Hydropower Impacts on Electrical System Production Costs in the Southwest United States

• Published in: Energies (Basel) Vol. 11; no. 2; p. 368
• Main Authors: Bain, Dominique, Acker, Thomas
• Format: Journal Article
• Language: English
• Published: Basel MDPI AG 01.02.2018
• Subjects: bulk electric system; Climate change; Colorado River; Drought; Electricity; Electricity pricing; grid integration of solar and hydropower; Hydroelectric power; hydropower value; Impact prediction; Industrial engineering; locational marginal prices; Manufacturing engineering; Natural resources; Navajo Generating station; Operating costs; production cost modeling; Production costs; Rain; Rainfall; Retirement; Rivers; Southwestern United States; Water availability; United States > US; Colorado River
• DOI: 10.3390/en11020368
• ISSN: 1996-1073

The Colorado River is an important natural resource for the Southwestern United States. Predicted climate change impacts include increased temperature, decreased rainfall and increased probability of drought in this region. Given the large amount of hydropower on the Colorado River and its importance to the bulk electricity system, this purpose of this study was to quantify the value hydropower in operating the electrical system, and examined changes in hydropower value and electricity costs under different possible future drought conditions and regional generation scenarios. The goal was to better understand how these scenarios affect operating costs of the bulk electrical system, as well as the value of the hydropower produced, and proposed a method for doing so. The calculated value of the hydroelectric power was nearly double the mean locational marginal price in the study area, about $73 to $75 for most scenarios, demonstrating a high value of the hydropower. In general, it was found that reduced water availability increased operating costs, and increased the value of the hydropower. A calculated value factor showed that when less hydroelectric power is available, the hydropower is more valuable. Furthermore, the value factor showed that the value of hydro increases with the addition of solar or the retirement of thermal generating resources.