ChartWatch: Hydro makes up more than one-fourth of Western US, Canada resources

Hydroelectric resources are expected to provide about 6% of the overall U.S. electricity supply in 2021, but their distribution varies across the country, leaving some states and regions more dependent on a source of electricity generation that is becoming less reliable due to diminishing winter snowfall and extended summer drought.

According to the National Hydropower Association, the U.S. has about 80 GW of conventional hydro resources, about half of which are located in three states: Washington, California and Oregon. Canada has a similar amount of installed capacity, about 78 GW, according to WaterPower Canada, but the resource is more widely distributed and comprises about 60% of the country's installed generating capacity.

Conventional hydro resources provide about 26% of the current operating capacity in the Western Electricity Coordinating Council, or WECC, reliability region, which covers the Western U.S. and the Canadian provinces of Alberta and British Columbia, according to S&P Global Market Intelligence data.

More than half the electricity generated in Washington, Oregon and Idaho comes from hydro, and nearly half of Montana's in-state power generation is hydro. The vast majority of British Columbia's generating resources is hydro, and the two Canadian provinces within WECC have exported an average of 11.3 million MWh to the U.S. each year since 2016, though actual year-on-year amounts have varied.

For the first six months of this year, British Columbia entities have exported a little more than 5 million MWh to the U.S., though most of that came from Powerex Corp., the energy trading arm of provincial government-owned BC Hydro and Power Authority, according to the Canada Energy Regulator.

The Grand Coulee Dam on the Columbia River in central Washington, with a current operating capacity of 6,765 MW, is the largest power plant of any fuel source in North America and the fifth-largest hydroelectric facility in the world. Its first units were built between 1933 and 1941, during the Great Depression. A major expansion was launched in 1967 and took seven years to complete, bringing the dam to today's capacity.

Higher-than-normal temperatures and ongoing drought conditions have reduced hydro availability throughout the WECC region. Through July, Grand Coulee's output for 2021 was 15.4% below the 10-year average output for the comparable period, according to monthly data compiled by the U.S. Army Corps of Engineers. Across the Pacific Northwest, year-to-date output through July from 23 hydroelectric facilities was down 22.0% from the 10-year average for the period.

Drought is reducing the availability of hydroelectric resources across the U.S. In its July Short-Term Energy Outlook, the U.S. Energy Information Administration noted that its prediction of hydro's share of U.S. generation for 2021, at 6%, is two percentage points lower than the 2020 share due to "[e]xtreme drought conditions in the West." That's expected to carry over in 2022 when the EIA predicts hydro will make up 7% of the U.S. generation mix.

The consequences of an extended drought were borne out Aug. 5 when the California Department of Water Resources said its Hyatt hydroelectric facility at Lake Oroville had to shut down because water levels in the lake were too low. The facility, consisting of the Edward C. Hyatt units and Edward C. Hyatt PS pumped storage units, has operated since the late 1960s. The agency puts the facility's overall generating capacity at 750 MW.

"This is just one of many unprecedented impacts we are experiencing in California as a result of our climate-induced drought," the department's director, Karla Nemeth, said in a statement. "California and much of the western part of the United States are experiencing the impacts of accelerated climate change, including record-low reservoir levels due to dramatically reduced runoff this spring."

Some hydro-dependent utilities have said drought conditions are beginning to impact their power supply. Avista Corp. said during its second-quarter 2021 earnings call Aug. 4 that its headquarters city of Spokane, Wash., recorded an all-time high temperature June 29 of 109 degrees. The company's hydro resources are projected at 91% of normal, leaving a shortfall of about 50 MW on average. Quarterly earnings at the company's Avista Utilities division were down, at 11 cents per diluted share compared to 26 cents in second-quarter 2020, in part because Avista had to purchase power on the market to make up its supply shortfall.

Idacorp Inc. reduced its forecast for hydro generation availability for the remainder of 2021 and noted that its Idaho Power Co. utility exceeded its previous peak demand, set in 2017, in more than 60 separate hours over 12 days this summer.