Thermoelectric and Hydropower Drought Monitor and Outlook: Tools for more robust resource adequacy planning and management

The primary focus is on issues related to water for energy; specifically, how drought-impacted water supply limits the generation potential of hydropower and thermoelectric assets.

Existing Challenge: Twenty-two droughts, each causing a billion dollars or more in damages have impacted the United States since 2000. Associated water shortages resulted in over 40 instances of power plant curtailment and over $25 billion in lost hydropower revenue. However, drought contingency monitoring capabilities are not broadly available to entities that are tasked with creating resource adequacy (RA) plans that stipulate the necessary derating of hydropower and thermo-electric resources. While there are tools that recently emerged to develop power-system relevant datasets for hydropower and thermo-electric capacity deratings at the scale of the power grid there is no operational, centralized point of communication concerning potential impacts on RA across a range of power grid services (energy, capacity, ancillary services), nor an industry-vetted consensus on impact severity classification for electricity RAs during times of drought.

Near-Term Opportunity: A publicly communicated, easy-to-understand and non-business- or compliance-sensitive metric that forecasts drought impacts on thermoelectric and hydropower availability could provide more relevant support for RA estimates in times of drought. This could also aid in the coordination of drought management across all sectors (water supply, agriculture, energy, industry, environment, recreation). Additionally, the forecasts could aid in drought communication with the public, which is identified by utilities as another critical need in order to implement voluntary and mandatory water and electricity use restrictions.
Toward this need, we suggest the development of a public-facing Thermoelectric and Hydropower Drought Monitor and Outlook (THDMO) for the U.S. Such a tool needs to meet at least five criteria: (1) include weekly to seasonal thermoelectric and hydropower production forecasts that are updated monthly, (2) be probabilistic and limited to skillful horizons, (3) cover the entire United States, (4) be resolved at different scales ranging from a basin perspective (e.g., HUC4) to scales relevant to grid management (e.g., balancing authority, interconnection) while avoiding any communication of sensitive information, and (5) have vetted regional drought classifications based on the regional generation portfolio and on the sequence of decisions associated with different severity levels.

Success Measure: Four measurable successes will be realized by establishing the proposed THDMO. The first benefit includes improved scientific and power system-relevant understanding of the impact of droughts on hydropower and thermo-electric plants. This benefit involves the creation of a first-of-its-kind metric and a regionally relevant drought impact classification. The second benefit is improvement in the RAs central to power system management, as measured by the integration of the THDMO maps and expert narratives into regional adequacy assessments, such as partnerships within the NIDIS Drought Early Warning Systems and NERC seasonal reliability assessment reports. The third benefit is improved multi-sector coordination, particularly as it relates to the integration of electric sector RAs with water resource contingency planning. The fourth benefit is the implications of droughts across sectors, which is critical to engage the public in temporary voluntary and mandatory restrictions and save billions of dollars to customers by not overbuilding for exceptional yet manageable conditions.