The document summarizes a study analyzing the potential benefits of integrating agricultural water conservation programs with power plant operations in the Ogallala aquifer region. The study found that targeting water conservation efforts could provide economic benefits, with a benefit-cost ratio of 4.2-4.6 solely considering potential power market savings. By making more water available, conservation reduced power production costs, purchase power costs for farms, and improved grid reliability and resilience during drought conditions. The analysis used models to compare baseline, restricted water, and conservation water availability scenarios and their impacts on electricity dispatch and costs.

1. 1 | Office of Fossil Energy fossil.energy.gov
Office of
Fossil Energy
Potential Benefits Of The Integration Of
Agriculture Water Conservation Program
Activities And Power Generation
Operations
Chuck Zelek Ph.D. - Presenter
Senior Economist
US DOE Office of Fossil Energy
Less Goudarzi
Chief Executive Officer
OnLocation, Inc.
Noel Gollehon
Associate Consultant
OnLocation, Inc.
July 31, 2019

2. fossil.energy.gov2 | Office of Fossil Energy
2015 U.S. Water Use
USGS Circular 1441, 2018
Public Supply
12%
Domestic
1%
Irrigation
37%
Livestock
1%
Aquaculture
2%
Industrial
5%
Mining
1%
Thermoelectric Power
41%
Total Water Withdrawals
(fresh & Saline)
131 BGD
73%
Fresh
27%
Saline
.
Withdraw – Discharge = Consumption
100%
Fresh
131
BGD
BGD = Billion Gallons per Day
Thermoelectric power and
irrigation are over 75% of
the total withdrawals
Thermoelectric Power Generation Presents
a Significant Demand for Water in U.S

3. fossil.energy.gov3 | Office of Fossil Energy
USGS Circular 1441, 2018
Water Withdrawals within States Are Dictated by
Presence of Power Generation and Agriculture
Note that irrigation is the
driver in the west and, and
as you move east
thermoelectric power
gains in importance, but
irrigation remains
important in the east,
especially Arkansas,
Mississippi and Florida.

4. 4 | Office of Fossil Energy fossil.energy.gov
Laramie River:
River drew water
from a local aquifer
to meet its cooling
water demand
(2008)
Martin Lake: Martin
Creek was 10 feet
below its spillway. It
imported water to
offset the plunging
level (2011)
Hammond: In
serious drought,
the river flows
upstream at the
plant’s intake
pipes (2011)
Drought Events have Resulted in Energy
Water Shortages in the Past
• Energy-water collisions
have occurred on several
occasions
• Collisions will become
more frequent with
– Increased competition
from other users
– Higher temperatures
– More frequent drought

5. fossil.energy.gov5 | Office of Fossil Energy
Objectives of Study
Key Question: How can a strategy for targeting agricultural water
conservation effort provide a win-win?
Goal: Assess and align targeting of already ongoing irrigation water
efficiency improvements to areas with potential power plant
implications to determine the potential for a winning targeting strategy
for agricultural water conservation program effort

6. 6 | Office of Fossil Energy fossil.energy.gov
High Level Results
 The Analysis Indicates That The Benefit Cost Ratio For The Conservation
Program In The Ogallala Region Is About 4.2x-4.6x
 Power Production Costs Are Lower
 Purchase Power Costs To Farming Operations Are Lower
 Grid Reliability Is Increased
 Regional Grid Resilience Is Improved

7. 7 | Office of Fossil Energy fossil.energy.gov
Area of Consideration: Ogallala Regional Aquifer
• The Ogallala Regional Aquifer
underlies about 111.8 million acres
(about 175,000 square miles) in
parts of eight states.
• Several rivers flow across the cross
the aquifer’s area, the Canadian,
Arkansas, Republican, and Platte.
• While locally important water
sources, these rivers provide only
limited water for withdrawal uses
when compared to the extractions
from the aquifer.
• Water moves laterally very slowly in
the aquifer and water not extracted
remains in place for future
extractive use.

8. 8 | Office of Fossil Energy fossil.energy.gov
Water Conservation Cost
Estimates
• Based on the 2008 Farm Bill that
funded the Ogallala Aquifer
Initiative.
• Average Federal cost to reduce
water withdrawals estimated at
$90-$202 per acre-foot.
Source of Conservation Data for Ogallala Aquifer; Winston, B. and N. Gollehon, 2014,
“The Evaluation of Practice Impacts within the NRCS Ogallala Aquifer Initiative.”
Presentation at the Annual Meeting of the Soil and Water Conservation Society, July 29, 2014, Lombard Il.
Federal cost per acre-foot of reduced irrigation water
withdrawals, Ogallala Aquifer Initiative Program, 2009-2014
Agricultural Water Conservation: What Does It Cost?

9. 9 | Office of Fossil Energy fossil.energy.gov
Intersection of Power Markets and Ogallala Region
The Ogallala region includes:
 4 HUC-2 regions
171 HUC-8 regions
12,473 MW of thermal power generation capacity
219 MW of hydroelectric generating capacity
Water Sources for Power Generation:
4,975 MW of generation capacity within the region
relies on surface water
5,443 MW relies on groundwater
Remaining capacity relies on other water sources
Cooling Technology Breakdown:
8 generating units with 1,945 MW total capacity use
once-through cooling
39 generating units with 9,979 MW capacity with
recirculating cooling technology
1 generating unit with 549 MW capacity with dry
cooling technology
Of the 7 Electricity regions that intersect with the
Ogallala region, only 6 have thermal power
stations

10. 10 | Office of Fossil Energy fossil.energy.gov
National Energy Modeling System (NEMS)
NEMS was developed by EIA
• Annual Energy Outlook projections
• Congressional as well as agency requests
NEMS has been used extensively outside of EIA
• Various NGOs , trade associations, and other private sector
entities
• Program offices within DOE for R&D benefits estimation
NEMS provides annual results through 2050 with significant detail
by fuel and sector
Modular structure allows each sector to be represented by
methodology and data that fit it best
• Optimization techniques used for electricity capacity expansion
and dispatch and petroleum refining
• Extensive technology representation for many sectors
• Econometric approach for others
Energy Information Administration’s
National Energy Modeling System (NEMS)

11. fossil.energy.gov11 | Office of Fossil Energy
NETL ENERGY-WATER MODEL (NWEM)

12. 12 | Office of Fossil Energy fossil.energy.gov
Three Scenarios Evaluated
• Baseline Scenario– normal water year, sufficient water availability to
allow normal generating plant dispatch,
• Restricted Scenario– 75% reduction in surface water availability from
Baseline to all users in the HUCs within Ogallala. Based on a very rough
assessment, a 75% reduction corresponds to a 20-34% probability of
occurrence,
• Conservation Scenario – The same restricted water availability except
additional water is available from conservation measures that were
assumed in the Ogallala region.
Scenarios assuming 50% reductions and 25% reductions were also evaluated – higher probabilities of occurring
but less of an impact.

13. 13 | Office of Fossil Energy fossil.energy.gov
77.52
47.29
35.32
29.16
55.47
31.65 21.10 15.82
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
0 100,000 200,000 300,000 400,000 500,000 600,000
Million$
Conservation Water Available (acre-foot)
PC Savings In Total Dollars (Lines) and Dollars Per Acre-foot (Numbers)
Under Three Drought Scenarios
75% drought 50% drought 25% drought
$9
$16
Water Conservation Results in Lower Electricity Production Costs (PC)

14. 14 | Office of Fossil Energy fossil.energy.gov
Resulting in Lower Electricity Prices
ConservationRestricted

15. 15 | Office of Fossil Energy fossil.energy.gov
And A Shift In Dispatch Across Generating Units
Available Water From Conservation Results In
Increased Generation From Lower Cost Coal
Drought Conditions Significantly Reduce Power
Generation From Coal Units

16. 16 | Office of Fossil Energy fossil.energy.gov
Results
•The analysis indicates that the benefit cost ratio for the conservation
program in the Ogallala region is about 4.2x-4.6x when ONLY potential
power market economic savings are considered
•Power production costs are lower by reducing the need to purchase water
or power from alternative higher cost sources
•Purchase power costs to farming operations are lower improving margins
•Grid Reliability is increased by avoiding plant derating due to water
limitations
•Regional grid resilience is improved by creating a wider range of
environmental conditions (e.g., droughts) under which the power system
can meet customer requirements without local curtailments and/or price
increases

17. fossil.energy.gov17 | Office of Fossil Energy
Questions?