Implications of water constraints on electricity capacity expansion in the United States

Abstract

The development of new electricity generation capacity is constrained by water resource availability. However, the sufficiency of available water resources is rarely incorporated into the planning of electricity capacity expansion in the United States. Previous studies on the implications of water constraints on US electricity generation are limited in terms of scale and robustness. Here, we extend previous studies by including physical water constraints within a state-level model of the US energy system embedded within a global integrated assessment model (GCAM-USA) that integrates both supply and demand effects under a consistent framework. We show that water constraints have two general effects across the United States: (1) to increase the cost of electricity generation, which results in slightly reduced electrification of end-use sectors, and (2) to incentivize early retirement of water-intensive technologies before the end of their designed lifetimes, while simultaneously boosting investment in less water-dependent technologies. Our results suggest that water availability constraints may cause substantial capital stock turnover and result in non-negligible economic costs for the western United States, whereas fewer impacts may be anticipated in the eastern United States. Our work emphasizes the need to integrate water availability constraints into electricity capacity planning and highlights the state-level challenges to facilitate regional strategic resource planning. Water constraints can affect plans to expand electricity capacity. This study shows that in the United States such constraints can increase the cost of electricity generation with slightly reduced electrification of end-use sectors, and can incentivize early retirement of water-intensive technologies.