A prolonged western drought, coupled with low runoff conditions, has threatened the long-term sustainability of the Colorado River System. With some of its largest reservoirs reaching critically low conditions, the US Bureau of Reclamation (USBR) has released an emergency operations plan that focuses on increased water retention with reduced outflows during the upcoming water years. The plan highlights two reservoirs, Lakes Powell and Mead, which provide the necessary water for powering the Glen Canyon and Hoover Dams. While the water savings contributions will have substantial effects on downstream consumption, today’s Energy Market Insight will focus on how the reduction in water releases in 2023 will impact regional outlooks on hydro generation in the near-term.
Rapid declines in reservoir elevation put increased strain on dams, as they require a minimum height of water to generate electricity. For Lakes Powell and Mead, water levels are treading dangerously close to this minimum power line, and, in USBR minimum probable scenarios, may even fall below it.
Over the last 20+ years, Lakes Powell and Mead have fallen to 25% of their respective reservoir capacities with the most drastic declines seen in only the last five years. While the most probable scenario outlined by the USBR maintains adequate water levels in both reservoirs for hydro generation, the mere approach towards the minimum power line will have compounding effects on the output and efficiency of their respective dams.
Declining water levels decrease both the pressure and height at which water flows through a dam, both critical components in the energy output of its turbines. Although these reservoirs have and will likely maintain water levels above the minimum power pool in the near-term, their dams’ generation and efficiency will continue to decline as well.
From the above figures, it’s apparent how closely correlated water levels and dam efficiencies are to one another. Reduced water heights are forcing dam operators to release increasing amounts of water to yield similar historical outputs. However, further increases in water outflows may not be feasible, and as a result, overall generation will fall, which we have already started to see in the last few years.
The diminishing output of western hydro dams, like Glen Canyon and Hoover, are a call to attention, especially for those situated within the Desert Southwest region of the Western Area Power Administration (WAPA). A closer look at daily peak generation for this region reveals how deep its reliance on hydro generation runs. The graphic below shows the monthly distribution of hydro generation’s contribution during daily peak load events, with the horizontal line in the box representing the median and the two sections of the box and lines above and below the box representing the distribution’s quartiles.
Peaking at around a 90% contribution in April 2019, it’s clear how substantial the effects of the drought have been for hydropower in this region. Its rapid decline has left WAPA to look towards other sources of generation, mostly natural gas. A closer look at the peak events from this summer provides insight into what other fuels are filling in.
Natural gas generation has severely ramped up, averaging 33% of summer peak generation this year. However, wind and solar additions are driving their capacity contributions higher, peaking at a combined 27% of the generation mix on May 26th. While hydro generation continues to fall, natural gas and renewables have the potential to prevent resource planning issues for this region as it continues to navigate an unrelenting drought. With generation projected to be at a historic low this upcoming water year, BTU Analytics will continue to look to the region’s operators for how they will procure sufficient resources to meet demand going forward.