilometres to develop coal in Xilinhot (Schneider 2011). Although
desalination remains at present an energy-intensive and expensive solution, it
might become a way to address water shortages and rising energy demand if
new innovations - such as solar-powered desalination – can make it more
cost-effective (Chellaney 2013: 284).
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Third, the water demand could be met by encouraging water-use efficiency
through inter-sectoral water allocations. Since 2003 industries in Inner
Mongolia and Ningxia have been investing in water-saving irrigation districts
in exchange for transferring water to the industrial sector, with compensation
based on mutual benefits. Because agriculture uses approximately 70 to 90%
of Inner Mongolia and Ningxia’s water, the greater the water savings are in
the agriculture sector, the more water will be available be for energy
production. Yet reports show that upstream regions of Ningxia and Inner
Mongolia exceed the given allocations from the Yellow River Basin
Commission annually by exploiting loopholes in the central regulation (Li et
al. 2012: 959; Watts 2011). Thus, despite its potential, water-rights trading to
meet the water scarcity and energy demand in Inner Mongolia has proven
difficult to enforce.
Fourth, demand could be met by increasing the use of air-cooling technologies
which, compared with water cooled power units, can reduce water use by 60%.
In 2011, the National Development and Reform Commission approved 8 coalfired power plants and 5 coal-fired power-heat co-generation plants in Inner
Mongolia with a total capacity of 12,220 MW, of which 9,120 MW power
generation and 2,500 MW power-heat co-generation plants used air-cooling
systems. However, air-cooled power plants only account for 4.25% of the total
capacity in China (Pan et al., 2012: 97; Chan 2013). In addition, recyling waste
water could also reduce water consumption. Pan et al. (2012) have shown that
while the coal mining industry withdraws 1.6 m3 to 3.0 m3 of water and
releases 2 to 10 m3 of wastewater to mine 1 tonne of coal, the recycling rate of
treated wastewater is only 22 %. Thus, increasing the recycling of waste water
in mining holds the key for large water savings. However, air-cooling
technologies and recycling waste water would increase the cost of power plant
construction and produce higher energy consumption per unit of electricity.
This comes as bad news for coal-fired power companies that have suffered
significant financial losses in recent years. For instance, the top 5 Chinese
power companies lost a total of RMB 15 billion (US$2.4 billion) in their coal-
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power generation business in 2011 due to the challenge of rising coal prices
and a fixed electricty price (WRI 2012:6).
In addition to these options, a rapid rollout of renewable energy could save
water since wind and solar power generation require virtually no water. This
will be discussed in section three, after next case-study.
2. The case of South Gobi: water scarcity and energy demand in the
mining sector
As in China, water and energy are both essential for meeting a broad range of
societal goals in Mongolia. While the aggregate per capita water resource in
Mongolia is 11,182 m3, the availability of water resources per square kilometre
is much lower than the world average, making Mongolia one of 60 countries
with limited water resources (UNEP 2011: 8). A striking fact is the country’s
“70-30 paradox”: some 76% of surface area has only 36% of all water
resources. Indeed, freshwater shortages and the geographically uneven
distribution of minerals and water pose great challenges. According to UNDP,
one-third of Mongolia’s aimags (provinces) fall “below 600 cubic metres per
capita that defines absolute water scarcity”, while the South Gobi aimags,
namely Omnogovi (20.3 m3), Dornogovi (85.8 m3 per capita) and Dundgovi
(209.6 m3) are home to massive mining projects, including the Oyu Tolgoi and
the Tavan Tolgoi (UNDP 2011: 59). It is estimated that the Oyu Tolgoi
copper/gold deposit will contribute 25% of Mongolia’s GDP in 2020 (Kjetland
2012). Rapid urbanization and mining, along with climate change and
inconsistent water governance, are the major drivers of over-exploitation of
water resources, both groundwater and surface water, in several regions.
A large proportion of industrial water consumption comes from the mining
sector. Based on data from 2005/2006, the total annual water use of
Mongolia was 443 million m3, 53% of which was for industrial uses. In general,
around 40% of the industrial water is consumed in the extractive mining
industry (World Bank 2010: 9). To highlight the challenge for the mining
industry, The Global Water Intelligence Group (GWI), a UK-based water
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consultancy, estimates that global mining companies will spend $12bn
globally on water infrastructure in 2013, marking a 56% increase from the
$7.7bn the industry spent in 2011 (Businessmonitor 2013: 2). Thus, in an era
in which Mongolia’s mining industry will consume up to 200,000 m3 per day
by 2020 – a 22-fold increase from the 2009 daily demand of 9,000 m3 (China
Environment Forum 2013: 2) – the implications of increasing water supply
limitations in the dry southern desert provinces of South Gobi are obvious.
Shortages of water and energy are set to become major barriers for any further
development of the South Gobi’s mining sector and could undermine the
country’s economic growth.
At a time when water issues are becoming more serious constraints for
mining, the rise in Mongolia’s electricity demand is being driven by existing
and new mining developments. From 2007 to 2011, electricity consumption
increased on an average 6% per year and it is estimated that overall energy
demand will grow at around 14% in the future. The Ministry of Mineral
Resources and Energy of Mongolia forecasts total electricity demand from the
major South Gobi mines of around 870MW to 1130MW (Prophecy Coal Corp.
2012), a huge proportion given Mongolia’s installed capacity of power
generation is 922MW, produced almost entirely by coal-fired thermo power
plants. At the same time, the South Gobi region is not connected to the central
energy system. The electric power system consists of four independent electric
power systems: the Central Energy System (CES), Western Energy System
(WES), Eastern Energy System (EES) and Altai-Uliastai energy system. The
CES supplies energy to the capital and 13 aimags in central Mongolia,
covering over 90% of the country’s total energy consumption (Energy Charter
Secretariat 2011: 31). However, it can’t meet the daily energy demand during
peak times, and electricity has to be imported from Russia. On the other hand,
the diesel-dependency on Russia carries risks and costs given that Russia can
raise duties on fuel exports, thereby pushing up the operating cost for using
diesel to generate power in the mining sector which has short operational
season before winter.
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Although the Mongolian Government plans to increase the share of renewable
energy to between 20% and 25% of its total energy consumption by 2020, coal
will continue to dominate Mongolia’s system with new coal fired power plants
– Tavan Tolgoi (600MW), TPP5 (450MW), Chandgana Power Plant
(600MW) – planned to be built to meet energy demand (Prophecycoal 2012).
In this light, water and energy are so interlinked that the Director General of
Energy Policy Department at the Ministry of Mineral Resources and Energy
admitted last year that adequate water availability for electric power
generation in Tavan Tolgoi could be a problem and the whole water issue
needed careful re-evaluation (Iderkhangai 2012). This raises a key question:
with a deficit of over 600MW by 2016 projected by the IMF, will Mongolia
have enough water in the long run to simultaneously build thirsty coal-fired
power plants and mine coal, copper, gold and other natural resources that also
use large volumes of water and produce wastewater? Indeed, in an era where
energy demand is increasing rapidly but water resources are already
constrained, the central dilemma might actually be how to meet the water
needs for an extractive mining industry and an energy sector that are both
driven by coal-fired power plants.
Until the 600MW power plant in Tavan Tolgoi begins operation, the Oyu
Tolgoi – the second biggest player in the South Gobi – takes its electricity
from coal-fired power plants in Inner Mongolia, China. As demonstrated in
the Inner Mongolian case, resources are managed at multiple levels. In this
regard, the linkages between Inner Mongolia as a source region and Oyu
Tolgoi in South Gobi as a demand site for energy are different from source and
demand links for water, which remain localized. The coupling of energy and
water demonstrates how energy demand for Oyu Tolgoi is met through coalgenerated electricity in Inner Mongolia with associated environmmental
impacts. Moreover, the scale of China’s presence and the geographic
proximity between the southern part of Mongolia and Inner Mongolia raises
the question of cross-border environmental problems. Alicia Campi, a wellknow researcher on Mongolia, argues that any large scale development of
Tavan Tolgoi and other coal mines in South Gobi would seriously affect the
flow of water to Inner Mongolia (China Environment Forum 2013: 6). But this
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is dismissed by a leading water scholar at Chinese Academy of Sciences who
argues that water demand for coal development is mainly concentrated in the
Yellow River basin in the south but not in the closed basin in the north of
Inner Mongolia. Moreover, apart from the upper reaches of the Wulawulun
River – the source area of Heilongjiang province – where water consumption
in Mongolia reduces the flow to downstream China, the water use in Mongolia
has little impact on water resources in China.1 Thus, water is a local/provincial
resource within South Gobi and Inner Mongolia, but the externalized water
impacts of energy development across boundaries makes energy the key to
addressing those local impacts.
In the mining sector, the Government of Mongolia has raised prices for
underground water to control the use of water by industry, but this had an
unexpected outcome of producing active initiatives and projects for the
increased use of surface water. To meet future water demand in the mining
sector of South Gobi, the government and the World Bank are studying
options to channel water from the Orkhon River to the Gobi via an aqueduct
(Kohn and Humber 2013). However, according to an official working for the
Ministry of Construction and Urban Development, the project has faced
growing concern from the northern provinces, which oppose the project.2
3. Can wind energy break the vicious circle of energy and water
into a virtuous one?
As presented from the case studies above, water and energy are coupled at
multiple levels. Following this reasoning, the energy demand from the eastern
coastline of China drives the development of coal in Inner Mongolia at the
expense of local communities, which are impacted by water quality and
quantity as well as air pollution. This spatial dislocation of energy and water
sources and demands is also highlighted by the fact that mines such as Oyu
Tolgoi in South Gobi, Mongolia receive electricity from Inner Mongolia. While
1
Correspondence with a water scholar at Chinese Academy of Sciences, July 10, 2013.
2
Correspondence with official at Ministry of Construction and Urban Development, July 24, 2013.
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the case of Inner Mongolia demonstrates the confrontation between water
scarcity and energy demand, the dilemma facing the extractive mining
industry in South Gobi is two-fold. On the one hand, water availability for
mining is under pressure at the same time as energy demand is increasing. On
the other hand, as demand for electricity in South Gobi increases, so too will
the volume of water needed for coal-fired power plants that are being planned
to power the mining sector and large parts of Mongolia. At the same time,
both the Chinese and the Mongolian governments have constructed or
proposed large water-transfer projects to address the problems in the north
and south respectively. However, moving surface water over great distances
demands energy, which undermines local renewable energy options and
water/energy conservation measures.
To break the vicious circle of energy demand and water scarcity, Mongolia and
China need to find ways to reduce their reliance on coal-dominated power
generation systems. In an attempt to move away from its coal dependence, the
Chinese government aims to increase the wind power generation capacity to
200 GW by 2020, 50 GW of which will be installed in Inner Mongolia.3 Even
if this only represents 5% of China’s total energy need, Xin Li et al. (2012)
have calculated that the deployment of 200 GW wind energy would contribute
a 23% reduction in carbon intensity and could save 800 million m3 of water.
For Inner Mongolia, the installation of 50 GW of wind turbines would save up
to 210 million m3. Besides having one fifth of the country’s total wind power
potential, Inner Mongolia has one of the largest solar power potentials in
China (Li et al., 2013: 7).
Mongolia, like Inner Mongolia, is blessed with vast wind and solar energy
resources but its market is tiny and heavily subsidized to be able to overcome
the challenges of scale to tap them efficiently (Borgford-Parnell 2011: 2767).
According to a presentation done by the ADB, Mongolia contains a maximum
installed capacity of 1113 GW of wind energy resources, but only 0.0002% of
the total wind energy potential has been installed. As a result, the Government
3
In 2012, the installed capacity was 62.36 GW of total 1000 GW wind potential. (Li, Junfeng2012: 2).
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aims to increase the wind power generation capacity to 200 MW by 2020
(ADB 2012). In addition, the imbalanced geographic distribution of wind
resources and consumption is a challenge: South Gobi is endowed with plenty
of wind resources while the demand centres are hundreds of kilometeres away
in the north. Thus, 200 MW is not enough to create the economies of scale for
electricity transmission south to north. However, if South Gobi and Inner
Mongolia could jointly integrate their wind resources with Inner Mongolia’s
power transmission system, then Mongolia could move away from its reliance
on coal while exporting renewable energy to China.
In this light, deployment of wind energy can be regarded as carbon and water
saving solutions for their existing coal-dominated power generation systems.
Indeed, it is important that Mongolia, in seeking to address the energy
challenges of the mining industry in South Gobi, does not exacerbate
challenges related to water. For Mongolia, the greater use of wind energy over
coal will bring significant savings in water consumed per megawatt-hour of
electricity produced. Achieving water savings in energy production ultimately
means more water available for agriculture, mining and urban households.
Conclusion
Water issues are of great importance to Inner Mongolia’s coal supply chain
and for the extractive mineral industries in South Gobi, Mongolia. At a time
when the ratio of electricity transmission to coal transportation will increase
from 1:20 in 2006 to 1:4 in 2020, there will be implications for the water
availability and the water quality in Inner Mongolia. This paper reveals that
the source region and demand sites for energy are different from source and
demand links for water. Urban energy consumers on the eastern seaboard of
China that use coal-generated electricity exported from Inner Mongolia don’t
internalize the water impacts of generation or coal development. Thus, the
regional demand for energy drives the coal development in Inner Mongolia at
the expense of local water quality and quantity. Similarly, the extractive
mineral industry in South Gobi is facing its own difficulties with water scarcity
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and has a large and rising energy footprint. There is a risk that freshwater
supply stress is increasing as more coal-fired power plants are built to meet
the rising energy demand driven by mining industries. Despite the geographic
proximity of Inner Mongolia and South Gobi, Mongolia, water will remain a
domestic concern and offers less scope for regional adaptation than energy
policy. Finally, because electricity is transmitted between Inner Mongolia and
South Gobi, combining the vast wind energy resources holds promise for
water savings and reducing CO2 emissions if costs and and institutional
barriers are to be overcome.
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