Capturing Energy-Water-Economy Interactions in an Integrated Modeling Framework: The Economic Impacts of Water Shortages on the Western Power Grid

Presented by Karen Fisher-Vanden: The interactions between energy, water, and land systems are poorly understood, yet have important implications for food security, reliability of electric power supply, demographic patterns, and the resilience of communities and critical infrastructure. Doing this type of work requires working on multidisciplinary teams and coupling a variety of tools including statistical tools, data products, and computational models. In this paper, we present our initial results from coupling a water balance model, power system model, and a socioeconomic model to assess the impacts of a severe water shortage in the western U.S. on the power system. Our preliminary results show that the impacts on electricity cost, electricity demand, and unserved energy are significantly higher when economic feedbacks are ignored. Allowing for these feedbacks we see that electricity demand falls in response to higher electricity costs and as a result, the amount of unserved energy is lower as well. We also find a shift in the composition of electric power generation away from coal generation to natural gas generation, since coal plants are most highly affected by the spatial location of water shortages. We also find that accounting for transmission and intertemporal constraints of the power system (which have been ignored in previous studies) result in much larger impacts on sectoral and regional output, and intra- and international trade.