Integrated assessment of water use and greenhouse gas footprints of Canada’s electricity generation and oil and gas sectors by Ankit Gupta A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science in Engineering Management Department of Mechanical Engineering University of Alberta © Ankit Gupta, 2020 Abstract The energy sector is responsible for a significant portion of global greenhouse gas emissions, water withdrawal, and water consumption. There are strong dependences between energy production and water use, and the adoption of more clean energy production technologies will affect water use. Such technological changes are not well understood. There is very little research assessing the water use associated with clean energy pathways in the energy sector. The objective of this research is to understand and evaluate the water-use impacts of Canada’s renewable energy transition. This research developed an integrated energy-water model to assess clean energy scenarios and the resulting technology penetration, water use, and cumulative and marginal greenhouse gas (GHG) emissions abatement costs. The energy sectors considered in this work are the oil and gas sector and the electricity generation sector. The Canadian Water Evaluation and Planning model (WEAP-Canada) was developed and integrated with the Long-range Energy Alternative Planning (LEAP-Canada) system model to determine integrated water-greenhouse gas footprints for the electricity generation sector and the oil and gas sector for the years 2005-2050. This research develops integrated water-greenhouse gas footprints for future electricity generation mix pathways in Canada with a focus on deep decarbonization. The LEAP model of Canada’s electricity system was developed by using technology system capacity requirements, technology capacity addition, and technology and economic inputs to provide electricity generation technology capacities and generation, system costs, and GHG emissions. A Water Evaluation and Planning model for Canada’s electricity generation sector was also developed by considering one- hundred-fifty-six electricity generation water demand sites and seventy-four major rivers. The two models were integrated to analyze electricity production and its associated greenhouse gas emissions and water use. Two scenarios were developed and evaluated for a planning horizon of 2019 to 2050. First scenario was based on current policy and second scenario was developed with a deep decarbonization target of 100%. In the current policy scenario, water consumption is projected to decrease by 5% and GHG emissions to decrease by 81% by 2050 compared to 2019. In the 100% decarbonization scenario, the water consumption is projected to increase by 3% by 2050 compared to 2019. Setting decarbonization targets of 100% resulted in a marginal water ii consumption of 3.6% and marginal GHG abatement costs of $23 per tonne of CO2 equivalent. There are water consumption tradeoffs in the 100% decarbonization scenario, but they are relatively small compared to those in other water-consuming sectors in Canada. Assessing the water-use impacts and costs of GHG emission reduction pathways helps to identify the co-benefits or tradeoffs associated with decarbonizing this sector and may be useful in policy development. This research also develops water use footprints for future oil and gas production in Canada by considering different energy pathways. The oil and gas section of the thesis focuses on developing a baseline for future water-GHG analysis in the oil and gas sector rather than understanding the water-GHG trade-off for clean energy scenarios. The WEAP model of Canada’s oil and gas sector (WEAP-COG) was developed using production, water-use intensities, and production shares based on watersheds to provide water withdrawal and consumption at the watershed level. Using the six water withdrawal sectors of the oil and gas sector (oil sands mining, oil sands in situ production, bitumen upgrading, conventional crude oil production, natural gas production, and crude oil refining), we modelled twenty rivers and forty-five demand sites. Energy scenarios were adopted from literature for high-price and low-price cases and then run in the WEAP-COG model. The results were compared to the reference scenario results to obtain marginal water use and GHG footprints for each scenario. The GHG emissions, water withdrawal, and water consumption for the oil and gas sector will increase by 80%, 21%, and 39% by 2050 from 2005, respectively, because of the increase in oil production. GHG emissions from the oil and gas sector will exceed Canada’s nationally determined contributions (NDC) target. The adoption of clean energy, less water-consuming technologies is recommended in order to achieve the current NDC target or to mitigate future water stress. The results developed in this research can be used by the decision makers in the government and industry for investment decision and policy formulation. iii Preface This thesis is an original work by Ankit Gupta under the supervision of Dr. Amit Kumar. Chapter 2 will be submitted to a peer-reviewed journal as “An integrated assessment of the water use footprint and marginal costs for decarbonization of Canada’s electricity generation sector,” coauthored by Ankit Gupta, Matthew Davis, and Amit Kumar. I was responsible for defining the problem, data collection, data analysis, model development, and manuscript composition. Matthew Davis reviewed the research, provided feedback, and corrected the manuscript. Amit Kumar was the supervisory author and provided supervision on problem formulation, development of modelling framework, input data and assumptions, results, and manuscript edits. iv Acknowledgements I would like to express my sincere gratitude to my supervisor, Dr. Amit Kumar, for his guidance, mentorship, and support throughout my research work. His supervision, insight, and continuous feedback were invaluable in conducting the research. I would also like to extend sincere thanks to Matthew Davis, a research engineer at the University of Alberta, for his timely feedback, knowledge sharing, and continuous support, which encouraged me towards the completion of my research. I would also like to thank Astrid Blodgett for editing my papers. I am thankful to the NSERC/Cenovus/Alberta Innovates Associate Industrial Research Chair in Energy and Environmental Systems Engineering and the Cenovus Energy Endowed Chair in Environmental Engineering for financial support. I am also grateful to representatives from Alberta Innovates (AI), Suncor Energy Inc., Cenovus Energy Inc., Natural Resources Canada, and Environment and Climate Change Canada for their valuable input and comments in various forms. Many thanks to the University of Alberta's Future Energy Systems research initiative, which made this research possible, in part through the Canada First Research Excellence Fund (CFREF). I highly appreciate the assistance of Drs. Eskinder Gemechu and Abayomi Olufemi Oni for their feedback on my journal papers. I am thankful to the members of the Sustainable Energy Research Group for their support, comments, and useful discussions throughout my research. Special thanks to my friends for sharing this journey. I am grateful to the Mechanical Engineering Graduate Students Association and the Faculty of Engineering Graduate Research Symposium committee, which provided me with the opportunity for professional development. Finally, I would like to acknowledge my parents for their overwhelming support and for believing in me. I would not be the same person without their love and encouragement. v Contents 1 Introduction ............................................................................................................................. 1 1.1 Clean energy transition and water impacts ...................................................................... 1 1.2 The Canadian context ....................................................................................................... 3 1.2.1 Clean energy transition and water impacts ............................................................... 3 1.2.2 Canadian electricity generation background ............................................................. 5 1.2.3 Canadian oil and gas sector background ................................................................... 8 1.3 Literature review ............................................................................................................ 10 1.4 Research gaps ................................................................................................................. 11 1.5 Research objectives ........................................................................................................ 12 1.6 Organization of thesis..................................................................................................... 12 2 Chapter 2: An integrated assessment of water use footprints and marginal costs for the decarbonization of Canada’s electricity generation sector .......................................................... 14 2.1 Framework ..................................................................................................................... 14 2.2 Electricity generation model development (LEAP-Canada) .......................................... 16 2.2.1 Model overview ...................................................................................................... 16 2.2.2 Net electricity demand