1. A Drop to Drink The Economic Case Against Policy Prohibition of CSP Wet Cooling Ben Haley Energy and Environmental Economics 101 Montgomery St., 16 th Floor San Francisco, CA 94104

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

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

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

5. Dry Cooling~80 gallons/MWh Wet Cooling~800 gallons/MWh

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

7. 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

8. 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

9. Policy Background California 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

10. 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

11. SAM Simulation Results

12. Ex. Water Cost Simulation Result- Twenty Nine Palms Airport

13. Results

14. 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”

15. Water Transfers: Cost of Committed Water Volume (2000-2009)

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

17. 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.