It is a symptom of a key challenge for China in the 21st century. The world's most populous nation and second-biggest economy must make difficult choices between two vital resources, energy and fresh water. Both help drive economic expansion, grow food and raise living standards.

Coal-fired power plants produced 84 percent of China's electricity last month, followed by 11 percent from hydropower (down from 16 percent in 2009). Nuclear and wind generated only about 2 percent each of the country's electricity.

By 2020, China's electrical generating capacity is expected to double to 1,900 gigawatts (GW). At least 500 GW (around 500,000 big plants) will come from coal.

China's coal production, 3.15 billion tons in 2010, is projected to rise to over 4 billion tons by 2020. Its coal reserves are vast but they lie in arid northern and western regions where annual rainfall is sparse.

Coal mining requires lots of water for cutting, dust suppression and washing. So do power plants that burn coal. They consume roughly twice as much water as gas-fired plants.

Meanwhile, China's total water reserves have fallen sharply since 2000. Over the next decade, water consumption is forecast to rise from nearly 600 billion cubic meters last year to 670 billion cubic meters in 2020.

Of the 70 billion cubic meter increase, as much as 50 billion cubic meters will be needed by the coal sector. Where will it come from?

China's challenge highlights a wider problem. Global energy demand, especially in Asia, is rising fast at a time when many scientists are warning that climate disruption and extreme weather events are intensifying, due largely to the burning of fossil fuels and the cutting of water-conserving forests.

The World Policy Institute (WPI), a nonpartisan U.S. think-tank, says that the competition between water and energy needs is a critical economic, security and environmental issue that has not yet received the attention it merits.

Energy production, to make transport fuels and generate electricity, consumes large amounts of water and will take even more in future. In turn, providing water for agriculture, industry and home use needs energy. Pumping, conveying and treating water is highly energy intensive.

Steven Solomon, author of "Water: The Epic Struggle for Wealth, Power and Civilization," calculates that each day every person living in an industrialized nation consumes an average of four-plus tons of water. Of course, most of it is not direct. It is embedded in the food we eat, the products and high-tech gadgets we use, and the energy we need.

In the United States, agriculture consumes about 80 percent of total water use, a level also typical of major developing economies with substantial farm sectors. Of the remaining 20 percent, coal, gas and nuclear power plants account for an estimated one-fifth. The water is for cooling and to make steam that drives turbines to generate electricity.

A recent WPI study found that wind and solar voltaic electricity consume minimal water and are the most water-efficient forms of conventional or alternative electricity production. Yet they contribute only a small proportion of the world's electricity and will take time to scale up.

China, India and Southeast Asia have some of the fastest growth rates of power consumption in the world. A study last year by the World Resources Institute found that availability and quality of freshwater are rapidly declining in many parts of South and Southeast Asia due to population increase, rising demand and climate change.

India, the second most populous nation after China, faces critical water shortages in the next decade. Malaysia, Thailand, the Philippines and Vietnam are expected to suffer localized water pollution and shortages, with climatic patterns shifting towards longer dry seasons with more concentrated bursts of rainfall and resultant flooding.

Yet over half the existing and planned generating capacity for major power companies in South and Southeast Asia is in areas considered to be short of water. Most of this capacity is coal and hydropower.

The best solution is to improve efficiency and conservation in using energy and water, and to control demand by raising prices. This is potentially unpopular and politically risky.

New technology could help. One of the "cleaner" coal systems, the integrated gasification combined cycle process, cuts coal plant water consumption by half, while also reducing carbon emissions and other pollutants.

Asia needs sustainable and well-integrated energy and water policies — sooner rather than later.