NewEnergyNews: TODAY’S STUDY: WATER IN THE WEST/

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

THINGS-TO-THINK-ABOUT WEDNESDAY, August 23:

  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And The New Energy Boom
  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And the EV Revolution
  • THE DAY BEFORE

  • Weekend Video: Coming Ocean Current Collapse Could Up Climate Crisis
  • Weekend Video: Impacts Of The Atlantic Meridional Overturning Current Collapse
  • Weekend Video: More Facts On The AMOC
  • THE DAY BEFORE THE DAY BEFORE

    WEEKEND VIDEOS, July 15-16:

  • Weekend Video: The Truth About China And The Climate Crisis
  • Weekend Video: Florida Insurance At The Climate Crisis Storm’s Eye
  • Weekend Video: The 9-1-1 On Rooftop Solar
  • THE DAY BEFORE THAT

    WEEKEND VIDEOS, July 8-9:

  • Weekend Video: Bill Nye Science Guy On The Climate Crisis
  • Weekend Video: The Changes Causing The Crisis
  • Weekend Video: A “Massive Global Solar Boom” Now
  • THE LAST DAY UP HERE

    WEEKEND VIDEOS, July 1-2:

  • The Global New Energy Boom Accelerates
  • Ukraine Faces The Climate Crisis While Fighting To Survive
  • Texas Heat And Politics Of Denial
  • --------------------------

    --------------------------

    Founding Editor Herman K. Trabish

    --------------------------

    --------------------------

    WEEKEND VIDEOS, June 17-18

  • Fixing The Power System
  • The Energy Storage Solution
  • New Energy Equity With Community Solar
  • Weekend Video: The Way Wind Can Help Win Wars
  • Weekend Video: New Support For Hydropower
  • Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

    -------------------

    -------------------

      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

    -------------------

    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • WEEKEND VIDEOS, August 24-26:
  • Happy One-Year Birthday, Inflation Reduction Act
  • The Virtual Power Plant Boom, Part 1
  • The Virtual Power Plant Boom, Part 2

    Tuesday, February 08, 2011

    TODAY’S STUDY: WATER IN THE WEST

    "Whiskey's for drinkin' an' water's for fightin'," they say in the West. The report outlined below offers some insight into how valuable water in the West is becoming and how imminent new fighting over it is, as Western populations rise and the climate heats.

    A recent book about climate change (review coming Friday) predicts that drought will have a much more significant impact on human populations than the more-heralded sea level rise. Floods, the book foresees, will kill tens of thousands, while lack of water will kill millions.

    The fight for water rights is celebrated in the West's archetypal movies, from
    Red River to Chinatown. Today's monied continue to spend to accumulate those rights. It is said the dirty secret behind oil and gas entrepreneur T. Boone Pickens' toying with the Texas wind industry is his aspiration to take over water rights there.

    It appears that, along with the global climate, the epic struggle for ownership of water is heating up.


    Every Drop Counts; Valuing the water used to generate electricity
    January 2011 (Western Resource Advocates)

    Executive Summary

    Water has tremendous value — people, crops, industry, and the environment all rely on this limited resource. In the arid and semi-arid West, the value of water is even more pronounced, rising precipitously in times of drought and scarcity. Climate change models project increased rates of evapotranspiration throughout the West, more severe droughts, and reduced runoff in the Colorado River. Accordingly, the value of water in the Southwest will continue to rise.

    In 2005, power plants in six states — Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming — consumed an estimated 395,000 acre-feet (AF) of water. These plants impact our region’s rivers and aquifers, and tie up water that could meet growing urban, agricultural, or environmental needs.

    Electric utilities’ choices can have vastly different impacts on water resources. A wet-cooled coal plant, for example, typically uses three times as much water as a combined-cycle gas plant; wind turbines, solar photovoltaic panels, and energy efficiency use no water; and employing dry cooling in a thermoelectric power plant can reduce water use by 90%. Yet most electric utilities and regulators do not adequately consider water in their future resource plans. Electric utilities typically appropriate or purchase water rights for new thermoelectric power plants, but the cost of these water rights does not reflect the opportunity cost of water use over the life of the power plant — 40 to 50 years or longer.

    click to enlarge

    While the value of water is highly varied, it is not zero. This report attempts to develop a range of values of water for use in electric resource planning. Western Resource Advocates (WRA) analyzed the prices paid for water by the three different sectors that compete with power plants: municipal, agricultural, and environmental (Figure ES 1). In addition, we assessed the authority of regulators in the six states to consider water in evaluating utilities’ electric resource plans. We found that, across the region, the degree to which water influences regulators’ and utilities’ electric resource planning decisions varies significantly.

    click to enlarge

    Municipal Values

    Cities have—by far—the highest willingness (and ability) to pay for water. WRA analyzed market-based transfers, municipal “tap” fees, and the cost of new water supply projects to identify the cost of water for municipalities. The values vary considerably between data sources, but the trends are consistent: Coloradans, particularly along the Front Range, have the most expensive water, and residents in Wyoming and Utah — where water is generally less (economically) scarce — have the cheapest water (Figure ES 1). Of note, the cost of water is notably different from the value of water. The cost, or price, likely forms the lower bound of the value of water, particularly for cities. Future trends of municipal water values are important. In Colorado, water prices rose precipitously in the early 2000s, as urban populations swelled along Colorado’s Front Range and severe drought impacted water supplies (Figure ES 2). This history provides valuable insight into future values across the region, as population growth continues and climate change reduces available supplies.

    click to enlarge

    Agricultural Values

    Increasingly, cities and power plants are turning to the agricultural sector to meet their water needs. As in other sectors, the value of water for agricultural use varies tremendously, depending on the scarcity of the resource, the value of the commodity grown, and the productivity of the agricultural land, among other factors. To estimate a value of water for agriculture, WRA analyzed several sources of data, including, among others, the price of water rights purchased by farmers through market-based transactions, the price farmers pay for off-farm sources of water, and differences in net farm revenues garnered from irrigated crops versus dryland crops.

    The median price farmers paid for permanent water transfers ranges from $16 per acre-foot per year ($16/AF/yr) in Wyoming to $153/AF/yr in Colorado (annualized costs), much lower than prices paid by municipalities (Figure ES 1). The range of transfer prices is large, especially in Colorado, where annualized costs exceeded $1,000/AF/yr in several instances. Importantly, our analysis focused solely on the monetary price of water for agriculture and does not reflect important non-monetary values, such as the value of rural communities and lifestyles, the value of open, undeveloped space, and the value of a local food supply. The full value of water would include these non-monetary values, as well as the indirect effects that water transfers can have on the regional economy, such as depleting the local tax base or reducing demand for agriculture-related industries.

    click to enlarge

    Environmental Values

    Leaving water instream provides a host of benefits: It supports recreation, sustains healthy ecosystems, improves water quality, and offers aesthetic benefits. Monetizing the value of instream or environmental flows proves challenging — valuing instream flows is a relatively new practice, and estimates of the value of these flows are scarce. Outdoor recreation activities, such as fishing and whitewater rafting, provide a tremendous (and growing) source of revenue throughout western states, but attributing that income to a volume of water proves difficult. And many of the benefits of instream flows, e.g., a healthy river ecosystem, are not yet adequately measured by economic analyses.

    To estimate the value of water for environmental uses, WRA examined market-based transactions (both permanent transfers and temporary leases), non-market valuation studies, the value of instream flows to recreation, and the cost of dedicating storage space in new reservoirs to serve environmental purposes (“environmental pools”). The median and average price paid for temporary leases was below $65/AF/yr (Figure ES 1). Nevada, where sales dominated, represents the key exception, with an annualized median cost of $377/AF/yr. Other indicators, like non-market valuation studies and the revenues generated by whitewater parks, suggest an even higher value of water — as much as $545/AF/yr on certain popular rivers in Colorado.

    click to enlarge

    Integrating Water in Energy Planning

    Most electric utilities and regulators do not recognize or incorporate the agricultural, municipal, or environmental values described above when considering future resource plans. Most state public utility commissions already have the authority to consider water impacts, but, to date, many have not exercised this authority. The Colorado Public Utilities Commission (PUC) and the Arizona Corporation Commission (ACC) are two notable exceptions, and in both of those states, the major investor-owned utilities are at the forefront of integrating water into electric resource planning.

    click to enlarge

    Arizona

    The ACC and Arizona’s largest investor-owned utility, Arizona Public Service (APS), have been leaders in the West on integrating water into energy planning.

    • The ACC is currently evaluating how utilities should consider the cost of externalities, including water use, in resource plans.
    • Earlier this decade, the ACC denied permits for two proposed gas plants, based, in part, on water impacts. And, in 2009, the ACC’s siting committee weighed the water impacts of a proposed wet-cooled solar thermal plant in southwestern Arizona and voted to approve the plant.

    APS reports water use for existing facilities and proposed future resource plans, and now assumes that a new, combined-cycle natural gas plant would rely on dry cooling. In contrast, the Salt River Project (SRP), which is not regulated by the ACC, does not evaluate or report water consumption for different portfolios. Like many other electric utilities, SRP considers the cost of acquiring new water supplies in its resource planning and siting processes, but does not factor in an externality value for water-efficient sources of energy.

    click to enlarge

    Colorado

    In 2004, voters in Colorado passed the state’s first renewable energy standard, which highlights the water savings of renewables. Since then, the state’s PUC has taken several important actions:

    • It now allows utilities to evaluate and rank competitive bids for renewables based on the cost of the energy and other factors, including water use.
    • As of August 2010, the PUC will require utilities to report water consumption for existing and proposed facilities and the water intensity in gallons per megawatt-hour (gal/MWh) of resource portfolios.
    • In its 2007 decision on the resource plan of Public Service Company of Colorado (PSCo), the PUC stated that “Public Service’s proposal to address emissions … and water through their costs being imbedded in generation resource bids is an appropriate first step in factoring externalities in resource planning.”

    Colorado utilities are also integrating water into their decisions:

    • Through a competitive bid process, PSCo recently selected a dry-cooled, 280-megawatt (MW) solar thermal plant in the arid San Luis Valley, in part because of the benefits to water resources.
    • Tri-State Generation and Transmission will report water use for all existing and
    proposed facilities in its new resource planning process.

    click to enlarge

    New Mexico

    New Mexico’s Public Regulation Commission (PRC) has focused primarily on the water benefits of energy efficiency programs, with rules directing utilities to:

    • File an annual report that quantifies non-energy benefits of the energy efficiency programs.
    • Choose energy efficiency programs based on considerations that include “non-energy benefits” — low-income customer participation in utility programs and reductions in greenhouse gas emissions, air pollution, water consumption, and natural resource depletion.

    In addition to these rules, the PRC requires regulated utilities to report freshwater consumption at existing facilities, though utilities do not typically report brackish or recycled water consumption. The New Mexico PRC has not, to date, cited water as a factor influencing its decision. In fact, citizens protesting the proposed Duke Luna Energy Facility, a 600-MW gas plant, raised concerns about water impacts, but the facility project manager argued that the New Mexico State Engineer — not the PRC — has jurisdiction over water use. The PRC’s final ruling on that facility did not address impacts on water resources.

    click to enlarge

    Nevada

    The Nevada Public Utilities Commission has the regulatory authority to consider water and other environmental factors in evaluating electric utilities’ resource plans. Environmental costs (or benefits) of new supplies and demand-side management include water use, among other factors. The PUC regulations direct utilities to evaluate costs for resources sited within Nevada and those sited outside of the state, but, to date, the PUC has not evaluated the water impacts of utility resource plans.

    Although NV Energy does not report water use in its resource plans, it does model the value of water savings in its energy efficiency programs. And, according to utility representatives, NV Energy now assumes that a new, combined-cycle gas plant would rely on dry cooling.

    At the direction of the PUC, the three utilities (Southern Nevada Water Authority, NV Energy, and Southwest Gas) recently created a Demand-Side Management Collaborative, which will help coordinate efficiency programs. This collaborative offers an opportunity to find synergistic efficiency programs and enhance water, electricity, gas, and carbon savings.

    click to enlarge

    Utah

    As part of its integrated resource planning requirements, utilities in Utah must perform an analysis of environmental risk, which should include “the quantification of actual emissions as well as a range of dollar values for external costs for each acquisition strategy.” However, the Utah Public Service Commission (PSC) has rejected the idea that utilities would include these external costs in “total resource cost” calculations, while noting that environmental costs may be internalized in total resource costs in the future.

    Rocky Mountain Power (PacifiCorp) considers the value of water in its resource planning process in a very limited manner. In evaluating supply side resources, the utility considers the cost of acquiring or developing water, the annual operation and maintenance (O&M) costs associated with water, and the risk of water not being available. But the utility does not report water consumption in its resource plans (for existing facilities or proposed new facilities) and has focused more on the impacts of climate change on water and hydroelectric generation.

    Wyoming

    Wyoming does not appear to have any statutes or regulations that directly address water use by electric generation facilities.

    click to enlarge

    Recommendations

    Water use at thermoelectric power plants competes directly with the water demands of cities, people, agriculture, and environmental needs. Recently, utilities and developers have proposed building new thermoelectric power plants in rural locations, distant from municipalities. These plants would draw on water supplies that would otherwise sustain agriculture or the environment, and, in many cases, the municipal value of water is not directly relevant. However, as municipalities seek new urban water supplies, they are increasingly looking farther afield; for example, the Southern Nevada Water Authority proposes to tap water from rural White Pine County, 300 miles north of Las Vegas, where electric utilities have also proposed building two new power plants. Additionally, many of the West’s oldest, most inefficient coal plants are located in or near urban areas, and accelerating their retirement could create valuable new municipal water supplies. For example:

    click to enlarge

    • Xcel Energy’s Cherokee Station, located just north of downtown Denver, consumes almost 8,000 AF of water each year. If Xcel retired the Cherokee plant five years early and made its water available to neighboring cities, the value of the water for the five-year period would exceed $4.8 million. If Xcel generates additional energy at natural gas or other water-using thermoelectric facilities, the water use may be shifted to other rivers or other basins. In contrast, if the utility offsets the energy generated at Cherokee with energy efficiency, wind, or solar photovoltaics, the company will maximize water savings in the region.
    • The Reid Gardner Power Plant, owned by NV Energy and the California Department of Water Resources, relies on water from the Muddy River and groundwater wells in southern Nevada and consumes over 4,300 AF/yr.

    The water used to cool Reid Gardner — an estimated 4,300 AF/yr — could be transferred to the Southern Nevada Water Authority, which supplies water to cities in the Las Vegas Valley. The water value of retiring the Reid Gardner units five years early would amount to over $5 million. Currently, the extent to which the region’s electric utilities and regulators consider water varies tremendously. Utilities and regulators in Arizona and Colorado are clear leaders in considering the impacts of electricity generation on water and other environmental resources. At a minimum, utilities across the region should report water consumption for existing facilities, along with projected water consumption for different proposed portfolios, as part of their integrated resource plans.

    click to enlarge

    In considering new water-intensive power plants, utilities and regulators should assess both the value of water today and the potential value of water in the future. In areas where water is scarce today, or will likely be scarce in the next 40 to 50 years (or the lifetime of the proposed power plant), utilities and regulators should analyze the opportunity cost of using water for electricity generation. That is, regulators should evaluate the value of the foregone opportunities — continued agricultural production, municipal development, or environmental benefits. Utilities should prepare projections and sensitivity analyses, and incorporate those opportunity costs in their decisions.

    click to enlarge

    Finally, in many parts of the West, climate change is projected to reduce available water supplies and increase the likelihood and intensity of drought. In order to adapt to changing water availability, water users throughout the region will need to preserve or increase flexibility in management — committing water to a new power plant would remove some of this flexibility. Regulators and electric utilities should consider the benefits of maintaining flexibility, and the role of water-efficient forms of generation and energy efficiency as a hedge against short- or long-term drought.

    0 Comments:

    Post a Comment

    << Home