Worsening water shortage threatens China's power sector

An increasing scarcity of water threatens to hinder the flow of electric power needed by the huge Chinese economy for growth.

Generating electricity requires water. Water is also used to cool nuclear power stations, in coal gasification and in fracking that extracts shale gas from deep underground. Everything that generates electricity needs water at some stage and Chinese water supplies are increasingly running short.

A new report by HSBC and consultancy China Water Risk warn that water shortages are set to play a bigger role in shaping China’s energy choices. Unfortunately for China, many of its driest areas are also centres of industry, including the provinces of Hebei, Shandong and Shanxi. Some 45% of China’s GDP is produced in water-scarce provinces.

The HSBC report said water shortages could one day become so severe that industrial plants might be forced to relocate away from dry areas.

China’s water scarcity is already serious. The World Bank says available water per capita is only a fourth of the world average.