The Role of Demand Response in Reducing Water-Related Power Plant Vulnerabilities

Abstract:

The electric sector depends on readily available water supplies for reliable and efficient operation. Elevated water temperatures or low water levels can trigger regulatory or plant-level decisions to curtail power generation, which can affect system cost and reliability. In the past decade, dozens of power plants in the U.S. have curtailed generation due to water temperatures and water shortages. Curtailments occur during the summer, when temperatures are highest and there is greatest demand for electricity. Climate change could alter the availability and temperature of water resources, exacerbating these issues. Constructing alternative cooling systems to address vulnerabilities can be capital intensive and can also affect power plant efficiencies. Demand response programs are being implemented by electric system planners and operators to reduce and shift electricity demands from peak usage periods to other times of the day. Demand response programs can also play a role in reducing water-related power sector vulnerabilities during summer months. Traditionally, production cost modeling and demand response analyses do not include water resources. In this effort, we integrate an electricity production cost modeling framework with water-related impacts on power plants in a test system to evaluate the impacts of demand response measures on power system costs and reliability. Specifically, we i) quantify the cost and reliability implications of incorporating water resources into production cost modeling, ii) evaluate the impacts of demand response measures on reducing system costs and vulnerabilities, and iii) consider sensitivity analyses with cooling systems to highlight a range of potential benefits of demand response measures. Impacts from climate change on power plant performance and water resources are discussed. Results provide key insights to policymakers and practitioners for reducing water-related power plant vulnerabilities via lower cost methods.