A Drop to DrinkThe Economic Case Against Policy Prohibition of CSP Wet Cooling

Ben HaleyEnergy and Environmental Economics101 Montgomery St., 16th FloorSan Francisco, CA 94104

Agenda• Concentrating solar power and water• CEC policy on water use for cooling• Analysis• Results• Conclusions

Source: N. Blair, Concentrating Solar Deployment Systems (CSDS) – A New Model for Estimating U.S. Concentrating solar Power Market Potential

Source: EPRI, A Survey of Water Use and Sustainability in the United States with a Focus on Power Generation

Dry Cooling~80 gallons/MWh

Wet Cooling~800 gallons/MWh

Source: Congressional Research Service, Water Issues of Concentrating Solar Power (CSP) Electricity in the U.S. Southwest

County StateCSP Capacity

Factor2050

Capacity

Thousand Acre-Feet/Year Wet

Cooled

Thousand Acre-

Feet/Year Dry Cooled

County Water Use

% of County Water Use if Wet Cooled

% of County Water Use if Dry Cooled

Riverside CA 0.25 15 81 8 1,124 7% <1%Riverside CA 0.43 15 138 13 1,124 12% 1%

San Bernardino CA 0.25 15 81 8 314 26% 3%San Bernardino CA 0.43 15 138 14 314 44% 4%

Tulare CA 0.25 1.3 7 <1 2,698 <1% <1%Tulare CA 0.43 1.3 12 1 2,698 <1% <1%

Why is cooling water so important for CSP plants?• Dry cooling towers have higher

capital costs and parasitic loads• Hot, dry conditions (read: desert)

mean a large temperature difference between wet and dry bulb temperatures, and thus higher efficiency losses

• The most severe efficiency penalties occur on hot days coincident with summer peak loads

• More important for parabolic trough than power tower

CEC Siting Policy in Action• Beacon X• Genesis X• Abengoa

CEC will approve wet cooling with potable resources if: • No recycled water is available • There are no negative environmental effects

from usage (significant groundwater overdraft, etc.)

• It can be proven that dry cooling makes the project economically unsound

Policy BackgroundCalifornia Constitution (Article X, Section 2)

State Water Resources Control Board Resolution 75-58: Water Quality Control Policy on the Use and Disposal of Inland Waters Used for Power Plant Cooling

California Water Code 13050 and 13552.6

Warren-Alquist Act

2003 Integrated Energy Policy Report

NREL Solar Advisor Model (SAM)

• Solar performance model combined with a financial model

• Allows for inputs of various system characteristics (field size, turbine efficiency, etc.)

• Allows modeling of both wet and dry cooling

SAM Simulation Results Location Capacity

Factor LCOE Incremental Cost Penalty

Incremental Water Use (AF/Y)

Wet Cooling

Twenty Nine Palms AP 0.281 $0.1575 - 2151 Imperial AP 0.283 $0.1601 - 2117 Barstow-Daggett AP 0.262 $0.1684 - 2027 Chino AP 0.209 $0.2243 - 1657

Blythe-Riverside County AP 0.271 $0.1654 - 2069

March AFB 0.244 $0.1894 - 1886 Riverside Municipal AP 0.212 $0.2208 - 1682

Palm Springs International AP 0.257 $0.1742 - 1992

Dry Cooling

Twenty Nine Palms AP 0.281 $0.1674 6.3% - Imperial AP 0.283 $0.1738 8.6% - Barstow-Daggett AP 0.262 $0.1784 5.9% - Chino AP 0.209 $0.2399 7.0% -

Blythe-Riverside County AP 0.271 $0.1779 7.6% -

March AFB 0.244 $0.2041 7.8% - Riverside Municipal AP 0.212 $0.2357 6.7% -

Palm Springs International AP 0.257 $0.1869 7.3% -

$0 $500 $1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500$0.1520

$0.1540

$0.1560

$0.1580

$0.1600

$0.1620

$0.1640

$0.1660

$0.1680

$0.1700

$0.1720

LCOE Dry CooledLCOE Wet Cooled

Annual Cost of Water Volume ($/AF)

LCO

EEx. Water Cost Simulation Result-Twenty Nine Palms

Airport

ResultsLocation Cost of Water Right Cost of Committed Water Volume Annual Cost of Water Volume

Twenty Nine Palms AP $45,552 $1,518 $2,972Imperial AP $65,178 $2,173 $4,191

Barstow-Daggett AP $45,628 $1,521 $2,972Chino AP $69,092 $2,303 $4,514

Blythe-Riverside County AP $57,506 $1,917 $3,762March AFB $67,331 $2,244 $4,383

Riverside Municipal AP $66,294 $2,210 $4,328Palm Springs International AP $57,738 $1,925 $3,757

Water Transfers• 155 water transactions examined

(2000-2009) from Water Transfer Database. Values recorded in terms of “committed water volume.”

• Not a hugely active market• Compares short term and long-term

transfers on an equal basis • Uses “average committed water

volume” as a proxy for “anticipated firm committed water volume”

Water Transfers: Cost of Committed Water Volume

(2000-2009)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009$0

$500

$1,000

$1,500

$2,000

$2,500

MaximumWeighted MeanCSP Plants

$/AF

Sources: Pacific Institute, Waste Not Want NotCongressional Research Service, Water Issues of Concentrating Solar Power (CSP) Electricity in the U.S. Southwest

Conclusions• All potential CSP plants demonstrate a

higher value for water than do other users, according to recent market transactions.

• The existence of potential water conservation is not reason enough to mandate it; hindering development of CSP projects is an uneconomic water conservation strategy.

• Using potable water resources for cooling should continue to be assessed on a case-by-case basis.

• The state’s water policies, or lack thereof, make cooling water use an added uncertainty for developers.