Wednesday, January 26, 2011

Valuing the water used to generate electricity

Electric generation is one of the largest users of water yet many utilities do not even report what they use nor calculate the "opportunity cost" of water over the life of the plant, according to a new report from Western Resource Advocates, Every Drop Counts: Valuing the Water Used to Generate Electricity. The report looks at water use in six western states, including Arizona.

One way they calculate water values is to use municipal tap fees [right, based on tap fees, the price of water is highest along the Colorado Front Range and Prescott, AZ]

The report came to 3 main conclusions:
  • At a minimum, utilities across the region should report water consumption for existing facilities, along with projected water consumption for different proposed portfolios, as part of their integrated resource plans.
  • In considering new water-intensive power plants, utilities and regulators should assess the value of water today, the potential value of water in the future, and the opportunity cost of using water for power generation over the lifetime of the power plant.
  • Regulators and electric utilities should consider the benefits of maintaining flexibility, and the role of water-efficient forms of generation and energy efficiency as a hedge against short- or long-term drought.

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