Dry spells can sap hydro, prompt greater reliance on fossil fuels

Drought can lead to increased greenhouse gas (GHG) emissions and heightened air pollution in the electric power sector, according to a new study posted by Resources for the Future (RFF).

It’s widely agreed that drought, like that seen in the American West in recent years, can play havoc with the public water supply.

Now, a study released Sept. 24 by Jonathan Eyer of the University of Southern California and Casey J. Wichman of RFF suggests that drought can prompt greater reliance on electricity generation from fossil fuels.

The study is titled “Does water scarcity shift the electricity generation mix toward fossil fuels? Empirical evidence from the United States.”

Because water is required to generate hydroelectricity as well as to cool conventional fossil fuel plants, increases in water scarcity can affect the type of fuels used to generate electricity.

The RFF study confirms that drought reduces hydroelectric generation, which is primarily offset by increases in electricity generation from natural gas, rather than a renewable energy source or nuclear generation. The level of carbon dioxide (CO2) emissions increases with the growing level of water scarcity.

In order to estimate the effect of water scarcity on domestic electricity production, the authors use an econometric model of monthly plant-level electricity generation levels between 2001 and 2012 for every power plant in the United States.

Their research provides empirical evidence that drought can increase CO2 emissions as well as local pollutants.

The authors go on to quantify the average social costs of water scarcity attributable to CO2 emissions increases to be $51m per state per year (2015 dollars); however, they state that “this figure is much larger for regions that rely heavily on hydropower.”

Water withdrawals by power plants are the single largest use of fresh water in the United States. This is because plants require water for electricity generation, either to turn hydroelectric turbines or to cool steam.

“Most directly, decreased water availability limits generation from hydroelectric power plants,” the authors say in the study. “Other less direct mechanisms include changes in thermal efficiency associated with higher river temperatures and higher marginal costs associated with curtailing water use.

“Additionally, water needs vary among power plants based on fuel type and characteristics such as cooling technologies and pollution abatement technologies,” according to the RFF study.

Climate change poses immediate risks to supplies of fresh water for the production of electricity as drought becomes more frequent and more severe, the authors say in the study.

The effect of water scarcity on the electricity mix and on emissions depends on the extent to which incumbent electricity generators are susceptible to changes in water supplies as well as the availability and type of alternative generation sources.

“Still, interpretation of our results for policy purposes is subject to several caveats,” say Eyer and Wichman.

“First, long-run water scarcity or abundance will affect utility decisions about the construction of new power plants, affecting both the exposure of the electricity mix to water scarcity and the marginal source of electricity generation that will offset displaced generation. Similarly, in our analysis we assume that plant generation and hydroelectric water release decisions are made myopically,” the authors note.

If water scarcity results in conservation of water, “our estimates will be overestimated at the beginning of droughts and underestimated at the end of droughts relative to the “true” hydrological production limitation. Still, to the extent that policy is concerned with the response of the electricity mix to water scarcity, the result of interest is, in fact, inclusive of conservation behavior,” the authors said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.