Influence of Deregulated Electricity Markets on Hydropower Generation and Downstream Flow Regime
Publication: Journal of Water Resources Planning and Management
Volume 138, Issue 4
Abstract
The flow regime of rivers is a complex but important measure of environmental quality and one that can be significantly impacted by conventional hydropower generation. While traditional hydropower scheduling creates a periodicity in downstream flows corresponding to seasonal and daily electricity demand patterns, deregulated electricity markets may provide financial incentives to further alter flows, as utilities respond to hourly market dynamics. This study investigates the potential for deregulated markets to impact both a hydropower utility’s revenue stream and downstream flow regimes. Six operating scenarios are explored: (1–2) full-market participation (including real-time energy), with and without flow reregulation; (3) day-ahead market only; and (4–6) run-of-river operations (ROR), with and without flood control and flow reregulation. Results suggest that, relative to a day-ahead-only scenario, the scale of any differences in flow regime resulting from full-market participation is relatively small compared to the additional revenue-generating potential of such a strategy. Implementing a run-of-river policy frequently yields “more natural” flow regimes than the day-ahead only scenario; but, in some cases these improvements are modest, and in others the ROR scenarios exacerbate deviation from unregulated flows. Regardless, the effects of implementing an ROR strategy come at a substantial cost in terms of foregone hydropower revenue.
Get full access to this article
View all available purchase options and get full access to this article.
Acknowledgments
The authors would like to thank the anonymous reviewers of this paper, whose criticism and suggestions for improvement were most welcome, as well as our funding sources: the North Carolina Department of Environment and Natural Resources, Progress Energy, and the Hydropower Research Foundation.
References
Aggarwal, S. K., Saini, L. M., and Kumar, A. (2009). “Electricity price forecasting in deregulated markets: A review and evaluation.” Int. J. Elec. Power Energy Syst., 31(1), 13–22.
Auble, G., Friedman, J. M., and Scott, M. L. (1994). “Relating riparian vegetation to present and future streamflows.” Ecol. Appl.ECAPE7, 4(3), 544–554.
Babbit, B. (2002). “What goes up, may come down.” BioScienceBISNAS, 52(8), 656–658.
Brattle Group. (2006). An evaluation of PJM’s peak demand forecasting process, The Brattle Group, San Francisco.
Butler, D. R. (1998). “Geomorphology of the lower Roanoke River floodplain. Component report from The Roanoke River Bioreserve: A preliminary assessment of flow modifications on hydrology, geomorphological processes, and vegetation.” The Nature Conservancy North Carolina Chapter, Durham, NC.
Cobb, D. T. (1990). “Impacts of unnatural, asynchronous river flooding on the habitat use and population dynamics of a wild turkey population along the Roanoke River.” Ph.D., dissertation, Dept. of Zoology, North Carolina State Univ., Raleigh, NC.
Edwards, B., Flaim, S. J., and Howitt, R. E. (1999). “Optimal provision of hydroelectric power under environmental and regulatory constraints.” Land Econ.LAECAD, 75(2), 267–283.
Energy Information Agency (EIA). (2010) “Hydropower basics.” 〈http://www.eia.doe.gov/kids/energy.cfm?page=hydropower_home-basics〉 (Jul. 30, 2010).
Gao, X., Vogel, R. M., Kroll, C. N., Poff, N. L., and Olden, J. D. (2009). “Development of representative indicators of hydrologic alteration.” J. Hydrol. (Amsterdam)JHYDA7, 374(1-2), 136–147.
Gorman, O., and Karr, J. (1978). “Habitat structure and stream fish communities.” EcologyECOLAR, 59(3), 507–515.
Graham, B., and Cannon, J. (2000). Effects of load following at Roanoke Rapids Power Station on Lower Roanoke River main stem and floodplain quality, Dominion, Richmond, VA.
Harpman, D. A. (1999). “Assessing the short-run economic cost of environmental constraints on hydropower operations at Glen Canyon Dam.” Land Econ.LAECAD, 75(3), 390–401.
Hart, P., and Poff, L. (2002). “How dams vary and why it matters for the emerging science of dam removal.” BioScienceBISNAS, 52(8), 659–668.
Hochman, E. R. (1999). “Lower Roanoke River hydroperiods: Part I. Altered hydrology and implications for forest health. Report for the Nature Conservancy.” Biology Dept., Univ. of North Carolina at Chapel Hill, Chapel Hill, NC.
Hochman, E. R. (2000). “Lower Roanoke River hydroperiods: Part II. Approaches to clarifying the affects of altered hydrology on forest health and species specific parameters. Report for the Nature Conservancy.” Biology Dept., Univ. of North Carolina at Chapel Hill, Chapel Hill, NC.
Huisman, R., and Mahieu, R. (2003). “Regime jumps in electricity prices.” Energy Econ.EECODR, 25(5), 425–434.
Jager, H., and Bevelhimer, M. (2007). “How run-of-river operation affects hydropower generation and value.” Environ. Manage.EMNGDC, 40(6), 1004–1015.
Konrad, C. E. II. (1997). “A hydroclimatological analysis of the Roanoke River. Component report from the Roanoke River bioreserve: A preliminary assessment of flow modifications. On hydrology, geomorphological processes, and vegetation.” The Nature Conservancy, North Carolina Chapter, Durham, NC.
Kotchen, M. J., Moore, M. R., Lupi, F., and Rutherford, E. S. (2006). “Environmental constraints on hydropower: An ex-post benefit-cost analysis of dam relicensing in Michigan.” Land Econ.LAECAD, 82(3), 384–403.
Lambert, J. (2001). Creating competitive power markets: The PJM model, PennWell Publishing, Tulsa, OK.
Ligon, F., Dietrich, W. E., and Trush, W. J. (1995). “Downstream ecological effects of dams.” BioScienceBISNAS, 45(3), 183–192.
Lynch, J. M. (1981). “Roanoke River Preserve design project.” North Carolina Natural Heritage Program and The Nature Conservancy, Durham, NC.
Mathews, R., and Richter, B. D. (2007). “Application of the indicators of hydrologic alteration software in environmental flow setting.” J. Am. Water Resour. Assoc.JWRAF5, 43(6), 1400–1413.
National Academy of Sciences. (2010). Electricity from renewable resources: Status, prospects, and impediments, The National Academies Press, Washington, DC.
North Carolina Climate Center. (2010). 〈http://www.nc-climate.ncsu.edu/〉 (Jul. 30, 2010).
North Carolina Dept. of Environment and Natural Resources (NCDENR). (2012). “Roanoke River Basin information & model.” 〈http://www.ncwater.org/Data_and_Modeling/Roanoke_River_Basin_Operations_Model/〉 (Apr. 16, 2012).
Nilsson, C., Jansson, R., and Zinko, U. (1997). “Long-term response of river-margin vegetation to water-level regulation.” ScienceSCIEAS, 276(5313), 798–800.
Pearsall, S. H., McCrodden, B. J., and Townsend, P. A. (2005). “Adaptive management of flows in the lower Roanoke River, North Carolina, USA.” Environ. Manage.EMNGDC, 35(4), 353–367.
PJM Interconnection. (2010). 〈http://www.pjm.com/〉 (July 30, 2010).
Poff, N. L. et al. (1997). “The natural flow regime: A new paradigm for riverine conservation and restoration.” BioScienceBISNAS, 47(11), 769–784.
Poff, N. L., and Ward, J. V. (1989). “Implications of streamflow variability and predictability for lotic community structure: A regional analysis of streamflow patterns.” Can. J. Fish. Aquat. Sci.CJFSDX, 46(10), 1805–1818.
Poff, N. L., and Zimmerman, J. K. H. (2010). “Ecological responses to altered flow regimes: A literature review to inform environmental flows science and management.” Freshwater Biol.FWBLAB, 55(1), 194–205.
Power, M. E., Sun, A., Parker, G., Dietrich, W. E., and Wootton, J. T. (1995). “Hydraulic food chain models: An approach to the study of food-web dynamics in large rivers.” BioScienceBISNAS, 45(3), 159–167.
Rice, S. K., and Peet, R. K. (1997). “Vegetation of the lower Roanoke River floodplain. Component report from The Roanoke River bioreserve: a preliminary assessment of flow modifications on hydrology, geomorphological processes, and vegetation.” The Nature Conservancy, North Carolina Chapter, Durham, NC.
Richter, B. D., Baumgartner, J. V., Powell, J., and Braun, D. P. (1996). “A method for assessing hydrologic alteration within ecosystems.” Conservat. Biol.CBIOEF, 10(4), 1163–1174.
Richter, B., Baumgartner, J., Wigington, R., and Braun, D. (1997). “How much water does a river need?” Freshwater Biol.FWBLAB, 37(1), 231–249.
Rothwell, G., and Gomez, T. (2003). Electricity economics: Regulation and deregulation. IEEE press power systems engineering series, Wiley, Hoboken, NJ.
Shields, F. D. Jr., Lizotte, R. E. Jr., Knight, S. S., Cooper, C. M., and Wilcox, D. (2010). “The stream channel incision syndrome and water quality.” Ecol. Eng., 36(1), 78–90.
Shields, F. D. Jr., Simon, A., and Steffan, L. J. (2000). “Reservoir effects on downstream river channel migration.” Environ. Conserv.EVCNA4, 27(1), 54–66.
Suen, J. P., Eheart, J. W., Herricks, E. E., and Chang, F. J. (2009). “Evaluating the potential impact of reservoir operation on fish communities.” J. Water Resour. Plnn. Manage.JWRDDC 135(6), 475–483, (Oct. 15, 2009).
Townsend, P. A. (2001). “Relationships between vegetation patterns and hydroperiod on the Roanoke River Floodplain, North Carolina.” Plant Ecol., 156(1), 43–58.
Townsend, P. A., and Walsh, S. J. (1997a). “Landcover classification and flood inundation models of the lower Roanoke River basin through remote sensing and GIS.” Component report from The Roanoke River Bioreserve: A preliminary assessment of flow modifications on hydrology, geomorphological processes, and vegetation, The Nature Conservancy North Carolina Chapter, Durham, NC.
Townsend, P. A., and Walsh, S. J. (1997b). “Roanoke River project: Database and documentation.” Component report from The Roanoke River Bioreserve: A preliminary assessment of flow modifications on hydrology, geomorphological processes, and vegetation, The Nature Conservancy North Carolina Chapter, Durham, NC.
U.S. Dept. of the Interior (DOI). (2005). “Managing water in the west: Hydropower.” Bureau of Reclamation, Power Resources Office, 11–14.
Vogel, R. M., Sieber, J., Archfield, S. A., Smith, M. P., Apse, C. D., and Huber-Lee, A. (2007). “Relations among storage, yield and instream flow.” Water Resour. Res.WRERAQ, 43(5), W05403.
Whisnant, R. B., Characklis, G. W., Doyle, M. W., Flatt, V. B., Kern, J. D. (2009). “Operating policies and administrative discretion at the john h. kerr projects.”A component of a study of operations at the John H. Kerr Project pursuant to Section 216 of Public Law 91-611, Univ. of North Carolina at Chapel Hill, Chapel Hill, NC.
Information & Authors
Information
Published In
Journal of Water Resources Planning and Management
Volume 138 • Issue 4 • July 2012
Pages: 342 - 355
Copyright
© 2012. American Society of Civil Engineers.
History
Received: Nov 11, 2010
Accepted: Aug 1, 2011
Published online: Aug 6, 2011
Published in print: Jul 1, 2012
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.