The marginal generation and emissions impacts of purchased hydropower: Evidence from the Colorado River Storage Project

Jesse I. Kaczmarski and Benjamin Jones

Energy Economics, 2024, vol. 138, issue C

Abstract: As the electric grid continues to modernize, utilities and regulators are continuing to emphasize low-emission, low-cost resources. While wind, solar, and storage are capacity additive targets, marketed hydropower continues to be an attractive source of reliable power for utilities. These utilities rely on hydropower as a cheaper and cleaner alternative to traditional fossil fuel generation. However, hydropower production is subject to continuously evolving ecological and regulatory constraints. Understanding the economic benefits of hydropower purchases to utilities and their customers is useful in the discourse surrounding management of hydroelectric dams. To date, there has been no work that directly examines the fossil fuel generation, emissions, and regional air quality impacts associated with hydropower purchases. In this study, we address this paucity of research by conducting a case study of a non-profit power wholesaler engaged in long-term hydropower purchase agreements in the western United States. We collect hourly generation, stack-level emissions (CO2, SO2, and NOX), and regional ground-level ozone data across a five-year period to assess how purchases of marketed hydropower effect these outcomes. We quantify the average hourly offsets of purchased hydropower, solar, and wind generation. We find that most of the purchased hydropower is passed through to other utility customers, but that overall, significant reductions in fossil fuel generation (particularly coal), emissions, and regional ozone levels occur. We conclude by approximating conservative, lower-bound health incidence benefits associated with marketed hydropower purchases. Our results are useful to policymakers, utilities, and other stakeholders for better understanding the potential benefits of marketed hydropower.

Keywords: Generation offsets; Emissions offsets; Wholesale energy markets; Electricity generation; Marketed hydropower; Federal hydropower (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:138:y:2024:i:c:s0140988324005243

DOI: 10.1016/j.eneco.2024.107816

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