The document discusses integrated water management strategies for the power sector. It notes that many power plants struggled in 2012 due to warm cooling water sources. Utilities have also suffered significant financial losses from drought-related decreases in hydroelectric power generation. The document then outlines various water-related risks to power production, including flooding, water stress, and tightening regulations. It provides examples of regulatory drivers for water management, such as Section 316(b) of the Clean Water Act. Finally, it describes a 4+1 step framework for developing organizational water management strategies, including assessing risks and opportunities, aligning with broader strategies, applying solutions, and measuring impacts.
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The power water connection
3
“Many nuclear plants have struggled this
summer [2012] with cooling water sources that
approached being too warm to generate power at
full levels”, said David McIntyre, US NRC.2
One utility reported a $200 million loss caused by
the 2008 drought that resulted in hydroelectric
power generation dropping by 50%.1
75% of utilities suffered water-related business impacts
in the past five years, 100% were exposed to risks in
direct operations or supply chain. 1
1. The Carbon Disclosure Report ,2012; 2. National Geographic, August 2012
MISO had power plants shut down in the
summer of 2012 – one after its cooling
water source fell below the plant's intake
pipe, another ramped back generation
when its cooling pond became too hot.
Water demand will outstrip
supply by 40% by 2030.1
4. The world’s leading sustainability consultancy
Vested Interest: Who Cares?
4
Internal Stakeholders
• Operations
• Development
• Environmental compliance
• Legal
• Communications
• Business (P&L)
• Trade floor
• Board
• Shareholders
External Stakeholders
• Customers/Offtakers
• ISO
• PUC
• Regulators
• Downstream users
• Conservation groups
• Media
• Wall Street
• Financiers
5. The world’s leading sustainability consultancy
Water related risk for power production
• Flooding
• Water stress/scarcity
• Restricted operational permits
• Declining water quality
• Rising discharge compliance costs
• Tightening withdrawal limits
• Water efficiency requirements
• Higher water prices
• Regulatory uncertainty
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6. The world’s leading sustainability consultancy
Regulatory Drivers
6
Urgent
316 (b)
Effluent guidelines
Important and ongoing
Spill contingency (SPCC, PPC/SPR, DPCC)
NPDES permits (storm, process, nonprocess), negotiation,
and sampling
Water withdrawal docket permits
Project siting evaluations (environmental, regulatory, and
socioeconomic factors)
Thermal discharge requirements
Water sourcing
7. The world’s leading sustainability consultancy
Example: The Evolution of 316(b)
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Clean Water Act
Initial 316(b) and 316 (a) Rule
(1972)
Cooling water intakes regulated at state level with wide range or
requirements, complexity and technical rigor
Consent Decree
EPA to develop 316(b) Rule
(1995)
Phase I
Rule (2001)
Draft Phase
II Rule
(2011)
316(b) Rule withdrawn
Regulations by State
(1979)
Industry activity to evaluate gaps,
technology, alternatives and
regulatory implications
Phase II Rule >50
mgd
(2004)
Phase III
Rule
>2mgd
(2006)
Phase II /III
Rules
remanded
(2007)
Final Phase II
Rule delayed
(2012)
Industry activity to evaluate gaps,
technology, alternatives and
regulatory implications
1970s
1980s
1990s
2000s
2010s
8. The world’s leading sustainability consultancy
Safety
Compliance
Reliability
Excellence
Profitability
Operations
Development
Financing
Flood
Drought
Heat Waves
Freezing
Lawsuits
Water Matters
8
Important activities lead to the achievement of our goals.
Urgent activities demand immediate attention, can be associated with the
achievement of someone else’s goals, or with an uncomfortable problem that needs
to be resolved.
Important
Goals
Critical
Activities
InterruptionsDistractions
Importance
UrgencyLow
High
Low
High
9. The world’s leading sustainability consultancy
■ The core of ERM’s approach is our 4+1 key steps to developing
organizational IWM strategies:
Implementation Phase
Strategic Phase
Awareness
Building
Assess Risks
and Opportunities
in Water Footprint
Align with
Broader
Strategies
Apply Solutions to
Resolve Key Issues
Measure
Footprint Across
Organization
Water Management: Urgent & Important
10. The world’s leading sustainability consultancy
■ We have successfully implemented the framework globally
across a range of sectors, including:
■ The key to this success stems from recognizing the unique
sector and regional contexts of our Clients, as well as the
complexity of water issues, and using these aspects to
tailor our overarching 4+1 step framework.
• Manufacturing • Oil and Gas • Mining
• Pharmaceuticals • Electronics • Power
• Food and Beverage
Core Framework is Universal
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Understanding of water challenges can vary across departments:
development, operations, trading, all see water issues through a
different lens
■ Business risks:
■ Ability to develop
■ Access to water supply
■ Quality of water supply
■ Financier perception of risk
■ Ability to operate and meet delivery obligations:
■ Under drought conditions
■ During heat waves
■ With grey water
■ Trade risks go hand in hand with operational risks
Water Risk Assessment
12. The world’s leading sustainability consultancy
Considerations
■ Lack of availability / quality
■ Too much water (floods)
■ Public opposition to real or
perceived competition with
community needs for water
■ Litigation/ court settlements to
scale back operations
Expected state water shortages over the next decade
under average water conditions
Water Risk is a Business Challenge
If you don’t have water,
will you still
have a business?
13. The world’s leading sustainability consultancy
■ Key benefits come from identifying risks and
opportunities
■ Various levels of water footprint can be
calculated, depending on business needs
• Water risk mapping: identify which
operational/pipeline sites are most exposed
to water stress issues into the future
• Water footprint quantification: take a
purely volumetric approach
• Water footprint impacts assessment:
incorporate quantification and the impacts
of the water used
Water Footprinting
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■ Map water for a
plant, current
operating assets
fleetwide, proposed
developments
■ Prioritize actions for
improvement
Source: National Renewable Energy Laboratory. Illustration by Andy Warner.
Footprint Quantification / Water Balance
15. The world’s leading sustainability consultancy
Incorporate water into business strategy at all
levels based on costs and benefits:
Plant level
Fleet level
Development
approach
Asset acquisition
due diligence
Trade risk assessment
Shareholder/Stakeholder involvement
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Integrating Strategies; Establishing Priorities
16. The world’s leading sustainability consultancy
Confidential Client:
■ Strategic Water Principles:
• Principle 1: Base management of water impacts of our operations on a robust
understanding of the key water risks and emerging trends
• Principle 2: Identify innovative tools and technologies to address water risks
• Principle 3: Optimize water use at each site to minimize the impact on local
catchment water resources
• Principle 4: Engage openly with stakeholders, to address local water issues,
contribute to regional water policy and international approaches to sustaining global
water resources
• Principle 5: Manage the impacts of operations at a catchment level; be a steward of
these water resources
• Principle 6: Plan for changing climate and the additional water risks that may result.
Integrating Strategies: Example
17. The world’s leading sustainability consultancy
The End Goal
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Develop an operational and development
strategy that minimizes risk, leverages
opportunities
■ Understand water availability for development
pipeline and plan accordingly
■ Be prepared to seize opportunities when they
arise
■ Prepare for potential water challenges with
existing fleet
■ Communicate water risk throughout company:
operation, development, traders, legal, etc.
■ Leverage water opportunities: resilience,
predictability, brand value, cost savings
■ Broader business risk reduction
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Discussion & Questions
Peter Flaherty, PE
Senior Engineer
Water Management
615.373.3350
peter.flaherty@erm.com
Skelly Holmbeck
Energy, Oil & Gas
Performance Assurance
610.524.3578
skelly.holmbeck@erm.com