2016 California Market Hydropower Comeback
With Super Bowl 50 right around the corner, we remember one of the most thrilling comeback’s in NFL history: “The Catch” by 49er’s Dwight Clark, from Joe Montana, in the back of the end zone with less than a minute on the clock and down by 6 points. That play secured the 1982 NFC title for the 49ers. How about the emotional return by tennis great Monica Seles to win a title in 1995 after having been stabbed? Or, recall the awe-inspiring Michael Phelps comeback victory in the Beijing 2008 Olympics’ 100 meter butterfly by 0.01 seconds, after Phelps had been 7th coming off the wall at the 50 meter mark?
Most of us love comebacks. They inspire us, give us a boost in daily life, and we see that adversity can be overcome. A good comeback victory offers hope, despite the difficulties that were passed through to achieve it.
There are many different types of comebacks. There are those in sports, as mentioned above, and there are others from personal or professional aspects of life. They can even occur in nature and different business sectors or markets.
Hydropower in California is one such comeback that is developing. After four long-drought-stricken years, and a corresponding drop in hydro generation, change is in the air…literally. El Niño is contributing to a good year for California’s hydro which will affect the entire state, but particularly CAISO. Adding to the enthusiasm, El Niño is predicted to continue to impact temperature and precipitation patterns through late spring to early summer, according to experts at the National Oceanic and Atmospheric Administration (NOAA) and National Weather Service. The effects of the recent precipitation patterns have lifted the statewide average of water content in snow to 113% of normal, with the northern Sierra Nevada at 124% of average for this time of year. Optimism is building, but more rain and snow are needed to end the drought – which could take more time than just one good year of precipitation.
For California’s power market, hydropower is an important source which can significantly influence power price. However, the power produced from hydro facilities fluctuates depending on the annual precipitation patterns, mountain snow pack, and temperatures just to name a few. The Northwest Power and Conservation Council mentions, in the Sixth Power Plan, how forecasts are affected by the pattern of spring rains and the associated run off. In 2011, before the drought, hydropower contributed 21.32% of California’s total system power – nearly 42,715 gigawatt-hours (GWh). This is more than 8.3% of California’s total system power (16,470 GWh) in 2014. If El Niño continues to positively impact the rain and snowfall in California, we should “… look out for some unusual energy flows,” according to Wood Mackenzie’s Jamie Brick.
As a comeback is in the works for California’s hydropower, analysis and modeling of the market must continue. AURORAxmp facilitates excellent scenario analysis and quickly models the impacts of water as adjustments are made to assumptions. For more information on modeling impacts of hydro or other projects, please contact us .