U.S. West Coast droughts and heat waves exacerbate pollution inequality and can evade emission control policies.

Droughts reduce hydropower production and heatwaves increase electricity demand, forcing power system operators to rely more on fossil fuel power plants. However, less is known about how droughts and heat waves impact the county level distribution of health damages from power plant emissions. Using California as a case study, we simulate emissions from power plants under a 500-year synthetic weather ensemble. We find that human health damages are highest in hot, dry years. Counties with a majority of people of color and counties with high pollution burden (which are somewhat overlapping) are disproportionately impacted by increased emissions from power plants during droughts and heat waves. Taxing power plant operations based on each plant's contribution to health damages significantly reduces average exposure. However, emissions taxes do not reduce air pollution damages on the worst polluting days, because supply scarcity (caused by severe heat waves) forces system operators to use every power plant available to avoid causing a blackout.

Evaluating the Financial Vulnerability of a Major Electric Utility in the Southeastern U.S. to Drought under Climate Change and an Evolving Generation Mix.

There is increasing recognition of the vulnerability of electric power systems to drought and the potential for both climate change and a shifting generation mix to alter this vulnerability. Nonetheless, the considerable research in this area has not been synthesized to inform electric utilities with respect to a key factor that influences their decisions about critical infrastructure: financial risk for shareholders. This study addresses this gap in knowledge by developing a systems framework for assessing the financial exposure of utilities to drought, with further consideration of the effects of climate change and a shifting generation mix. We then apply this framework to a major utility in the Southeastern U.S. Results suggest that extreme drought could cause profit shortfalls of more than $100 million if water temperature regulations are strictly enforced. However, even losses of this magnitude would not significantly impact returns for shareholders. This may inadvertently reduce pressure internally at utilities to incorporate drought vulnerability into long-term strategic planning, potentially leaving utilities and their customers at greater risk in the future.

Using life cycle assessment and techno-economic analysis in a real options framework to inform the design of algal biofuel production facilities.

This study investigates the use of "real options analysis" (ROA) to quantify the value of greater product flexibility at algal biofuel production facilities. A deterministic optimization framework is integrated with a combined life cycle assessment/techno-economic analysis model and subjected to an ensemble of 30-year commodity price trajectories. Profits are maximized for two competing plant configurations: 1) one that sells lipid-extracted algae as animal feed only; and 2) one that can sell lipid-extracted algae as feed or use it to recover nutrients and energy, due to an up-front investment in anaerobic digestion/combined heat and power. Results show that added investment in plant flexibility does not result in an improvement in net present value, because current feed meal prices discourage use of lipid-extracted algae for nutrient and energy recovery. However, this study demonstrates that ROA provides many useful insights regarding plant design that cannot be captured via traditional techno-economic modeling.

Evaluating the relative impacts of operational and financial factors on the competitiveness of an algal biofuel production facility.

Algal biofuels are becoming more economically competitive due to technological advances and government subsidies offering tax benefits and lower cost financing. These factors are linked, however, as the value of technical advances is affected by modeling assumptions regarding the growth conditions, process design, and financing of the production facility into which novel techniques are incorporated. Two such techniques, related to algal growth and dewatering, are evaluated in representative operating and financing scenarios using an integrated techno-economic model. Results suggest that these techniques can be valuable under specified conditions, but also that investment subsidies influence cost competitive facility design by incentivizing development of more capital intensive facilities (e.g., favoring hydrothermal liquefaction over transesterification-based facilities). Evaluating novel techniques under a variety of operational and financial scenarios highlights the set of site-specific conditions in which technical advances are most valuable, while also demonstrating the influence of subsidies linked to capital intensity.

The impacts of wind power integration on sub-daily variation in river flows downstream of hydroelectric dams.

Due to their operational flexibility, hydroelectric dams are ideal candidates to compensate for the intermittency and unpredictability of wind energy production. However, more coordinated use of wind and hydropower resources may exacerbate the impacts dams have on downstream environmental flows, that is, the timing and magnitude of water flows needed to sustain river ecosystems. In this paper, we examine the effects of increased (i.e., 5%, 15%, and 25%) wind market penetration on prices for electricity and reserves, and assess the potential for altered price dynamics to disrupt reservoir release schedules at a hydroelectric dam and cause more variable and unpredictable hourly flow patterns (measured in terms of the Richards-Baker Flashiness (RBF) index). Results show that the greatest potential for wind energy to impact downstream flows occurs at high (∼25%) wind market penetration, when the dam sells more reserves in order to exploit spikes in real-time electricity prices caused by negative wind forecast errors. Nonetheless, compared to the initial impacts of dam construction (and the dam's subsequent operation as a peaking resource under baseline conditions) the marginal effects of any increased wind market penetration on downstream flows are found to be relatively minor.