Tensions in the Water-Energy Nexus Will Demand Excellence from Water and Energy Regulators
MAY 30, 2018

The UN Sustainable Development Goal 6 on Clean Water and Sanitation lies next to Goal 7 on Affordable and Clean Energy. This is probably not an accident as these two goals are so intertwined we often hear them referred to as the water-energy nexus. Actions taken to achieve one of the goals will have dependencies and consequences for the other through the nexus of linked causes and effects.

For example, clean water and sanitation services are energy-intensive, especially when we deploy technologies like seawater desalination or operation of centralized sanitation plants in megacities. But the energy systems needed to support these technologies need water as well, whether in the form of stored water at hydroelectric dams, cooling water and steam-water for nuclear and coal thermo-electric plants, or water for hydraulic fracturing of methane-hosting shale deposits.

Choices in water-resource and aquifer stewardship also lead to tensions between water and energy development. For example should subsurface porosity be used for aquifer storage and recovery systems for resilient water supply, or used to isolate wastes to preserve surface-water quality for ecosystems? Or should underground porosity instead be used for geothermal energy development to reduce greenhouse-gas emissions, emissions that can drive climatic changes that impact the annual hydrologic cycle and therefore affect water supply and sanitation services?

Regulatory agencies face these kinds of choices every day. As agencies of the state, they must adhere to policy directions from their central government, but they also consider the need to manage risks to economic, social, and environmental outcomes desired by their society as they aspire to sustainable development.

Regulators come in many forms with many different mandates and powers to achieve these outcomes. Many water supply regulators are economic regulators, using tariffs and market incentives to influence the behaviors of water utilities. Environmental regulators, on the other hand, may use monitoring information and educational programs to influence behavior through shaping social values to protect sensitive ecosystems. Energy regulators in turn are typically safety regulators, using powers of permits and inspection-driven enforcement to reduce risks of harm associated with energy development like drilling and refining.

Regulators protect what matters, Abraham Lake Alberta

It is becoming more common for water and energy regulators to interact to achieve their mandates and outcomes and successfully co-intervene in the regulated marketplace. To do this successfully in such complicated action arenas, regulators need to be nothing less than excellent. Fortunately, there has been a new body of scholarship around excellence in regulatory practice that can guide water and energy regulators.   One model of regulatory excellence, called RegX for short, was recently developed by Pennsylvania State University for the Alberta Energy Regulator (AER), an oil-and-gas-industry regulator in Canada that has responsibility for energy sector water regulation in the Canadian province of Alberta. The RegX model now guides the AER in its journey to become a top regulator within the water-energy nexus.

The RegX model states that a successful regulator of any kind in any sector needs to have three key attributes: utmost integrity, empathic engagement, and stellar competence:

  • Utmost integrity means the regulator respects the law, adheres to the direction of their society, and puts the public’s interest ahead of private parties.
  • Empathic engagement means the regulator is even-handed, listens to all parties with a stake in a regulatory outcome when making decisions, is responsive to concerns, and transparent in its actions.
  • Stellar competence means the regulator uses its technical and analytical capacity to maximize public value in the most efficient and effective way.

The RegX model is ultimately a people model, in that the attributes of regulatory excellence are embodied in the staff and leadership of the regulatory agency, and visible through their priorities, decisions, and actions. The proof of regulatory excellence is measureable and externally validated by achievement of the regulator’s outcomes. Regulatory outcomes will be both substantive, stated in terms of measurable performance indicators, and perceived, which are reflected in terms of how the society trusts and legitimises the regulator’s actions.

The Sustainable Development Goals of Clean Water and Sanitation and Affordable and Clean Energy for all will demand a lot from regulators. The best path to sustainability will need trade-offs and interventions supported by excellent regulators. The RegX model will set regulator agencies up for success on this path, whether they work only on one of the Goals or along the water-energy nexus linking them.

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Dr. Parks is an IWA member and Programme Committee member of the 5th International Water Regulators Forum, held at the IWA World Water Congress and Exhibition in Tokyo (16-21 September, 2018).

He will also deliver the training for the session: Delivering Regulatory Excellence in Water Energy Nexus during the Congress. All delegates can attend this training at small additional fee. Read more about learning objectives and how to sign up

For more on the Best-In-Class Regulator Initiative that developed the RegX model please click here.

Further information can be obtained through the International Centre for Regulatory Excellence (ICORE) at www.icoreglobal.ca

Dr. Kevin Parks

Chief Geologist in the Strategy and Regulatory Division of the Alberta Energy Regulator (AER)
Dr. Kevin Parks is Chief Geologist in the Strategy and Regulatory Division of the Alberta Energy Regulator (AER). The AER is a founding member and strategic partner in ICORE. He is an IWA member. Dr. Parks is a Canadian hydrogeologist with over 30 ye…Read full biography

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