For Want of Water: Drought & Electric Power Generation
by Laylan Copelin, AUSTIN STATESMAN, January 10, 2012
Although state officials predicted they could manage during 2012, both resources are intertwined and under pressure by natural or human constraints.
In the case of water, which cools generating plants, the problem is an ongoing drought. For electricity, the question is whether low retail prices are discouraging investment in future power plants.
That two-headed dilemma has state officials debating how much government can — or should — do in a deregulated market for electricity generation.
At stake are jobs.
Sen. Leticia Van de Putte, D-San Antonio, told her colleagues that other states are watching to see whether Texas stumbles. Van de Putte said a Michigan lawmaker recently told her, “In 10 to 15 years, when you Texans are sucking dirt because you don’t have water, the jobs are coming back here.”
Water is crucial to power generation.
Plants that generate power require access to about 40 percent of the state’s water supply each year but consume only about 3 percent of that total, according to the industry. The remainder is returned to nature after it cools generators.
“While we need a lot of water, we do not consume a lot of water,” said John Fainter, president and CEO of the Association of Electric Companies of Texas.
Lauren Ross, an engineer who studied the issue for the Sierra Club, disputed that 3 percent. She said the state water board’s estimates are 10 times greater than the industry’s self-reported water usage.
“The data is not reliable,” Ross testified. “We don’t have good measures of the water we need for electric generation.”
Whatever the percentage is, a longtime utility executive said the power industry ties up a large amount of water that could be used for other purposes.
“The future needs to belong to power that doesn’t need water,” said S. David Freeman, who has 40 years of experience managing utilities, including the Tennessee Valley Authority and the Lower Colorado River Authority.
It won’t be easy to change the fuel mix for generating electricity.
Coal and nuclear energy, the two thirstiest fuels, accounted for 60 percent of the electricity generated last year in Texas. Although Texas leads the nation in wind-generated electricity, it accounted for only 8.5 percent of last year’s power generation. Solar remains negligible for large generators.
Water usage for natural gas, which generated 40 percent of last year’s power supply, depends on whether it uses older steam technology or a gas-driven turbine.
If the drought continues beyond 2012, it could force shutdowns or reductions for some generators.
“Risks of water scarcity to the power sectors are real, severe and expensive,” University of Texas professor Michael Webber said.
He said the state could encourage the electricity industry to move to a drought-proof system using more natural gas, wind and solar. His suggestions ranged from the state buying generators’ water rights, so they could afford to retrofit their plants with air coolers, to charging for emissions of nitrogen oxide, which would favor options other than coal.
He admitted some of his proposals are controversial.
Fainter, the industry spokesman, said the escalating price of scarce water will drive innovation in cooling technologies, as well as possibly changing the mix of generating fuels.
The state’s dwindling electricity reserves complicate switching fuels for generation.
Electricity use was up 5 percent last year. And the prospect of just two older coal-fired plants shutting down because of new federal air rules had state officials predicting that power reserves would be too close for comfort. The courts have put the rules temporarily on hold.
The state already plans to pay for old plants, mothballed because they aren’t competitive or pollute, to help on summer days with the highest electricity demand.
Sen. Kirk Watson, D-Austin, said state leaders should be planning for how to generate more electricity in the deregulated market, as well as promoting conservation.
Donna Nelson, chairwoman of the Public Utility Commission of Texas, said the regulatory agency is reluctant to interfere with the free market.
“We’re not doing anything to send signals to build one kind of facility over another,” she said.
Watson argued that the state is already intervening in the market when it orders mothballed plants to fire up. He said the state should have an energy plan but said he can’t even get a hearing for his proposals. [Read rest of story]