Click here to read the report from the Energy and Policy Institute (Joe Smyth). Here’s the executive summary:
Burning coal to generate electricity consumes large quantities of water, which exposes the electric utilities that operate coal plants to water supply risks. Large coal plants consume millions of gallons of water each day, which can also lead to legal disputes and conflicts with other water users, increased costs when water supplies are disrupted, and other challenges. Those water conflicts and risks are magnified in the American West, where water supplies are already scarce and increasingly threatened by persistent drought and hotter temperatures driven by climate change.
Several utilities have recently announced plans to close coal plants that they operate in order to reduce costs and meet the expectations of their customers, regulators, and investors for a cleaner power supply. Those closures will free up large quantities of water, creating potential economic and environmental benefits while also raising questions among communities, utilities, and regulators over the fate of that newly available water.
Still, many coal plants in the Western U.S. do not yet have clear closure plans, and the utilities that operate them will continue to face water supply risks and conflicts.
Recent reports by Moody’s Investors Service and BlackRock have highlighted the growing risks of climate change impacts to electric utilities and the power plants they operate, including water supply risks and drought. Major electric utilities also acknowledge those risks; in filings with the Securities and Exchange Commission, the largest electric utilities and coal plant operators in the Western United States – including Xcel Energy, PNM, Arizona Public Service Company, Pacificorp, Talen Energy, and Tri-State Generation and Transmission Association – reported that drought in the region could disrupt water supplies consumed by their coal plants. Utilities that don’t disclose risks in SEC filings, like Basin Electric and Arizona G&T Cooperatives, have nevertheless faced water supply challenges at their coal plants.
Some parties propose keeping coal plants online by installing infrastructure to capture their carbon emissions. Carbon capture infrastructure nearly doubles the water consumption of a coal plant, significantly increasing the water supply risks for companies that pursue carbon capture instead of closing coal plants.
This report explores the water supply risks facing coal plants in the American West, and the conflicts and legal disputes over water that have already arisen between communities and the utilities that operate coal plants. We show how much water each coal plant in the Western U.S. consumed in recent years, and estimate how much more water each will consume until its closure. And we discuss key water supply risks facing particular coal plants in the American West, based on documents filed with the SEC and state utility regulators, annual reports, local news articles, and correspondence with utilities in the region. Those include legal disputes over water rights between Native American communities and utilities, increased water needs of a carbon capture proposal in New Mexico, groundwater consumption by coal plants in Arizona, the impacts of drought on coal plants in Colorado, Montana, and Wyoming, and more.
Cumulatively, 30 coal plants in Arizona, New Mexico, Colorado, Utah, Nevada, Montana, and Wyoming consumed 370,555,000,000 gallons [ed. 1,137,190 acre-feet] of water between 2014 and 2018, according to data published by the Energy Information Agency (EIA). On average, that amounts to more than 76 billion gallons of water each year, or 208 million gallons [ed. 638 acre-feet] each day. Coal capacity owned by Pacificorp consumed over 102 billion gallons of water between 2014 and 2018, 27% of the total and the most of any utility in the region.
Combining coal unit water consumption data with coal unit closure dates (announced as of July 2020) shows that coal plants in the Western U.S. could consume 886 billion gallons of water between 2020 and 2040. That figure could be reduced as more utilities announce additional coal plant closures, close coal units before their scheduled retirement dates, and operate coal plants less often.
Most coal plants in the Western U.S. consume surface water, including from the Colorado River, Yellowstone River, Green River, San Juan River, Laramie River, North Platte River, Arkansas River, Yampa River, San Miguel River, Cottonwood Creek, Sevier River, Huntington Creek, Hams Fork River, and the Bighorn River.
Nine coal plants consume groundwater, including in Arizona, Colorado, New Mexico, and Nevada, a practice that is rare outside of the Southwest. Two coal plants in Colorado consume reclaimed municipal water, which reduces but does not eliminate water supply risks. Three coal plants in Wyoming use dry cooling systems instead of water-cooled systems, which reduces water consumption but increases costs and air pollution.