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Wednesday, August 26, 2020

Lack of Water May Mean Lights Out

Water Fuels Energy

As water supplies decrease, thoughtful planning is needed.

Written by Gavin Dillingham, Program Director, Clean Energy Policy

Greenhouse gas reduction is not the only reason we should transition from fossil-fueled power plants. With almost 70% of our power reliant on water, availability of water is another reason.

Lack of water is accelerating the closure of Xcel’s 1.1 gigawatt Tolk power plant. The Texas-based plant will close by 2032, 10 years earlier than planned. The shutdown is largely due to its dependence on a rapidly depleting water source, the Ogallala Aquifer. The Aquifer has been depleted significantly over the last several decades, largely due to irrigation, as well as oil and gas activity and urban development. Due to this depletion, and the expectation that it will run out of groundwater rights to use Aquifer water, the decision was made to close the plant.

This May Be Just the Beginning
A while back I wrote an article on how the power sector has a water problem both now and well into the future. The water problem means water is too warm either flowing in or flowing out of the plant, as well as lack of water availability. Warm water or lack of water may lead to plant curtailment, plant shutdowns, or request for regulatory variances to keep plants operating. A 2017 study by NREL found that between 2000 and 2015 there were 43 water-related incidents.

The primary conclusion to be drawn from my “water problem” article is that although we see some significant movement to non-water cooled systems, such as PV solar, wind, and battery storage, a good portion of our grid will continue to rely on water-cooled thermo-electric plants well in the future. We see a significant uptick in renewable energy in both Outlooks, some justifiably argue that the uptick in renewables will likely be greater, but that is a discussion for another article. We also see continued growth of natural gas plants and a decent amount of nuclear and coal staying on the grid. With the recent FERC ruling related to PJM’s capacity market, if upheld, coal may not see as great of a decline as projected. The key point is that a good bit of thermo-electric power plants will likely remain online, and thus, water remains a significant issue.

The possibility that much of our power will be provided by highly water-dependent power plants is problematic when looking at the most recent National Climate Risk Assessment (NCA4). The assessment concludes that we should anticipate higher water temperatures and increased intensity of droughts. The NCA4 states that “U.S. power plants rely on a steady supply of water for cooling, and operations are expected to be affected by changes in water availability and temperature increases.” Further, a recent study in Nature Climate Change, finds that most of the thermo-electric plants are in areas where climate models indicate less precipitation.

How to Lessen this Risk?
Some steps can be and have been taken to lessen this risk. These actions may include investments in plants to lessen water consumption by improving plant efficiency; building or retrofitting plants to be air cooled or, at least, a hybrid air/water cooled plant; building cooling towers to cool off effluent before reentering the water body; switching to aquifer water from surface water; and increasing capacity of upstream rivers by dredging; etc. These actions appear to be happening in plants that have had repeat issues.

Unfortunately, there has not been more widespread action to mitigate this risk. The primary reason is that all of these efforts are expensive, both in economic and political costs. Due to the cost of the investment and the uncertainty as to when there may be a temperature or water scarcity problem, investments to mitigate the future risk may not be taken. The earlier mentioned NREL article discussed adding a water price signal in the cost of electricity, but I would suggest that is a nowhere train.

To have a price signal, you need to be able to set a price. It is hard to set a price if you do not know the actual risk you are trying to mitigate. Another option is for a utility to develop a rate case to pay for resilience upgrades. However, according to NARUC, the way decisions are made by public service commissions may bias against investments in resilience. Reliability decisions are made under blue-sky conditions. Situations that impact the resilience of a system are not blue-sky conditions. They are typically rare and wide-spread events.

Resilience should be considered as an aspect of reliability which would better allow for us to more explicitly consider large scale events and costly hazards that had not been considered previously.

That is easier said than done. Resilience is difficult to measure because it is related to non-frequent events. Fortunately, improved down-scaled climate models are becoming more widely available. The climate models can assist utilities and public utility commissions to get a better idea as to the likelihood and intensity of a severe weather event. If you have a better idea as to when, where, and how intense, it is much easier to put a number on the cost of damage and the benefit of adaptation.