Heavy rains deluge Western hydro basins, but power forwards unmoved
PA Consulting energy markets expert Salem Esber comments on the recent heavy rains on the US west coast and impact on hydro basins.
The article notes that an “atmospheric river” of storms that hit the US West Coast the weekend of Oct. 23 delivered record heavy rain across the region, bringing mud and rock slides and cutting power to more than 108,000 customers in California as of about noon Oct. 25. The immediate pricing effects have been muted, and industry observers expressed doubt that enough water might accumulate behind hydropower dams to diminish power forwards that have strengthened along with natural gas.
In the state capital of Sacramento, for example, rainfall set a 24-hour record of 5.4 inches, breaking a 141-year-old record of 5.3 inches, according to the US National Weather Service, which also issued multiple weather bulletins for flood warnings, watches and advisories to last through early Oct. 26.
Salem said: “There’s no doubt this weekend’s weather system was a significant event – for example, lake levels at Lake Oroville have increased by over 20 feet in the past 4 days. For perspective, it only increased about 35 feet across the whole runoff seasons of both 2020 and 2021.”
He adds: “What the hydro system in California and the West really need is a sustained run of precipitation this winter that provides a good snowpack and can fill the reservoirs back to more normal levels. If this happens, there will be a material impact on gas consumption and power prices in the West for 2022, but it is too early to know if this storm will ultimately have much of an effect.”
The big drop: realising the untapped potential of water on decarbonisation goals