The role of hydropower reservoirs in deep decarbonization policy

Abstract

This paper analyzes the role of hydropower reservoirs in the deep decarbonization of power systems. Extending previous work, this study models the impact of hydro reservoirs on optimal planning decisions. It further provides a more holistic assessment of the role and economic value of hydro reservoirs through the use of a detailed capacity expansion and dispatch model. Our model is parameterized based on the power system of New England, U.S. and the hydro-based system of Quebec, Canada. We find that expanding transmission access to hydro reservoirs reduces the need for fossil-fuel power plants that may otherwise be deployed to balance renewable intermittency. Our results show that hydro access can accelerate decarbonization by decreasing optimal gas plant capacity and generation. At levels of very deep decarbonization, reservoir hydro reduces the need for Carbon Capture and Storage. Our modeling shows how hydro reservoirs accomplish this by serving as both a short- and long-term energy storage resource. We further show that, by reducing the need for more expensive balancing technologies and by enabling a more efficient utilization of variable renewables, hydro access lowers the cost of decarbonization, and that this benefit grows non-linearly with the decarbonization target.