Asia Risks Water Scarcity Amid Coal-Fired Power Embrace

Inner Mongolia’s rivers are feeding China’s coal industry, turning grasslands into desert. In India, thousands of farmers have protested diverting water to coal- fired power plants, some committing suicide.

The struggle to control the world’s water is intensifying around energy supply. China and India alone plan to build $720 billion of coal-burning plants in two decades, more than twice today’s total power capacity in the U.S., International Energy Agency data show. Water will be boiled away in the new steam turbines to make electricity and flush coal residue at utilities from China Shenhua Energy Co. (1088) to India’s Tata Power Co. (TPWR) that are favoring coal over nuclear because it’s cheaper.

With China set to vaporize water equal to what flows over Niagara Falls each year, and India’s industrial water demand growing at twice the pace of agricultural or municipal use,Asia’s most populous nations will have to reconsider energy projects to avoid conflict between cities, farmers and industry.

“You’re going to have a huge issue with the competition between water, energy and food,” said Vineet Mittal, managing director of Welspun Energy Ltd., the utility unit of Leon Black’s Apollo Global Management LLC-backedWelspun Group. “Water is something everyone should be probing every chief executive about,” he said in an interview.

Investors have driven up the 49-member S&P Global Water Index (SPGTAQD) about 96 percent from its low point after the 2008 financial crisis. That beat the 88 percent gain in the period by the 1,625-stock the MSCI World Index, a global benchmark, and trailed the Dow Jones Industrial Average’s 101 percent increase. More