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,'oastal Zone I nformation C' Centi J Technical Report ZONE 10" CRWR-1 13 ESTABLISHMENT OF OPERATIONAL GUIDELINES FOR TEXAS COASTAL ZONE MANAGEMENT Final Report on Example Application I: Implications of Alternative Public Policy Decisions Concerning Growth and Environment on Coastal Electric Utilities XZ C > AU CENTER FOR RESEARCH IN WATER RESOURCES Department of Civil Engineering HD The University of Texas at Austin 9685 Austin, Texas U6 T46 1974 Atmospheric Sciences (Civil Engineering) Department of Aerospace Engineering Department of Petroleum Engineering and Engineering Mechanics S It water di Water cycle studies f fluid flow sposal systems and treatment Evaporation-condensation processes Mechanicso pa lant design Environmental Health Engineering Atmospheric physics Pattern recognition and remote sensing Pollution studies Laboratories (Civil Engineering) Water chemistry laboratory T Department of Chemical Engineering Microbiology and aquatic organisms laboratory Pollution research laboratory Department of Civil Engineering Simulation of water resource systems Water treatment plant design laboratory Optimal expansion of water resource systems Water purification laboratory Hydraulics and hydrology laboratory Modeling of wastewater treatment processes Electrical Engineering Research Radioisotope laboratory Phologfammetry and mapping Laboratory Research flume and model river system Planning River and lake sampling facility Structural design Dep rtment of Mechanical Engineering Precipitation studies Transportation Development of a computer-based Ocean engineering Operations Research and Systems Analysis weather forecasting technique Thermal Pollution Studies Department of Botany COLLEGE OF ENGINEERING Biological research laboratories Brackenridge Field Station Herbarium and phytochemistry Center for Research in Water Resources Coordination of University water Department of Chemistry resources research Corrosion control Administration of grants S Department of Economics interdisciplinary research programs Use, development, and conservation of Surface chemistry Wa:e; rreesou;ces education and training 0 water resources Organic synthesis Wa e sou ces laboratory and off ice C Availability and cost of water ies Economics of water resources N =te terminal to the CDC 6600 A' Department of Geological Sciences A L T Erosion and sedimentation research U & Water pollution studies R B Department of Sociology Land use planning A E Ground water research L H Disaster study: hurricanes and floods Marine geology A Sociology of water use S V C I Department of Microbiology 1 0 t R Department of History Microbial physiology N COOPERATIVE FACILITIES A Decomposition of hydrocarbons C FOR RESEARCH IN L History of droughts Study of viruses in natural waters E WATER RESOURCES History of water supply problem S AT THE UNIVERSITY S or TEXAS C Department of Physics AT A USTI N I The University of Texas Relativity Center It t of Geography N Departmen C Study of distributional patterns of E water resources Department of Zoology S Cartographic laboratory Population biology and community structure Aquatic ecology Ecosystems analysis Brackenridge Field Station CONTRIBUTING UNITS I I hool of Architecture Bureau of Engineering Research Computation Center Bureau of Business Research Other Laboratories Equipment Research into available resources The Graduate Program in Community Processing Research Proposals . Algal Physiology Laboratory CDC 6600/6400 computers and their utilization and Regional Planning Coordination of research contracts Plant Ecology Research Laboratory XDS Sigma 5/930 computers Determination of water Isc Graduate fellowships AD/4 Analog Hybrid computer requirements !ervices Time sharing/interactive computing A Bureau of Economic Geology Local/remote batch computing Marine Science Institute School of Law . Basic geologic research Programming consulting services Organic geochernistry of Texas bays Courses on water law Lyndon B. Johnson School Land resources research near-shore Water law conferences of Public Affairs Mineral and energy research Circulation, tides and coastal currents Texas L ow Review Research in current governmental Systematic geologic, environmental, Balcones Research Center Processes of sediment transport and problems and land mapping Promotion of interdisciplinary Training programs for students shorelines Public service information approach to research projects Distribution of living organisms in and public officials State geologic survey Promotion of industrial and govcrri Service and information activity tal participation in research programs estuarine systems Facilities, equipment and services for Environmental data management systems research laboratories Marine Geophysics ESTABLISHMENT OF OPERATIONAL GUIDELINES FOR TEXAS COASTAL ZONE MANAGEMENT Final Report on EXAMPLE APPLICATION I. IMPLICATIONS OF ALTERNATIVE PUBLIC POLICY DECISIONS CONCERNING GROWTH AND ENVIRONMENT ON COASTAL ELECTRIC UTILITIES Prepared by Joe C. Moseley II Property of CSC Library for Research Applied to National Needs Program National Science Foundation Grant No. GI-3487OX U - S . DEPARTMENT OF COMMERCE NOAA CQAS,,1AL @ERVICEIQ) CENTER and 2234 SOUTH H06SON AVENUE CHABLESTON, SC' 29405-2413 Division of Planning Coordination Office of the Governor of Texas Interagency Cooperation Contract No. IAC (74-75)-0685 Coordinated through Division of Natural Resources and Environment The University of Texas at Austin This is one in a series of eight final reports describing progress on this research project for the period June 1 , 1972, to May 31 , 1974. The eight reports are: r Summary Example Application I. Implications of Economics & Land Use Alternative Public Policy Decisions Water Needs & Residuals Management Concerning Growth & Environment on I- Estuarine Modeling Coastal Electric Utilities Resource Capability Units Example Application II. Evaluation of Biological Uses Criteria Hypothetical Management Policies for the Coastal Bend Region ACKNOWLEDGMENTS This project was possible only with the support and assistance of many organizations and individuals. The over-all effort, of which this is an ad- junct, is supported by a grant from the National Science Foundation, Research Applied to National Needs Program (GI-3487OX), and by a contract from the Office of the Governor of Texas (IAC (74-75)-0685 Some of those providing particularly valuable assistance are listed below and gratefully acknowledged: Office of Information Services (Office of the Governor) - Dr. Herb Grubb and Dr. Bill Lesso Governor's Advisory Committee on Power Plant Siting, especially Howard Drew, Chairman; Fred Repper, Vice-President of Central Power and Light Company; D.E. Simmons, Vice-President of Houston Lighting and Power Company; and Charlie Cooke, Staff Director Texas Water Development Board Texas Water Quality Board Texas Coastal and Marine Council Environmental Protection Agency Corps of Engineers Also, Dr. Richard Kolf's efforts as NSF-RANN Project Officer are appreciated. The author and principal researcher of this report thanks the State of Texas for its implicit support. During all of this work he was employed by the State, first in the Governor's Office and later as the Executive Director of the Texas Coastal and Marine Council. It was principally through the continual responsibility in these two positions that he was able to focus this effort on producing a technique that can be immediately applied in the real world. i ABSTRACT The principal objective of this project was.to develop a methodology for assessing the implications of alternative public policies concerning growth and environmental control in electric power production, including a feasibility demonstration on a real-world problem. Public policies, rather than specific regulatory aspects were stressed because there is a crying need to carefully examine alternative policies for possible adverse impacts. This would be greatly preferable to heated confrontations over specific regulatory decisions, although the author realizes that the. latter approach presently prevails. This effort simultaneously examined three alternative growth policies and three alternative cooling policies in the Corpus-Christi area; this results in nine alternative futures. The growth policies ranged from zero population growth to an extrapolation of past trends. Various cooling techniques were applied to meet environmental criteria, which ranged from "continuation of present practice" to "zero-discharge" , while satisfying electrical demand for the three growth levels. The implications of these "alternative futures" upon natural resource requirements, costs, and possible socio-economic impacts were carefully displayed and assessed. All work was done emphasizing existing. techniques and real-world data. For example, the Region Seven Texas Input-Output Model proved invaluable, as did the cooperation and assistance of many influential public and private officials. Several interesting, and timely, findings.were produced. (1) It is pos- sible to develop, mostly from existing techniques and data, a methodology for examining the implications of alternative, public policy decisions. (2) Ap- plication to a real-world problem, in cooperation with leaders from the public and private sectors, revealed that (a) such an analytical method can be applied to real-world problems and the results achieve respect and consideration by decision-makers; (b) natural resource availability may override dollar costs in selecting a cooling system; and (c) the socio-economic implications of very stringent environmental protection policies can be substantial--in this case the zero-discharge policy, applied to power plants only, would annually cost the typical family one month's rent. (3) Quantitative evidence is produced to substantiate the need for carefully assessing the long-term, often pervasive, implications of public policy decisions. TABLE OF CONTENTS Page ACKNOWLEDGMENTS ABSTRACT TABLE OF CONTENTS iv LIST OF FIGURES vi LIST OF TABLES viii CHAPTER I. INTRODUCTION 1 1. 1 BACKGROUND AND NEED I 1.2 OBJECTIVES AND SCOPE 4 1.3 METHODOLOGY 10 1.4 SUMMARY OF FINDINGS 10 1.5 CONTENTS 13 CHAPTER II. THE PROBLEM 15 11. 1 GROWTH AND ENVIRONMENTAL CONFLICTS 16 11.2 THE NATIONAL ENERGY SITUATION 19 Present and Projected Energy Usage 20 Summar 26 11.3 THE U.S. WATER RESOURCE OUTLOOK 27 Pressures Against Full Development of Water Resources 27 IIA CHARACTERISTICS OF THE ELECTRIC POWER INDUSTRY 31 Summar 33 11.5 CURRENT REGULATORY PRACTICES 34 11.6 THE NEED FOR AN ANALYTICAL APPROACH 36 11.7 THE ANALYTICAL APPROACH 38 Simplified Example Using Six-Step Analytical Procedure 44 CHAPTER III. ALTERNATIVE PUBLIC POLICIES 57 III. I GROWTH POLICY 57 111. 2 ENVIRONMENTAL CONTROL POLICIES 71 111.3 ALTERNATIVE FUTURES 80 CHAPTER IV. TECHNICAL CONSIDERATIONS IN THE PRODUCTION AND MOVEMENT OF ELECTRIC POWER 81 IV. I THERMODYNAMIC REQUIREMENTS FOR POWER GENERATION 81 Principal Characteristics of the Thermo- Electrica I Process 84 Practical Bounds on Plant Efficiencies Using Ideal Thermo- dynam c Cycle 89 Summary of Current Capabilities and Prospective Improvements in Efficiency of the Generation System 92 IV. 2 COOLING ALTERNATIVES 93 Considerations in Choosing Cooling Systems 93 Heat Dissipation 95 Processes for Disposing of Waste Heat 98 Once-Through Cooling: Advantages and Disadvantages 102 iv TABLE OF CONTENTS (CONTINUED) Paqe Cooling Ponds: Advantages and Disadvantages 102 Evaporative Towers: Advantages and Disadvantage 106 Dry Cooling Towers: Advantages and Disadvantages 113 Coolinq System Costs 116 IV. 3 THE FUEL SITUATION 130 Alternative Fuel Sources 131 IV. 4 TRANSMISSION CONSTRAINTS 134 CHAPTER V. RESULTS AND ANALYSIS 138 V. I ALLOCATION OF PROJECTED REQUIREMENTS 139 V.2 COOLING COSTS REQUIRED TO SATISFY ALTERNATIVE POLICIES 149 V.3 NATURAL RESOURCE REQUIREMENTS FOR SATISFYING ALTER- NATIVE PUBLIC POLICIES 158 Consumptive Uses of Water 158 Water Throughput 163 Land Requirements 166 Energy Requirements 170 Observations Concerning Natural Resources Requirements 174 V.4 REGIONAL ECONOMIC IMPACT 175 Input-Output Impact Analysis Procedure 176 Regional Economic Structure 181 Computing the Impact of Cooling Costs 188 Households 191 Processing Sector Impact 199 Summary of Regional Economic Impact 209 CHAPTER VI. CONCLUSIONS AND RECOMMENDATIONS 211 VI.1 CONCLUSIONS 211 VI. 2 RECOMMENDATIONS FOR ACTION 214 VIA SUGGESTIONS FOR FURTHER INVESTIGATIONS 214 REFERENCES 216 v LIST OF FIGURES Paqe Figure I. 2A. Nine Alternative Futures Considered 7 Figure I. 3A. over-All Analytical Methodology 9 Figure II. 2A. Major U.S. Energy Markets 21 Figure II. 2B. Total U. S. Energy Demand, Domestic and Imported 22 Figure II. 2C. Projected U.S. Liquid Petroleum Supply by Source 24 Figure II. 2D. Historical and Projected U.S. Gas Supply by Source 25 Figure II. 7A. Generalized Analytical Procedure 40 Figure II. 7B. Hypothetical Growth Levels and Cooling Characteristics 45 Figure II. 7C. Example Costs & Water Consumption for Hypothetical Example 46 Figure II. 7D. Distribution of Power Costs and Utility Sales 47 Figure II. 7E. Hypothetical Transactions Table Before Introduction of Increase in Utility Cost so Figure II. 7F. Distribution. of Increased Electrical Cost 52 Figure II. 7G. Graphics Relating Water Consumption, Demand Level, and Cooling Method 54 Figure II. 7H. Added Economic Impact of Cooling Modifications 55 Figure III. IA. Procedure for Developing Total Energy and Peak Load Generating Requirements 59 Figure III. I B. Plots of Alternative Population Projections 61 Figure III. IC. Alternative Per Capita Energy Consumptions 63 Figure III. 1D. Annual Energy Consumption 66 Figure III. I E. Seasonal Load Distribution 67 Figure III. IF. Required Installed Generating Capacity (MW) 69 Figure III. I G. Comparison of Projections for Maximum Required Generating Capacity 70 Figure III. 3A. Nine Alternative Futures as Obtained from Three Growth Policies and Three Cooling Policies 78 Figure IIIAB. Arrangement of Alternative Future Matrices Over Time 79 Figure IV. 1 A. Principal Components in Steam Electric Power Genera- tion Plant 83 Figure IV. I B. T-S Diagram: Temperature -Entropy Relationships for an Ideal Heat Engine 86 Figure IV. 2A. Heat Transfer Across the Air-Water Interface 97 Figure IV. 2B. Closed Cycle and Once Through Cooling Systems 100 Figure IV. 2C. Typical Once Through Cooling Configurations 103 Figure IV. 2D. Typical Cool Pond Configurations 104 Figure IV. 2E. Typical Natural Draft Evaporative Cooling Towers 108 Figure IV. 2F. Typical Mechanical Draft Evaporative Cooling Towers ill Figure TV. 2 G. Simplified Heller System 114 Figure IV. 2H. Comparative Costs of Alternative Cooling Methods 124 vi LIST OF FIGURES (CONTINUED) Page Figure IV. 4A. Transmission Distances to Principal Load Center 136 Figure V. 1 A. Distribution of Generating Capacity by Cooling Technique MW/Method 143. Figure V. I B. Distribution of Annual Energy Produced by Cooling Technique Millions of KWH/YR/Method 144 Figure V. I C. Percentage Distribution by Cooling Method for Both MW and KWH/YR 145 Figure V. 1D. Percentage Shifts Among Cooling Methods Over Time for Various Cooling Policies 147 Figure V. 1E. Assignment of Generating Capacity to Cooling Processes for Various Growth Levels and Cooling Policies 148 Figure V. 2A. Capital Investment Requirements for Cooling Processes, 1970-2000 ($-Millions) 151 Figure V. 2 B. Total Cooling-Related Capital Investments ($-Millions) 152 Figure V. 2C. Components of Annual Projected Cooling Costs by Process for Each Future ($-Millions) 153 Figure V. 2D. Total Annual Cooling Related Costs for Two Select Years, 1980-2000 155 Figure V. 2E. Total Per Capita Cost Due to Cooling ($/Capita/Yr.) 156 Figure V. 3A. Consumptive Water Use (Million Gallons/Year) 159 Figure V. 3B. Annual Consumptive Water Use for Years 1980 and 2000 (Billion Gals./Yr.) 160 Figure V. 3C. Total Water Through Put (Billion Gallons/Year) 164 Figure V. 3D. Annual Water Throughput for 1980 and 2000 Billion Gallons Per Year 165 Figure V. 3 E. Land Requirement (Acres) 168 Figure V. 3F. Land Area Required in 1980 and 2000 Thousands of Acres 169 Figure V. 3 G. Annual Energy Requirements for Cooling Processes (Millions of KWH/YR.) 172 Figure V. 3 H. Energy Requirements for Cooling in 1980 and 2000 KWH Reqd./103 KWH Produced 173 Figure V. 4A. Typical Transaction Table Showing Procedure for Tracing Rate Increases 178 Figure V. 4B. Incremental Direct Increase of "Electric Bill" Resulting from Different Cooling Policies (Percents) 192 Figure V. 4C. Decrease in Household Residual Income Due to Direct Increase in "Electric Bill" Resulting from Different Cooling Policies (Percent) 194 Figure V. 4D. Total Per Family Costs Attributable to Cooling for Satisfying Various Cooling Policies ($/Family/Year) 196 vii LIST OF FIGURES (CONTINUED) Page Figure V.4E. Decrease in Household Residual Income Due to Overall Economic Impact Resulting from Different Cooling Policies 198 Figure V.4F. Effect on Residual Processing Sector to Meet Strictest Cooling Policy 203 LIST OF TABLES Paqe Table I. 2A. Classification of Principal Study Parameters 9 Table II. 6A. Satisfaction of Three Necessary Conditions by Proposed Analytical Process 39 Table III. IA. Alternative Population Projections 60 Table 111. 1 B. Projected Energy Consumption (KWH/Cap) and Required Generating Capacity (MW) Under Alternative Growth Policies 65 Table III. 2A. Summary of Alternative Cooling Policies 77 Table IV. 2 A. Principal Cooling Techniques 99 Tab le IV. 2B. Principal Design Parameters for Various Cooling Devices 101 Tab le IV. 2C. Estimated Total National Annual Cost Estimates for Thermal Pollution Abatement for 1970-1980 Under Varying Public Policies 119 Table IV. 2D. Estimated Total National Cooling Costs for 1970-1990 121 Table IV. 2E. Relative Costs of Alternative Cooling System for Nuclear Plant with @LT = 20OF 123 Table IV. 2F. Estimated Cooling Costs for Texas Coastal Areas 127 Table IV. 2 G. Estimated Resource Requirements for Alternative Cooling Techniques 129 Table V.4A. Select 1970 Demographic Data for Study Area 182 Table V. 4B. Top Ten Utility Sales (Outputs Before, and After 10 Percent Price Increase ($ x 1A, 183 Table V.4C. Top Ten Utility Purchases (Inputs), Before and After 10 Percent Price Increase ($ x 103) 185 Table V.4D. Industries Spending More Than One Percent of Budget on Electrical Energy 187 Table V.4E. Ratio of the Cost of C2 and C3 Policies to Cl Policy for Various Growth Projections 189 Vill LIST OF TABLES (CONTINUED) Paqe Table V.4F. Percent of Total Electrical Cost Attributable to Cooling Under Different Policies 190 Table V.4G. Total Annual Per Capita and Per Family Cooling-Related Costs 195 Table V.4H. Decreases in Residual Income of Processing Sectors 200 Table V.41. Electrical Energy Expenditures by Those Sectors Showing Zero or Negative Residual Incomes 208 ix CHAPTER I INTRODUCTION 1. 1 BACKGROUND AND NEED Recent years have witnessed the growth of great public concern over first the environment and then energy. The environmental movement began in the mid-1960's and was initially focused on air and water pollution, but evolved into an overall concern about the "quality of life", national growth trends, consumption or irreversible destruction of natural resources, etc. Public concerns spurred governmental entities at all levels, from city council to the Congress, to take sweeping actions, both in the reorganization of existingagencies and the anactment of tough, new laws. The private sector also responded, although somewhat more slowly. Public awareness over energy supplies is a more recent phenomenon. Although 'warnings were broadcast by industry and certain government circles, these prognostications of gloom,were largely ignored. Many regarded such dire statements only as part of a propaganda effort to relax environmental criteria and,increase prices. The principal variables being considered in this project deal directly with energy and environmental considerations; however, the economic impli- cations are continually evaluated and displayed. Without a healthy economic system, we would not be able to have either ample, affordable energy or a pleasant environment. Areal and significant cost i.s associated with attaining either. The cost of providing each increases if both are to be realized. A.confrontation between energy production and environmental preservation is inevitable, since many env ironmental constraints do make the development I 2 and utilization of energy resources, including the transformation between energy forms, both more difficult and more expensive. For example: (a) the water quality laws have made it much more difficult to locate electric power generating plants and handle heated effluents in an acceptable manner; (b) fear for the marine ecosystem has caused strong opposition to the develop- ment of offshore oil and gas reserves; (c) air regulations have precluded the use of high-sulphur fuels; and (d) public concern over environmentally destruc- tive land-use practices has limited strip-mining. Such a conflict is most unfortunate, since both a clean environment and a plentiful supply of inexpensive energy are necessary for the "quality of life" that most Americans have become accustomed to enjoying and the others strive to achieve. At the heart of this confrontation is a more basic issue, "growth". The question here is very simple: "How much can we increase in size and/or consumption and still enjoy the amenities of life when these amenities are based on a finite, dwindling supply of natural resources?" . Emotions run high on both sides of the e nergy- environment dilemma, with heated rhetoric and "black hat-white hat" accusations characterizing entrenched, adversary positions. All sides frequently use selected data to substantiate their positions. The problems are most complex, going straight to the heart of our socio-economic system, political structure, and body of natural resource science. Creative cooperation must replace adversary posi- tions and name-calling if the energy -environment dilemma is to be resolved. The project that this report describes has, as its principal goal, the development of a methodology that will utilize available information and analytical capability on one segment of the energy- environme nt dilemma in an attempt to replace accusations with valid scientific facts. In order to accomplish this goal within the available time and manpower constraints, it is necessary to focus on one part of the overall problem. Thus, this effort 3 concentrates on the implications of public policy decisions regarding growth and environmental control as they impact'on theelectric power industry in South Texas. The decision to focus on the broad implications of public policy decisions rather than to emphasize specific criteria and regulatory standards is one of the most unusual--and important--features of this entire project. Frequently much effort goes into the detailed investigations of the impact of a single facility and the establishment of particular criteria applicable to that indivi- dual facility. This is readily apparent from the reams of reports that are generated on the environmental impact of large projects such as nuclear power plants, offshore oil and gas developments, major reservoirs, etc. A large quantity of data is compiled and scrutinized by some of the best available scientists to assess the possible adverse effects and determine ways of minimizing undesirable environmental impacts. Millions of dollars are rou- tinely spent on such studies just to determine- precisely where an outfall should be located, or how close to particularly valuable environmental areas oil drilling should be allowed. Such specific technical decisions are made for the purpose of complying with some previously established public- policy, i.e. , the National Environmental Policy Act (PL 91-190) or the Water Pollution Control Act Amendments (PL 92-500), or to satisfy public opinion. It is startling, and possibly even unnerving, to comprehend how much concentrated efforts and valid scientific facts are amassed in order to comply with public policies, and yet suddenly realize that very little technical exper- tise and thought go into the development of such public policies. Or, stated another way, emotions usually control the establishment of public policies, and after such policies are established, science and technology are brought in to determine how to best achieve these policies. Regrettably, at the time such policies are established, there has usually been no serious effort to assess the overall long-range economic and environmental implications of 4 such policy decisions. What makes this approach doubly unfortunate is the fact that the data and analytical techniques (although they may be fragmented and scattered) usually exist to assess the subtle and often counter -productive implications of such policy decisions.* This does not suggest that technocrats should be allowed to set public policy, but rather that those responsible for establishing public policies should have the technocrats evaluate the impli- cations of proposed public policies before such policies are adopted.** Obviously there is a pressing need to have available a methodology for assessing the broad, long-term implications of public policy decisions relating to the energy-environment dilemma. It is critical that these assessments be made at the policy formulation stage, before such policies are adopted. If a true balancing of needs is to be achieved, it is necessary to bring scientific and technical expertise to bear at the strategic level of policy deci si on-ma king, rather than at the tactical level of program implementation. Thus, this project attempts to respond to a real, pressing need by developing and testing a pro- cedure for evaluating the implications of alternative public policy decisions. 1. 2 OBJECTIVES AND SCOPE The overall goal is to develop a methodology for assessing the long- term, and often subtle, implications of public policy decisions impacting on the energy-environment dilemma. The results obtained should have two principal effects: Many examples could be cited, such as the impact on gasoline consump- tion of automobile emission controls, added fuel consumption of dry cooling towers, etc. , but these alone constitute plenty of materials for another sizable inve stigation. ** The Congress has taken a significant step in this direction by the passage of PL 92-484 which established the Technical Assessment Act of 1972 that has the mission of assessing the scientific requirements and/or implications of laws before they are enacted. 5 1. Defuse much of the current emotional nature which results in adversary positions, and mellow such confrontations with a strong body of viable, acceptable scientific fact. Such action could greatly improve the climate for the constructive coopera- tion that will,ultimately be required to attain the necessary compromises. 2. Inform those elected and/or appointed officials who are respon- sible for establishing public policies of the probable consequences .of their actions. This should help in the adoption of policies which accomplish their stated objectives within a framework of what is realistically possible. Specifically, this investigation has the following objectives.: I to develop a methodology for. assessing the implications of - alternative public policies concerning growth and environmental control of electric power production; 2. to apply this methodology to a real-world situation in order to insure that all necessary factors have been incorporated and to demonstrate its practical applicability and utility to those decision-makers who could possibly benefit from its application to certain of their problems; and 3. to gain experience from this application and use such expertise in the second year of a broader project of which this is one element. This project has a dual role: (a) it is a stand-alone investigation of energy- environment considerations, and (b) it is a leading effort in a broader NSF-RANN and Governor's Office sponsored project aimed at evaluating a spectrum of alternative public policies and developing operational guidelines for coastal zone management. (Fruh, et al, 1972; Fruh, et al, 1973) 6 The above objectives are rather broad, and it was necessary to limit the scope and intensity of this investigation to something that could be realistically accomplished within the time and resources available. The entire project was subjected to the following scope and limitations: 1. Two public policies, growth-and environmental control, are examined, and three alternative "levels" of each are considered. This results in nine "alternative futures" for each point in time. 2. The growth policy consists,of three projected levels, one each corresponding to a very low growth rate, a very large growth rate, and an intermediate value. For easy identification these are named ZPG (Zero Population Growth), COC (Chamber of Com- merce), and INT (Intermediate). 3.. Environmental control was limited to waste heat dissipation. Three alternative policies are formulated, with each being based upon some realistically conceivable regulatory approach. They are a continuation of present practices, a zero-heat discharge to the aquatic environment (the stated 1985 goal of the 1972 amendments to the Water Pollution Cont rol Act) and an intermediate policy which would hold total heat release at current levels. Figure I. 2A shows how the alternative policies combine to produce nine alternative futures. 4. The study area is the 13-county portion of South Texas surrounding Corpus Christi that-corresponds to the Coastal Bend State Planning Region. This part of the Texas Coastal Zone was chosen for the following reasons: (a) the area is a logical compromise between the urbanized and the undeveloped regions of the Texas Coastal Zone and as such it provided all the realistic features needed for analysis yet was not hopelessly large; M institutions, both public and private, in the region expressed a willingness to cooperate; (c) the region presents a spectrum of characteristics, urban-rural settings, heavy industry, tourism, agriculture, etc. , that would COOLING, POLICY cl cp C3 0 ZPG 1 N T R ij coc ABBREVIATIONS Cl COOLING POLICY -PRESENT PRACTICE C2 -CONSTANT BTU DISCHARGE C3 - ZERO BTU DISCHARGE ZPG = GROWTH POLICY - ZERO POPULATION GROWTH INT z it -'INTERMEDIATE :C(x 2 to - CHAMBER OF COMMERCE Rij = RESPONSE CORRESPONDING TO POLICIES W- TH IS CAN BE ANY OF A NUMBER OF MEASUREJ SUCH AS WATER REQUIREMENTS, COSTS, DECREASE IN DISCRETIONARY INCOME, ETC. NINE ALTERNATIVE FUTURES CONSIDERED FIGURE 1. 2A 8 tend to make the procedure more widely applicable; (d) the region closely corresponds to the principal service area of a single, major electric utility; and (e) the institution doing the research maintains a field campus in the area. 5. The time period under consideration covered 1970 to 1990. 6. Power production and cooling technology are limited to existing methods and those currently under development that are antici- pated to be operational by the early 19 90 @ s. 7. Existing information and analytical techniques are used. Heavy reliance is,placed on the Texas Input-Output Project's Region 9 Model, and other necessary data are accumulated from a variety of available reports, and in a few instances from proprietary private sources. 8. Every effort is made to: (a) use real-world data and make no as- sumptions that would destroy the reality of the results; (b) display the results in a simple, easily understood manner; and (c) while focusing in on one particular area, keep the methodology general enough so that with new data and only minor analytical adjustments the technique can be transferred to another area and applied to similar problems. 9. Principal measures of system response to the alternative policies include quantitative evaluations of (a) resource consumption, i.e. , water use, land requirement; (b) direct dollar costs of satisfying each alternative; and (c) the indirect and induced economic impacts of such expenditures. In addition, quantitative comparisons were made considering household and commercial expenditures and other economic characteristics in an attempt to identify and assess some of the socio-economic implications of the alternative futures. 10. All study parameters can be placed into one of three categories: state, independent, or dependent variable. They are shown so classified in Table I.2A. 9 STATE VARIABLES 1. STUDY AREA 2. TIME FRAME 3. EXISTING TECHNOLOGY,cosTsaPERFORMANCE INDEPENDENT VARIABLES 1. GROWTH POLICIES A. Z PG B. INT C. Coc 2. ENVIRONMENTAL (COOLING) POLICIES A. PRESENT PRACTICE B. CONSTANT BTU DISCHARGE C. ZERO BTU DISCHARGE DEPENDENT VARIABLES 1. RESOURCE REQUIREMENTS 2. DIRECT COST (s) OF COOLING 3. INDIRECT AND INDUCED COSTS OFCOOLING A. @/FAMILY/YEAR B. PERCENT ANNUAL RENT PAYMENTS C. IMPACT ON DISCRETIONARY INCOME FOR BOTH HOUSEHOLDS AND-SELECT INDUSTRIES CLASSIFICATION OF PRINCIPAL STUDY PARAMETERS TABLE 1. 2 A 10 1.3 METHODOLOGY The general analytical procedure contained five principal steps: 1 . Postulate Alternative Public Policies - Determine policies to be studied and develop quantitative projections of each. 2. Devise Technical Base Needed - Determine what kind of techno- logical devices will be needed to satisfy the alternative policies. Establish their principal characteristics, including operating re- quirements and costs. 3. A: Quantify Alternative Futures - Develop specific, quantitative descriptions of the various futures from the policy alternatives. B: Find Technical Solutions - Determine ways to use the technology developed in step 2 in order to achieve the alternative requirements in compliance with policies. C: Compute Costs - Determine what it will cost, in resources as well as dollars, to satisfy the alternative futures. 4. Identify and Evaluate Implications - Determine what the indirect and induced effects of satisfying each alternative future will be, and assess, in broad terms, just what the socio-economic and institutional implications of such actions are apt to be. (While the other steps are purely (quantitative, this one is partially qualitative and relies heavily on intuition.) 5. Present Results - Be as non-technical as possible in the presenta- tion of the results so that non-analysts will be able to follow them. The analysis and discussions presented in later chapters all fit into the above general framework (see Figure I.3A). 1. 4 SUMMARY OF FINDINGS The detailed results are given in Chapter V and the conclusions and 2 POSTULATE DEVISE TECHNICAL ALTERNATIVE BASE NEEDED PUBLIC POLICIES 7A_ POST4JLATE ALTERNATIVE FUTURES FIND TECHNICAL SOLUTIONS :c) COMPUTE COSTS C4 IDENTIFY AND EVALUATE IMPLICATIONS PRESENT RESULTS OVER-ALL ANALYTICAL METHODOLOGY FIGURE 1. 3A 12 recommendations are presented in Chapter VI. From these two general findings stand out: 1 Application of the methodology to a real-world problem demon- strated that the technique can, if applied carefully, reveal major, long-range implications and subtle side-effects of alternative public policies. 2. Development of this procedure with its heavy reliance on available techniques and data, strongly suggests that similar investigations of the consequences of alternative public policy decisions could be conducted on a number of topics without a significant increase in basic research and data collection. Rather, what is needed is (a) a thorough understanding of the policy aspects of the problem at hand; (b) the capability to present the significant questions in a quantitative manner; (c) a sound, working knowledge of avail- able analytical techniques; and (d) presentation of results in a form that is meaningful to policy makers as well as analysts. The South Texas case study revealed several interesting facts. While some results are general, others are applicable only to that region; however, all provide interesting insight into the complex nature of the problem under consideration:. 1 The "cost" in the consumption of certain natural resources, such as water, fuel, or land, may preclude the use of certain cooling techn iques. At times, such "resource costs" may override con- ventional dollar costs in the selection of a cooling system. 2. Under certain conditions a solution to one environmental ill may create another environmental problem which is worse than the original difficulty. 3. Considering only cooling water for power plants, attainment of the "zero waste discharge" goal by 1985, as prescribed by law, will have a significant socio-economic impact on this region 13 where the average annual per capita income is only $652. For example, meeting these standards would place a total cost burden on the typical family equivalent to one month's averag e rent, namely $74.* 4. Although there will be marked economic impacts on some sectors in this area and the cost increases may drive some marginal es- tablishments out of business, no broad "inflationary waves" will be triggered. The results lend strong quantitative evidence to the argument that detailed analysis should be done of the possible implications of public policy decisions before such decisions are made. While sufficient data and analytical capability are available to assess environmental and economic impacts and every effort should be made to apply such resources now, the need for quantitative information on sociological and socio-economic aspects is particularly acute. 1. 5 CONTENTS This report is divided into six chapters in the following manner: Chapter I: Introduction covers the background, need, scope, objectives, and provides a concise statement of the principal findings. Chapter II: The Problem discusses the need to resolve the energy- environment dilemma, and explores the basic conflicts between growth and environmental protection. It culminates with the development and presentation * This total cost burden includes direct, indirect, and induced costs. Direct cost is the increase in the monthly household electric bill; indirect and induced costs reflect the increased cost that will be contained in the goods and ser- vices purchased by the household. See Chapter V for details. 14 of an analytical approach for evaluating and comparing the implications of alternative public policies. Chapter III: Alternative Public Policies explains why the policies "growth" and "power plant cooling" were chosen for the test case, and presents the details of1how the alternatives of each were developed and quan- tified. Chapter IV: Technical Considerations in the Production and Movement of Electric Power contains the information base needed to develop the charac- teristics and assumptions concerning technical aspects of heat rejection re- quirements, alternative cooling processes, resource requirements, dollar costs, reliability, etc. These are necessary in developing estimates of resource re- quirements and economic impact needed to assess the overall impact and impli- cations of the policy alternatives. Chapter V: Results and Analysi combines the quantified policies, with the appropriate technical background information, and takes them the final step, by performing the analyses which are the central objective of this in- vestigation. Chapter VI: Conclusions and Recommendations presents the principal findings of this project. CHAPTER II THE PROBLEM The resolution of the e nergy- environment dilemma is one of the major difficulties facing our society today. Almost all aspects of our daily lives are dependent upon abundant, relatively inexpensive energy in many forms. The great bulk of this energy comes--either directly or indirectly- -from limited fossil fuels which are rapidly being depleted. Simultaneously, strong drives are being mounted to clean up the environment, to eliminate pollution, and to provide an "improved quality of life" . The electric power industry--which is a multi -bi Ilion-dollar series of complex private-public entities, all operating as a regulated monopoly--is often caught in the middle of this'controversy. Undoubtedly, electricity is the cleanest energy to move and use; however, many problems can arise during generation or development of this secondary form of energy. Emotions run high on both sides of the electric power -environment conflicts, characterized by strong stances and a reluctance to compromise. Misinformation abounds; in many instances there is no adequate information base or viable method by which to compare and ultimately resolve the two positions in a realistic and reasonable fa shion. Before the conflicting positions can be resolved, it is necessary to@ develop a method for comparing the characteristics and implications of the alternatives. The objective of this chapter is to supply vital background, information on both the energy and water situations; illustrate the basic con- flicts involved; demonstrate the need for a comparative analytical approach which satisfies stringent conditions of trans formability, analytical acceptability, and interpretability; and lastly, to present a method that is capable of com- paring, in a realistic manner, the selected alternatives. 15 16 11. 1 GROWTH AND ENVIRONMENTAL CONFLICTS Our present society is the product of a long growth-oriented heritage: almost all activities in the past have stressed growth and development aimed at improving the quantity and quality of goods and services available to Americans. In pursuing this goal, the United, States has consumed copious quantities of energy of all forms, as well as most other available natural re- sources. Currently the United States consumes 27 percent of the world's total energy yet has only 3 percent of the world's population. (Shell, 1972) Electrical power is a derived or secondary form of energy which requires some primary form to operate the generation process. Of the present U.S. daily energy consumption of approximately 35 million barrel - equivalents, or 2.03 x 10 14 BTU*, about one-quarter or 8. 75 million barre I-equiva lent s (5.07 x 10 13 BTU's) are used to produce electrical power. (Shell, 1972) In the past the principal forms of primary energy used to produce electricity have been coal, natural gas and oil, supplemented with some hydro-electric genera- tion; nuclear energy has become a recent addition, but still accounts for less than 1 percent. While electricity is unquestionably the "cleanest" and most environ- mentally-acceptable form of energy to transport and use, many persons have severely attacked it on environmental grounds because of the hazards involved in the production of the primary energy source (e.g. , oil spills, strip mining) or during the conversion from the primary form to electricity (e.g. , air emissions from coal/oil fired plants, or thermal discharges from steam plants). Substantial For purposes of this report, the common conversion factor of 5.8 x 10 6 BTU per Bbl of crude oil is used. 17 disagreements have also arisen over the safety features and siting of nuclear plants. Environmental arguments against power plants often go further than just disagreements over whether or not a given plant, or its fuel supply will adversely affect the environment in direct ways: expansion of electrical generating capacity offers a good focal point for people who oppose in general all forms of additional growth. Power plants make an ideal soapbox for such confrontations. They are highly visible; almost everyone knows what a power plant looks like and can think of several good reasons why it should not.be located in any given spot. Since power is continually available to all persons in essentially unlimited quantities, it is impossible for most people to visualize how "not having just that one more plant" will adversely affect them. Some power plants have had unfavorable localized impacts, the more vivid examples being dark air emissions, strip mining abuses, oil spills, etc. Also negatively influencing public opinion are the electrical bills which come to every household in the United State s, 12 times per year, as a persistent reminder that electricity is still alive and well. Because of these highly visible characteristics the power industry, along with highways, water resources, and others, has become a common point of attack for those espousing a no-growth or a greatly reduced growth philosophy. Many of these conflicts are taken into the courtroom; currently there are more than 125 power plant related cases before the courts. (Personal Communication- Governor's Office) Controversies over power plant siting, pollution control and fuel supply have produced some of the most violent conflicts of the environmental move- ment. Typical examples include the effective blocking of all new power plants in Consolidated Edison's system, and the now-famous Calvert Cliffs Decision 18 in Maryland. Texas has not been without problems either, as witnessed by the long and indeterminate fight over Houston Lighting and Power's Cedar Bayou facility. Unfortunately, almost everyone suffers in these kinds of confrontations: the environmentalists trying to stop a project often succeed only in delaying construction for a while; the utility companies' costs go.up because of inflation and costly court battles; and the public has to wait longer to get additional power supplies, with the costs being inevitably higher. This does not imply, however, that resorting to litigation is always bad. Court actions have pro- duced some valuable benefits to the public. For example, some truly "bad" or unnecessary projects have been eliminated. In many other cases both the project developer and the involved regulatory agencies have been forced to take a more careful look at what they were doing and as a result, have often come up with alternatives or improved modifications which have made the entire venture much more acceptable to all those concerned. Current attitudes and trends indicate that these disagreements and con- frontations, while they may change in specific characteristics, are nonetheless apt to continue because of the diversity of interests and beliefs. The rapidly developing energy crisis is likely to have a stimulating impact on both groups. Those responsible for providing power will say "Let's hurry up and build more facilities. 11 Those opposing additional growth wi.11 predictably caution - "Look, we've already exceeded what we can safely and consistently provide over long periods, so let's simply learn to live with less energy." The ultimate resolution to this dilemma can only come from a general migration of public attitude toward one camp or the other. In the meantime, it would be most desirable and valuable for all persons involved, whether or not they favor proposed growth or environmental policies or a mixture of both, to have some techniques to evaluate the broad impact of various decisions on 19 the future. Such information could intelligently alter major resource allocation decisions being made today by both private enterprise and government. 11. 2 THE NATIONAL ENERGY SITUATION The United States is rapidly moving toward a major energy crisis.* Some hopeful persons prefer to call it a "gap" rather than a "crisis" , but this is merely a game of words. A society as heavily dependent on energy for all aspects of its routine functioning as ours is, cannot span a significant "gap" between the requirement for energy and its supply, without certain routine functions being substantially curtailed or even eliminated. By definition then, we are in the midst of an energy crisis. The situation has not developed overnight, though the general public awareness of the pending severe energy shortage has been triggered by a series of "enlightening" events. For the first time in the nation's peacetime history, motorists are being faced with shortages and almost certain rationing of gaso- line supplies. Also, during the summer of 1973, certain areas including Austin and San Antonio, were faced with the possibility of having to ration electric power to customers because of a shortage of the basic fuel used for generating purposes. Yet, less than a year ago, during the fall of@ 1972, voters in Austin initially defeated a bond issue to finance the city's participation in the joint construction with several other utility companies of a nuclear power plant. That same year, The University of Texas remained shut down during a severe winter cold spell because it could not get natural gas to operate its power generation and heating plants. These are only a few close-to-home examples illustrating the real nature of the problem confronting us. Webster defines crisis as "An unstable or crucial time or state of affairs; specifically: the period of strain following the culmination of a period of business prosperity when forced liquidation occurs. 20 Present and Projected Energy Usage The complexity of the "energy problem" is overwhelming when viewed in its totality. A brief presentation of the current and projected U.S. energy usage will give us a perspective on the. problem. Present energy usage in the U.S. is fact and can be thoroughly docu- mented. Attempting to project future consumption, and to identify the alterna- tive sources is substantially more difficult. Many "authorities" exist on the subject, each with its own unique characteristics and positions, but agreeing on most significant features. In this study a variety of the different broad analyses and projections were reviewed (National Petroleum Council, 1972; Winger, 1972; Shell, 1972; Governor's Advisory Committee on Power Plant Siting, 1972.) The current U.S. energy usage can be divided into five principal markets (Winger, 1972): industrial (32 percent), electric utilities (25 percent), trans- portation (24 percent), residential (14 percent), and commercial* (5 percent). These data are shown in Figure II.2A. Winger subdivides each of these market categories into finer segments and shows the trends, in growth rate and fuel sources of each subcomponent. Alternative projections of future energy demand are currently available. One of the widely used projections is presented in Figure II.2B. This figure shows the total demand for energy, and the anticipated domestic supply from all sources. It refers to total prime energy and, according to other data, about a quarter of this will continue to go for electrical power generation. All of these are markets for primary.energy only; they do not show how electric energy (a secondary form) is used among the other sectors. 21 INDUSTRIAL ELECTRIC UTILITIES 4 Em/my 6.5 x 10' DAY 1014 BTU/DAy -r x 5.0 2@ 14% ANSPORTATION TR 5 X 1014 4.87 BTU/DAY RESIDENTIAL 2.84 x 10 14 BTU/DAY COMMERCIAL 1.02 X 1014 BTU/DAY MAJOR U.S. ENERGY MARKETS BASED ON 1972 DAILY CONSUMPTION OF 2.03 x 1014 BTU /DAY (OR 35X 10 BBL/DAY) FIGURE 11. 2A 22 70- 406 60- 348 50- -290 TOTAL DEMAND IMPORT REQUIRED 40- -232 TOTAI- "M SUPPLY 30- -174 HYDRO NUCLEAR COAL 20- 116 m cn z 0 NATURAL GAS 10- -58 OIL (DOMESTIC) 0 70 75 io 85 90 TUrAL U.S. ENERGY DEMAND. DOMESTIC AND IMPORTENSHELL 1972 FIGURE ]I. 2B 23 Figure, II. 2B indicates that domestic Olil production will continue at about the present level of 10 million barrels per day; however, this assumes that all known reserves, including the Alaskan North Slope, will be used and that in- creased outer continental shelf activity will add significant new reserves. Natural gas is anticipated to decline; in fact, this decline already exists in many areas. The total contribution of coal is projected to almost double, 12 12 from the 1970 rate of 34. 8 x 10 BTU/day to 63.8 x 10 BTU/day. This prediction makes two rather significant assumptions:. first, that the great coal fields of the western U.S. will be developed; and secondly, that wide- spread use of strip mining techniques will become more acceptable. The figure indicates a 10-fold increase in the combined hydro-power and nuclear energy sector. Essentially, all of the increase will be nuclear because there are few possible hydro-power sites remaining and most of those are not likely to be developed. The great bulk of additional 1990 energy requirements would have to be met with imported supplies. While speculation is growing about liquified natural gas imports (LNG), most experts do not believe these will account for a significant percentage of the total U.S. energy demand. Thus, the only feasible alternative appears to be the importation of foreign crude, the great majority of which would come from the Persian Gulf--provided international politics permit. Figure II. 2C shows the import requirement that will be supplied by overseas crude. The crude oil is almost certain to be shipped in a new breed of "supertankers" which are beginning to ply the world's oceans since these ships offer great saving over smaller, conventional tankers. Natural gas currently provides the great bulk of the prime energy for electrical generation in the study area, and accounts for about a quarter of all U. S. generation output, has already peaked in the U. S. and is beginning to decline. Figure II.2D traces this rise and projected fall of U.S. gas pro- duction from 1955 through 1990. It also indicates possible future alternative sources for gas. 24 PROJECTED U.S. LIQUID PETROLEUM SUPPLY BY .SOURCE 32- U. S. PETROLEUM SUPPLY 28 PRODUCT IMPORTS I OVERSEAS CRUDE CANADIAN CRUDE SYNTHETIC CRUDE PRODU LOWER 48 AND SOUTH ALASKA Imp ts 24- CRUDE AND NGL U.S. ARCTIC 20 cr rr_ OVERSEAS 16- CRUDE 0 CtMADIAN CRUDE _vmTHETI C U.S. ARCTIC 8 LOWER 48. AND- SOUTH ALASKA, CRUDE 'AND N$L@ 4 0 1955 1960 1965 19TO 1975 1980 1985 1990 FIGURE II. 2C 25 HISTORICAL AND PROJECTED US GAS SUPPLY BY SOURCE 24 COAL GASIFICATION 22 N 6- FMO, 2D OIL. U.S. GAS SUPRY 18 CANADIAN 4 16 w w w [4 U.S. ARCTI 12 0 ca LOWER 48 NATURAL -j GAS PRODUCTION 8 COAL GASIFICATION 6 LNG IMPORTS SNG FROM OIL CANADIAN IMPORTS U.S. ARCTIC LOWER 48 NATURAL GAS PRODUCTION 2 AFTER NET STORAGE, FIELD, TRANSMISSION AND EXTRACTION LOSSES 0 1955 1960 1965 1970 1975 1980 1985 FIGURE 11 .2D 26 In investigating the national energy picture, Figure II.2D is a most significant illustration, highlighting a dilemma'we are facing. It shows that the U.S. gas supply is going to decline; this strongly suggests that any new plants built in the study area will not be gas-fired. Combined with the rapid depletion of crude oil and the projected increased reliance on nuclear power, it follows that all new generating facilities that will be built to satisfy the study region's electrical demand are apt to be nuclear plants. This reliance on nuclear power is particularly significant when considering cooling aspects, because nuclear plants, for safety reasons, must be operated at lower tempera- tures and pressures than fossil fueled plants, and therefore at lower overall efficiencies. Summar This brief discussion of the national energy situation underscores the following points: (a) The U.S. is entering a period when limited energy shortages are likely to be experienced by all. (b) Industry and government are striving to increase our domestic energy production capacity, but decreasing domestic supplies make it increasingly necessary to rely upon imported energy sources for the future. (c) Crude oil will form the bulk of the imports, although some LNG may be imported in limited quantities. (d) While coal gasification and synthetic natural gas (SNG) may supplement domestic natural gas and LNG to a limited degree, the overall availability of gas will decrease; the resulting increased competition for the remaining gas supplies will virtually preclude the use of natural gas as a boiler fuel within the next decade. 27 (e) The costs of all forms of energy will increase; the increase will be passed on to the consumers. 11.3 THE U.S. WATER'RESOURCE OUTLOOK This country has experienced a long and aggressive history of water re- source development and utilization. Most of the nation's major river systems have been dammed and developed for water supply, flood control, hydro-power generation, and navigation. Some of these major ventures include the Tennessee Valley Authority projects, the massive Mississippi-Missouri-Ohio waterway, and the Columbia River system. Associated benefits have been large water bodies for recreation and cooling purposes; an outcome, not as admirable, has been the availability of such waters for the deposition of liquid wastes. However, this latter situation is being eliminated. Pressures Against Full Development- of 'Water Resources Without the development of its water resources, the U. S. could not have become the nation it is today. However, in the last ten years a new change in outlook has tried to reverse the trend which prevailed throughout the first 60-odd years of the Twentieth Century. Numerous organizations, spearheaded by concerned environmental groups have begun to question the continued need for developing and damming all the nation's rivers. These opposition groups forcefully argued (1) such unrestrained develop- ment had irreversably damaged the natural environment; (2) in many instances projects had been promoted by certain special interest groups for their own immediate economic gain, with no consideration for the general public benefit, and this expenditure of large sums of federal funds for the actual profit of a few was most improper (this view was also shared by many consumer-advocate groups); (3) such projects, while they might generate much additional growth, 28 might still not be in the best national interest because size could exceed the supporting capacity of our available natural resources; and (4) that certain parts of the natural environment should be left as they are, with the program for a national system of "wild-rivers" being derived from that feeling. Other pressures have been superimposed on the public based environ- mental issues.. Congress, in passing the National Environmental Policy Act (NEPA), has made it a national policyrequirement that the environmental im- pact of all federally supported projects be determined and evaluated in compari- son to their other benefits. This means, for example, that a project proponent can no longer justify a project solely on the basis of a benefit/cost ratio greater than one. While "adverse environmental impact" has certainly caused some projects to be dropped by sponsoring agencies and resulted in others not being openly advocated, the real "key" in NEPA to stopping or at least to delaying projects has been a procedural tactic of using the courts. Anti-project forces have been most effective in obtaining injunctions based on the thesis that "a proper en- vironmental impact has not been prepared". Thus, many projects have been effectively delayed or stopped not on the substantative grounds that they would significantly damage the environment, but on a procedural ground that not all the proper factors had been examined. Thus the search for answers has shifted from the hands of the scientists, engineers,, and technicians and their laboratories and field investigations, and been put in the hands of the lawyers and the. courts. This has been the real significance of NEPA. Water policy and its role in the nation's future has also become contro- versial at the federal level. Ten scant years ago essentially all federal forces - Congressional and Executive* - were -committed to continuing water resources The Courts were not significantly involved in any policy aspects because there was only one policy - "build"; the Courts, however, did have power on matters of land acquisition/condemnation, etc. 29 development; today the policies and outlooks are now quite diver se and fre- quently conflicting. Often the env ironmenta I/con servation-re lated agencies, including those charged with fish and wildlife management may openly oppose a project that is being promoted by other federal agencies such as the Bureau of Reclamation or the Corps of Engineers. The effect has been confusion and antagonisms resulting in delays or even cancellations of projects. Federal water policy has been strongly affectedand often pre-empted by federal fiscal policy, especially under the current administration. The basic thrust has been a change in federal cost-sharing policy which reduces, or even eliminates entirely, the federal support of a project. The Water Re- sources Council's principals and standards released in 1971 were a direct move toward the termination of federal support for water projects. The Office of Management and Budget, by impounding Congressionally appropriated funds, has in effect implemented such a policy through its control of the "purse strings" . In 1968, the National Water Commission was established and given the mandate to develop a comprehensive national water policy and report back to the President and the Congress in 1973. The Commission's report, (National Water Commission, 1973) has recommended the withdrawal of the federal government from water resource development, thus placing the financial re- sponsibility for project funding on state and local governments. The Commis- sion's recommendations have drawn both sharp criticism and strong support. In general, the feelings engendered by the report can be categorized in the following manner: (1) Those interests supporting further water resource development either criticized or outright condemned the Commission's recommendations. This group included port And navigation interests, water supply/development agencies, river authorities, barge and towboat operators, irrigation 30 interests, etc. (2) Environmental groups, consumer advocates and those favoring federal spending for urban problems, generally praised the Commission's report. The controversy spawned some strange bed-fellows: while most big business opposed the report, railroad and trucking quietly supported it. At the national level there are major conflicts over whether water resource development should be done at all and, if it is done, how much, if any, of the cost should be borne by the federal government. In the past the.power industry has often depended upon such multi-purpose public works to pro- vide their cooling water; the implications then of significantly altering such policies become self-evident. Increasingly stringent federal regulations on water pollution control present another important concern in terms of future heat -di s sipation schemes for power generation. Pollution controls are apt to get "tighter" in the future, however vague they may be now. , The current crackdown began in late 1969 when Congress passed NEPA and established the Environmental Protection Agency (EPA). This move served to consolidate the old "pollution control" agencies into one "super" department. EPA began to pull together and enforce the many federal pollution control laws. The most significant new development in water pollution control has been the Water Pollution Control Amendments of 1972 (PL92-500). The 1972 amendments have many provisions; from the standpoint of the electric industry, the "zero-discharge" goal is the most compelling. The act declares it to be national policy to achieve "zero-discharges" of all pollu- tants by 1985, provided the technology is available to do so. The act is unclear as to whether or not an addition of thermal energy to a water body constitutes a "pollutant". What the possible ill effects of the thermal energy 31 additions to the water body may be poses an -even more fundamental question which should--but probably will not-- be answered first. There is no uni- formally applicable answer. In terms of the future, the implications of this uncertainty are profound. For example, planning and building new facilities that will have a zero- discharge in thermal energy to the receiving wat ers is technically conceivable, but highly impractical in terms of expense. Modifying all existing plants to meet this condition would simply be impossible. Some such plants could be modified with "add-on" cooling devices, but because of existing land uses, or water requirements, the majority would have to be abandoned and new plants constructed. The environmental assets to- be gained from such actions are quite unclear, but it is certain that the economic penalties would be great. These cost increases, coupled with costs of new fuel supplies, could con- ceivably increase the cost of electric power out of all proportion to the rate of increase of the other components of living costs. 11.4 CHARACTERISTICS OF THE ELECTRIC POWER INDUSTRY The electric power industry is one of the most unusual and diverse industries in the United States. While the many individual entities that generate and supply electrical energy do share many common problems, such as fuel supply and environmental control, they each have distinguishing individual characteristics. For that reason, any in-depth discussion of the electric power industry is far beyond the scope of this report; howeve r, 'a few of the principal characteristics are central to this study and should be considered. Utilities may be either investor-owned private corporations,, special purpose public bodies, or part of a municipal government's public utilities department. All three of these.exist in Texas. Since they all will be con- 32 fronted by the same future growth and cooling alternatives, it is not germane to this study, into which of the three categories an electric utility might fall. All are regulated monopolies which means that some public body is responsible for setting their rates. These rates allow the utility a reasonable profit after all expenses have been met. Texas is unique in that it does not have a statewide utility rate-setting commission. Instead, a utility must deal with each community within its service area and negotiates the rates on an individual basis. Regardless of how the rates are negotiated, any increased cost in power production and supply will be passed along to the consumer through increased rates. This means that in the future any thermal pollution control equipment that the utilities might be required to use will be ultimately paid for by the consumers. A common characteristic of most utilities is that, as regulated monopo- lies, they are required by law to meet all power demands in their service area. If a customer says he wants a given quantity of electricity, the utility is bound to provide that amount. If the utility does not comply, then it may be taken to court. Utilities have often been criticized by environmental groups for promoting the increased use of electricity, yet the utilities' only alterna- tive to expanding is to reverse their public relations efforts and try to dis- courage, rather than encourage additional uses and to promote energy conserva- tion practices. Naturally, this requires substantial institutional adjustments and a profound shift in corporate thinking; essentially it amounts to "demotion" rather than "promotion" advertising. The electric power industry has become highly sensitive about its public image, and with good reason. Its presence in virtually every home, office and factory insures that the "electric company" will not be forgotten or ignored. . Most, if not all, electric utilities have been the frequent targets of both environmental and consumer- interest groups. 33 All utilities fall under a wide variety of regulatory bodies at the federal, state and local levels. Federal activities are involved with safety and reli- ability, and increasingly with environmental concerns. State government's priorities are environmental protection, rate regulation (in all states except Texas) and, to a lesser extent, safety. Local governments are concerned with land use regulations, police protection, rate and, in* many instances, environ- mental control,- especially air pollution. This frequently complicates the utilities' operations. For example, there is no one place at any of the three levels of government that a utility can go to get a single permit or li cense to cover all aspects of siting and operation. Attempts have been made to estab- lish such 6ne*-stop procedures, especially in the environmental field; however.' many experts* feel that such efforts usually result only in one more layer of red tape'rather than a simplification of the process. Other problems facing the electric power industry, though not unique to that industry, include'large capital investments, high interest rates, changing public attitudes and objectilVes, varying and often arbitrary regulations, diminishing fuel supplies, and rising manpower costs. Like other private concerns and public entities, the electric industry must 'continually strive to maintain its operation with the goal of providing acceptable service at the lowest reasonable cost to the customers. Summary The following points should be emphasized as crucial to this study: (1) Increased costs as a result of pollution control measures will be passed on to the utilities" customers in the form of rate increases. Personal communications with utility personnel and governmental officials. 34 (2) Power generation capability will be expanded to meet projected demands. 11.5 CURRENT REGULATORY PRACTICES The impression that emerges from trying to fathom the current practices of regulatory agencies is that they are "consistently inconsistent" . New agencies are constantly being created in the environmental field: each new emergence alters the existing system, thus, inevitably, if not intentionally, changing some of the rules. This proliferation is occurring at the federal, state, and local levels. Although no new federal agencies have emerged since the Environmental Protection Agency (EPA) was created in 1970, new laws have been passed which change the ways the-existing agencies operate. This complex situation is further complicated at the federal level by (a) the lack of a definable, comprehensive national energy policy, (b) continued federal involvement in land-use management through the existing Coastal Zone Management Act of 1972 (P192-583) or as proposed in the National Land Use Policy and Planning Assistance Act (i.e. S268), and (c) the drive by many toward a "one-stop" federal agency for all aspects of power plant site approval. At the state level the regulatory picture is generally no less complex. Many states have enacted mini-EPA's or passed state land-use legislation; almost all have some form of utility regulatory commission. In Texas, the institutional situation is, somewhat simpler. Despite repeated attempts by environmental groups, no comprehensive state environmental agency has been established, nor has any land-use legislation passed. Texas, as previously stated, is also in the unique position of being the only state in the nation that does not have a utilities' regulatory commission. This means that when a utility proposes a new plant, it does not have recourse to an "all-powerful" agency from which to secure a license. Instead, the utility must get several 35 independent permits from a number of separate, autonomous, and highly independent commissions, boards and elected officials. Different agencies provide approval for water rights, waste discharges, air emissions, intra- state gas rates radiation safeguards, and the modification, if applicable, of state-owned public lands. The industry has shown a strong desire to keep the regulatory powers fragmented rather than move toward a more centralized state system. The local regulatory situations encountered by the electric power industry are too varied to describe within the scope of this project. The fact that the regulatory practices vary greatly within a state as well as from state- to-state, and that such practices are apt to change rapidly with. time, only compounds the problems. For example, a change over in a city council or county commissioner's court often results in a complete reversal of previous policies. Such an about-face can make life extremely difficult and uncertain for a utility planning program. For the study area being considered in this report, such regulatory con- siderations are somewhat simplified by the following: (a) while municipal entities may change and wield significant land-use regulatory powers, all new plants are almost certain to be built well outside municipal limits, (b) county governments in Texas have few regulatory powers, and usually could not significantly interfere with a decision to locate a plant in an unincorporated area of a county, and (c) the general attitude of most local governments is strongly pro-development, and adverse reaction to any new power facility is not likely from this quarter. The current laws, policies and administrative structure of governmental agencies tend to be fairly well suited for resolving conflicts between adversary positions. Unfortunately, these same arrangements, however, are not adaptive to the more demanding situation of developing creative, innovative approaches 36 for fostering cooperation between the potential adversaries to develop realistic, feasible solutions acceptable to all involved. This institutional shortcoming inevitably results in harsh feelings, name- calling, and often court action. The public may benefit by being "saved" from a given project that may have been against the public interest, yet the public often pays dearly in the long run for such decisions. Lost time, inflated costs, and a general feeling of ill-will, suspicion and reluctance among the adversaries to work together hurt future ventures, and leave deep scars. If constructive cooperativeness is to be attained, several important conditions must be achieved, including (a) institutional changes which would provide a better opportunity to work together, (b) education of all concerned parties to improve mutual trust, and create a desire to cooperate for mutually beneficial purposes, rather than simply to "get the other side" and (c) the development of valid ecological and economic information upon which all parties can agree, and understand the trade-offs involved in controversial decisions. The last of these three requirements is the objective of the report: namely to develop a method for investigating the implications of environmental- economic trade-off and apply the technique to a regional power supply situ - tion. 11. 6 THE NEED FOR AN ANALYTICAL APPROACH By describing the present situation in the power producing industry, and the status of water resource development, some insights into future alterna- tives and solutions might be provided. The admirable goal of developing an orderly system for defining and analyzing options and trade-offs in the complex 37 three-way triangle of "growth, energy and the ''ei-ivironment" , is a massive, if not impossible, undertaking within the immediate future', co nsidering the information constraints in which we must operate. An analytical approach, to be of real value in resolving the conflicts of this three-homed dilemma- -growth, energy, and environment--must possess the following characteristics: Condition I - Transformability - Rather nebulous policy statements, such as those found in legislation, must be transformed into quantitative alternatives. This quantification is necessary because "hard numbers" not "general philo- sophy" are required to trigger analytical techniques. This transformation is the most difficult step in quantitatively assessing the impact of public policy decisions on either the economy or the environment. Condition II - Analytical Acceptabilit - The approach must be scien- tifically sound and generally acceptable to the experts in each field involved. Nothing can more quickly neutralize the validity of any given result than to have some noted authority point out that the procedure used in obtaining the result was in disagreement with some major theory or finding. Using tech- niques which command a maximum degree of acceptance is necessary. Some- times such an approach means foregoing a latest development in favor of an older, proven technique. Condition HI - Interpretabilit - After the analytical gymnastics ar e completed, there must be a mechanism of translating the key numerical data back into information which is meaningful to the non-analyst. Essentially such a step is an inverse of the transformation required in Condition I. Unless the results are transformed into the,general language of the original policy state- ment, the entire investigative process is almost certain to fail, simply because those who formulated the policy in the first place need an answer they can understand. 38 The need for a broad analytical approach which incorporates these three conditions may seem obvious. In the past, however, much analytical effort has been uselessly expended, while many public policies have.been estab- lished and implemented without any serious analytical effort to evaluate their consequences. Indeed, the need to develop and use an acceptable as- sessment procedure is as necessary as it is obvious. 11. 7 THE ANALYTICAL APPROACH A generalized schematic diagram of the analytical procedure developed and used in this study is presented in Figure II.7A. The process begins with a formulation and quantification of alternative public policies, proceeds into an analytical phase, then culminates with an interpretation and presentation of the appropriate results. The six principal steps shown in Figure II. 7A sati sf y the three conditions shown in Table II. 6A. The analytical flow outlined in Figure II. 7A consists of six principal steps with two sub-steps. Step 1: Formulate and Quantify Alternative Public Policies - In this first step the public policies which are going to be studied are determined. Each policy is concisely defined, and the ranges of the policy are selected. Once the policy and the general boundaries are determined, the minimum, max- imum and intermediate points to be studied must be quantified. In some cases, considerable study and ingenuity may be required to reduce a general public policy statement into quantifiable terms, but the task can be accomplished, either discretely or by a series of approximation' s. In developing and presenting thts sort of information, it would be possible to use more resolution or less resolution. However, for explanatory purposes, this format was selected as being a good compromise between too much detail (confusing) and too little detail (vague). 39 CONDITION COVERED IN STEPS I. - TRANSFORMABILITY I. POLICY FORMULATION AND DEFINITION M:.- ANALYTICAL ACCEPTABILITY 2. DETERMINE TECHNICAL REQUIREMENTS AND CONSTRAINTS 3A.COMIPUTE ASSOCIATED COSTS 3B. HOLD RESOURCE AND TECHNICAL INFORMATION FOR SUBSEQUENT -USE. 4A. INTRODUCE COST PERTURBATKAIS TO 1-0 MODEL, EXECUTE BALANCING AND IMPACT ANALYSIS TECHNIQUES. 4B. EXTERNAL EXAMINATION OF RESOURCE REQUIREMENTS /TECHNICAL CONSTRAINTS M. - INTER PRETABILI TY 5. COMBINE RESULTING INFORMATION FROM PREVIOUS STEPS, SYNTHESIZE AND ASSESS THE OVER-ALL IMPACT AND RESULTS. 6. PRESENT THE RESULTS IN A MANNER READILY UNDERSTOOD BY NON-ANALYSTS (I E PUBLIC OFFICIALS SATISFACTION OF THREE NECESSARY CONDITIONS BY PROPOSED, ANALYTICAL PROCESS TA BLE R It GA 40 STEP I FORMULATE ALTERNATE PUBLIC POLICY AND QUANTIFY PRINCIPAL G P COMPONENTS OF EACH CID STEP 2 DETERMINE THE TECHNOLOGICAL REQUIREMENTS FOR SATISFYING THE PUBLIC POLICIES T R STEP 3A COMPUTE THE COST OF S@EP @3B THE TECHNICAL REQUIREMENTS "STORE" RESOURCE AND TECH. RECORDS FOR LATER USE STEP 4A STEP 4B INTRODUCE THE COST PERTURBATIONS PERFORM APPROPIATE ANALYSIS INTO THE REGIONAL INPUT OUTPUT OF DATA ON RECORDS AND ETC. AS MODEL, EXECUTE BALANCING TECHNIQUE SEPARATE INVESTGATIONS AND RUN MODEL El: TR STEP \5 Ac COMBINE RESULTS FROM THE 1-0 ECON IMPACT STUDY AND THE ASSOC. RES.-TEbH. ANALYSIS TODEWLOP AN OVER ALL ASSESS- MENT OF THE CONSEQUENCES OF THE DIFFERENT COMBINATIONS OFPOSS ALTER. STEP 6 1 1 F_@ PRESENT THE RESULTS IN A FASHION READILY UNDERSTAND- ABLE BY NON-ANALYSTS 0 5 12 IT 0 7 13 18 0 2 5 8 2131 19 7 GENERALIZED ANALYTICAL PROCEDURE FIGURE ]I. 7A 41 Step 2: Determine Necessary Technological Requirements and Con- straints. - Onc e the public policy alternatives have been quantified, the method for best achieving the various policies' objectives while working within the constraints imposed by other policies must be determined. This second step, while requiring more technical/scientific expertise and computational effort than the first step, is apt to be conceptually simpler than policy formation because available technology is applied to meet explicitly stated conditions. The end-product of this step will be a series of technical alternative. designs that meet the policy criteria and a set of resource requirements necessary to satisfy the technical conditions. For example, if ponds are to be used to achieve the necessary cooling, then relatively simple engineering calculations will determine how many acres of land area will be required for the pond. Step 3-A: Compute Costs of Technical Requirements - Once the technical requirements are fully developed, the costs of each alternative can be com- puted, assuming'that relatively specific situations are being considered. For example, if a given amount of land is required for cooling ponds, the approximate land prices in a locality can be obtained. For other technical, requirements that are not as subject as land to speculative ventures, such as equipment, interest on capital, labor, etc. , costs can be accurately estimated. Thus, the total cost of the pond system can be estimated. Step 3-B: "Store" Resource and Technical Requirements - The costs of these technical requirements and additional resources computed in Step 3-A must be retained for later use. ' This information is particularly necessary when dealing with other resources which may themselves become critical limiting factors at some future date. Step 4-A: Introduce Cost Perturbations into Regional Input-Output Model The cost increases determined in Step 3-A are converted into a percentage change of the total electrical power cost. This change is then introduced 42 as a percentage increase in each cell of the appropriate utility row of the input-output model. The input-output tables show transactions, i.e. , sales and purchases, among the various sectors of the economy. These transactions are shown in terms of dollars spent (output) and dollars received (input). If the cost of the product or service in any row increases by a specified percent- age, this increase must be distributed across the entire row. This series of changes will result in an increase in the purchases of all columns. Thus, a price increase or decrease may be introduced into one sector and, with the proper mathematical manipulations, the impact of the specific cost change can be traced throughout the entire economy. A careful scrutiny of the results by a person familiar with both input-output analysis and the specific situation being investigated is necessary to prevent an erroneous interpretation of the results. Step 4-B: Perform Appropriate External Analysis of Technical and Re- source Requirements Data - The resource requirements and the technical data developed in Step 2 provide a basis for the calculation of cost changes as com- puted in Step 3-A. These data also include information on land requirements, water consumption, water through-put, additional fuel requirements, etc. The significance of the data increases as the availability of other natural resources limits the options available to power system designers and govern- mental regulatory agencies. For example, a demand by certain interests to greatly reduce, or even completely eliminate the discharge of heated water from a plant into an estuary, would require fresh water cooling towers or dry cooling towers. If the plant were located in a 11 water- scarce" area with limited fresh water supplies, the first alternative might be eliminated, not simply on a cost basis, but because of the competing uses or possible ad- verse environmental effects from the construction of the dams and reservoirs necessary to provide the fresh water for the wet cooling towers. In the case of dry towers an equally unpleasant dilemma could result: dry towers require large amounts of additional energy for their operation, and as available fuel 43 decreases such an alternative might become less desirable from the conserva- tion standpoint, than was the warm-water discharge. Any real problem will reveal a number of other important auxiliary analyses which must be examined in order to make an investigation complete. This "secondary information" may exceed in importance the information being sought in the principal analysis. Step 5: Combine Output from Each Element, Evaluate and Assess the Overall Consequences - Once the detailed economic impact results of the input-output analysis and the more. general information from the resource/ technical assessment are available, then a collective study of the two ana- lyses is necessary. The various consequences of the different alternatives can be determined. Unfortunately there are no simple rules to follow. A meaningful interpretation of the collective results depends on the knowledge of the basic problem and related data, coupled with the ability of the analyst to identify and explain the significant relationships. In a "real-world" situa- tion the amount of data generated will be overwhelming, which presents a challenge to the analyst's ingenuity to devise ways to identify the meaningful information without becoming bogged down in reams of numbers. Such an ability is probably more of an art than a science and comes only through dedi- ,cated effort and experience. Step 6: Presentation of Results in Understandable Fashion - Once the analytical procedure is completed the "real" work begins. The ultimate value of an analytical study is independent of the quality of the problem definition and analysis. The analytical process has no power unles,s the results are used. Unfortunately, the results of most such ventures are never implemented, not because the results obtained are wrong, or too politically unacceptable to the decision-makers and policy setters, but rather because the analysts have failed to communicate with the.top management responsible for implementation. A failure to present (i.e. , market), the findings, results in the entire effort being shelved. To avoid this fate, simplified but realistic presentations with 44 a maximum amount of graphics is recommended. Simplified Example Using Six-Step Analytical Procedure The example begins with the three basic known pieces of information shown in Figure II.7B. These data are as follows: B. I - Three hypothetical future demand curves showing the demand (KWH/cap/ A t) for each of three forecast levels. For some future time, t, demands of 3, 7 and 10 KWH/cap will be used for the low, median and high projections. B.2 and B.3 - Two principal characteristics, consumptive use of water and cost, for each of three cooling methods are presented for ponds W, wet towers (II), and dry towers (III). The water use and cost data are given on a per unit basis i.e., $lAWH or Gals/KWH. Total water consumption varies from a low of zero for the dry towers which do not use water (W 3i j=1,3) to a high of 60 units for the maximum growth coupled with wet cooling towers (W 23 ). Similarly, costs vary from $3 (C 11 ) to $ 80 (C 33). The relative impacts on water resources become obvious by this point in the analysis. Costs are known; additional analysis is required to assess the over-all economic impact. Data, involving overall power cost and break- down of utility sales are required to complete the analysis. These data are shown in Figure II. 7D. The base cooling cost can be used to construct tables showing the possible range of water consumption and costs for each growth level and cooling option as illustrated in Figure II. 7C. The water consumption for each alternative is determined by multiplying the amount of energy (KWH) required at any given level by the amount of water (GaVKWH) for the particular cooling option. This procedure can be simply stated as: W (W i (E i 1,3; j = 1,3 45 c 10 8 6 4 2 tl T I M E cr_ Lu cr uj w HYPOTHETICAL GROWTH LEVELS AN D COOLING CHARACTERISTICS FIGURE ]I. 7B 46 ARRAY OF POSSIBLE OPTIONS FOR TIME t GROWTH A (3) B (7) c (10) C. I Z= 0 CL E E (p) 6 14 20 0- COSTS 08 T) is 42 Z (W 60 Cij (DT) 0 0 0 GROWTH (Pj) A (3) B (7) C (10) I x 3 1 x 7 C. 21 (p) 3 7 fio a- 0 -@r T-r 3x3 H OCONSUMPTION (D U) 2 z 8 (WT) 9 21 30 W ij (D T) 24. 56 so EXAMPLE COSTS AND WATER CONSUMPTION FOR HYPOTHETICAL EXAMPLE FIGURE R. 7c 47 5% DUE TO COOLING FOR PONDS D. I 95% OTHER COSTS BASE COST OF PROVIDING ELECTRICAL POWER D. 2 D. 3 50-- 44 _.RES. M D.. 30 -44, 25 OR 25- 3. POM-!@ CL w 30 Ix 8 FIGURE ]I 7D 48 where W total water consumed by an alternative (Gals) W unit water consumption of cooling method i (Gals/KWH) E. energy requirement at growth level j (KWH/KWH) 3 i cooling options, I,II, or III growth level, A, B, or C The various possible costs are constructed in the following manner using Figure II. 7C. 2: C.. (C (E i=1,3; j=1,3 The cost of using ponds is assumed to be 5 percent of the total power cost. If the monthly electric bill is $20.00, then $1.00 is spent on cooling. Similar data are pre sented in Figure s II. 7D . I and II. 7D. 2 and indicate the hypothetica I breakdown of utility sales, namely: RES (residential) . . . . . . . . . . . . . 25% COM (commercial) . . . . . . . . . . . . 30% UTL (utility) . . . . . . . . . . . . . . . 1% IND (industrial) . . . . . . . . . . . . . 44% Tota 1 100% The costs of cooling options II and III would result in an increase in the cost of cooling and thus increase the total cost of electricity. This increase can be calculated by multiplying the base cooling cost percentage (5 percent from Figure II. 7D. 1) by the ratio of the modified cooling cost (II or III) over the base cooling cost (I), and then subtracting the original 5 percent. Option II (WT) = ( i x 5%) - 5% = 10% 3 Option III (DT) = ( 24 x 5%) - 5% = 35% 3 Thus, if the base cost of power is taken to be $1.00 with ponds (I), the cost increases to $1.20 for wet towers (II) and is $1.70 for dry towers (III). 49 A simplified four- sector transaction table is shown in Figure II. 7E. The four sectors in this table correspond to the four groups shown in Figure II.7D, namely residential, commercial, utility, and industrial. Rows represent the sellers (output) and columns represent the buyers (input). Therefore, the utility's total sales of $20 (row 3) are distributed in the following manner: residential $ 5.0 25%) commercial $ 6.0 30%) utility (self) $ 0.2 1%) industry $ 8.8 (.44%) $20.0 (100%) Similarly the commercial sector's purchases are distributed as follows- residential (wages) $ 3 25 %) commercial (self) $ 1 16.7%) utility (energy) $ 6 50 %) industrial (products) $ 2 33.3%) $12 (100.0%) Commercial purchases are equally easy to obtain -from the data in Figure TI. 7E. I. Note that some cells in the matrix contain only In a real input-output table these cells would contain numbers representing the transactions for the cell in question. No transaction would be shown by a zero entry. However, for this example these cells are blank to minimize the confusion. Now the cost change resulting from the increase in the cooling component must be inserted into the utility row. From the data previously given in Figure II. 7D. 1 , the cooling cost is 5 percent of the total cost for the base condition, Ponds W. The base cooling cost increases 10 percent in the total cost of energy for wet towers (II). Similarly, the cost increase for dry towers (III) would be 50 BEFORE (X32) .BUYER (INPUT 1 2 3 4 - 3 - 12.5 cc UJ _3 -i W =) 2 1 9 U) 0 .25 -o-.30 .01 -.44 1.66- 3 5 6 0.2 8.8 20 .1 4 12 20 1.00 1.00 12 50.3 HYPOTHETICAL TRANSACTIONS TABLE BEFORE INTRODUCTION OF INCREASE IN UTILITY COST FIGURE R. 7E 35 percent. The procedure for distributing this increased cost is simple. If the total cost of all utility sales increases by a certain percentage, each com- ponent of the utility's sales -is assumed to go up by the same percentage. If, for example, the total cost increases by 10 percent, each individual customer should expect his own bill to increase by 10 percent, regardless of whether he was a small or large purchaser. Mathematically this phenomenon is described by the following expression: X1 kX j=1,4 3i X3j + 1 3i where X1 3i new value for cell i in utility row after the increase X3i = value for cell j before increases k = increase in utility rate cost (percent) = columns corresponding to the four purchasing sectors. The above operation is executed for both the 10 percent increase (k = 0.1) for wet towers and the 35 percent increase (k 0.35) for dry towers. The results are shown in Figure II.7F. The effect of a 10 p ercent increa se is shown in Figure H. 7F. I . Note that each value in each cell of row 3 is 10 percent greater than the corresponding cell in Figure II. 7F. This matrix illustrates the result of distributing the 10 percent increase proportionally to each cell in the row. Even more. interesting information is obtained from row 2, the commercial sector. Electricity'constitutes 50 percent of the purchase of this sector, or $6 out of a total of $12. If the price of electricity goes up 10 percent, the net electricity cost if $6.6, thus the new column total becomes $12.6. This change amounts.to an increase of 12.6 - 12.0 ), or 5 percent, in the total 12.0 52 BUYER INPUT 1 2 3 4 F. I 3 12.5 0- k=10% 0 2 9 ui -i -1 3 5.5 6.6 0.22 9.68 22.0 L.Li U) (+10%)- 4 2 20 12.6 51.18 (+5%), :(+1.76%): BUYER (INPUT) 2 3 4 F. 2 3 - 12.5 k= 35% :D a- D 0 2 9 x w -i -1 3 6.65 8.10 0.27 11.88 270 ui 4 2 - 20 14.1 53-38 (+6.1 %) FIGURE IE. 7F 53 purchases of sector 2. Similar manipulations can be performed on the indus- trial sector purchases shown in column A which would show that a 10 percent increase in utility rates would cause a 1. 76 percent increa.se in the cost of industrial products. A similar examination of the data presented in Figure II. 7F. 2 reveals that the hypothetical dry tower case, which necessitates a 35 percent increase in electric rates will result in a 17. 5 percent increase in commercial costs and a 6.1 percent increase in industrial costs. According to the overall procedural guide presented in Figure II. 7A , the first four steps of the process have been completed. The joint consideration of the results from the input-output analysis and the independent examination of resource availability, consumption @and associated implications must be evaluated for each specific situation. The above example, though an oversimplification, served to illustrate this method. The presentation of the analytical results in a manner readily understandable by decision makers is possibly the most significant step, and the most neglected. Refined, but simple graphics are an absolute necessity for this presentation. Two effective ways of showing the relation-ships among water consumption, growth (demand) level,* and cooling method are illustrated in Figure II.7G.l. A much better, simultaneous view of these relationships is represented in Figure II.7G.2. This three-dimensional plot is particularly valuable for assessing relative impacts of two different independent variables on a given dependent variable. Results derived from the modified input-output tables of Figure II. 7F are shown in Figure II i 7H and provide a graphical indication of the added economic impact of the two cooling modifications- -wet towers or. dry towers-- over the base option of ponds on commercial activities and industrial output. WATER CONSUMPTION WATER CONSUM TOTAL VOLUME TOTAL VOL G) -n G) >kil rn < rn G) G) P, 0 zov) 4A--,,4 55 COMMERCIAL INDUSTRIAL ACTIVITIES OUTPUT 2 (4) +5VI4 + 1. 760/1 WET TOWERS + 1.760/1 +64/10 DRY TOWERS FIGURE ]1. 7 H 56 The above example has been deliberately kept simple to illustrate tech- nique and make the procedure easier to follow, thereby preparing the reader to follow and understand the much more complex analyses presented later in this report. The procedures are the same, but the analyses are performed on complex 78 x 78 matrices with no voids, as compared to the special 4 x 4 matrices with 30 percent voids used here. CHAPTER III ALTERNATIVE PUBLIC POLICIES In this chapter two policies, population growth and environmental protec- tion, are subjected to the kind of analysis that was developed in Chapter II. For the growth aspects, the total per capita energy consumption is held constant; the only growth variable is population. Environmental protection measures are restricted to waste heat disposal for power plants. These simplifications were made for the sake of technique development and demon- stration; however, the approach is equally applicable to more complex studies. An additional benefit of such simplicity is that the results can be more readily interpreted by the non-analyst. Since one of the primary goals of this investi- gation is to make the facts more accessible to the decision makers and public officials who must eventually implement the public policies, such simplifica- tion is justified and even necessary. This chapter traces the development of both the growth and waste-heat control (environmental) policies. It includes an expl.anation of the assump- tions used in developing each set of policies, a presentation of the quantita- tive policy (i.e. I numerical data), and a brief discussion of some of the implications.' 111. 1 GROWTH POLICY Only a few short years ago, growth was a principal national goal; growth in all its forms: population, resource use, energy consumption, economic development, was synonymous with national progress. In the late 60's and early 70's, however, this general attitude began to change, and now many persons are questioning the old adage that says, "bigger is better". The 57 58 recent decline in the U.S. population growth rate is one indicator of this change in attitude of many Americans. In this section, alternative growth projections for the future demand for electrical energy are developed. The total electrical energy demand is the result of many factors including population growth, per capita consumption, seasonal and daily demand variations, price, substitution of electricity for other energy sources, and changing socio-economic conditions. For the purpose of this project, two growth figures are needed to compute dollar costs and resource requirements. They are (a) the total annual and seasonal energy consumption, and (b) the installed generating capacity re- quired to meet the maximum instantaneous load placed on the system. Several different approaches are available that could be used to develop the total demand figures. Figure III. 1A is a simplified flow chart of the proce- dure used in this study to develop the projections. This procedure has five step s: Step I . Obtain three alternative population forecasts covering the stud time horizon. These are given in Table III. 1A and are shown in Figure III. 1B as curves A, B, and C. Each is defined as follows: (a) A - Chamber of Com- merce projection ("COC"), (b) B - Intermediate projection ("INTER"), and (c) C - Zero Population Growth projection ("ZPG"). The COC projection assumes that the region's population will increase 50 percent above the 1970 level by the end of the twentieth century. Alternative B, the intermediate projection, is based on the official state population fore- casts issued by the Governor's Office. (Office of Information Services, 1972) The ZPG projection is based on the assumption that the population.will increase another 10 percent and stabilize by the year 1985. Although many demographers 59 (2.) OBTAIN ALTE7RNATIVE DE\ELOP SET OF POPULATION PROJECTIONS; PER CAPIWENERGY COG, INTER, Ek ZPG REQUIREMENTS (3 PROJECTIONS a FIG.M.18) I CURVE-FIGM. IC.) COMPUTE TOTAL- ANNUAL ENERGY REQUIREMENTS (KWH1YR) BY MULTIPLYING ( I ) BY (2) 3 PROJECTIONS) (4) DEVELOP SEASONAL LOAD FACTORS 12 COEFFICIENM 5.) 17 17 TRANSFORM ANNUAL ENERGY REQUIREMENTS (KWH/YR, FROM (3)) INTO GENERATING CAPACITY REQUIRED TO HANDLE PEAK LOADS (MW) PROCEDURE FOR DEVELOPING TOTAL ENERGY AND PEAK LOAD GENERATING REQUIREMENTS FIGURE 1E. IA 1970 1975 1980 1985 1990 1995 2000 ZPG 455,000 4701000 475,000 - - - ACTUAL NO. INTER 433,700 461,500 484,300 509,500 5311100 557,000 570,000 C 0 C 470,000 505,000 540,000 576,000 612,000 655,000 ALTERNATIVE POPULATION PROJECTIONS TABLE III. IA CD 61 650- COC CHAMBER OF COMMERCE INTER z INTERMEDIATE Coc 0 ZPG = ZERO POPULATION GROWTH 0 600- A INTER R 550 - 0 B CL z 0 Z5 500- w c ZPG 0 450- 433.7 400 1970 1980 1990 2000 T I M E PLOTS OF ALTERNATIVE POPULATION PROJECTIONS FIGURE M. iB' 62 might consider these projections rather crude, the development of refined population projections is not one of this study's objectives, and therefore, for the purposes of the study, these data are as good as any. Any other set of projections could be incorporated into this analysis procedure. Step 2. Develop a set of per capita energy consumption data. Figure III. IC shows the historical growth of per capita consumption in Texas from 1958 to 1971. (Governor's Advisory Committee on Power Plant Siting, 1972) This figure also shows three alternative predictions for per capita consump- tion through the year 2000. These historical data indicate that overall per capita consumption increased 160 percent between 1958 and 1970. In the one year period from 1969 to 1970, an increase from 8,795 to 9,410 KWH/CAP/YR, or an annual growth rate of approximately 7 percent occurred. For 1970 to 1971 these figures were 9410-10,180 for an increase of 8. 1 percent. Three future alternatives for the period 1972 to 2000 are postulated. The most conservative of these is an alternative that few persons would have thought credible even as recently as two to three years ago, namely a sudden leveling of unit consumption at current rates of approximately 10,000 KWH/ CAP/YR. Because of fuel shortages and difficulties in power plant siting and licensing, this is now considered a real and desirable possibility. The most liberal projection assumes a continuation of the present annual growth rate. The middle alternative shown in Figure III. IC is the above annual per capita consumption projection coupled with the population projections developed in Step 1, and used to compute future load forecasts. This projection is based on the following assumptions: (a) that the per capita consumption will double to 20,000 KWH/CAP/YR by the year 1990; (b) it will level off at that time and remain constant at 20,000 KWH/CAP/YR beyond 1990; and (c) the rate of in- crease will be uniform (an.average of 5 percent per year) until that time. The selection of this projection is based on the two following premises: the per 63 --20,000-KHW/C/YR---- 20,000-- A w B 2UJ15,000 cr w cr 0 c !0,000 KWH/C/YR a: 10,000-- CL !,9 5,000-- 0 1 se 62 66 TO 74 78 82 86 90 94 98 2000 T I M E ALTERNATIVE PER CAPITA ENERGY CONSUMP,TM FIGURE M.1 C 64 capita consumption of all forms of energy will remain about constant, but the shortage of other alternatives (in the study area this means natural gas) will force more and more consumers, including industrial and commercial users as well as residential customers, to convert to electricity. It would have been possible to use multiple levels in the same way as the population alternatives, but for the purposes of this investigation a single projection is adequate. Step 3. Multiply the per capita consumption by the population to get total annual energy consumption (KWH/YR) for the region. These data are given in Table III. 1B and shown in Figure III. 1D. Even for the 1990 ZPG level, based on previously stated assumptions, requirements will increase from 4.08 billion to approximately 9.5 billion KWH/YR; for the COC case the increase would be to 11.5 billion KWH/YR. Step 4. Develop seasonal load factors. From the annual energy consump- tion, the seasonal load distribution patterns are used to determine the genera- ting capacity that will be required to meet the peak seasonal demands. Figure III. IE illustrates the typical seasonal load distribution patterns for the study area; 10.9 percent of the annual energy consumption occurs in the month of August, whereas February accounts for only 6.2 percent. Stated another way, the load factor i s 1. 76 for the month of Augu st a s ba sed on I . 0 0 f or February. The widespread use of air conditioning causes this pronounced peak during the summer months. Step 5. Compute required generating capacity. Two options are pos- sible in developing the relationship between annual energy requirements and the maximum required generating capacity. One method depends upon using seasonal load factors, hourly load factors, transmission distribution loss coefficients, required spinning reserves, "fudge -factors" for extreme weather conditions, etc. , to synthesize a maximum probable instantaneous system ZPG PROJECTION INTER PROJECTION C 0 C PROJECTION EN.(KWHxIO@ GEN.(MW) EN(KWHxIO6) GEN.(MW) EN.(KWHxIO6) GEN.( Mw) TO 42081 11682 75 57550 2,300 5,630 27300 51T30 2,400 80 71050 211900 T1270 31000 T1580 32100 85 81310 31450 82920 31700 91450 31900 90 91500 32900 101620 42400 111520 41T50 95 9,500 32900 111140 49600 122240 5*050 2000 9,500 3,900 111400 41700 132100 51400 (I.) KWH PROJECTIONS ROUN@ED TO THE NEAREST 10 x 106 (2.) MW PROJECTIONS ROUNDED TO THE NEAREST 50 MW (3) PEAK GENERATION CAPACITY (MW)=ANNUAL REQUIREMENT (KWHxIOG) x MAXIMUM MONTHLY PERCENTAGE (0.1091) x 3.777 MW/MILLION KWH PER MONTH PROJECTED ENERGY CONSUMPTION (KWH/CAP)AND REQUIRED GENERA-nNG, GAPACITY(MW) UNDER ALTERNATIVE GROWTH POLICIES TABLE III. I B cn 66 15-- ui U2 Or x cr (n w z z 0 w z z 5-- -i F- ACTUAL FOR 1970 0-1. f T-- 70 75 so 85 90 95 2000 Y E A R ANNUAL ENERGY CONSUMPTION FIGURE DIAD 10.91 10.0- 1.76 6.20 z z 5.0@. cn < 1.00 w ID- co i F M A M J i A S 0 N D i F M A M J J A S 0 N D MONTH M 0 N T H SEASONAL LOAD DISTRIBUTION 1.00 cn FIGURE M. I E 68 load. This requires a large amount of actual system operational data. The other method is an empirical approach which correlates present maximum monthly demand to existing generating capacity and assumes this same relationship will continue in the future. This implicitly allows for all the factors mentioned under the first alternative. For the purposes of this project the latter approach was selected and used for the following reasons: its accuracy was sufficient for the objectives; it utilized the aggregated loss/ reserve factors by tracking the current industry "best practice."; and this approach was much more straightforward and readily understandable. The re- quired installed capacity data developed from this approach are given in Table 111. 1 B and shown graphically in Figure 111. 1 F.. It is worth carefully differentiating between the data shown in Figures III. ID and III. IF. The curves in III. 1D reflect the total energy consumed over the entire year. These data, plus a fixed percent to allow for reserves and losses, are used to compute such long term resource needs as fuel con- sumption, land requirements, total water demand, etc. The data in III. IF reflect the probable maximum instantaneous load conditions that the system will encounter, and thus are used to determine the size and maximum capa- city of the facilities. A trend in changing attitudes toward growth and expansion is shown in Figure 111. 1 G. The three lower curves are the projections developed for use in this study. The two upper lines are projections taken from reports pub- lished by the utility operation in the study area. (Personal Communications) Both projections were made by the same company, but done two years apart, yet there is a substantial difference in the two utility projections. In the 1972 estimates, the 1985 projected demand is about 25 percent less than the projected demand done in 1970. Both are higher than the COC projections, but if the apparent trend toward lower projections holds, the industry 6,000 coc 5,000 INTER 4,000 ZpG Lu 3,000 U) 1,000 0 1970 1975 1980 1985 1990 1995 2000 T I M E c REQUIRED INSTALLED GENERATING CAPACITY (MW) FIGURE M. IF 70 1970 INDUSTRY PROJECTION 5000-- 1972 INDUSTRY PROJECTION Coc 4000-- INTER ZPG 3000-- < 2000'. w ui cc 1000 70 75 so 85 T I M E COMPARISON OF PROJECTIONS FOR MAXIMUM REQUIRED. GENERATING CAPACITY FIGURE 111. 1 G 71 forecasts and synthetic projections developed for this study will soon coincide. The following points should be emphasized. (1) , The projections for future growth in power demand are based on numerous assumptions of population growth, per capita energy usage, etc. (2) Although these growth projects will be used in subsequent computations, any other set or s@ets of projections could be used equally well. (3) When assessing different parameters,. it is necessary to care- fully differentiate between total energy consumed (III. ID) and maximum system capacity (III. 1F). 111. 2 ENVIRONMENTAL CONTROL POLICIES Many types of environmental control devices and procedures are assoc- iated with a modern power plant. They include devices to deal with air pollu- tion, water quality, and in the case of nuclear facilities, radiation; other more subtle considerations involve noise and visual aesthetics. In the National Academy of Engineering's report oft power plant siting ( National Academy of Engineering , 1972) there is a good summary discussion of the various environmental controls of modern power plants. Our investigation concerns itself only with the waste-heat disposal as- pect of powerplant environmental control. The objectives of this report are limited to evaluating the impact of cooling alternatives and growth levels. To determine just what might constitute a reasonable, i.e. , " expect- able" set of future conditions for waste heat disposal, a preliminary investi- gation was doneto evaluate the current situation including recent trends, regulatory action, and the stated goals of recent federal water pollution 72 control legislation. The views, and opinions of a number of prominent indivi- duals, representing all interest groups were solicited. Several studies which had evaluated the economic impact of alterna tive levels of pollution control were reviewed. From studying all these sources the following conclusions were drawn: (1) The pressures to eliminate thermal discharges from steam- electric power plants will continue, and in most instances much stricter waste-heat discharge constraints will be im- posed. (2) As a result, few, if any, new facilities will be built with once-through cooling on rivers and estuaries.@ (3) Most existing plants will probably be allowed to continue operation in their present state; however, there may be some specific cases where damage due to waste-heat will be proved. Some sort of supplemental cooling will then be required. (4) There will be a general impetus to use cooling towers, al- though cooling ponds will be acceptable in certain cases. (5) Proponents of dry towers will continue to grow, but because dry towers require considerable energy to operate, their widespread use in the near future. is likely to be inhibited. (6) While there will be some supporters of deep-ocean outfalls and offshore floating plants or artificial islands, many obstacles, including both environmental objections and international law uncertainties, still exist. Three alternative waste-heat disposal policies follow from these con- siderations. By combining them with the three growth policies presented in the previous section, nine "alternative futures" are created. 73 Before presenting and explaining the three 'waste -heat -management policies, two other studies that have investigated the costs 'of various cooling policies, should be considered. Both studies involved the development and analysis of "alternative futures" as used in this study. One study, "A Systems. Analysis of Aquatic Thermal Pollution and its Implications" , (Cheney and Smith, 1969) was done for the National Coal Policy Conference, Inc. It had the following objective: 11 ... provide a broad system overview. . highlight the considera- tions that must enter the systematic appraisal and evaluation of the problem. . . The estimation of cooling costs and the appraisal of the cost implications on both the industry and consumers were two significant elements of that study that are of consequence to this investigation. The cost portion of the study included an estimate of thermal pollution abatement costs to 1980. In attempting to estimate these costs, one of Cheney and Smith's first steps was to postulate three possible strategies that might be imposed by regulatory agencies*: (1) "Pristine Purity" - Under this condition, all steam-electric plants, both those already in operation as well as all new facilities, would be required to eliminate heated water discharges. (2) "Nondegradation" - In this case, all new facilities would have to eliminate heated discharges, but existing plants could con- tinue their operation's as they are now. (3) "Practical Maximum" - This case is more complex, but Cheney and Smith view it as more realistic than the other proposals. It The report was published in January, 1969; the work was done in 1967-68 4 which was before the recent enactment of numerous environmental law S by the Congress and the various states. 74 has.three assumptions: (a) one-third of the new units and one-fourth of existing units would eliminate heated discharges; (b) an additional one-third of the new units would be able to meet abatement requirements at 50 percent of wet tower costs; and (c)-. the remaining units, both existing and new, would be exempted from controls involving appreciable costs because of favorable local circumstances. Another study done by the Federal Power Commission (Warren, 1970) is also based on three assumptions concerning future restrictions on heated water discharges: (1) "A" assumes that each plant will use the cheapest cooling system which causes the least "physical intrusion" on the environment, provided there is no violation of approved local criteria. For example, if sufficient natural flow were available to restrict significantly raised temperatures to a reasonable mixing zone, once-through cooling would be used. If this were not possible, then ponds would be the next alternative; and if for some reason, such as lack of land, ponds could not be used, then cooling towers would be used. (2) Condition "B" assumes that either a pond or tower would be re- quired on all new plants, unless it were possible to use a long- ocean outfall. All existing units would be left as is. (3) Assumption "C" would require that all plants, regardless of when they were built, would be required to use ponds or towers unless a long-ocean outfall were possible. The approaches taken by Cheney and Smith and Warren seem realistic, even though they were formulated several years before the National Environmental 75 Protection Act was passed or the EPA was established, and predated by more than four years the passage of the 1972 Water Quality Act Amendments. Also, since the late 60's a number of states have significantly tightened up their water pollution abatement program. The national attention within the last year has been focused on the pending energy crisis; this may ulti- mately cause the loosening of environmental protection constraints--at least in some localized situations. Even though both sets of projected conditions were made for the entire nation and were therefore based on national trends and nationwide averages, their assumptions provided valuable background material in developing the alternative futures for this project. Several different sets of assumptions were considered in this study. The objective was to devise three possible cooling policies which would span the entire range of possible choice, from liberal to extreme. After several possibilities were explored, the three follow- ing cooling wate r policies were selected as most representative: (1) Cooling Option A (C I) - Continue present practices, subject only to meeting localized discharge criteria. While various interpre- tations of this policy are possible, for the purposes of this analysis, it is assumed that once-through cooling, either. salt or fresh water, will be permitted on new facilities and that all existing plants may continue to operate as they presently do. (2) Cooling Option C (C 3) - This is the other extreme from option "A". It would constitute strict interpretation of the zero- discharge provisions in the 1972 Water Pollution Control Act Amendments. This would mean that, by 1985, any water dis- charged by any power plant would have to be cooled to its initial input temperature. This would necessitate the removal, by sup- plemental cooling techniques, of all BTU's added to the water during its passage through the condensers. This would apply to both new and existing plants. 76 (3) Cooling Option B (C 2 This alternative would "freeze" the total heat discharge (BTU/day) at current levels. It would be left up to the utility to determine how to allocate this allowable load among existing and new plants. No individual discharge would be allowed to exceed existing local criteria, and this would im- pose an added constraint. While meeting these local standards might pose some non-trivial problems for the utility, the overall regional incremental cooling cost would be about the same re- gardless of what specific trade-offs might occur on these indivi- dual decisions, because on the whole, the utilities would meet the environmental requirements in the least expensive manner. These three environmental control options are certainly not all inclusive, but they are logical and sufficient for the purposes of this project. The following four points substantiate this contention: (1) They cover the entire spectrum of probable alternatives. (2) They are easily explained and readily understandable to both public officials and the general public who may not be familiar with the situation.* (3) These three general verbal policy statements can be easily "quantified" and used as numerical input to trigger the analysis procedure. (4) The three policies are different enough so that once they have been quantified and analyzed, the different implications of each can be readily seen by the non-analyst. Table III. 2A presents a brief summary of the three cooling policies with some important features of each. In the next section these cooling projections While this may seem relatively unimportant to some, this concern for accep- tibility and simplicity cannot be overemphasized; unless this condition is met, the entire effort to utilize high technology in public-body decision- making will fail. COOLING POLICY ACCEPTA BILE PLANTS DOES IT SATISFY TECHNIQUES AFFECTED EXISTING FEDERAL LAW? Cl -CONTINUE TO ALLOW ONCE-THROUGH NEW ONLY NO ONCE-THROUGH BUT DO PONDS NOT VIOLATE LOCAL TOWERS (W a D) TEMPERATURE STANDARDS. C2-FREEZE TOTAL BTU RELEASE LIMITED ONCE-THROUGH MOSTLY NEW, PARTIALLY AT CURRENT LEVELS. PERMIT PONDS BUT SOME ALLOCATION OF ALLOWABLE BTU's TOWERS EXISTING ON AMONG NEW AND EXISTING TRADE- OFF BASIS FACILITIES, PROVIDED HOWEVER THAT NO LOCAL STANDARDS ARE VIOLATED. C3_ZERO WASTE HEAT DISCHARGE SOME PONDS-WITH ALL - BOTH YES TO BE REQUIRED BY 1985 OF ALL SPRAY SUPPLEMENTS. NEW AND FACILITIES. TOWERS EXISTING SUMMARY OF ALTERNATIVE COOLING POLICIES TABLE Ill. 2A 78 C 0 0 L I N G P 0 L I C Y cl c 2 c 3 R R 12 R 13 0 a_ G 2 R 21 R 22 R 23 ct G 3 R 31 R 32 R33 NINE ALTERNATIVE FUTURES AS OBTAINED FROM THREE GROWTHPOLICIES AND THREE COOLING POLICIES FIGURE X, 3A Rl I R12 R --'2000 1971 1972 13 21 1970 R22 RII R 23 RI, R12 R R 12 R 31 R R13 13 32 R33 R21 R21 .R 22 R22 R R 23 2 3' R R 31 31 R R33 R 32 32 R 33 J;:v CID pa ENVIRONMENTAL CONTROL c@ C7) ARRANGEMENT OF ALTERNATIVE FUTURE MATRICES OVER TIME FI GURE 111. 3 B 80 are combined with the growth projections to develop the "alternative futures" that will be used throughout this analysis. 111.3 ALTERNATIVE FUTURES The three growth projections developed in III. I can be combined with the three environmental control policies developed in 111. 2 to create nine "alternative futures". Figure III.3A shows a 3 x 3 matrix in which this combination of three environmental control policies and three growth poli- cies creates nine alternative possibilities at any point in time. Figure III.3B illustrates the nature of this relationship over a period of time; a series of 3 x 3 matrices like the one appearing in Figure III. 3A are arranged over time. If one were constructed for each year of the period being considered, 1970-2000 inclusive, there would be 31 such matrices arranged in a sequential manner. CHAPTER IV TECHNICAL CONSIDERATIONS IN THE PRODUCTION AND MOVEMENT OF ELECTRIC POWER The electric power industry is one of the most complex, if not the most complex, single-purpose industry serving our society. The production and delivery of electric power requires exacting input from many disciplines, in- cluding thermodynamics, materials science, systems analysis, economics and fiscal management--to name only a few. Further complicating the situa- tion is the nature of the real-time operation of the electirc power industry: when service is wanted, it is wanted instantly, and any failure to deliver, regardless of how quickly it may be overcome, is readily noticeable. An understanding of some of the technical concepts involved in the elec- tric power indus try is crucial to following the procedure developed in this re- port. Chapter IV briefly details some of these technical concepts. Areas of principal concern include the need for a heat sink (i.e. , thermodynamic re- quirements), costs for various cooling options, fuels, transmission considera- tions, etc. It must be kept in mind that this discussion only begins to touch the surface in a few technical areas of the power industry, and limits itself to those aspects that have a direct bearing on the overall objective of this project, namely to assess the environmenta I- economic trade-offs associated with waste heat disposal IV. I THERMODYNAMIC REQUIREMENTS FOR POWER GENERATION More than 85 percent of the electricity currently consumed in the U.S. is produced using some form of a steam cycle. (National Power Survey, 1970) In Texas this figure exceeds 99 percent. (Governor's Advisory Committee on Power Plant Siting, 1972) The remaining fraction. is hydro-electric power. 81 82 Some primary energy source is required to produce the necessary heat for the steam cycle. This source may be coal, natural gas, fuel oil, or nuclear fis- sion. The heat source makes no significant difference as far as the cooling aspects are concerned. The comments, observations, and data presented in this report are generally applicable to both fossil-fuel and nuclear-powered facilities. Any differences will be noted and discussed. For a given electri- cal output a nuclear facility does reject more waste heat than a modern fossil fueled plant of the same size. This lower efficiency is caused by operating the nuclear facility at lower temperatures and pressures to meet safety require- ments. A simplified schematic of the four principal components in a steam elec- tric power generation plant is presented in Figure IV. 1A. The functions of the boiler, the turbine, . the generator and the condenser are briefly described: (1) The boiler takes the heat energy from the fuel and uses it to create steam from the water in the boiler. The function is the same for both fossil and nuclear plants. (2) The turbine converts some of the heat energy contained in the steam to rotary mechanical energy; the rest is discharged out- side the system. (3) The generator converts the mechanical energy from the turbine into electrical energy for distribution and use. (4) The condenser transfers the residual heat from the steam to the cooling water. There are certain requirements and/or constraints that each of these highly complicated and intricate processes impose on the overall system which have direct implications on cooling requirements. Since this study deals in depth with cooling processes and their implications, principal characteristics of the 83 FRICTION FRICTION 6 HEAT ELECTRICITY I PRODUCED STEAM TURBINE GENERATOR HEAT r STEAM fHEAT OUT BOILER COOLING WATER CONDENSER WATER HEAT ENERGY L ADDED SCHEMATIC UNIT PRINCIPAL FUNCTION BOILER USE HEAT ENERGY TO RAISE THE INTERNAL MOLECULAR ENERGY OFTHE STEAM. TURBINE CONVERT THE INTERNAL STEAM ENERGY, AS LINEAR MOLECULAR MOTION INTO ROTARY MECHANICAL ENERGY. GENERATOR USE THE ROTARY MECHANICAL ENERGY TO GENERATE ELECTRICAL CURRENT CONDENSER CONDENSE STEAM AND PROVIDE A VACUUM EXHAST PRESSURE ON TURBINE. ENERGY TRANSFORMATIONS PRINCIPAL COMPONENTS IN STEAM ELECTRIC I :R :@ POWER GENERATION PLANT FIGURE IV. I A 84 thermo-electric'process that affect cooling are discussed. The best obtainable overall efficiencies of modern power generation plants are about 30 percent and 40 percent for nuclear and fossil-fueled plants respectively. However, relatively few people understand why these seemingly low efficiencies are currently the best obtainable, considering our modern technology, or why the prospects for significant improvements are not more encouraging. In order to explain this present situation and to justify projections of continued high heat rejection rates, some basic thermodynamic concepts must be examined and their implications for power production ex- plored. Principal Characteristics of the Thermo -Electrica I Process Thermodynamics is one of the most complex sciences challenging engi- neers and scientists. It is continually encountered in all ventures, ranging from water pollution control, to human physiology, to nuclear sciences, to materials science, etc. Of the three basic laws of thermodynamics, the Second Law of Thermodynamics (Thermodynamics, Faires, 1962) governs the maximum efficiency of power plants. The Second Law is defined by the fol- lowing general expression: dS Q rev (Eq. IV. 1. 1) T where S entropy (BTU/R) Q = heat added in a reversible process (BTU) rev T = absolute temperature (OR) The change in entropy can be defined as: -2. 2 d Q dS S2 Si rev (Eq. IV. 1. 2) T 85 For the purposes of illustrating the constraints imposed on the thermal power generation process, the relationship can be reduced to: S Q or (Eq. IV. 1. 3) T Q TS (Eq. IV. 1.4) Thermal energy of a substance is defined as the molecular energy of that substance. For gases this energy is mostly kinetic and for liquids and solids, mostly potential. If such a substance is heated, thermal energy increases, and the temperature also increa:ses. The addition and removal of heat to or from a substance amounts to adding and subtracting energy from that sub- stance. This process is just as much adding- -reclaiming work as raising a weight and letting it come back down. (I:6f and Cootner, 1965) A plot of T vs. Sfor an ideal heat engine is shown in Figure IV. I.B. For this ideal engine it is necessary to assume that the engine is self-contained and operates continuously, which in turn means that the engine is working through a closed cycle, i.e. , the ending state is identical to the initial state. The areas under the curves in Figure IV. 1B represent heat inputs to or outputs from the system. Thus, since heat is a form of energy, if we can find the total heat added to the system and the total heat removed fromthe system, the amount of heat energy converted to another form of energy and "used" to do work by the heat engine.can be calculated. Therefore the work done by such an engine is defined by the area contained within the polygon described by the T-S cycle. This means that the most efficient such cycle takes the form of a rectangle because the maximum area exists between the maximum temperature (T 2) line and the zero temperature axis, i.e. , rectangle ABS S Also, the area @bounded by ABCD is obviously greater than the area 21 1, bounded by AB'CD. The rectangle. will always contain'Ahe largest area for the given maximum and minimum values of S and T. Thus, in order to 86 T2 B w x M < x w a. w w 0 T1 c 0 s I s2 ENTROPY, S T-S DIAGRAM: TEMPERATURE- ENTROPY RELATIONSHIPS FOR AN IDEAL HEAT ENGINE(AFrER COOTNER a LOF) FIGURE IV. IB 87 maximize the work output of an ideal heat engine, it is necessary to maximize the area within the T-S diagram. The implications of this basic premise of the Second Law of Thermody- namics on the overall cooling efficiency are substantial. One must strive to maximize the temperature at which heat is added (AB), and then provide as low a temperature as possible for the waste heat to leave the system (CD). The other two steps (BC, DA) are constant entropy processes with temperature changes. In the ideal engine the cycle is called the Carnot cycle, and all of these actions must be done in a frictionless, reversible manner. Areal engine, using steam as the working fluid, cannot reproduce this cycle for numerous reasons, both theoretical and practical. The Carnot cycle begins at point D, (TIS the working fluid is com- pressed which raises its pressure and. temperature, without adding any heat; the entropy is held constant at SIfor this step, which moves to point A (T21S 1). On the next step, going from A (T2SI) to B (T2S2), heat is added, but the temperature is kept constant by permitting the fluid to expand. At this step the fluid, while it is expanding, is also doing work, such as driving a piston. At point B (T2S2 the heat source i s " shut off but the ga s i s a llowed to continue its expansion; for an ideal fluid, the total heat content stays con- stant (S2) but the continued expansion results in a loss in both'temperature and pressure, a loss which continues until point C (TIS2) is reached. At point C (TI S2)'it is necessary to compress the working fluid; however, if this co m- pression is to be a constant temperature process as indicated along (CD) it is necessary to release heat (S -S ) to the surroundings. This continues until 2 1 point D (T S is reached where the cycle begins again. I Since steam is not an ideal fluid, these same exact relationships do not appl y to a real thermo-electric plant. The concepts, however, are the same, and the ideal situation serves to illustrate why major improvements are not 88 possible with current steam-electric generation methods even with the most advanced technology. The following relationships are apparent: Energy Input (Total Heat Input) = Area (ABS S 2 1 Energy Converted to Work = Area (ABCD) Energy Discarded (Waste Heat) = Area (DC S 2 S Efficiency = Work - ABCD (Eq. IV. 1 . 5) Input ABS 2 SI For the theoretical efficiency to reach 100 percent, the energy discarded will have to be zero, but for this to happen the area of the rectangle DCS 2 SI must be zero. The only way for this phenomenon to occur would be to have a T1 equal to absolute zero (-460 0R) which is not possible. About the lowest year round temperature sink in the U.S. is on the order of 60 0F. For the South Texas study area substantially higher temperatures are common for much of the year. Calculation of the maximum theoretical efficiency can readily be done u sing F i gure IV. 1 B and the definition of efficiency already given: ABCD Efficiency = ABS S (Eq. IV. 1. 5) 2 1 where ABCD = (T 2 - T 2 (S2 SI ABS 2 S1 = (T 2 - 0) (S2 S 1) (T 2 -T 1 (S2 S 1) T2 T 1 Efficiency T (S S1) T (Eq. IV. 1. 6) or, converting to percentages and adjusting terms: Efficiency (1 T, 100 (Eq. IV. 1. 7) T2 89 Thus-, it'becomes obvious that the only way for the efficiency to become 100 percent is for the TI/T2ratio to become zero. But this implies that T would have to be an absolute zero which, of course, is unrealistic. Practical Bounds on Plant Efficiencies Using Ideal Thermodynamic Cycle The maximum combustion temperatures attainable with fossil fuels are about 25000F (approximately 30000R), but the actual operating temperature of modern fossil-fueled plants is closer to 12000F (16600R). This lower value is used in operational plants because it is the maximum temperature that cur- rent materials can operate under for prolonged periods without possible ad- verse effects. The turbulence and randomness which exist in large furnaces also tend to hold the actual temperature well below the theoretical maximum. For a sink temperature of 600F and an operating temperature of 12000F, the theoretical efficiency is given by: t 520 2 Eff (1 --i6-60) x 10 68 percent Modern fossil-fueled plants are achieving about 60 percent of the theoretical Carnot cycle efficiency, thus providing an actual maximum thermodynamic effi- ciency of about 40 percent. Nuclear plants also depend on the steam cycle,. and also are constrained by the same thermodynamic principles. However, nuclear units must operate at even lower temperatures because of special safety factors and material limi- of the reactor fuel rods. Typical maximum temperatures are on the order of 6500F (11100R) which results in a theoretical efficiency of 55 percent and an operating efficiency (assuming 60 percent of ideal efficiency) of about 32 percent. Thus, for every BTU of energy which goes out over the wires as electricity from a nuclear facility, approximately two BTUs of energy must be dissipated into the environment as waste heat. 90 It is not likely that greatly increased initial temperatures will be pos- sible. In fact, lower average temperatures are likely to be the rule as an increasing portion of all power is produced by nuclear reactors. Efficiency methods to lower the exhaust temperature, improve the mechanical efficiency of turbines, or decrease losses in the generator must be developed if the overall process efficiency is to be increased. Lowering the exhaust temperature is an attractive alternative, but unfortunately man has little control over this variable, since the designer must work with the naturally occurring air and water temperatures. Efforts to reduce exhaust temperatures have caused power-plant designers to turn to water as the principal cooling source. The simplest way to get rid of the steam after use in the turbine is simply to exhaust it into the atmo- sphere. However, through the use of a cooling fluid, a partial vacuum can be created beyond the turbine, and the efficiency can be significantly increased. Therefore water cooling is currently used in all U. S. thermal power plants. The steam is condensed into liquid and circulated back to the boiler for use as re-cycled boiler feed water. In the proposed dry cooling towers, water would still be used to remove the heat from the back of the turbine. However, instead of releasing this heated water directly into the environment, or passing it through wet towers to be cooled by evaporation, the water would go through heat exchange where the cooling medium would be at the atmosphere. After cooling, the water would be sent back to the turbines to act as a heat sink for the exhaust steam again. Other unique cooling possibilities may exist at specific sites, such as a deep reservoir nearby where cold water could be drawn from near the bottom, or possible offshore sites in deep water. However, in all cases, the plant designer is limited to natural conditions. 91 Unlike the thermodynamic problem, there is no theoretical principle that limits turbine efficiency. However, some: major practical problems/ constraints exist. I The objective of a turbine is to convert the internal molecular energy which will ultimately be used to drive a generator. The steam is allowed to expand in one'direction along the turbine axis. The steam expands and moves many series of intricate blades which cause the shaft to rotate. The design objective is to transform a maximum amount of the steam's internal molecular energy into rotary motion of the turbine. Turbine losses principally result from friction, turbulence, and leakage. As the steam molecules encounter the blades and cause them to rotate, a certain amount .of friction is produced between the molecules and the blades. Also, there is some random turbulence within the steam going through the turbine; this non-linear motion does not contribute to the turbine's operation. Another significant energy loss results from leakage of the steam around the turbine's blades. Even though@ design and fabrication is very precise, some leakage is inevitable. The full-load efficiency of the best turbines approaches 85 percent. However, this efficiency can drop off rapidly if such turbines are not operated at their design loads, or if minor imperfections are allowed during fabrication and installation. The current limiting constraint for nuclear plants is the 6500F maximum sustainable temperature for the fuel cells and control rods. The basic prin- ciple for combustion in a fossil-fueled plant simply is to add air and fuel to a furnace at the necessary temperature, provide agitation to bring the two into contact and let the fuel and oxygen burn. Thi-s process is not .100 percent efficient. The principal losses result from incomplete combustion, heat loss with exhaust gases, and inefficiencies -in the heat transfer process from the combustion gases to the working fluid@. While relatively little 92 progress has been made in improving the thermal efficiency of boilers beyond about 90 percent, considerable improvements in the economic efficiency (i.e. , fuel savings) of such operations have been achieved. The generation process involves conversion of the rotary motion of the turbine shaft into electrical energy. The currently best possible mechanical- electrical conversion efficiencies exceed 95 percent, but no significant increase above that is anticipated. Principal problems usually result from material failures or fabrication shortcomings which cause overheating. Some utility personnel feel that the generator probably is the most efficient, trouble- free component in the entire generation system. (Personal Communication, 1972) Summary of Current Capabilities and Prospective Improvements in Efficienc of the Generation System (1) Theoretical constraints imposed by the Second Law of Thermo- dynamics, and naturally occurring air and water temperatures limit the theoretical efficiencies of fossil-fueled plants to 68 percent, and nuclear plants to 55 percent. (2) Practical design and operating considerations lower their best attainable efficiencies to approximately 40 percent and 32 percent respectively. (3) Nothing on the drawing board or in the conceptual stages promises to provide a significant substitute for steam-cycle plants. (4) No method of greatly increasing these efficiencies appears likely in the foreseeable future. (5) Taken collectively, advances in generation technology will not have a significant impact on the overall production of waste heat requiring disposal. 93 IV. 2 COOLING ALTERNATIVES There are several compelling facts that emphasize the need for new cooling technology. The demand for electricity 1wll continue to grow; present and new generation facilities will continue to rely on some form of the steam- electric cycle; plant efficiencies will not greatly increase above the current levels; energy will become relatively scarcer with increasing demands; competition will drive prices up; curtailments and mandatory allocation will be a reality; and the environmental regulations on waste heat disposal will continue., Therefore, new cooling technology must be developed and applied to meet these environmental constraints under increased loads, at the lowest possible cost, and with the minimum expenditure of additional energy. This section details the alternatives available for handling this future waste-heat load and discusses the merits and liabilities of each cooling system. Considerations in Choosing Cooling Systems When making decisions between two or more alternatives, factors other than the capital and operating costs of the equipment must be considered. Some of the related considerations include: (1) Flexibility - How well can a given cooling system be modified to meet changing standards? As more and more agencies get into the regulatory business, it becomes necessary for the utility to anticipate future requirements. The advantages of a system which can be readily upgraded become apparent. (2) Resource Requirements - A given system may 11 solve" the thermal discharge problem, but may create associated difficulties or re- quire increased amounts of other resources which make the system impractical. For example, fresh water cooling towers, on a closed-cycle system would eliminate thermal discharge -into an estuary, but the consumptive use of water in such towers might 94 require withdrawal of essentially all of the fresh water inflow to the estuary. Such reduction of inflows would be moredetri- mental than the addition of thermal energy--a classic case of the cure being worse than the illness. Land requirements for cooling ponds, or energy requirements for dry tower operations, are examples of other resource requirements which must be considered and assessed. (3) Public Image - Most private and public electric utilities have fallen under criticism from environmental groups and consumer advocates, If a cooling system can be selected, designed and operated in a manner to produce and show associated benefits to society, then it becomes a valuable public-relations asset. Some examples would be a cooling pond used as a fishing reser- voir; a viable aquaculture project; possible open-space and recreational areas near a plant, etc. (4) Adaptability to Intermittent Operation - The likelihood of fuel shortages for fossil-fueled plants is a certainty. This situation makes it desirable to have a cooling system which can operate on a "go-stop-go" basis with a minimum of special attention. (5) Flexibility in Cost Trade-Offs - Situations are certain to develop where it may be desirable to deviate from a strict minimization of the total amortized capital cost plus operating expenses. The high .cost of money, 8-1 to 9 percent, coupled with other uncertain- 2 ties, may make it more attractive to save on the initial investment and endure higher operating costs. The individual decisions to be made in selecting a specific cooling tech- nique for a given plant will depend upon all of the above, plus other less tangible factors such as the attitude of the utility's management, the local regulatory "climate" , recent experiences with regulatory authorities, local public attitudes, etc. While all of these considerations are significant and 95 may ultimately be more important than strictly technical-economic considera- tions, detailed development.and exploration of such non-quantifiable concerns will not be attempted in this report. Heat Dissipation Outer space is the ultimate sink for all waste heat from the generation process. Heat rejection systems capable of direct atmospheric heat disposal are conceptually possible but because of practical considerations, water is used to remove the heat from the condenser in all existing U.S. thermal- electric power plants. The water either gives off the acquired heat energy directly to the atmosphere or transfers the heat to larger water bodies where the energy is eventually given off to the atmosphere. These processes of evaporation, radiation, conduction, and convection are the same for once-@-through, cooling ponds, spray ponds, or wet towers. Different systems simply alter the relative importance of the individual pro- cesses. For example, radiation may predominate in ponds where evaporation accounts for the bulk of energy transfer in wet towers. The classical depiction of the air-water interface (Edinger and Geyer, 1965) is presented in Figure IV. 2A. The general energy budget for a unit surface are .a of a reservoir can be written as follows (Krenkel and Parker, 1968): Q K, -Q) + (Q _Q _Q ) + Q _Q _Q _Q (Eq. IV. 2. 1) s r a ar bs v e h w 2 where (all Q's given in BTU/FT Day): Q increases in energy stored in the body of water Q short-wave radiation incident to the surface Q reflected short-wave radiation r 96 Q a = incoming long-wave radiation from the atmosphere Qar = reflected long-wave radiation Qbs = long-wave radiation emitted by the body of water Q = net energy brought into the body of water by inflows, including v precipitation Qe = energy utilized by evaporation Qh = energy conducted from the body of water as sensible heat QW = energy carried away by the evaporated water Four terms in equation IV. 2. 1 are of particular interest because they describe the mechanisms by which all waste-heat energy must be dissipated from a power plant. These terms are evaporation (Q e + Q w), conduction (Qh) and radiation (Q bs ). Figure IV. 2A shows the major terms in the liquid-air heat transfer equation and indicates their relative importances. Analysis of the detailed behaviour of thermal discharges generally in- volves the mathematical modeling of the hydrodynamic characteristics of the outfall. This process is coupled with a model which describes the dissipation of the thermal energy simultaneously into both the surrounding water mass and the atmosphere. The ecological impact of the heated effluent also must be assessed. Techniques generally are established and well accepted to perform the first two analytical steps. Unfortunately, no such methods currently exist for determining the ecological impact of such discharges. In fact, con- siderable disagreement exists over whether such discharges are significantly detrimental, especially in climates where the Aquatic ecology is essentially composed of warm-water species. In-depth discussion of such analytical techniques is beyond the scope of this report. Hs=Solar Radiation (400-2800)* H2 = Long Wave Atmospheric Radiation (2400 - 3200) j@Hb,= Long Wave Block Radiation (2400-3600) ALHe= Evaporative Heat Loss (2000-8000) ALHe Conductive Heat Loss, or Gain (-320 - + 400) =Reflected Solar( 40-200 ALHsr jLHar =Atmospheric Reflection( 70 -120) *All Units in STU Ft-2 Day-' HEAT TRANSFER A-CROSS THE AIR -WATER INTERFACE (AFTER EDINGER AND GEYER) FIGURE IV.2A 98 Processes for Disposing of Waste Heat Once-through cooling is the most elementary method of disposing of waste heat. Three basic devices--ponds, wet towers, and dry towers--may also be used to supplement once-through cooling in a non-recycling system, or to replace the once-through system with some sort of closed system. Taken in combination, and considering both fresh and salt water, a number of possi- bilities shown in Table IV. 2A can be developed. These data indicate that the availability of fresh or salt water for cooling is a most important consideration. Careful differentiation is necessary between the cooling devices and the system arrangement. "Device" refers to the mechanic al/physical apparatus used, and may be a pond, tower, etc. "System" arrangement means the way the device is used. For example, a pond or tower can either be used in a closed system (i.e. , one employing recycling), or as suppl emental cooling in a once-through arrangement. A closed-cycle system is compared to a once- through system with supplemental cooling in Figure IV.2B. Most devices may be used in either a closed cycle or a supplemental system. Technology is not presently available, however, to build salt-water cooling towers. Corrosion is a minor problem, but the principal difficulty re- sults from salt mist drift from such towers which can cause devegetation and other difficulties. If salt water is to be used in closed-cycle pond systems, a considerable amount of the recirculating water must be discharged and re- placed to prevent the build-up of solids in the system. Excessive solids will cause scaling, mineral deposits, and impair the efficiency of the heat exchanges. Factors other than environmental protection or cost may combine to determine whether or not once-through, closed-cycle, supplemental, or dry systems are to be used. The principal design parameters which must be con- sidered for cooling devices are summarized in Table IV. 2B. For example, in 99 SYSTEM/DEVIC E FRESH SALT/BRACKISH WATER WATER ONCE' THROUGH Y Y CLOSED CYCLE REGULAR PONDS Y L SPRAY PONDS Y L WET TOWERS Y N SUPPLEMENTAL REGULAR PONDS Y Y SPRAY PONDS Y L WET TOWERS Y N DRY TOWERS Y(na) Y(na) Y = YESCURRENTLY READILY AVAILABLE AND USABLE L = GENERALLY USABLE, BUT CERTAIN FACTORS MAY SIGNIFICANTLY LIMIT THEIR USE. I N = NOT CURRENTLY AVAILABLE DUE TO TECHNOLOGICAL CONSTRAINTS na NOT APPLICABLE - ie, IN THE CASE OF DRY TOWERS, COOLING WATER IS NOT NEEDED. PRINCIPAL COOLING TECHNIQUES TABLE IV.2A 100 MAKE-UP WATER FROM TURBINE -------- CONDENSERS COOLING DEVICE (POND OR TOWER) TO BOILER E BLOW-DOWN CLOSED CYCLE COOLING FROM INTAKE - RIVERS, ESTUARY, ETC. FROM TURBINE CONDENSER COOLING DEVICE (POND OR -rowER) TO BOILER SUPPLEMENTAL COOLING CLOSED CYCLE AND ONCE THROUGH COOLING SYSTEMS FIGURE, IV. 213 101 A. A@q csj V (? A., X cj Cli co ONCE THROUGH 1 1 2 1 2 1 1 REGULAR, POND 1 1 2 1 1 2 1 2 SPRAY -POND 1 1 2 1 2 2 2 2 WET TOWER4ND) 1 1 2 0 0 0 0 2 WET TOWER (MD) 1 2 2 0 0 0 0 2 DRY TOWER 2 1__LLO 0 0 0 0 I = PRIME IMPORTANCE 2 = SECONDARY IMPORTANCE 0 = MINIMAL IMPORTANCE PRINCIPAL DESIGN PARAMETERS FOR VARIOUS COOLING DEVICES (AFTER CHENEY a SMITH,1969) TABLE I V. 2 8 102 some water short areas plagued with intermittent or fluctuating stream flows, closed systems containing substantial on-line storage may be used to insure the availability of cooling water. Similarly, in arid coastal regions, any fresh-water cooling may be avoided because of competing uses for the same limited fresh-water supplies. Once-Through Cooling: Advantages and Di sadvantages This method is generally used whenever possible because of simplicity and low cost. Typical once-through configurations for the r iver and coastal situations are shown in Figure IV. 2C. Environmental constraints on thermal discharge, however, often prohibit this process. This method also requires substantial amounts of water. Approximately 30-50 gallons/KWH are circulated through the condensers, but the consumptive use is only about 0.20-0.30 gal- lonsAWH. This consumptive use is about the same as for cooling ponds. Once-through cooling is equally applicable to either fresh or salt water; however, the costs of a system for salt water normally are slightly higher. Cooling Ponds: Advantages and Disadvantages Ponds often are used when substantial land area is available at a moderate cost. Two typical coolihg-pond configurations are illustrated in Figure IV. 2D. The surface area for a given size plant depends on local meteorological con- ditions. One study (Vanderbilt, 1971) examined the effect of geographical location on cooling-pond performance and design. The literature is filled with detailed studies of the mechanics of evaporation dating back to the Lake Hefner Project (Anderson, 1954) and with detailed evaluation and design procedures for sizing cooling-ponds (Raphael, 1961; Edinger and Geyer, 1965; Dynatech, 1971). 103 DIRECTION OF STREAM FLOW DISCHARGE INTAKE P L A N T RIVER DISCHARGE PLANT INTAKE COASTAL TYPICAL ONCE THROUGH COOLING CONFIGURATIONS D@IRECTI@ON FIGURE IV. 2C 104 INFLOW INTAKE PLAN DISCHARGE DAM OUTFLOW RESERVOIR BEING USED AS A COOLING POND INTAKE PLANT BAFFLES,,@L MAKE-UP AND-*-&- SLOW DOWN DIKED,OFF CHANNEL POND TYPICAL COOLING POND CONFIGURATIONS FIGURE IV. 2D 105 The many variables involved in estimating pond size plus the wide fluctuations naturally inherent in these variables due to location and meteor- ological phenomena, generally cause most regulatory bodies to insist on .large safety margins (i.e. over-de signs") to minimize the likelihood of undesirable environmental impact. The pond performance is most crucial during the summer season when the natural conditions'are least favorable. Mo'st ,utilities in Texas use a rule-of-thumb method for sizing ponds. (Personal Communications, 1972, 1973) For a modem fossil-fueled plant the norm is approximately 1A ac*re/MW (megawatts) and for nuclear plants this increases to 1. 5 acre/MW. Data presented in the Vanderbilt study (1971) indicate that the natural conditions that may occur across Texas during summer months tends to substantiate this rule-of-thumb procedure. Another rule-of-thumb method (Dynatech, 1969) also is approximately the same; namely 1 acre/MW + 20 percent for fossil-wfueled plants and 2 acre/MW for nuclear plants. Edinger and Geyer (1965Y identify three principal types of cooling ponds: completely mixed, flow-through (plug-flow),'o'r internafty-circulating ponds. Flow-through ponds,' where the temperature decreases linearly between the plant discharge and the plant intake or pond outfall, is the type most commonly found at power plants in Texas. The inlet and outlets are usually so located to insure this type of behavior. In simple. rectangular ponds, baffles can be added to maximize travel distance and prevent short circuiting. In Figure IV.2D the lower example is typical of this design. Unfortunately, ponds alone are not a.lways'capable of returning heated water to the original ambient temperature if the initial water and air:. tempera- tures were about the same. As one author (Dynatech, 1971) points out, a pond of infinite size would be required to cool the water back to equilibrium temperature. The same source observes that bout the best pond-cooling at- tainable under: practica 1 conditions still leaves a 2-30F net temperature rise. 0 If regulatory agencies required a temperature rise of less than 2 F, ponds 106 used alone would not always be satisfactory under certain conditions. In the study area, several types of cooling ponds are postulated, in- cluding a diked salt or brackish water pond with baffles; an off-channel, fresh- water pond,. probably built in a shallow valley; a shallow reservoir, and a deep reservoir. The latter two would almost certainly be general, multi- purpose facilities providing water supply, flood control, and recreation, in addition to power plant cooling. The off-channel, fresh-water pond would probably not be multi-purpose in the general sense, although such a pond might be used for aqua-culture activities with the surrounding land developed as recreational open space. Cooling pond costs are normally a direct function of land price. Simple ponds may be only slightly more expensive than once-through systems unless land is very costly. However, if a major reservoir is being used as a cooling pond, and a substantial portion of the reservoircost is allocated to the electrical utility, then cost can become quite significant. In certain in- stances, it may be expedient for the utility to purchase existing water rights from other users (e.g., irrigation interests) and these costs could add a non- trivial expense. Evaporative Towers: Advantages and Disadvantages Wet cooling towers capitalize on the significant amount of energy re- quired to evaporate water. The energy source for this physical process is the excess thermal energy, i.e. , waste heat, contained in the cooling water. For a typical fossil-fueled facility, an evaporative loss of about 0.75 gallons/ KWH may be experienced at a heat rejection rate of 5300 BTU/KWH. Evapora- tion accounts for about 75 percent of the cooling in wet towers compared to about 25 percent for once-through or ponds. These specific rates vary sub- stantially with geographic location and transient meteorological conditions. 107 Evaporative cooling towers can be natural draft (ND) towers or mechanical draft (MD) towers. In the ND towers, several natural phenomena are allowed to work collectively to produce updrafts and the evaporative cooling effect. MD towers utilize blowers to supplement the natural processes. The principal design factors are the temperature and enthalpy differences between the water and the air. Other. significant parameters include barometric pressure, wind velocity (especially for certain ND designs), water quality, and the nature of the air-water interface. The tower is designed to maximize the interfacial contact area between the air and water masses. Various de- sign configurations within each of these two categories are possible. Natural Draft Towers--ND towers are somewhat simpler than MD towers because they have no mechanical devices to enhance air flow. However, this same fact makes them more dependent on atmospheric conditions and necessi- tates larger structures. ND towers come in three basic configurations: spray- filled, counterflow, and crossflow (Dynatech, 1969). These are shown in Figure IV. 2E. The spray-filled, or atmospheric. tower (Figure IV. 2E. 1), is the simplest possible design and can be built with or without internal packing., The water enters the top of the tower in small droplets and falls through the tower to the bottom where it is removed. These towers are built with a flat side perpendicu- lar to prevailing winds to'maximize air through-put. Closely-spaced louvres serve to minimize the drift losses on the downwide side while the same louvres induce some turbulence in the incoming air streams. Such towers are the least expensive to construct and provide relatively trouble-free mainten- ance, but are somewhat inefficient and provide a small, cooling range. This low range, coupled with the sensitivity to changing winds, precludes the use of atmospheric spray towers on all but the smallest power stations. 108 WATER IN AIR AIR IN I N WATER OUT IV.2E.1 SPRAY TOWER AIR OUT Al R OUT DRIFT EUMINATOR PACKING WATER IN WATER IN AIR IN AIR IN AIR IN WATER OUT El OUT L_WATER IN IV. 2E. 2 IV. 2E.3 COUNTER FLOW HYPERBOLIC CROSS-FLOW HYPERBOLIC TOWER TOWER R" IN T ATOR -_jKING EJRIN WAT@R A TYPICAL NATURAL DRAFT EVAPORATIVE COOLING TOWERS (0TER DYNATECH, 1969) FIGURE IV. 2E 109 All large ND towers currently in use are of the hyperbolic design. This particular design utilizes density differences between the air in the tower barrel and that outside to produce upward cur-rents in the tower and thus create a natural draft. Air enters the tower at the base and'is brought into contact with heated water. This heated, lighter air is displaced at the tower base by outside, cooler heavier air and the heated air is for ced upward through the tower barrel. This phenomenon sets up a continuous process that usually produces verical exit velocities of 10-12 feet per second. Such velocities will drive the exit plume up and generally keep the moi sture-laden air away from the ground and allow the heat to dissipate into the atmosphere without any adverse, localized ground effects. Hyperbolic towers may be of counte r-flow (Figure IV.2E.2) or crossflow (Figure IV.2E.3) design. The pressure differential concept is the basis for both; the way in which the airandwaterare brought into contact at the tower base is the main difference. Counterflow designs have slightly more cooling capacity for a given size because of superio r air-water interfacial contact. However, there are about as many,towers of each design currently being built. Typical designs are 300-400 feet tall with base diameters about 70 percent of height, and throat diameters about 50 percent of base diameters. Hyperbolic towers usually are designed for the least favorable meteoro- logical conditions; thus, over-designs are normal. However, all natural- draft towers perform well at off-de@ign operating conditions. Initial costs of hyperbolic, ND towers can be quite large, especially Af the design includes the' structural strength to'survive 200 mph hurricane winds. However, the low operating costs, which include only a limited pumping head on the circulating water, and general facility maintenance, may compensate for higher capital costs. 110 Mechanical-Draft Wet Towers --Mechanical-draft (MID) wet towers de- pend on the same physical mechanisms to transfer energy from the heated water to the atmosphere as do ND towers. The difference is that MD towers use blowers to move the large quantities of air through the towers to enhance contact with the water. These blowers eliminate the dependence on natural drafts and wind velocity, thus providing more control over the cooling process. MID towers also are significantly smaller than ND towers of equal heat transfer capacity. MID towers, in return, are more complex and require significant amounts of energy to run the blowers. Like ND towers, the design usually is based on the "worst" probable conditions. The blower through-put can be varied to conserve energy when operating at off-design conditions. Under certain conditions, moderately high winds-can impede the performance of some MID towers. The three most common MID designs are the forced-draft, the induced -draft -counterf low tower, and the induced -draft-cro s sf low tower. These three configurations are shown in Figure IV. 2F. The simplest MD tower is the forced-draft design (Figure IV. 2F. 1) . These towers are structurally easier and generally cheaper to build than other MID designs since the fan is located near the base. Also, placement of the blower at the.inlet rather than at the outlet, greatly reduces erosion and corrosion on the fan blade and other mechanical parts. Stability diffi- culties restrict the maximum fan size to about 12 feet. In cold weather the blower mechanism may ice up, whereas in an induced system the blade is in the exhaust; and thus, freezing does not occur except in very extreme cli- mates. Possible short-circuiting of exhaust air can cause significant diffi- culties. The forced-draft design is not widely used by the utility industry, although these systems have seen considerable. application in the chemical and petrochemical industry. The induced-draft counterflow evaporative tower, shown in Figure IV. 2F.2, is the most commonly used MD tower in the utility industry. These AIR OUT AIR OUT <Z:x=> WATER WATER @IN AIR AIR <11N IN WATER WATER OUT OUT IV. 2F. I IV. 2F.2 FORCED DRAFT TOWER INDUCED-DRAFT COUNTER FLOW TOWER AIR OUT WATER WATER I N IN </ AIR AIR I N I N 14 WATER OUT IV. 2F.3 INDUCED-DRAFT CROSSIFLOW TOWER TYPICAL MECHANICAL DRAFT 4 N =1 =3 i C:_ JAT R Uj T EVAPORATIVE COOLING TOWERS FIGURE IV. 2F 112 towers typically are 60-75 feet high and have vertical exhaust velocities of 5-10 feet per second. The upward exit velocities are designed to push the exhaust stream upward with enough momentum to insure dissipation into the atmosphere, thus reducing possible ground fog and related undesirable ef- fects. Counter-flow towers adhere to the general rule that any counter-flow heat exchanger device is more efficient than parallel-flow or cross-flow de- vices of equal size. By placing the blower in the exhaust stream, the threat of icing is greatly reduced, but the fan and supporting mechanical equipment is subjected to more erosive and corrosive elements. Even though the operating costs will increase, this is offset by the close control of the cooling process which is possible by blower output variation, allowing for relatively precise adjustment and selection of exhaust temperatures. Induced-draft crossflow towers have many of the advantages of the induced-draft counterflow towers; however, crossflow towers are usually shorter and require less pumping head; this advantage often is offset by the requirement for substantially more blower horsepower. The crossflow design is generally less efficient at heat transfer than the counter flow configuration. It is more likely to ice up and require more land area than a counterflow tower of the same capacity. If evaporative cooling towers are to be used, and sufficient fresh water is available for their operation, the-selection of the general type (ND or MD) and specific configuration depends on many considerations. Principal p.ara- meters include land area, anticipated energy (fuel) costs, corrosiveness of available water supplies, aesthetics, wind resistance requirements, etc. Actual selection of a type of system and subsequent design depend on many specifics which are beyond the scope of this investigation. 113 Dry Cooling Towers: Advantages and Disadvantages If no water is available for cooling purposes, and if water quality regu- lations will not permit heated water discharges, dry-cooling towers offer a possible alternative. At this time, no dry towers are being used on power plants in the U.S. The only large dry towers currently in use are at Rugeley, England. There, a hyperbolic dry tower 350 feet in height and with base and throat diameters of 325 feet and 205 feet respectively, is being used to cool a 120 MW plant (Dynatech, 1969). Since the design is entirely a function of air temperature, a tower of similar size would have somewhat less cooling capacity in the hot Southwest where the temperatures are substantially higher than: in England. All large dry towers utilize the Heller cycle rather than direct air cooling of the steam-cycle fluid. Figure IV.2G shows a simplified schematic of the Heller system. The dry tower itself is essentially an air-cooled heat ex- changer in which a cross-flow fin is located inside a chimney. The fin is designed to maximize the controlled air flow over the exchanger. Such towers can be either natural or mechanical draft. In this system, two loops of flowing water are used. One water system provides the usual working fluid for the steam cycle. The other water system receives the he-at from thi s working f luid through a heat exchanger, and then goe s to an air-cooled heat exchanger where its thermal energy is dissipated directly to the atmo- sphere. The type of dry cycle which does not use an intermediate fluid is .generally known as an air-cooled condenser. In this device, the discharge vapors from the turbine enter directly into the air exchanger and pass through finned tubes where air is blown over the tubes. The condensed liquid is returned to the boiler for another cycle.: Such air-cooled- condensers are used only for very small-cooling situations, and none have been developed 114 AIR FLOW TURBIN GENERATOR AIR-LIQUID HEAT EXCHANGER LIQUID LIQUID BOILER HEAT EXCHANGER INTERMEDIATE FLUID STEAM FLUID SIMPLIFIED HELLER SYSTEM, FIGURE IV. 2G that would suffice for even a small power-generatio'n plant. While the know-how is readily available to design and build operational dry towers for even the largest power plants, several factors tend to limit their practical application. The capital cost of dry towers is more than double that of wet towers. Total operating cost, including amortization and fuel, may run four to five times that of wet towers. Of course, if no water is available, or if the water is very expensive, dry towers conceivably might be the logical economic choice. Sheer size creates another problem. A large modern plant of 3500 MW could require 20 or more towers 400 feet high and with base diameters of over 350 feet. The appearance of such a set of structures might be aesthetically unacceptable to the public, particularly in very flat terrain such as that along the Texas coast. In certain cases, competing land uses may eliminate dry towers because of the substantial land area required. Susceptibility to hurricane damage is another consideration. These structures which are usually large, thin concrete shells, would have to be designed to accommodate the 150 mph plus winds associated with the major hurricanes, and this would greatly increase costs. Restoration of electrical service after such a natural disaster is of utmost importance to all concerned; if a plant's dry towers were disabled, the plant could not operate--a situation that would not be encountered with othe r cooling processes. Unlike other cooling systems, a dry tower cannot be viewed as an "add-on" cooling device, for dry towers must be carefully designed and built as an integral part of the overall generation system. Many cost trade- offs exist between system capital cost and operating efficiency. Careful cost-optimization studies must be performed t o design and size the overall facility, including the dry cooling system as well as the production system. For this reason, it is impractical, or at least prohibitively expensive in terms of dollars and other resources required to attempt to add dry towers to an existing plant. 116 Because of all these reasons, the use of dry-tower systems is abhorrent to most persons who are well-acquainted with the electric power industry. On the other hand, many environmentalists believe that such towers are the only acceptable solution to the "thermal pollution problem". The future of dry- cooling towers for power-generation facilities in the U.S. is undecided. The eventual outcome will have significant implications for everyone. Cooling System Costs In the long range planning for large-scale power systems, -there will always exist a certain amount of uncertainty in estimating the costs of alter- native cooling systems; the best one can hope to do is minimize that under- tainty to acceptable levels. Such uncertainties arise from a number of factors, including future performance requirements, technological break-throughs in techniques and materials, inflation, and indirectly from regulations such as Occupational Safety and Health Act (OSHA), etc. The uncertainty decreases with the size of the system under consideration and the state of the planning/design process. Estimates of the total cost necessary to attain the zero-discharge requirement for all power generation in the U.S. between now and the year 2000 must be considered rough at best, possibly plus or minus 100-200 percent or more. On the other hand, the estimates of cooling-system cost for a specific plant in the advanced stages of design should be within a few percent of the actual costs. For a 30-year planning horizon and a specific sub-state region with one principal load center, with only a few feasible cooling alternatives available due to local conditions, the reliability of the cost estimates would fall between the above bounds. Most information that has been reported in the literature can be put into one of two categories, either broad-based projections on a national 117 basis or case studies of a particular 'lant.. Ample generalized dat p I a are avail- able, but specific case history data are scarce. This scarcity is caused by two compounding factors. Normal accounting procedures do not differentiate between dollars spent on cooling and non-cooling parts of the facility, a fact which makes accurate cost reporting of the cooling systems difficult. Then too, most utilities are not eager to distribute cost information because such action is almost certain to generate criticism over rates, etc. For corporate planning purposes, utilities develop internal estimates of the many alternatives; however, these estimates generally are not available to out- siders. Studies and estimates of increased dollar costs under various thermal pollut ion control policies have been conducted. One representative study (Cheney and Smith, 1969) was done by the Travelers' Research Corporation for the National Coal Policy Conference. The purpose of the overall study was to "provide abroad system overview of the production and disposal of waste heat within the thermoelectric generation process; ... and form the basic framework within which such an evaluation can proceed. . . Probable overall costs to the power generating industry were determined based on various waste-heat discharge policies that might be adopted by the federal government. Three basic policies were postulated and costs developed. The policies were a "pristine pure policy", a "nondegradation policy", and a 11practical maximum policy". (See previous discussion, Section 111. 2) The authors of that report emphasized that the results must be considered only as "order of magnitude" estimates because of emerging technology, local cost variations, environmental conditions, ambiguous state of governmental regu- lation, and the differences within the industry. Obviously, for any national study, the development of rational heat- control -abatement programs for each plant, computation of individual costs, and 118 summation of these costs to get a total national cost are virtually impossible. Therefore, several broad assumptions about the reaction of the industry as a whole to meet future standards is necessary. The costs of this general reactive abatement program must be computed and applied industry wide. While the overall results should be representative, it would be misleading and improper to apply such data to an individual plant, or even a single utility system. In addition to the three policy assumptions previously mentioned, the Cheney and Smith estimates were based on the use of MD evaporative cool- ing towers used either as supplemental cooling devices or in a closed-cycle system. Even though the authors readily recognized that not all cooling would be provided by MD evaporative towers, they contended that the aggre- gated estimates were sufficiently realistic for their purposes. The results of the Cheney and Smith study are summarized in Table IV. 2C. The cost predictions for total industry expenditures on thermal pol- lution abatement range from a low of $2.46 billion to a high of $6.85 billion. Unfortunately the published report of Cheney and Smith did not discuss the unit cost data from which these figures were developed. While such nation- ally aggregated data may not be of any direct use to this investigation, the data do provide some insight into the magnitude of the overall problem on a national basis and illustrate the type of information which is frequently pub- lished in the literature. Recent Federal Power Commission studies reported in the Nuclear Forum (Warren, 1970) have been conducted along similar lines; i.e. , using three assumptions about the level of required environmental controls. (See Section 111.2 for discussion) Warren's basic assumptions are somewhat similar, ranging from a reliance on simple once-through cooling wherever possible to closed systems for all plants, both new and old. 119 COOLING ALTERNATIVE TIME GENERATION ANNUAL COST PERIOD AFFEMD OF ABATEMENT (BILLIONS KWH) (M I LLIONS OF (A) "PRISTINE -PURE" 1970 1,038 4 73 1980 2210 5 84 7 1'70-IK 161672 6,8 5 5 8) "NO N- DEGRADATION" 1970 2 49 7.6 1980 11482 53 3 1'70 -'801 8,898 219 5 2 (C) "PRACTICAL MAXIMUM" 1970 3 6 4 13 8 1980 11449 3 4 6 1:'70-'8 7,905 214 6 4 01 ESTIMATED TOTAL NATIONAL ANNUAL COST ESTIMATES FOR THERMAL POLLUTION ABATEMENT FOR 1970-1980 UNDERVARYING PUBLIC POLICIES AFTER CHENEY.a SMITHs 1969) IrABLE IV. 2C 120 Th ese data which are summarized in Table IV. 2D indicate that between now and the year 2000, the industry will spend somewhere between $5.5 and $9 billion to dispose of waste heat, which will total more than 15,500 trillion (15.5 x 10 15 ) BTU's, an amount equal to about 2.7 billion barrels of oil. For the 1970-1980 period, these figures range between $1.8 and $4.1 billion, which is somewhat lower than the total national cost estimates of $2.46 and $6.85 billion developed by Cheney and Smith. The difference is most noticeable when the tightest environmental control policies are imple- mented. This difference is partially explained by Cheney and Smith's ex- clusive reliance on MD evaporative towers, while Warren used a mixture of towers and ponds and in some cases, deep ocean outfalls to achieve the re- quired cooling. Taking these basic differences into account, the two studies are in general agreement. Warren makes a cautioning statement about his results which is applicable to all such studies: " . . the resulting figures produce no significant (quantitative) conclusions. They do, however, give an idea of the gross mag- nitude of investment in cooling facilities and the impact on power costs of this phase of environmental protection ... continual assessment of the benefit-to-cost ratio--with the broadest pos- sible interpretation of 'benefits' and 'costs'--will provide the best guide for decisions in critical judgment cases. . . A study by Dynatech (1969) prepared for the Environmental Protection Agency consisted of a survey of alternative cooling methods including the pros, cons, and estimated costs of each. This study produced a wide variety of individual cost data, as well as discussions of the various cool- ing systems. The last section of that report developed a set of tables which gave the comparative capital, operating, maintenance, and total costs, and added cost to the consumer, for eleven different cooling schemes for 100F and 200F condenser rises for both fossil-fueled and nuclear plants. The eleven alternatives included: (1) Once-Through Run-of-River (2) Once-Through: Estuary 121 REGION t MILLION 71-80 81-90 TOTAL NORTHEAST A 335 620 955 B 435 810 j305 C 815 895 1710 EAST CENTRAL A 255 430 685 B 335 615 950 C 670 615 1285 SOUTHEAST A 415 775. 1190 B 535 940 1475 C 985 955 1940 q WEST CENTRAL A 185 390 575 B 255 640 895 C 495 655 1150 SOUTH CENTRAL A .275 540 815 B 345 740 1085 C 510 755 1265 WEST A 390 835 1225 13 405 1055 1460 C 625 1060 1685 NATIONAL TOTALS A 1855 3590 5445 B 2310 4860 7170 C 4100 4935 9035 ESTIMATED 70TAL NATIONAL COOLING. COSTS FOR 1970 -1990 @(AFTER WARREN,1970) TABLE IV. 2D 122 (3) Cooling Pond (4) Spray Pond (5) ND Wet Tower with River Makeup (6) ND Wet, Tower with Reservoir Makeup (7) MD Wet Tower (8) ND Dry Tower (9) MD Dry Tower (10) Evaporative Condenser (11) Air-Cooled Condenser The reported data for a 1000 MW nuclear-fueled plant with a condenser AT of 20OF are summarized in Table IV. 2E. A number of assumptions about plant efficiency, water availability, local meteorological and geological con- ditions, construction costs, and other factors were made. The calculations were based on heat rejection rates of 6410 BTU/KWH for the nuclear units and 3840 BTU/KWH for fossil units. The resulting overall efficiencies were 33 percent for the nuclear plant and 40 percent for the fossil-fueled plant. The Dynatech results were generalized over the entire country, and did not consider the regional conditions of any particular study area; how- ever, a few of the observations are still illuminating. The lowest costs were incurred with once-through systems and the highest were for dry towers; with ponds, evaporative towers and spray ponds falling in between. Comparative cost data were generated and presented for evaporative condensers and air- cooled condensers for the hypothetical 1000 MW plant, even though the text specifically states that such devices never have been built in sizes large enough for even a small power plant. For this reason, these data must be considered purely speculative. The relative costs of the alternative systems are compared graphically in Figure IV. 2 H. The value is a total unit cost in mills/KWH, which includes CAPIIAL COSTS OPERATING MAINTENANCE TOTAL ADDITIONAL TOTAL UNIT $/KW COST COST COST COST TO COSTS $ /KW-YR @/KW-YR $/KW-YR CONSU K 04HERPE MILLS/ KWH ONCE THROUGH - RIVER 5. 24 0.50 0.50 1 . 47 0 0.1 68 ONCE THROUGH-ESTUARY 6. 24 0.50 0.50 1 .56 0.05 0.1 78 COOLING POND 7.50 0.6.2 0.62 1 .92 0.26 0.219 SPRAY POND 8.10 1 .00 0.50 2. 23 0.43 0.255 N D, WET TOWER -RIVER 11 .50 1 .00 1 .00 4.08 1 49 0.466 NDWET TOWER-RESERVOIR 14.00 1 .00 1 .00 4.3 1 1 .62 0.493 MD WET TOWER 9..40 1 . 33 1 .33 4.20 1 .56 0. 480 ND DRY TOWER 22.0 1 .00 1 .00 5. 38 2. 24 -0.615 -M D DRY TOWER 15.0 1 .33 1 .33 5.41 2.26 0.618 EVAPORATIVE CONDENSER 13.0 1 .40 1 .40 4.67 1 .83 0.534 J.AIR COOLED CONDENSER 17.0 1 .00 0.50 4.43 1 .70 0.506 8 3 J4 0 6 RELATIVE COSTS OF ALTERNAT IVE COOLING SYSTEM FOR NUCLEAR PLANT WITH AT = 200 F (AFTER DYNATECH,1969 TABLE IV. 2E MILLS K.W.H. 0 0 0 0 0 6 in 0 0 Z;o CooQNG ONCE THROUGH AND PONDS -nmm Y, G)X0 C (n S cc) 0 rrl (n 0 4fo -n WET TOWERS N:0 > 4(D 3: 4fD x DRY TC Z.. < m 125 an amortized annual capital cost (30 years at 9 percent, plus operation and maintenance). In Figure IV.2H, the cooling costs for the alternatives discussed fall into three distinct categories: once-through plus ponds, wet towers, and dry towers. The cost of wet towers is about double that of once-through sys- tems and ponds, while dry towers are about 50 percent more expensive than wet towers, or about three times the cost of the cheapest alternative. These are generalized data based on aggregated and/or averaged parameters; how- ever, these general relationships are probably valid for most locations, unless some particular local condition excludes one of the alternatives. A-rough comparison of these data with those of the earlier cases (Cheney and Smith, 1969; and Warren, 1970) is enlightening. Cheney and Smith, in order to achieve the "pristine pure" condition estimate a total out- lay of $6.8 billion between 1971 and 1980, based on 16.6 x 10 12 KWH being affected by abatement measures. If one takes the Dynatech figures for ponds (approximately 0.20 mills/KWH) and wet towers (approximately 0.50 mills/KWH), and assumes that each system will be used for half of the facil- ities, the average cost would be 0.35 mills/KWH. Multiplying this by the 12 number of KWH projected (16.6 x 10 gives an estimated cost of $5.8 bil- lion, which is fairly close to Cheney and Smith's estimate of $6.8 billion. Warren's data for the same period indicate that about $4. 1 billion would be spent. Thus, considering the coarseness of the projections, and the many assumptions implicit in each, all three sets of data are reasonably compar- able. These data give a good general picture of what can be expected on a broad national basis, but are still somewhat "coarse" for application to a specific power system which covers only a part of Texas and will produce substantially less than I percent of the nation's power. Several options 126 were available for obtaining improved data estimates. The three principal alternatives were: (1) Perform an engineering analysis based upon conditions in the study region, and compute the associated costs for each cooling alternative. (2) Go to published reports which give regional variations in meteorological conditions., building costs, etc. , and at- tempt to develop a method to "regionalize" the national data by the use of multipliers applied to the many parameters. (3) Approach several utilities. operating in the. state, and, working through the Governor's Advisory Committee on Power Plant Siting, attempt to acquire reasonable approximations of the actual system-planning data. The last approach, was chosen and proved successful. Several utility com- panies readily provided data on certain cooling methods which they believed were promising*. A summary of these cost data is given in Table IV. 2F. Capital and total unit costs are presented for five different systems using fresh water and salt water as applicable. All data are for nuclear plants with a 32'percent overall efficiency, since most experts do not expect any major fossil-fueled plants to be built in South Texas**. However, since fossil plants produce about * The information on this cooling- system cost data was readily obtained, though it was rather scanty. The utilities gladly share such information with each other. This is in marked contrast to other types of cost data that they consider confidential because they relate to competitive/propietrary proces- ses/information. They are not at all reticent, however, in sharing cooling system cost data; they welcome any publicity on how expensive these extra cooling systems will be. ** During the course of this study, major natural-gas curtailments became a reality for some utilities. Also a consortium of private and public utilities announced plans for a major-nuclear plant called the "South Texas Nuclear Project" to be built in the northeastern portion of the study area. 127 COOLING SYSTEM FRESH WATER SALT WATER MILLS/ KW, MILL;YKWH $/ KW KyM ONCE THROUGH 7.44 0. IS 8.08 0.19 ONCETHROUGH W/PONDS 15.41 0.20 1 6.05 0.21 WETTOWERS, (NDorMD)' 1 1.65 0.53 NOT AVAILABLE3 DRY TOWERS - ND 22.00 2.40 DRY TOWERS - M D 17.00 2 .20 1. INCLUDES ESTUARINE OR BRAC KISH WATER AS.WELL AS SEAWATER ND TOWERSARE OFTEN SHOWN CHEAPER THAN MD TOWERS; HOWEVER,THE ADDITIONAL STRUCTURAL STRENGTH REQUIRED TO WITHSTAND 150 MPH HURRICANE WINDS MAKES THEIR COSTS THE SAME FOR THIS AREA. 3. TECHNOLOGY NOT AVAILABLE TO BUILD THESE WITHIN ACCEPTABLE DRIFT TOLERANCES. ESTIMATED COOLING COSTS FOR I I I I r vv'-' Ry DRY TEXAS COASTAL AREAS TABLE IV. 2 F 128 50 percent less waste heat per unit of electricity generated, estimated costs for fossil plants can be obtained by multiplying the costs given in Table IV. 2 F by 2/3. Five options also are presented in Table IV.2F: once-through, once- through with ponds, wet towers (one figure includes both ND and MD), ND dry towers and MD wet towers. Two of these systems, once-through and once-through with ponds, can be used with either fresh or salt water. Thus, seven possible alternatives for cooling exist. The costs for each method are also given in Table IV. 2F. These cost data were used in this study to deter- mine the costs of meeting the alternative environmental constraints. The resource requirements, or "resource costs", may often be as im- portant as the dollar costs in selecting a heat dissipation system and evalu- ating its impacts. The three principal natural resource requirements of prin- cipal concern in this investigation are water supply, land requirements, and energy (i.e. , fuel) consumption. In Section 1. 2, as each of the cooling alternatives was presented, the natural resource implications were also discussed, and when dat& were available, quantitative estimates of the re- source requirements were presented. Table IV. 2G contains a set of "resource costs" analogous to the "dollar costs" of various cooling techniques shown in Table IV. 2F. These data, derived from a variety of sources discussed in the previous section, will be used later in Section V.3 for computing the total natural resource "costs" required to satisfy the heat dissipation strategies under the various growth and cooling policies. Thus, in summarizing the power plant cooling situation as it impacts upon this project, the following conclusions can be drawn: 129 W ATER@ LAND@ ENERGA THRU-PUT CONSUMPnW AC/MW KWH/103KWH (GAL./KWH) USE(GALA(W ONCE-THROUGH 30-50 0.2-0.3 1.33 (40)- (.25) 30- 50 0.2-0.3 COOLING PONDS 1.5 1.50 (40). (.25) WET TOW ERS M D 401 0.75 0.5 4.00 DRY TOWERS-MD 0.8 16.00 1. TYPICAL PUBLISHED FIGURES- 2. THE 1.5 AC/MW IS GENERALLY ACCEPTED FIGURE FOR NUCLEAR FACILITIES; THE 0.5 AC/MW FOR WET TOWERS INCLUDES TOWER SITE AND IMMEDIATE SUPPORTING EQUIPMENT WITH NO SIGNIFICANT RESERVE FOR DRIFT ALLOWANCES; THE 0. 8 AC/MW FOR DRY TOWERS IS AN ESTIMATE WHICH I.NCWDES TOWER SITES WITH SOME SPACING TO PREVENT AIR INFLOW INTERFERENCE. 3. DEVELOPED FROM DYNATECH,1969 El H ESTIMATED -RESOURCE REQUIREMENTS FOR ALTERNATIVE COOLING TECHNIQUES TABLE IV. 2G 130 (1) Numerous cooling alternatives exist on paper, but practical realities such as costs, adverse secondary impacts, other limiting resources, etc. combine to narrow the feasible options for any given system or specific facility to very few options. (2) For a given location, any set of environmental constraints gen- erally can be met if one is willing to pay the resulting costs. (3) A cooling system which meets one rigid set of environmental constraints, must be selected with considerable caution to insure that the solution chosen does not create secondary problems potentially worse than the waste-heat problem. (4) Numerous methods could have been used to develop cooling cost estimates for this project. Several, including "regionalization" of nation-wide data and detailed cost estimates developed from hypothetical specific plant designs were considered. The method of obtaining, through the Governor's Advisory Committee on Power Plant Siting, actual planning data from several utilities in Texas, provided the most accurate information. Also it had the added benefit of convincing persons that the results were realistic and might have real world applicability. IV.3 THE FUEL SITUATION Some significant changes in the facts and attitudes about alternative fuels for electric-power generation have occurred during the last three years. As recently as two years ago, a general feeling prevailed among both the public and many utility officials that fossil fuels would continue to be the principal energy source. Natural gas is about the "ideal" boiler fuel, because of its low cost, ready accessibility, and clean -burningnature. It has always been the pre- dominant fuel in Texas, accounting for more than 90 percent of the state's 131 electrical power. And Texas has long been a leader in gas production. Many believed that natural gas, occasionally supplemented by fuel oil, would continue for many years as the principal fuel in Texas. This situation, however, is rapidly changing as competing demands, price increases, and mandatory allocation programs all occur. The cumulative effect will be a decrease in the use of gas as a boiler fuel. Some corporate planners who'tried to sound the alarm were met by strong resistance from management, the general public, and public agencies. The current energy situation has created a public awareness, that changes in energy production, movement, and usage are inevitable in the near future. Several companies in Texas have announced plans for large nuclear facilities. One major lignite plant recently went on-line, and other options are being' explored by various utilities. The fuel situation in Texas is changing from gas-dominated systems to a broader base, with coal holding some promise. The major trend, however, is toward nuclear power. Alternative Fuel Sources Fuel oil is currently used in limited quantities, principally as an emer- gency back-up fuel to natural gas, even though gas-fired plants are being built/converted to permit the use of oil. Many factors, however, prevent oil from becoming a probable major new fuel source, such as rapidly dwindling domestic resources, competition for available supplies, cost, environmental constraints on air emission, and the very questionable reliability of foreign sources. Coal is an attractive possibility. Texas does not have any high-grade bituminous coal resources, but a significant band of lignite deposits crosses the state from Texarkana in the Northeast to Del Rio in the Southwest. These deposits are scattered, but some are shallow enough to be economically re- 132 covered with strip mining methods. Experiences with the existing plants at Fairfield and Rockdale have proved that strip mining can be done in the flat Texas countryside without any environmental damage if proper procedures are followed. Extensive air pollution control equipment also has been used to . eliminate most undesirable atmospheric emissions. Thus, lignite does offer a possible long-term fuel source. Nuclear energy is now considered by most experts to be the most probable energy source for electrical power generation. The Governor' s Advisory Com- mittee on Power Plant Siting quotes estimates predicting that by 1985 Texas will have an installed nuclear capacity of 15,000 MW. Current total operable U.S. facilities total 13,260 MW. Almost without exception, all utilities in Texas now appear to be favoring nuclear plants. Within the last year, four major nuclear proposals, totaling more than 17,600 MW, have been announced. At this time, most proposals favor a light water reactor, but developments with the first full-scale, high-temperature gas-cooled reactor being completed and tested at Fort St. Vrain in Colorado are being carefully watched. Unfortunately, the fuel supply for nuclear reactors is more limited than most persons realize. The nuclear fission process is dependent on development of the breeder reac- tors if nuclear energy is to become a viable long-term energy source. Many other possibilities exist, but at this time most of these have seemingly insurmountable technical and economical obstacles that must be overcome. Fusion offers an attractive possibility because the fuel source is essentially unlimited. The nature of the process makes a plant completely fail-safe with only negligible quantities of radioactive waste being produced. Unfortunately, fusion research, after many years and millions of dollars, is still only in an embryonic state. While.solar energy is much lauded by some, the technical and economic constraints appear to preclude the sun as a viable centralized power source. 133 However, modified building designs could enable direct use of solar heating/ cooling which would significantly reduce electrical demands for these uses. Other alternative sources such as geothermal, fuel cells, synthetic natural gas, topping cycles, etc. , offer'some relief at some point in time, but cannot be counted on to either meet a significant amount of the new energy demands or to handle any significant amount of the petroleum demands. Thus, the following points concerning future fuel supplies that pertain to this project can be concluded: (1) Natural gas will become scarcer as a boiler fuel; it is no longer realistic to expect gas to be available to meet any new electrical generation requirements. (2) Fuel oil may be used in the short run, but must not be viewed as a long-range alternative. (3) Lignite offers a possibility, but is not favored because of the difficulties in coping with air-pollution and related strip mining impacts. The importation of coal from the northern Rocky Moun- tain States is being considered, but it would still require the same cooling water. (4) Fusion offers an attractive long-term solution, but ismot expected to be operational much before the Twenty-first century. (5) Nuclear fission appears to be the most likely prime-energy source for power generation during the rest of the Twentieth century. (6) For the purposes of this study, all new power-generation facili- ties are assumed to be nuclear fission plants. 134 IVA TRANSMISSION CONSTRAINTS The principal role of transmission facilities is to move electricity from the generating plant to the load centers. Transmission lines also play a vital, but frequently overlooked, role, by interconnecting major systems and thus providing redundancy and increasing reliability. Such long- distance inter-ties permit exchange of power on an interregional basis, there- by saving on the generating facility investment*. As in all other components of the electrical-utility industry, techno- logical progress has been substantial; transmission facilities and operations have been greatly improved by new materials, improved methods, and the advent of computerized system-load centers. However, despite these im- provements, the transmission system required still plays a significant role in power plant siting. Two extreme attitudes can be adopted when considering the impact of power plant siting on transmission requirements. One attitude calls for locating the generating plant at the fuel source, whereas the other maintains that the plant should be located at the load center. Mine-mouth located, coal-fired plants, such as the Fairfield "Big Brown" plant and the "Four Corners" complex in New Mexico are examples of mine-mouth plants. In these cases the other resources required for generation, principally ample water and cheap land, were available, and economics indicated that power transmission to the load centers would be more favorable than transporting the coal to plant sites nearer the load centers. While this is done in some parts of the U.S. , it is worth noting that the member companies of the Texas Inter-connected System are required to meet all their own demands, plus keep a spinning reserve of about 13-14 percent just for emergencies. This eliminates interdependence except under emer- gency conditions. 135 A tendency to locate as near to the load centers as possible has been prevalent in Texas. The ease with which natural gas can be moved was a major reason for this. Also, in Texas, many load centers are located on coastal waters or on inland reservoirs which simplified the situation further by providing the necessary cooling water. In the last few years there has been a reversal from the tend of locating the plants atthe load centers. This could be attributable to the increased public concern over plant location, associated with a reluctance to have a power plant for a neighbor. Also the rapidly increasing land values near most growth areas have made land costs prohibitive. Then too, as nuclear power replaces gas, there will be a further impetus to locate the plants in sparsely populated areas because of safety reasons. Transmission considerations, however, are not likely to play a major role in the sit ing of power plants in the region included in this study. A map of the entire Texas Coastal Zone is presented -in Figure IV. 4A. The study area is shaded. The principal load center, accounting for approximately 85 percent of the area's electrical demands, is in the Corpus Christi standard metropolitan statistical area. The map indicates abundant coastal waters that are readily accessible if water-quality regulations permit their use. if low-population areas are required because of increased nuclear safe- ty, or in the case of the need of building large dry towers for aesthetic rea- sons, numerous sites with low-population can be located nearby. The numbers in parentheses in each county indicate the 1970 population. If availability of fresh water is a determinant, several close options exist. These alternatives are .shown in Figure IV. 4A as circled numbers which identify a feasible reservoir site or location for an off -channel cooling pond. It is worth noting that site "4" has recently been chosen by a consortium of 13& fe WALKER MONTGOMERY LIBERTY ORANGE r'.A L,L.F-R@ JEFFERSON A TIN US HARRIS CHAMBERSi! LOCATION MAP COLORADO FT. BEN) LAVACA @..ALV WHARTON BRAZORIA % DE WITT\*\X 't JACKSON'*t-" MATAQOR@A I \1 14400 VICTORIA GOLIAD I BEE MCMULLEN LIVE 04\. "RE 010 LN i 2 1700 --'-/9 150C) 10 0 10 20 30 40 6,7 SCALE IN MILES 1,100 BAY '47 WO :4SAN aRl DUVAL JIM WELLS/ . 1\ 11,7W NUECIES NORTH 237500 CORPUS CHRISTI KLEBERG (PRINCIPAL LOAD CENTER) i !3 BROOKS i 50 MILE RADIUS mo KENEDY fj HIDALGO WILLACY 100 MILE RADIUS CAMERM TRANSMISSION DISTANCES TO PRINCIPAL LOAD CENTER FI GU RE IV. 4A 137 electric utilities as the location of a 4400 MW nuclear facility; fresh water availability was given as a prime reason for selecting that site. The arcs included on Figure IVAA indicate distances of 50 and 100 miles from the principal load center, and show that an ample assortment of alternatives exist at a reasonable distance. The rural nature of the area, with ranch and pasture land predominating, will minimize any significant conflicts between transmission right-of-way and other land uses. The pos- sibility of hurricane damage to such facilities presents a threat about which nothing can be done at this time. Differential transmission costs over the distances being considered between possible generating sites in this study are low enough to be con- sidered negligible. Several conclusions can be drawn concerning the influence of trans- mission considerations on this investigation: (1) Alternative sites, which can satisfy a wide variety of con- ditions, are available within a 100 miles radius of the princi- pal load center; transmission facilities will not be a major factor in power plant siting decisions in this investigation. (2) For the distances being considered, differential costs of trans- mission are minor compared to cooling costs, and will not have a significant impact on the results of this study; therefore, transmission costs can be ignored without affecting the pur- poses or outcome of this analysis. CHAPTER V RESULTS AND ANALYSIS Thus far in this report, alternative growth and environmental policies have been developed (Section 11. 1-2), and cooling options and their respec- tive costs were presented (Section IV. 2). In the important second chapter, the need for an analytical approach was discussed and developed (Section 11.6); and a step-by-step analytical methodology was presented along with a greatly simplified example problem (Section 11. 7). The six principal steps and two sub-steps which comprise that overall analytical procedure were given in Figure II. 7A. This chapter combines the quantified policies, with the appropriate technical background information, and takes them the final step, by performing the analyses which are the central objective of this investigation. This analysis is done in five principal sections: (1) Allocation of energy requirements among available cooling alternatives in compliance with established public poli- cies; (2) Computation of costs for satisfying each projected condition; (3) Determination of the natural resource requirements to satisfy each projected condition and a discussion of major implica- tions; (4) Determination of the regional economic impact of cost increases as shown by the regional input-output model; and (5) An overall appraisal of the institutional, socio-economic, and political implications of the various options. 138 139 V. I ALLOCATION OF PROJECTED REQUIREMENTS It is necessary to allocate the projected generating requirements in accordance with the specified cooling policies. Both annual energy generated (KWH/CAP/YR), as given in Figure III.ID, and total installed generating capacity (MW) , as shown in Figure III. IF, must be considered. These two figures supply the above data for the three projected levels, ZPG, INT, and COC, through the year 2000. The generating capacity and annual production must be distributed among the available cooling techniques so as to comply with the three cooling policies developed in Section'III.. 2. These cooling policies range from the continuation of present practices, and only meeting certain localized criteria (CI to a "zero discharge" policy which would eliminate all disposal of waste heat into the aquatic environment (C A third, inter- 3 mediate policy which would restrict total heat releases to present levels (C 2) is also investigated. The first, step in this allocation process is to develop a quantifiable "strategy" for achieving each cooling policy. These strategies are essentially plans for using particular cooling processes on specified fractions of the system's generating capacity. Under certain policies, this allocation strategy will principally involve installing cooling devices on new units, whereas under other circumstances the strategy will require the'addition of cooling devices to existing facilities. Other conditions will involve a combination of new and add-on equipment. To satisfy each policy condition it is necessary to quanti- tatively determine by a series of steps what portion of the total capacity is to be assigned to the various cooling methods. A specific procedure is given discussed for each policy. Cooling Option A (Cl) - Continue present practices, subject to satisfying localized discharge criteria. The following four-part strategy is proposed to meet this liberal policy: 140 (a) All existing units continue operating "as is" (b) Assign 50 percent new capacity to once-through, (c) Assign 25 percent new capacity to ponds, (d) Assign 25 percent new capacity to wet towers. This strategy is based on the assumptions that existing facilities will be permitted to operate; enough acceptable sites exist for once-through cooling, using either salt or fresh water, to handle half of all projected needs; and ponds and wet towers will be used about equally on future additions where once-through cooling is not acceptable. Cooling Option B (C Freeze the total heat discharge (BTU/day) 2 at current levels. To achieve this goal a five-part strategy is used: (a) All existing units on either cooling ponds or wet towers continue operating " a s i s (b) Allow 50 percent of existing once-through units to continue as they are now, (c) Convert the other 50 percent of existing once-through units to wet towers, (d) Assign 50 percent of the new capacity to ponds, (e) Assign 50 percent of the new capacity to wet towers. In order to hold the total heat discharge at present levels, it will be necessary to either require zero discharge on all new units, or to add some additional cooling capability to existing plants. Based upon current industry practice and a knowledge of current facilities in the region, the above strategy seems realistic because it would be easier to convert some existing facilities to fresh water towers rather than to ponds; dry towers would be avoided if at all possible; and, at the candidate new sites in the area, there are several places where ponds would be preferable and several instances where fresh- water towers probably would be selected. Cooling Option C (C 3 This policy calls for "zero discharge", i.e. , the elimination of all waste-heat discharge to the aquatic environment. 141 To satisfy this 'strict policy, a six@-part strategy would be used: (a) All existing units on either cooling ponds or wet towers continue operating "as is" (b) Convert 50 percent of the existing once-through units, to cooling ponds, (c) C onvert the other 50 percent of the existing once-through units to wet towers, (d) Assign 25 percent new capacity to ponds, (e) Assign- 50 percent new capacity to wet towers, M Assign 25 percent new capacity to dry towers. The rationale behind this strategy stems from the following assumptions: in order to convert all existing once-through units to some other cooling process, both wet towers and ponds will be used; some new units can go on ponds, and some will almost certainly use dry towers, but the bulk of the new facilities, under zero-d is charge" conditions, will use wet towers. The above strategies are certainly not the only possible ones that could be used to satisfy the three cooling'policies. However, after invest 1- gation of the present situation and congideration of available alternatives, plus discussions with utility officials, these strategies seemed as realistic as any which could be anticipated at the present time. Uncertainty is always inherent in anticipating how the private sector will react technically in order to comply with any sort of governmental regulation. This uncertainty is particularly true in the electric power industry where the planning horizon is long and many -factors, e.g. , consumer demand, public attitudes, fuel problems, technological breakthroughs, are always present. Only one thing is certain: no projected conditions will ever exactly be encountered; rather, such projections can only give a reasonable, realistic' approximation of future circumstances. Those who might believe otherw ise are only fooling themselves. 142 The projected requirements developed in Section 111. 2 were distributed among select cooling methods according to the above stated criteria; the results are shown in Figures V. 1A - V. IC for the period 1970 - 2000. The computations were done on time steps of five years rather than annually, since any projections beyond 8-10 years are simply not accurate enough to realistically predict whether a demand will materialize in 1987 or 1989. The many uncertainties facing the power industry, ranging from fuel availability to unpredictable environmental restrictions, also would make a 30-year annual analysis largely a number- ge ner ating exercise. For the purpose of illustrating the long-term implications of public policy decisions, the seven points in time given by five-year intervals between 1970 and 2000 provide ample resolution. On the other hand, 31 points would only add more numbers without contributing any significant additional information. Figure V. IA shows the projected distribution of generating capacity by cooling process used. Each 3 x 3 matrix represents one point in time. Each cell within that matrix represents one possible combination of growth level and cooling policy. The four numbers within the cell give the generating capacity utilizing each cooling technique: the first number in the cell refers to once-through cooling, the second to ponds, the third to wet towers, and the fourth to dry towers. Figures V.1B and VAC are similar but show the dis- tribution of annual energy production as percentages rather than installed generating capacities. For example in Figure VAA, cell 5, which represents the intermediate (INT) growth policy and.the C 2 cooling policy, shows a total 1970 generating capacity of 1680 MW, to be distributed among once-through (350 MW) and wet towers (1330 MW) with neither ponds nor dry towers being used. Similarly, in 1990 this same cell indicates that once-through is still used on 350 MW, wet towers are used on 2690 MW, and ponds account for 1360 MW. Dry towers are still not used in meeting the total generating capacity of 4670 MW. .1985 1980. 580 350 1975 --- 445 890 0 131 0 -2-5 TO 1 42,5 2 795 1970 305 61 0 0 210 2 @10 7-0 1-0 350 1285 1 0 655 0 155 310 0 0 940 1940 17.30 445 700 505 0 350 1 1.35 1 640 1640 1 370 -_3 0, 5 350 5 49 1 0 Z. PG 0 0 0 350 1 4 75 010 860 0 0 325 0 2340 2340 980 1330 1350 1 0 10 155 1 -305 660 680 0 --- 0 - 0 330 155 350 0 0 1990 1990 1 sto ----0- '500 700 --- 0 -- 1 135 1 310 510 0 3 5 0 350 640 1 410 330 550 0 I UT 0 0 0 0 0 1640 3,50 350 0 1540 1110 goo 350 160 710 2440 980 1 .3,30 1 0 6 0 -- - 1,34 700 0 0 2440 0 1330 350 L 00 2040 2040 _, --X-2-Ui 0 180 0 0 560 0 360 530 360 coc 700 350 1 160 1 690 1690 2000 0 0 0 L-,O - --@O - --L@t Oj 810- 980 13-30 350 1995 3 50 0 1 30 1 810 555 1 110 0 0 ------1990 350 1535 2440 905 1510- -- 5 5 1 110 0 0 2440 3 5 0 15 0 555 5 2440 905 2 2 4 0 555 1110 0 2440 350 00-OLING 1 4 7 1535 905 2190 0 555 745 0 2440 2440 1510 1110 0 35 1715 2840 2 5 8 0 715 2840 2 555, 1460 0 6 9 090 --- 1--@ 1695 1 080 0 665 350 2790 2560------ 750 3 1360 0 0 2790 3 so -- CEL C 1 645 1030 0 2690 2 3 9 0 --? a 0 9,30 1 0 0 0 269o 350 1910 '3860 128 0 KEY Ni= ONCE THROUGH -- - 680 840 0 190 319 NI z 240 350 1 a 1690 1 190 1-10, 0 0 N2=PONDS 0 40 3010 930 760 1540 1 110 L---ZL, 0 Np 0 -3020 N3 Ny WET TOWERS 1750 2860 2820 N4 N4= DRY TOWERS L--O' ---0-- 770 (KWHxlO6) DISTRIBUTION OF GENERATING CAPACITY BY - 5 350 " 0 445 890 "0 310 F14 2 r E3 2 0 @' 5 1 @55 0 to 3 3 5: 8'0 0 555 1 0 1535 0 2 505 5 44 0 0 190 3 50 7 @ 160 6 go 0 0 COOLING TECHNIQUE MW/METHOD FIGURE V. I A 1985 1980 3830 1 850 0 1975 3 1 8 0 080 2140 1 goo 770 850 0 3400 5320 5,3,30 1970 2440 3100 148o 1560 0 0 1.080 390 720 0 0 4720 4720 4 2 00 0 1 720 850 2720 4830 1220 3346- 770 1 16 800 0 ZPG 0 0 0 000 3940 8 7-0 0 24to IL 0 860 .3 9 0 Soo 1600 0 3560 5710 --50 0 3220 2480 850 30 4 1670 0 2360 3230 31 800 48oo .5710 0 390 0 0 0 1 160 -1-7 @2o --d-5-0 -- 0 760 730 1240 0 4350 85 -- O_ 2 40 800 1320 0 o--- INT 0 0 50 4000 -3420 830 -- --- a 2650 2 170 236 0 860 0 390 910 0 78o 596 0 3230 2 5 2 0 32 .50 1 7'5 0 1740 0 00 5960 0 0 3220 8 6 0 5000 500 1320 ---- -- 0 460 860 0 0 0 0 coc 1 72 0 2750 40 10 1260 8 4 0 2 000 0 850 0 0 4010 2360 32 0 860 --- 0-- 460 1 995 4370 85 30 1 430 2670 0 3220 1990 4370 850 3700 59 2150 0 1430 2670 21 0 0 80 60,50 4 370 ------- 5980 6050 5470 850 700 So 0 130o - 1 430 2670 0 0 800- COOLIN6 1 4 7 2150 0 1300 1 830 3760 0 3700 5980 6050 5360 4 2720 0 2 5 8 ----0 - 0 1300 1 78o 870 0 '00 6840 6840 m - 3 0 0 IS 5100 4000 570 2670 40 850 6700 670o 6150 3 16 1 9 1 600 3 0 0 0 790 4 6480 648o 8-60-----o 4720 7, 3 140 CELL CODE 3920 290 2440 7-5-0 1770 22,30 4 50 0 KEY NI=ONCE THROUGH 0 2 80 4040 2940 860 77,30 -5-42-0 ---8-01-0- -1-7 -0-2- 440 0 Ni N2=PONDS 1 0 1 0 7340 7220 --- 0 2230 850 38 6 0 N2 4250 .9 2650 0 208o 5 N3= WET TOWERS 6850 691 0 N4 N47 DRY TOWERS L--0--L ----0- 1960 (KWH xlO") DISTRIBUTION OF ANNUAL ENERGY PRODUCED BY ! b 11 57,04 0 0 51 @600 ,350 1320 0 37J8 0 23 7 0 0 8 jo 850 2 3 @0 3230 -3 220 .3 2670 0j_ @o 0 37 ACW @14 10 700 0 5 60 q7n COOLING TECHNIQUE MILLIONS OF KWH/YR./METHOD FIGURE V. I B 1985 1980 .46 10 .13 0 1975 .45 12 .26 1970 .11 0 .41 .64 -23 .44 .44 21 .22 0 .64 .15 0 .67 0 13 .07 .'a 0 .67 -- .42 .49 22 0 .47 .09 z PG .21 .72 .4 6 --:- ' ' -13 0 0 0 0 --- 0 - 0 .7 1 .11 12 0 .27 23 -58 .21 .07 .22 40 .64 64 0 .79 .79 .44 Is .43 .66 .23 0 0 0 .07 0 0 .66 74 @6 0 .13 .13 --- -- 0 -76`9- .42 .21 .49 72 -22 .45 1 1 .14 .2 8 INT 0 0 0 0 0 .71 .12 - II --- 0 40 .63 .23 .58 .21 .79 .4 4 0 7 .43 .23 .23 0 .63 0 .79 66 0 0 0 .08 .15 0 0 -66 1 4@ coc 42 .48 .22 ---, --j I j - 0 2 1 0 .70 70 2000 .58 0 .21 o -08 1995 .46 .09 0 .79 .79 .15 -28 0 0 0 1990 .46 0 q .39 .63 .23 .46 .15 .28 0 0 0 .63 09 .39 .23 - .15 '28 0 .63 .48 _I @4 COOLING 1 4 7 .39 .63 .23 0 -_: 1@4 16 .07. 0 2 5 a 0 0 .63 48 .08 .36 .33 .24 14 .16 0 .60 .48 -32 0 .6,0 3 6 9 1 .08 -36- 24 0 .16 0 5 .31 0 0 .60 .60 .47 -.06- ---- .37 .6 1 .23 .47 -@ 0 .16 .17 .34 0 .61 .0 7- .36 .24 N I ONCE THROUGH ---o, .17 33 0 .60 KEY 4 7 .16 .24 .59 1 .07 .36 *60 @-T@J7 Ni Np PONDS .16 -32 0. 0 .59 N 2 ..37 .23 .17 N 3 N 3 WET TOWERS 0 .61 .60 N 4 N4 DRY TOWERS 0 .17 _46 0 13 - 26 41 @6 4 E 42 0 5 8 0 09 0 27 a -2-3 6.3 6 46 09 15 28 -.39 3 0 .6 , -0 4-8 0 -0 _7 .33 0 L@t6 Lii Jo,@ 0 KWH x106) PERCENTAGE DISTRIBUTION BY COOLING METHOD F- 4@- FOR BOTH MW AND KWH /YR. cn FIGURE V. I C 14.6 An adjacent cell, No. 8, which also shows the intermediate level at 1990 for the C3 or zero-discharge policy, indicates the following: once-through is not used at all; ponds handle 1030 MW; wet towers 2960 MW, and dry towers account for 680 MW. Figures VAA - JC all read alike; the only difference is in the type of information given. Figure VAD is derived from data presented in Figure VAC. It shows the shifts, over time, among the various cooling methods. Since these curves are percentages rather than absolute values, they apply to all pro- jected growth levels. Several characteristics are worth observing from Figure VAD. Once- through cooling is used significantly under policy C I but becomes minor in C2 1 and is completely eliminated under C 3' Dry towers are used only under policy C and, then handle far less than 15 percent of the cooling load. 3 However, in later sections where cost and resource requirements. are analyzed, even this small usage has a marked impact on operating costs and energy requirements. Ponds are significant under all policies, especially near the end of the planning horizon; however, wet towers which currently handle a majority of the heat disposal load, would continue to do so under all strategies developed in this study. While Figure VAD shows only the shifts in,the percentages among cooling methods, the nine curves in Figure VAE show the actual projected usages of each cooling method under the three cooling policies and the three projected growth levels. From these curves, which are developed directly from the data given in Figure VAA, it is possible to determine the amount of generating capacity handled by each cooling process under any projected alternative future. ONCE THROUGH (OT) PONDS (P) WET TOWERS (WT) DRY TOWERS (DT) COOLING POLICY COOLING POLICY COOLING POLICY I C, Cg C3 100%-- loolir - 10007'r WT 60%. so%.- WT so%- WT 40%- 4007a - 40%- -@-OT p 20 20%. 207d. p OT 1970 i9so 140- 1970 1 wao 1900 20M 1970 1 sigo li'90 26)w nT PERCENTAGE SHIFTS AMONG COOLING METHODS OVER TIME FOR VARIOUS COOLING POLICIES FIGUREV. ID 148 C, C2 C3 4000- 4000- 4000- -0000- WT 3000- 3000 WT WT 2000- 2000- 2000- OT. p 1000 1000- 1000- 0 7. i. OT.. 0 0 ;0- -SLO -910- Ek-0 70 so 90 2000 '70 so 90 20DO Z PG GROWTH LEVEL 5000- 5000- 5000- 4000- WT 4000 - WT 44000 - WT QT -:1:3000- 30DO - 3000 - p 2000- 2000- 2000 OT p 1000- 1000- 1000- p 01- 0 OT i 1 0 1 . 70 80 90 2000 70 so oo 2000 TO so 90 295D INTERMEDIATE GROWTH LEVEL 6000- 6000- 6000- 5000- 5000- 5000- T 4000- WT 4000- WT 40DO - WT 23000- 30 3000- 00 20DO - 2DOO - 2DOO - -OT a P, looo-, 1000- 1000- p 0 0 0 70 so 90 so so 2000 70 COC GROWTH LEVEL ASSIGNMENT OF GENERATING CAPACITY TO COOLING PROCESSES FOR VARIOUS GROWTH T T p -//WT WT T T p -;0 T DT WT ,LEVELS AND COOLING POLICIES FIGUREV. IE 149 A figure similar to ME could be developed showing the amount of energy generated annually which is distributed by cooling techniques for each alternative future. The necessary data are given in Figure V.lB. Since the plots would be identical to those in Figure V. IE, with the only difference being the ordinate units, this curve will not be developed. The projected alternative energy requirements have been allocated to specific cooling methods in accordance with the cooling policies established earlier in this investigation. This information may now be used to compute costs and resource requirements and to examine the natural resource and economic implications inherent in im9lementing the various combinations of alternative policies. V.2 COOLING COSTS REQUIRED TO SATISFY ALTERNATIVE POLICIES Annual cooling costs and total capital investments are readily calculated once the extent to which each cooling process used is known and the unit capital and operating costs of each process are established. The cooling process distribution pattern for both generating capacity (MW) and annual energy consumption (KWH/-YR) has been developed earlier and presented in Figures VAA and V.lB. Costs of the alternative cooling processes were covered in Section IV. 2, along with other necessary cooling information. The best available unit cooling cost estimates of the various processes for the Texas coastal regions were summarized in Table IV.2F. These unit cost data are used to compute total cooling costs . The appropriate unit cost in Table IV. 2F are multiplied by the use of Figures MA and V.lB to obtain the required total cooling related capital, investment, and the annual expenditure attributable to cooling. 150 The total cooling related captial investment and the incremental increase required over each 10-year period are shown in Figure V.2A. All entries are in millions of dollars. The matrices in the first column are the total investments. The entries within each cell represent the same components as in the previous illustrations. The second column of matrices contains the incremental investment between time periods. These figures were computed by multiplying each cell entry in Figure V. 1A by the proper unit cost values and summing the products. Consider cell 5 for Period I. The entries in millions are 2.60, 10.17, 23.18, 0, and 35.95 and were obtained by multiplying -the corresponding entries, 350, 660, 1990, and 0. (MW) by the proper entry from Table IV. 2F and summing to get the total costs: Once-through: 350 MW x 10 3KW/MW x 7..44 $MW $ 2. 60 x 106 Ponds: 660 MW x 10 3KW/MW x 15.41 $MW 10 .17 x 106 Wet Towers: 1990 MW x 103KW/MW x 11. 65 $MW = 23.18 x 10 6 Dry Towers: 0 MW TOTAL = $35.95 X106 The incremental increases are found by subtracting the total investment at the end of the previous period from the total investment at the end -of the present period. Graphical presentations of the data from Figure V.2A are presented in Figures V.2B and V.2C. The upper illustration in Figure V.2B is a three dimensional plot showing the intital capital outlays. required to satisfy the three environmental policies. It can be seen that $16. 63 million is required to meet the C I cooling policy, whereas $20.89 million, an increase of 25 percent, would be required to satisfy the strictest policy, C 3* INCREASEIN 1Z.81 INVESTMENT OVER INITIAL 0 11.42 1 0'5' aog PREVIOUS PERIOD CONDITIONS 06.60 Is'so 16..6,3 18 c20 9.74 C2 Cl C2 Z" 4,7-0 g'eo C'3 9.4010 14-94 22.'so .0'9 002@60 12.78 Z 9.41 5,19 4,9 18,99 PERIOD 1 10.19 34. 60 37.88 INT 2.600 15-01 fO 17 1971-1980 ZS' ja 10-48 1.3.7. 23 8 4 1 8""38 So _-18 ,55.95t'& i coc 2.603 155-6391 10-94 1 0 0,5.77 .79 14. ow @_ 077 88 1.9." 19,79 @@31 - -4n 6.1 _@Z@ 4 .68 is. . 7 8.661Z. 00 Z PG 17-88 27.11 /,3.. 9. 8.435 08,43 10.49 o480944 'a-54 PERIOD 11 15.,56 .14 INT lo.'os 2,80 1981-1990 19.16 20.0 31.-96 18,437 31.34 14,5 18.96 19 @44 .9a a 16 6?. 64.,90 11 6's So I ' coc 11.71 -_k5 8 l!75 20 Z3. 730 .39 17,11 033..3,23 0.90 4 713.09 71 59.'s.5 @;@ I ;r .28 2-.39 22-43 13.47- __3 ZPG S..55, 2.60 19.110 028-43 13-95 0 028-43 0 39.90 _7___ 9.44 0 PERIOD III 4a 14 le"ss 51 ae INT 112-0 1991-2000 1918 1*3.270 '98 .3,3.0,9 17.11 :4@8 0.33, 3-15 4. 4 .18 .;6 78 COC 14 33 2.60 22 :25 28@66 19.0 NJ -ONCE THROUGH 37.16 72 N2 - PONDS 0037,1's '86 8,77 8.96 N3- WET TOWERS 68.4 04- DRY TOWERS N5 - TOTALS THRO 0 a 2 c q9 ;P;, 1 @78 4 0 X1 '7 0 1'3' 9' 084 -4 9.1 0a4 4 E g., 98 4 .181 U D@WERSG' WERS CAPITAL INVESTMENT REQUIREMENTS FOR COOLING PROCESSES, 1970 - 2000( $-MILLIONS FIGURE V. 2A 0 0 0 INITIAL COOLING RELA INVESTMENT x 106) 8 TOTAL COOLING RELATED INVESTMENT f- T H ROUGH 2000 x 106) 0 z C-) (A G). s(it OD m N c: > o 4hb M ro 01 r -4 :< M OD fla z 0 0 U) L" 0) c') PD co (D a) (D OD > OD ,AV CA < Z m CA -A W 0 rL 0 K 00 m 0 z @-a U) 1985 1980 .73 23 .16 0 1975 .60 1.80 .45 .39 1970 .16 .16 0 2.82 2.82 .31 0 0 2.50 .46 1.64 .33 :-- @.76 0 2.38 .08 .14 0 2,50 ::-3:.:4,:3 __ - :_ -1 1.44 .17 --2,.40 .79 11.59 .33 .26 97 .15 0 16' 0 2.12 2.09 .64 '24 0 z 0 0 1 0 .17 1.89 51 .43 1.25 98 .17 0 3.03 1.71 1*18 @.3 86 .34 0 3.03 0 0 .71 .47 :F@-l 1.66 2.54 .35 .92- -2.65 0 08 @o .54 0 .87 1 .15 :2:04@_7 0 1.76 .83 ::@69 Z :3:. 6::S@ ..33 --------- .80 0 2.15 2.26 .28 .16 0@ .16 0 .12 .65 2.00 .56 0 0 2 - .19 .16 46 INT .01 86 3.15 1. 0 0 0 26 Is '46 1.72 37 0 Is 0 71 1*71 .48 -24 2 .'65 .37 1..90 0 . .15 2.65 @8:7' to 17 .81 .87 1.89 1.,46 27 2.56 3 .18 coc .33 __t@k 0 1.99 2.'l 3 4-87 2000 0 0 0 1.2 0. 2 .04 2 Of 5 1,71 3 .83 .16 0 .71 41 1995 ,3D @0 0 .83 1.96 .56 .45 87' 1990 .16 0 3.17 3.21 .30 .0 0 8-9 1.96 3 00 2.86 *56 .83 3 17 .48 -Z3:. @;q .16 0 3.21 1 6 52 .30 .56 0 a- .09 0 -04 1.96 .45 2.86 88 .15 COOLING 1 4 7 3.17' 17 O@ 0 3.21 6 .52 2' *79 1.02 2 57 3 og 286 .17 0 .63 a*. 63 2 5 8 _-LA:9- - 37 ix - @_t @_w 75 0 0 6.52 2.12 3 59 4.o5 .97 3.5s 56 34 16 0 ss 0 0 7 8.25 2.08 69 3..51 3.89 .15 CELL CODE 3.43 __4 0- 8. 00 2'.5c 0 .66 - 0 3.43 1 1; _j_@ 3.39 3.74 .16 N =ONCE THROUGH 4 .28 - -z- '44 0 0 0 409 KEY 1 1. 0 3 __7 2 .85 4 4:91 .15 .34 3.89 .62 .14 6 .26 39 0 q NI 0 0 3.8, N2=PONDS .81 56 87 4.58 9,66 Np 25 3.63 _4 - N N3=WET TOWERS _____O 10 3.66 90 3 3.67 4 31 _9@09 N4 N4 =DRY TOWERS .919 8.5.3 (KWH x 10" @) COMPONENTS OF ANNUAL PROJECTED COOLING COSTS 0 .18 7 0 1-01 r@9,2: .80 _83 66 .90 0 7. 5_ 18 L ZP-,5 @6 3 3 16 1 @3. 0 .56 .96 317 L4 0 0 4'09 4 14 .91 5 _6@ 9.66 BY PROCESS FOR EACH FUTURE ($-MILLIONS) FIGURE V. 2C 154 The lower part of Figure V.2B gives the total cooling related invest- ments required to meet any of the nine alternatives through the year 2000. The total investment varies by almost a factor of two between the $39.90 million required by Case I (ZPG, C I) and the $72.06 million required by Case 9 (COC, C 3) . Further examination of Figure V. 2 B reveals other inform a- tion such as (a) the C3 policy requires about 30 percent more capital invest- ment than C I and this holds for all growth levels, (b) for any cooling policy, the capital investment required under the COC growth policy is about 40 percent more than under the ZPG policy. The annual costs ($/YR) required for cooling purposes for five-year intervals from 1970 to 2000 are shown in Figure V.2C. These figures reflect capital amortization, operation, maintenance, taxes, insurance, etc. The first four figures in each cell are the annual costs attributable to each proc ess, and the fifth figure is the sum of these costs which represents the total annual cost. These data were developed in a manner identical to those in Figure V. 2A, except that annual energy production rather than in- stalled generating capacity, was the principal variable. The annual energy production data (KWH/YR - Figure V. iB) were multiplied by the appropriate unit cost information ($/KWH) from Figure IV.2E to derive the annual costs ($/YR) shown in Figure V.2C. The two 3 x 3 surfaces developed from data given in Figure V. 2C presented in Figure V.2D show the annual cost, in millions of dollars, attributable to cooling processes for 1980 and 2000. For 1980 the total annual cooling cost for any given growth level almost doubles under the C 3 policy, as compared to the C 1 policy. For the 'year 2000 this difference rang es between 2. 1 and 2. 3. 155 4.86 1980 4.66 6) 3. 1@@2.57 3) L 3.05 4.52 2.96 to 7) 2) 0 2.98 CIO x 4) 241 @cl +x c cg cl 9.66 '/8.24 6) 5.25 4.14 2000 6.52 57 3) 7) 3.59 40 4) 3.89 C., 0 3.09 oc% / ---7'-@C2 C, C3 TOTAL ANNUAL COOLING RELATED COSTS FOR TWO SELECT YEARS., 1980 - 2000 FIGURE V.2D 156 9.64 9.60 1980 6.30 7) 9.62 6. 5.07 6.30 5.10 6.32 < 5.11 CIO C3 C2 C I 14.74 14.47 2000 13.73 8.01 5.) 8.02 6.32 N., 4.) 8.19 )6.30 6.51 < C) 00 Al C3 c 2 c I TOTAL PER CAPITA COST DUE TO COOLING(@/cAwA/YR) FIGURE V. 2E 157 The data in Figure V. 2 E go a step further and give the annual average per capita cost of electricity resulting from cooling related expenditures. These costs were computed by dividing total annual cost by the estimated population. For the year 2000 these cooling-related costs range from about $6.30 to about $14.75 per capita. Thus, if public-policy should dictate the zero-heat discharge option, the realistic anticipated cost per person is about $14.30 in electrical bills per year just to pay for this elimination of heat discharge. For a family of five this cost would amount to about $72.00 per year or almost @6. 0 0 per month. Under the C 1 or relatively lax policy, where localized standards would be met to protect specific aquatic communities, these costs would average about $6.40 per person, or $32.00 per five member family per year. Therefore, if the no- discharge, C 3 policy were adopted, instead of the immediate discharge area protection alternative of policy C, a five'member family would have to pay an average of approximately $40.00 per year more in electrical bills. This $40.00 per year per family is an average figure. If the family's per capita consumption were greater than the average for the region the $40.00 figure would be too low; conversely, if their con- sumption were below average, the $40.00 figure would be too high. While these average data do not differentiate among income levels, the data shown in-Figure V. 2E provide a means by which the direct cost implications of the alternative policies can be. simply determined. Such data are inexact, but they are better than nothing. Some of,the economic implications of these cost increases will be quantified later in this chapter (VA) by using these cost differentials to trigger changes and trace their impacts in the regional input-output model, which takes into account indirect as well as direct costs. 158 V. 3 NATURAL RESOURCE REQUIREMENTS FOR SATISFYING ALTERNATIVE PUBLIC POLICIES The costs of the various cooling system alternatives will undoubtedly be a significant factor in determining how any public policy may ultimately be implemented. However, certain other considerations also will be important, and may, under certain circumstances eliminate or override the economically preferable solution. This fact is particularly applicable to some natural resource requirements which may themselves become limiting factors in the selection and operation of waste heat disposal systems. Natural resources which might become limiting factors are water, land and energy (i.e. , fuel) . In assessing whether or not any natural resource considerations might impose limits on the selection of a waste heat disposal system, it is -necessary to consider availability, reliability, com- peting uses, costs, and possible changing public attitudes toward the use of a given natural resource. Consumptive Uses of Water Water is the most obvious natural resource affected by power plant cooling. In evaluating water use and its implications, a careful distinction must be made between water throughput and water consumption, which were discussed at length in Section IV. 2. Based upon the unit water use data (both throughput and consumption) given in Table IV. 2G, and the annual electric al energy production shown in Figure V. IB, water throughput and water consumption could be computed for the nine alternative futures. Consumptive water use estimates at -five-year intervals for the period 1970 2000 are presented in Figure V.3A. A three-dimensional plot of the same data for the years 1980 and 2000 is shown in Figure V.3B. The 1985 960 ---2-10 980 270 00 2550 540 0 1970 -@' 1 -0 3990 480 1975 igo 390 0 0 0 399c) 610 1 a o 3,3 C) 390 3780 1 oo 0 3200 320o 4740 C2 21 0 0 20 0 1050 4470 4,30 c 3 2040 3 000 300 3 @7@ 0 0 290 200 0 2960 840 600 0 ZPG 150 0. : - @6-@Q 26 810 17 0 0 177@0 13:@o 2 220 70 4280 70 2420 150 0 0 23 00 4oo, 0 0 4280 0 20 420 0 0 24 6 0 _2 @o so 3600 -- 2200 ---- - I o o `@ @l -----o 3600 3 0 it 0 0 0 -- 2570 _----o 20 70 1 80 33 go ---o 0 1090 43 3 a io 42 20 - 330 2570 ----7 e 10 0 /so 0 040 30 4020 2840 0 0 00 860 21o 660 INT 177 0 1500 2790 0 2130 4470 64 0 34 30 440 0 0 4470 0 2 4'2 0 2 3.3 /0 2440 375 4 40 0 0 420 630 4 2 t5 0 0 2200 -E @00 2570 @ 5 @7 206 0 0 50 a 0 4400 0 1 20 ioo 0 37 73-13@0 43 2060 2830 20 0 0 0 0 3000 2000 coc 0 !810 242 50 r2-3zo- -0 1 090 0 2420 3 @2; 1995 360 210 0 2780 670 0 7-6 0 1990 1090 2 10 44 540 360 0 90 4,540 1090 2 6 0 210 780 44 540 42 30 0 2360 670 0 0 - 4540 13 0 5370 :30 @a 780 4490 540 4230 0 460 2 0 0. - .--Z- 0 0 1340 9@40 0 KEY N ONCE THROUGH 0 454 - 51-70 @0-8-0 3080 51 30 6800 423o @3 220 0 0 -0 450 ago 0 0 61,3 3000 4 9 / 0 N, N2=PONDS 1 Z8 -@ 0@0 6030 670 62 70 0 400 21 0 5030 5810 820 0 0 15 4 0 .N2 N =WET TOWERS 2940 4860 610 47,90 0 560 200 N3. 3 0 4860 144 6140 -5-70 70 1110 90 7----- 0 5900 47 0 220 N4 N4= DRY TOWERS 90 6/40 352 /010 0 0 5 00 5700 3/0 740 'ao - - Ns 1360 200 5510 5 -@2 -,@ - o 4 N5 =TOTAL 460 410 6&-g 3/ go 0 0 C ELL LJ 5 Jg 6 6 52 0 @w 0 0 ;0 0 6740 @10 0 5/80 0 6,310 -tT @8 4 6 ' 0 a 0 100 040 3 000 _0 0 "3 2-77 50 0 24200 5 1 ' 24200 0 0 0 6 0 130 20 [2 060 0 1770 0 2200 0 90 --0 .370 2 0 0 1 1 540 4So .0 08 2 4540 0 R3 lw4 0 So 0 0 5 .30 56 , 1 30 0 12 go 0 480 to 0 900 8 20 W2 F14 - 40 0 4 ff7 3560 486 60 0 uo 40 7 22 7400 8 10 1 @0 90 44 20 /01 /0 0 0 'S, 51 '3 60 0 60 0 54 4 /go F-3 5@2 @7O L CONSUMPTIVE WATER USE(MILLION GALLONS/YEAR) FIGURE V.. 3A 160 4.40 ir (6) < 4.19 w 9) 4.22 1980 4.02 z 0 (8) 3.53 -1 3) 3.78 3.39 z 4) 2) 0 3.59 -1 /7 -1 3.32 m 'C3 /C2 /C I /6) 7.21 Z@ 6.59 2000 9) 6.27 5 5.64 cr 5.81 /(3 w /8 z 0 5.37 4.91 4) 7) 5.08 0 -j 4.23 1) C3 C2 cl / 3.53 3) 7 @4 .59 ///6.591 9) 5 9 @, c 41)"C5 ANNUAL CONSUMPTIVE WATER USE FOR YEARS 1980 AND 20OO(BILLION GALS./YR.) FIGURE V. 3B 161 relative implications of growth and cooling policies on water consumption are clearly illustrated by this three-dimensional diagram. For the year 1980 the values vary from 3. 32 to 4. 40 billion gallons per year depending on the alternative future being considered. It can be seen that for the year 1980, changes in the cooling policy have a significantly greater impact than those in growth levels, i.e , consumptive use is more sensitive to cooling policy than to growth policy (27'petcent vs. 17 percent) . The estimated consumptive use for the year 2000 shows a greater difference between alternative growth policies than do the 1980 data. The maximum difference occurs between growth policies (35 percent) rather than between cooling policies where the maximum difference is the same as in 1980, namely, 27 percent. This fact should not be surprising since the analysis is structured to subject all growth policies to the same cooling policy, whereas the population growth projections begin to diverge signi- f icantly beyond 1985 when the ZPG projection becomes static at 47S, 000. The policy C 2 @in Figure V.3B indicates that the "Constant BTU" approach requires more water than C 3 or "zero discharge" policy because policy C3 uses some dry towers, whereas C 2relies principally on wet towers and ponds which evaporate approximately 0. 75 and 0. 27 gallons/KWH of electricity produced, respectively. these data in billions of gallons per year may seem rather meaningless, and therefore some examples are given to relate these to other uses. The maximum use figure of 7 w 21 billion gallons per year equals 19. 8 million gallons .per day, or 22,130 acre-feet or 30. 63 cubic feet per second. The COC population projection, from which the 7.21 billion gallons per year is developed, shows an estimated population of 655,000 in the year 162 2000. Therefore, this level of water use is equivalent to 30. 2 gallons per capita per daywhich compares with a national household average total use of about 150 gallons per capita per day. However, only a small fraction, about 45 to 60 gallons of this daily volume is actually consumed. The remainder is wastewater and is eventually discharged. The significance of these differences in water consumption of 6.6 gal lon s per capita per day (2 3. 6 f or C 1 1 3 0. 2 for C2) may be questioned. However, under certain circumstances this water consumption could become quite critical, e.g. , in and or semi-arid areas where fresh water might be a limiting factor on additional growth or other water uses, including stream flow maintenance or fresh water inflows to estuaries,. On a national basis with a population of 300 million, this consumptive use could amount to 720 billion gallons per year, or 2. 2 million acre-feet per year. For comparative purposes, the annual firm yield of the entire Trinity River Basin, if fully developed, is 2.30 million acre-feet (Texas Water Plan, 1968). The total water consumed nationally under the stricter policy would amount to 3, 290 billion gallons per year or 10. 1 million acre-feet per year, or 13,900 cubic-feet per second. The average flow of the Mississippi River at New Orleans is 900,000 cubic-feet per second (U.S. Geological Survey, 1971). Although many comparisons illustrating the amount of freshwater involved could be made, such numerical exercises are largely meaningless, until some, specific alternative is proposed or some measure of benefit delineated for consumptively using this water in the electrical generation process. What is salient is that sizable quantities of fresh water, especially for a water- short, arid region, are required for electrical power generation. 163 Water Throughput Figures V. 3C and V. 3D address another water-related question, that of total water throughput, i.e. , the amount of water mo ved across the.con- densers. The throughput water is affected only by an increase -in temperature. For any given size plant, throughput volume is an inverse function of tempera- ture rise across condensers. About 40 gallons of water per KWH generated are required for a 14-150F rise, which is a common practice for electrical generating plants in Texas coastal areas. Of each 40 gallons only a small fraction is evaporated, namely 1. 88 percent (0. 75 gallons/KWH) for evapora- tive towers and 0. 68 percent (0. 2'7 gallons/KWH) for ponds. Current technology restricts evaporative towers to fresh water because of salt spray drift, however either fresh or salt water can be used with cooling ponds, although the buildup of total dissolved solids eliminates continuous recycling of salt water through a pond system. The data in Figure V.3D indicate that policies CI and C 2require more water throughput than policy C31 because C 1 and C 2rely on various mixes of once-through, ponds and towers. However, while the consumptive losses differ, the same volume of water must be moved across the condensers for both CI and C2' C 3uses some dry cooling towers so the throughput is lower. Changes in growth policy have substantially more effect on water throughput than do changes in cooling policy. For the maximum growth case,, COC, this water throughput is about half a trillion (524 billion) gallons per year. Expressed in other units 1. 6 million acre-feet per year or 2220 cubic- feet per second are required. This water throughput is equivalent to passing the total volume of Lake Corpus Christi (302 thousand acre-feet) through a plant 5. 3 times per year or about once every two months. For a body of water the size of Corpus Christi Bay, with an estimated volume of 1382 million 1985 43.2 1980 5'3' 2 340 5.6 0- 127.2 r6 30 -4 -0 0 1 213.2 136.0 2.8 .0 1970 9 75 8 89.2 0 9,7.6 /24:0 188.8 62.4 0 c 28.8 0 188.8 332 4 c 289.,, 15.6 0- -- 3324 c 108.8 53.2 -_2-8-' @ j_() 0 0 168.0 68.8 160 0 48.8 32.0 34.0 0 0 @g 46.4 ZPG 0 0, 157.6 .13-3.6 96.4 94.4 0 0 222.0 -- 0 32.0 -34.6 142.4 82,0 34.4 222 2 64.0 0 228.4 0 @6- 66.8 0 129.2 .4 125 228,4 128.8 9 -21 .2 192.0 0 0 @_7@7 35 356 8 - 0 2 34 0 0 0 192.0 1 6 1 0 @96 .8 :@79,6 o 174.0 10.4 IJ9-Z 4 34 0 163.2 1 .8 _f,76-4 .2 2.o 96 136 52 8 too..0 8 _ 0 o 0 0 0 0 0 33 2 is/ 88.8 as. .2 INT 94.4 0 34.4 225.2 - 0 70 . 0 0 238-0- 058.4 22 30. 696 0 12 5.2 1 0 9-2 128.8 log.8 209.4 200.0 1 34 " 0.0 -0 0 0 0 AZ9C-0 0 6 3-2 - 0 0 0 0 16 3 T -1 -61 Ito t 30 : t .3 @ 3.2 0 68-8 0 166. 50.4 30 - I -34 160.4 --3,2 1-@696 4.4 coc 9 0, 0 - 2000 0 a 2 2 t@- _@@2 @9 0 4.4 .2 174.8 0 129.2 128.8 9 9 5 57.2 4.0 0 176 0 86.0 i-e 0 4.8 148.0 106.8 163 2 1990 34.0 --- 239.2 57.2 106.8 0- 0 242.0 0 174 -- @86 0 .8 .0 34.0 148.0 2,39.2 86.0 148.0 106 a 0 --i @, -; i27@80 57.2 0 242.o 239: 2 86.0 3800 0 32.0 0 380.0 73.2 0- KEY NI=ONCE THROUGH - 0 242.0 214.4 328.o 164.0 150.4 '08- 8 380.0 34.8 0 273.6 273.6 @86. 0 0 71.2 0 :@72- -i 142.8 106.8 0 NI N?=PONDS .0 160.0 456.0 -- - 34. 0 268. 456 0 0 0 268.0 2,46. Z82-4 N? 64.o 0 0 N N3xWET TOWERS 156-8 131 6 1445 6 0 89. -31.6 259:2 97-6 445 6 0 3 0 259.2 230.0 374 8 188. 17' 0 .314'.04 125.6 N4 N4 =DRY TOWERS :@@2 - 83.2 34.4 ----104 0 309.2 8 3-2-1-8 161 6 0 N 356.8 1/7-6 524. 0 --- 0 21i@-; -- 176.4 29 *6 3 2.4 0 3 288.8 N5 =TOTAL 01 0, CELL LJ 1 164.4 106.0 :_-W-8;6 0 4.:- 489 6 - - 70-0 274.0 276.4 406.4' 46 .8 -4-60 0 .0 0 2 77 'o .2 3 8 2 .0 2 2.- r2 96. 28.4 a '89 2 160 0 0 0 82 0 2_a 4 02.0 2 30 0 99.2 -4 15.6 9 I I HO4 4 a 44 0 88 0 4 2 120 So @7-63 160 F34 . 0 0 0 4 log 2 .34.4 74 0 12a.a 340 7.2 8.1 n 0 106.8 P74 - 0 8 14 .2 23 48 .0 2 0 4- 16 * 0 56.0 246.0 1.6 9. 78. 8-8 11 0 .3 4.04 0 TOTAL WATER THROUGH PUT (BILLION GALLONS/YEAR) FIGURE V. 3C 165 1980 6) 303. Z330 cn 269.6 z 9 0 290.8 290.8 -j 5) /2) -i 258.8 z 8 282.0 282.0 0 4) /1) co 251.2 7) /C2 7c, A.0) /6) 524.0 (3) 524.0/ 2000 434.8 456 456D 5) .!Z2) 382.4 8 /380.0 4) 380.0 1) / 328.0 7 /C3 /C2 /Cl 5) @7O /I /C 3 .C@ Z4 ANNUAL WATER THROUGHPUT FOR 1980 AND 2000 BILLION GALLONS PER YEAR FIGURE V. @3D 166 acre-feet, this recirculation interval would be a year. Complete mixing in any body of waters such as,a reservoir or estuary is never practical, therefore some of the volume is recirculated more frequently and some less frequently. A number of natural processes, such as inflows to and releases from a reser- voir, precipitation, evaporation,-tidal action and the physical arrangement of inlets, dischargesi and baffles, all greatly@affect circulation patterns and the recirculation method. Meaningful assessment of water throughput is most speculative for general cases on a regional basis. To deduce any meaningful information from such numbers it is necessary to identify a specific plant site and a spe- cific receiving water body. Even then there will be considerable differences of opinion over the ecological impact of such water circulation, apart from temperature considerations. Nevertheless, almost inconceivably large amounts of water are involved. If the entire U. S. adopted a policy simi'lar to either C or C then more than 1 2 238,000 billion gallons per year would have to go through power plants at an average rate of 1,010,000 cubic-feet per second. The utilization of such amounts of water for cooling purposes would certainly have a significant effect on the future water resource picture in this country. Land Requirements The significance of the land requirement in selecting a cooling process is underplayed, but in many instances availability and/or cost of the real estate may preclude the use of certain cooling methods. The importance of the land requirement is increased by the fact that power plants often are located adjacent to a body of surface water. where competing uses and land values are the highest. 167 The space. required for generating facilities, fuel storage, switching equipment, and service areas is essentially independent of the cooling method used. The estimated resource requirements, including unit land require- ments, for different cooling techniques were presented in Table IV. 2G. Simple once-through cooling requires no large land areas, while cooling ponds require the most land area. For heat rejection rates of 7000 BTU/hour (32 percent efficiency) of installed capacity, pond surface area should be about 1. 5 acres/MW. Evaporative towers require, as a minimum, about 0. 5 acres/MW. However, the mist drift may produce problems and necessitate significant buffer areas adjacent to the towers. This land is in addition to the areas ,a,ctually required for the towers themselves. Dry towers require more space, with something on the order of 0. 8 acres/MW being required to prevent inflow interference between tower inlet streams. When the land requirements given in Table IV. 2G are applied to the distribution of cooling techniques presented in Section V. 1, the total land requirements for the nine combinations of growth and environmental policies can be computed. These requirements are shown in Figure V.3E for the 1970- 2000 period. A three-dimensional plot of these data for 1980 and 2000 are presented in Figure V.3F. The implication of these data is that cooling policy has a greater impact on land requirements than does growth policy, although both are ,significant. In 1980 the C3policy requires more real estate than does C2for all growth policies. By the year 2000 the situation is changed: the INT policy requires the same land area (3690 acres) for both CIand C21 whereas for the ZPG policy less land is required, while in the year 2000 more land is needed for the C2 policy than for the C3policy. The C 2 policy relies more 1985 0 0 1980 668 1335 0 1970 975 0 - --- 0 7t 3 1105 1193 1 458 91 0 ------o 0 1105 5 98,3 0 643 138, 356 C, 23 0 0 970 970 2440 C2 c 5 3 465 0 0 26-54 0 0 68 820 758 0 2-44 743 0 0 0 1515 0 620 :Lni 0 ZPG - 0 0 88 7 1290 49 -1:278 j 124 0 38 117 660 525 --8,01 '990 0 0 l17O 5 665 0 @7j 653 995 1020 -7- 0 400 0 1461 g- -6 8; X-- - 8- 99 6_ 49 --10 233 0 0 5 0 665 5 46 765 1141 2154 0 0 1190 68 820 i:93 t - 825 0 0 0 0 0 820 0 @@727@ 7 1665 0 0 7 1 50 INT 49 @81 T2-6@ 128 5 0 1220 1 0 2 0 525 6 705 1065, 0 0 20 665 77"T-1--3 1 50 0 --_--O 0 665 0 ------- 0 1020 1020 :@:F9 490 0 833 166 0 9t - 0 -2-2 85 .3018 @ @O 1220 8; 288 665 -ZI -9; 5 1,358 0 768 0 Q- coc 0 1220 2358 2000 0 1621@@ @88 5 490 669 25 444 4 _@@O 2 1995 8,33 0 0 5 1665 490 1-1 -9--0-9- 0 768 1220 1358 1990 833 0 0 1220 768 601 0 444 0 1126260t 1358 2Ea8 g a 0 0 1220 roi -i 33 1665 0 0 768 1 135S 444 Ilia 0 220 '6 01 288.5 --. @4-- , 0 N =ONCE THROUGH 0 1220 3022 ass 2265 1665 KEY , 0 0 1420 1420 1 0 444 107"3 2140 0 16 @l - N, N2=PONDS 0 XO 'i2 848 139s 1620. 1-977-j 0 60 0 9 a 0 @- @ @ f6 'aj N2 1395 0 9 204PO - u X6-@@5 N3 N a 1545 192 0 584 1395 0 3=WET TOWERS 23 1345 1 -3 -5 A *r, @m 2790 0 N - 0 1345 0 95 1595 1920 N4- DRY TOWERS T8 2 -r 0 544 1260 0 1595 N--@ 0 0 0 42.59 N T3 3 -4 r4- 20 25 0 9 35 1785 2@4-5&60 N,=TOTAL 1140 2,31 -b7- 0 1505 1 10 0 1 0 CELL LJ 878 1438 1665 '-4-0-46 544 410 967 0 1-5 - 610 '74 0 - @61 0 2 C 0 0 U[2 0 1 , 49 ji _X 4 0 @66:05 5 20 0 0" 0 665 0 5 40 I -i9 205 0 0 0 @56 490 0 1-9 0 0 -- jo 0 9 0 0 4 5 5 0 66 525 1186 5 5 0 665 20 136 0 1 5a 22 -- 4404 0 022 65] 0 F,1262 0 0 9 0 [1189283 F27 9 00 --- 15 95 5 3 LAND REQUIREMENT (ACRES) FIGURE V. 3E 169 2.36 9 Ld w 2.0 1980 2.28 < 7 LL- 1.99 2.20 (5 U) 7) a z --7 1-89 U) 1.14 D /2) 0 /* C3@@C 2 @@C I 4.39 4.26 6 2000 /3.69 3.69 /(8) A) 3) 2.45 ui 3.02 x /M 2.89 u LL 0 1.98 M 0 z U) 1.60/ co) D .0 r llz@l /C3 /C 2 /C 1 100 2.01 //)2 K6 (8) 2 @8 V7)@ /(5) c W1,00 4.3 4@@6 Y 71' 4) ' 2 LAND AREA REQUIRED IN 1980 AND 2000 THOUSANDS OF ACRES FIGURE Y. 3F 170 heavily on cooling ponds which require substantially more land than do either wet or dry towers@. As expected, the C 1policy, which relies heavily on once-through cooling, requires the least land of all the policies being considered. It can be safely said that the pro).ected land requirements, ranging from 1600 - 4390 acres for the various policies, will not constitute a signi- ficant problem in the South Texas study area. Furthermore, because of the abundance of potentially usable, relatively inexpensive property, land should not be an overriding factor in site selection. However, substantial cost must be anticipated because of the requirement of location in high value, waterfront areas. In other areas of the country, such as the northeast or southern Pacific coast, the costs of waterfront real estate, which will go into the millions of dollars per acre, could become prohibitive. One solution would be to develop such valuable real estate for multipurpose uses in addition to cooling facilities. Ponds which can be used for limited recreational purposes offer the only feasible. opportunity. The potential of ponds to support and/or enhance aquaculture operations also is being explored at several sites. Energy Requirements Before the current energy shortage no concern about the power requirements of the different cooling techniques was expressed. If one raised this issue, the standard comment was invariable: "Why should this be a problem, after all power plants generate power, so just ma.ke the plant a little bigger to allow for the cooling requirement. 171 Now, even though the energy consumption differential between two cooling methods might be only a few percent of the output, even these small amounts have become significant, especially in the warmer areas of the U.S. where the peak energy demand is caused by air conditioning,. and coincides with the highest natural exhaust temperatures which in turn result in the least efficient cooling system operation. The annual energy requirements (KWH/YR) for the nine alternative five-year steps -for 1970-2000 are shown in Figure V. 3G. These requirements were derived from the unit energy requirements developed in Table IV. 2G and the allocation of generation capacity among cooling processes presented in Section V.I. Unit energy requirements vary by about a factor of 10, ranging from IA3 KWH/1000 KWH for once-through cooling to 16.00 KWHIIOOO KWH for dry mechanical draft towers. A three-dimensional plot of the energy requirements for the alterna- tive for the years 1980 and 2000 is illustrated in Figure VAH. These data a re given in KWH/1000 KWH; thus, dividing the numbers shown in Figure VAH by 10 gives the percent of the total electrical output'which, will have to be devoted to operating the cooling system. For 1980, the data in Figure VAH indicate that the C 2 requireq only 18-25 percent more energy than the C policy. The reason for this increase I is apparent since C relies heavily on wet towers, which require about three 2 times the energy of once-through systems or ponds, while C Irelies mostly on the latter two processes. The C energy requirement is very high, because 3 .dry tower cooling which is a very energy- intensive cooling process is included. In 1980 there is relatively little difference between the percentages of energy usage for the various growth policies, because even for C 3 the pe rcentage of tower capacity (and especially dry tower capacity) as compared to ponds, has not grown and become as significant as twenty years hence. 1985 5 1 1 .1 1980 1 '6 0 3,2 4 .3 13.6 2.9 1 ------ 21.3 21.3 1970 1975 1 .2 0 0 2-2 2.3 20. 17.3 C, 3.2 .o 12.4 18.9 18.9 25 0 C2 to* 6 1 2 0 5.6 117-5 2.3 1. 1-- C3 9 16*-0 1.8 1.7 1 0 ZPG 0 0- -10 15.8 4.4 14. 3 16 3.1 9.4 0 1 L4,-7 6 3 1 2 2 0 2 22.8 12.9 .3 L&J@r 12*5 2.4 2.5 o2.8 --lo 12.9 3.3 1., -:ztt 19.2 19.2 -.uu It 7 -- 0 10 0 .6 0 14.0 ]74-- 1 5.8 11.0 - 12 8 1 1.9 2 0 1.1 0 6.2 4. 4 o 0 0 0 16.0 15' 1 2X 8 3.3 63 2.6 23 INT 0 1 3 1 9 180 1 4 .8 9.4 12. 4 13,0 2 ----,0 0 9 12:9 3 4 :'i::2: 20.0 .6 22 9 ----,0 21.1 0 11 0 20.0 11 7 0 .7 0 0 -9.:@4@2 14 0 @4 1.9 Ij.0 112 : @3 --2-'-*-i .' 13 4 1 5 36 0 coc 0 0_ 0 ----_--o 16.0 2000 9.4 0 1.3 7*4 5.8 12.9 12.9 @-l @53 1995 2.1 0 --.--,0 0 5.8 1.1 14.8 *0 3.2 L 1-4 - 0 -T 1990 2.1 2 4-@ 0 -9 24.2 5. 14.8 4 0 0 22. ----,0 20a 23: 3-2 29.0 2.1 4 0 0 9 24.2 7. @8@ 14.8 2S.0 3.2 0 208 1.1 7 2.7 5.6 0 N =ONCE THROUGH 0 9 24.2 9. 16.4 0 7. KEY .7 '008 1 1.2 0 27.4 4.1 N N 6.8 2.7 5.4 0 274 1 2= PONDS 16. 4.0 :1 @5 29.4 N 2.4 26.8 -. j 3., @; 2 1 4.9 0 26.8 9. N3 0 ----7 5. 334 3. 6'0 N =WET TOWERS 5.7 __ 0 8 3 3.7 28.3 1 N 25.9 7 18.9 7 0 4 6, 31, 4.7 N,= DRY TOWERS 4-; 277 0 .4 N 7.2 3 1 309 5 31-9 56 17*6 6 1 4-- N5=TOTAL 1.1 29:4 .4 Lzoli:_3 9 5 9 CELL LJ @,8 28.3 ----,-0 3 *3 '"o 2. [email protected] 0 4 6 16 @7. o 0 .4 b6-6 4 1.4 52.8 ANNUAL ENERGY REQUIREMENTS FOR COOLING PROCESSES M I L LIONS OF KWH/ YR.) 3 [--t-T rl4Z:t4 9 4 0 0 4 @.5 3 4 2 6 4 2do 3-4 7 2 15.1 5.8 .T F21 41.1 1 4.0 4 .8 239 3 [-75 .3 -8 k2 4' 2@ 0 4 0 3 .2 2 @8 7 1 E23'- go 4 .2 - 8 . .8 2n 'a - -' 49 .0 2 0 9 277 5 .6 4 6.41 27.4 0 -5@@ c' -@3 *4 [ 3*j L2 leg 0 0 8 6 7 7. 6. .4.7 3. 4 6 0 fo@ L240 31.4 r 2.8 FIGURE V.3G 173 36.0 9) 1980 34.5 6) 23.7 18.9 3) 7) 3.5 5) 22.8 0 2 4) 21.2 17.9 ov C3 C2 c I 9) 71.3 2000 /8) 59.1 6) 39.1 :lz 7) 48.2 3) 30.4 33.4, 5) 25.8 29.0 IN. /4 22.7 C3 C2 cl @7/ 29 @OW C 3@@C 2@@C I ENERGY REQUIREMENTS FOR COOLING IN ig8o a 2000 KWH REQD. /103 KWH PRODUCED FIGURE V 3H 174, The lower diagram in Figure V. 3H shows the energy requirement for the year 2000. Depending on the policy, this requirement can range from 2. 3 to 7. 1 percent of total plant capacity. The C3policy requires from 2.1- 2. 3 times as much energy as.the C I policy. Variability in energy require- ments is greater than in the 1980 case because at this later date more generating capacity is needed. As more capacity is added, the percentages of cooling towers as compared to other cooling processes increases, because more added capacity goes to towers. While it is not possible to draw specific conclusions about either the environmental or economic impact of devoting a significant portion (5-7 percent) of the total electric energy generated to driving cooling processes, some observations are possible. One of the most obvious considerations is the overall impact of this energy use on fuel supply. The total fuel requirements will be 5-7 percent more, as will the costs and all facilities, including fuel supply, generating and cooling facilities will be increased by a similar percentage. Some of the possible environmental implications are less apparent. For example, if lignite is the fuel, then, 5-7 percent more land must be strip-mined to meet the same demand; similar ratios hold for air emmissions and radiation Observations Concerning Natural Resources Requirements The natural resource-related implications of the various growth and cooling policies can be summarized as follows: (1) While dollar costs, along with regulatory practices, are likely" to continue to be dominating factors in cooling process selection, the importance of natural resource availability will increase. In certain cases, constraints. imposed by natural resources will determine the coo,ling process, or at least eliminate some cooling options. 175 (2) Water availability is still generally the princ ipal natural re- source consideration in the location of a power plant, and with current and intermediate range technology, water will probably continue to be the single dominant factor. For this South Texa's study area, water use varies as follows, depend- ing on the combination of policies being considered: - Consumptive Use: 11.6 - 19.8 MGD by 2000 - Throughput: 898 - 1436 MGD by 2000 (3) Land is certainly a consideration since 1600-4400 acres will be required. for cooling purposes by the year 2000. However, even though land costs may be significant, land should not become a limiting factor in the region under study, although land availability may be limited elsewhere in the U.S. (4) Energy consumption has not been important in the past, but will become increasingly more important as a cost item and ultimate ly as a limiting factor. Such action will become especially important as more sophisticated cooling systems, many of which require a substantial fraction of the total plant output, are installed. The energy required to drive the cooling systems could amount to 5-7 percent of the total plant output for the gradual phasing in of mixed cooling systems. For a plant using only dry cooling towers this could run as high as 25 percent of the plant's entire output. VA REGIONAL ECONOMIC IMPACT Assessment of the economic impact of a price increase in any product is never*as exact as the engineering design calculations and cost computations describing the extent and the factors affecting such prices. This inaccuracy 176 is attributable to various factors including: (a) the lower precision of the quantitative description of the inter- relationships of the economy, (b) the complexity of the total system which must be considered, and (c) the difficulty in predicting human reactions to such changes, especially if similar changes have never been experienced. When electrical energy is the price variable this human reaction becomes particularly difficult to predict since significant price increases in this commodity have never before occurred in the U.S. and thus there is no substantial body of reliable data on customer reaction to price increases. Despite the above difficulties, some assessment of the economic impact of cost increases due to str ingent environmental control policies is a very necessary part of this investigation Thus, a procedure was developed around the Texas Input-Output Model. Input-Output Analysis is an awesome,, and flexible economic analysis technique. The inventor of this technique, Wassily Leontif, was awarded the 1973 Nobel Prize in Economics almost 40 years after its development. Input-Output modeling is thoroughly discussed elsewhere (Miernyk, 1965,., Cameron, 1968; Leontif, 1953; Grubb, 1971; and others) and will not be presented herein. .Input-Output Impact Analysis Procedure The "'Texas Input-Output Project", also known as the '7exas Inter- industry Project, " was initiated in 1968 in the Office of the Governor with the backing of a consortium of state agencies and with the partial financi al support of the Department of Housing and Urban Development (Grubb, 1971). The initial project required three years, cost $1. 4 million, and resulted in a 183-sector state model and 9 regional models. The regional models and the state model were developed using the same data. (Grubb, et al. , 1973). Since the initial model became operational, continual maintainence and improve- ment have been carried out. However, such "enhancements" have not 177 interfered with the application of the Input-Output model to numerous real problems by various state agencies. both in long term research/planning efforts. and in the rapid analysis of short term operational situations. One recent application in the latter case has dealt with assessing the impact of a recent rail strike on Texas' economy in an attempt to quantify the necessity for a rapid settlement and to analyze the implications of the alternate settlements. Another cruc.ial use has been in developing a position to use to get a special exemption from the proposed fuel oil allocation to enable. the farmers of Texas to harvest their crops. The Input-Output model is presently being used to assess the implications of various energy allocation strategies on the state in an attempt to influence the federal decisions concerning such allocations. The expected costs of satisfying the stipulated cooling policies for each of the growth policies were developed in Section V. 2. These cost changes are used to "trigger" an increase in the price of electricity in the utilities sales in Region 7 Input-Output model which corresponds to the South Texas Coastal Bend study. area (Murrell, Grubb, et al. 1972). Since the regional economy is somewhat simpler than the overall economy of the state, the regional model has only 78 sectors rather than 183 sectors. The transactions matrix is used for the calculations. A typical transactions matrix is shown in Figure V.4A. Sectors 1-71 are the process- ing sectors; rows 72-78 are the final payments sectors, and columns 72-78 are the final demand sectors. Sector 41 represents electric utilities, with ,row 41 showing the utility sales and column 41 showing the utility purchases. The cost increase, "X" , attributable to cooling processes is added to the total electrical sales and distributed proportionally across row 41 to all those sectors purchasing electricity. This procedure results in providing 178 IL FINAL z SALES DEMAND 1 2 3 -70 71 72 73 7475-----78 I 2 PROCESSING 3 SECTORS w U) 41 A 70 71 72 73 74 75 A z <w z @- c'ff 78 0 0 0. A 0 ILAA T-1 TOTAL INPU I SECTOR KEY 41 ELECTRIC UTILITY 70 EDUCATION 73 GOVT.FEDERAL 74 GOVT STATE 75 GOVT.LOCAL 78 RESIDUALS (SAVINGS) A=INCREASE 0 = DECREASE TYPICAL TRANSACTION TABLE SHOWING PROCEDURE FOR TRACING RATE INCREASES (AFTER LESSO,i972) FIGURE V. 4A 179 an 11XII percentIrate increase to the utility. This increase represents only an increase in price and does not represent a change in sales volume at any given point in time. By increasing the total value of sales the revenue to the utility sector also is increased. For the case under consideration, this revenue increase is assumed to be going to pay for additional cooling equipment and operation of the equipment. However, some of this revenue also will go elsewhere. Since this type of cooling equipment is not tax exempt but is treated, for tax purposes, like any other capital improvement, the utility must pay taxes on all the revenue gained. Thus, the revenue to education and government will increase, since industry pays taxes to education and all levels of government. These increases are shown by ",L 's" in Figure V.4A. This increase in revenue by the utilities obviously means that the sectors purchasing electricity must pay out more to the utilities sector. Vftle these sectors will ultimately pass these increased costs of products and/or services on to the consumers, it can be reasonably assumed (Lesso, 1971) that the initial consumer reaction will be to pay these increased costs from residual income, also often called "residuals," "savings" or "discretionary income. " For industries these funds are used for contributions for profits, retained earnings, funds available for dividends, etc. or just simply "cash in the bank." For households this residual income represents simple savings, i.e. cash put away, and not savings invested in bonds, stocks, etc. This extra expense will cause a decrease in the discretionary income for all sectors except utilities, education, and government as shown in Figure V.4A. Application of Input-Output analysis procedure to the problem under investigation in this project requires several basic assumptions: 180 (1) The demand for electricity can be considered inelastic over the range of price changes being investigated. (2) The assumptions of linearity inherent in the Input-Output model are valid over the ranges of price chkanges being considered. (3) The general relationships between sectors of the economy can be considered valid over the time period being studied; however the absolute numbers in these relationships must be carefully scrutinized (i.e. , ratios are more valid, than actual values) . (4) Processing sectors can generally be expected to pass any increased electrical costs along to the customers in the form of increases in the prices of goods and services. However, the initial burden of such increases will be met by funds from discretionary income. (5) Households will initially meet the increased costs from their discretionary income. In the long run three courses of action are possible: decreased use of electricity, continuation of paying for increased rates.from discretionary funds, or altera- tion of consumption patterns (i.e. , buy less of something else) Overall response will be a mixture of the three preceding strategies Once the above assumptions are accepted, it is possible to apply the matrix adjustment procedure to the appropriate transaction tables and procedd with the analysis. However, before doing so, it will be valuable to develop some general understanding of the regional economy. 181 Regional Economic Structure The study region is one of the more economically depressed areas in the state. Some revealing demographic data for the region are presented in Table VAA and these data, especially the education, income, housing and occupational information are indicative of current conditions. Since this study is about electrical energy, the sales of the utility industry (output, row 41) and purchases (input, column 41) are of principal concern. Table VAB shows the principal utility sales, both for the initial transactions table and a second case where a 10 percent price increase is assumed. Households (72) are by far the largest purchaser, accounting for direct sales of over $23 million, which is 37.4 percent of total electrical sales. Chemicals, drugs, and related (25) are second with $8.5 million, or 13.5 percent, and no other single sector accounts for more than 3.5 percent of sales. The ten sectors listed buy 72. 7 percent of the total electricity sold in the region. The purchases made by the utility from the top ten buyers of electricity also are listed in Table VAB. It is worth noting that only households provide any significant goods/services to the utility. The data presented in Table V. 4B indicate that after the 10 percent rate increase, the utility sales to each sector are each up 10 percent in value. This increase simply shows the proportional distribution of extra utility revenue across those sectors purchasing electricity. 182 CHARACTERISTIC PERCENT EDUCATION < 9 YEARS 38.0 9-11 YEARS 18.5 HIGH SCHOOL 23.9 1- 3 YRS. COLLEGE 10.6 4 OR MORE YRS. COLLEGE 9.0 FAMILY INCOME 0-2000 19.4 2000-6000 29.6 6000:49.0 6000-10,000 24.O:l0,000:73.O 10,000- 15,000 16.8 >10,000:27.0 >15,000 10.2 MEDIAN FAMILY 7,29 MEDIAN PER CAPITA 1,444 (5.2 CAPITA/FAMILY) HOUSING MEDIAN RENT 74 MO. MEDIAN OWNER VALUE 10,212 OCCUPATIONS PROF.ADMIN.,TECH 21.8 CLERICAL a SALES 21.4 SKILLED 8& SUPERVISORY 15.0 UNSKILLED a SEMI-SKILLED 41.8 SELECT 1970 DEMOGRAPHIC DATA FOR STUDY AREA (U.S. CENSUS,1970) TABLE V. 4A SECTORS- BEFORE AFTER S A L E S PURCHASE FROM SALES PURCHASE FROM SAME SAME 1.) 72,HOUSEHOLDS 237670.0 97670.1 257972.0 9)670.2 (2) 25, CHEMS,DRUGS,ETC- 82545.0 0.4 .91399.5 0.4 (3.) 70, EDUCATION 21182.1 0 21400.3 IT743 .1 (4) 13, CRUDE PET lGAS 21071.3 0 21278.4 0 (5.) 54,FOOD STORES 21019.2 0 21221.1 0 (6.) 29, PRIM METALS,FNDRYS. 17973.1 0.6 11972.5 0.6 (7) 26) PET REFIN. a RELATED 1)758.6 97.4 17934.5 97.4 (8.) 49, GENERAL WHOLESALE 11334.4 24.7 11467.9 24.7 (9) 63, LODGING SERVICES 11246.0 0 11370.51 0 00.) 2q OTHER FOODS 11218.1 0 11340.0 0. TOTAL, ABOVE OUTPUTS 461017.8 91793.2 501356.7 111536.4 GRAND TOTAL,ALL OUTPUTS 63t256.4 631256.4 690582.1 691582.1. % GRAND TOTAL IN ABOVE OUTPUTS 72.7% 15.5% 72.4% 16.6% TOP TEN UTILITY SALES (OUTPUTS) BEFORE AND co AFTER 10 PERCENT PRICE INCREA�E(ftio,3) TABLE V.413 184 Table V. 4C is similar to Table V. 4B except that the top ten purchases by th e utility (ie. , where'the industry's money goes). are shown. There is less distinction among the leading sectors in this case since the top five are residuals (78), $18.7 million or 29.6 percent; households (72), $9.7 million or 15. 3 percent; federal taxes (73) $ 9. 6 million or 15. 2 percent; gas (4 0) $ 8. 3 million or 13. 1 percent; and deprec iation (7 6) $ 8. 0million or 12. 6 percent. These top five sectors, account for 85. 8 percent of the total pur- chases by the utility; while the top ten sectors account for 96.4 percent. Of these 10 sectors, only households and education also are major buyers of electricity. It is interesting to note that combined payments to federal, state, and local governments account for $11.9 million or almost 20 percent of the utilities income, whereas total fuel purchases (gas services plus imports) account for $10.7 million or 17 percent. This situation of course is changing rapidly and by the end of 1973 fuel is the larger expense (Personal Communication). While the dollar value of an electrical purchase by a processing sector is significant the overall importance of electrical energy to that processing sector is also very important. If two industries consumed the same amount of electrical energy, a person would normally assume that electricity was equally important to each. However this assumption could be very misleading if one facility happened to be.a large, low-energy using concern whereas the other was a small energy- intensive operation. In the first case the electrical purchases might account for 0.25 - 0.50, percent of the sectors expenses whereas in the latter case it might be 5-10 percent. Obviously, the smaller, energy- intensive plant would be much harder hit by a significant increase in the price of electricity. The direct requirements table of the Input-Output model is used to determine the importance to any sector relative to another. This table is simply a transactions table with each row. scaled to one by dividing each SECTORS BEFORE AFTER PURCHASES SALES TO PURCHASES SALES TO SAME SAME (1.) 78, RESIDUALS 181730.2 .0 237709.9 0 (2.) 72,HOUSEHOLDS 91670.1 231670.0 97670.0 251927.0 (3.) 73, GOVT.-FEDERAL 91 643*. 2 875.2 10 t 607.5 963.2 K) 402 GAS SERVICES 8,343.9 237.4 81343.9 261.1 (5.) 76, DEPRECIATION 71972.4 0 71972.4 0 (6.) 77, IMPORTS 2-7349.6 0 27349.2 0 (7) 70, EDUCATION 17584.6 21182.1 1,743.1 2,400.3 (a) 7@ GOVT-LOCAL 12245.1 .29.4 17369.6 32.4 (9.) 74, GOVT-STATE 985.7 -282.2 11084.3 310.4 (10) 38, OTHER TRANSP(PLRR) 440.0 369.3 440.0 406.2 TOTAL,ABOVE INPUTS 601964.8 27,645.6 677290.5 30,300.6 GRAND TOTAL, ALL INPUTS 631256.4 63,256 .4 691582.1 69,582.1 % GRAND TOTAL IN 96.4% 43.7% 96.7% 43.5% ABOVE INPUTS TOP TEN UTILITY PURCHASES (INPUTS) BEFORE co AND AFTER 10 PERCENT 'PRICE INCREASE(@ xlo@ cn TABLE V. 4 C 186 transaction entry by the column total. Table VAD shows those industries which spend one percent or more of their total budget on electrical energy. Most of those industries spending more than one percent of their budget are relatively small consumers of electricity utilizing energy- intensive processes. It is interesting to note that wholesale farm products (45) is the most electrical energy- intensive industry with 6. 67 percent of its budget being spent on electricity. This observation is true only for this region, and probably not for any other region and definitely not for the state as a whole. Water and sanitary services (42) also spends over six percent (6. 34) of its budget on electrical energy This expenditure is the result of the widespread use of electrical pumps to produce ground water and to move surface water and wastewater. Of the industries spending more than two percent of their budget of electricity, only two, lodging services (63) and chemicals, drugs, and related (25), appear in the top ten energy purchasers. The I argest purchaser, households (72) which buys 37.9 percent of all.electricity produced, ranks 27th in terms of the importance of its electrical purchases as compared to other purchases. These data simply show that while a given sector may account for a large percentage of total electrical sales (and demand), and thus be very important to the utility industry, each individual unit (i.e. , firm) may spend only a small fraction of its budget on electricity. Careful scrutiny of Tables V. 4A - V. 4D will provide additional information about the structure of the regional economy which may be helpful in following the assessment of the economic impact caused by price increases resulting from cooling-related expenditures needed to meet the cooling policy constraints. 187 DIRECT REQUIREMENT SECTOR (AS % TOTAL EXPENDITURE) :@z 6 To 6.34 42 WATER AND SANITARY SERVICES 6.67 45 WHOLESALE FARM PRODUCTS 5- 6 To 5.65 10 COTTON GINNING 5.02 *63 LODGING SERVICES 5.31 66 MOVIES AND AMUSEMENTS _R 07 %o 10 4.87 *25 CHEMICALS DRUGS AND RELATED 4-61 27 CLAY,STONE AND SHELL 3-47o NONE NONE 2-307o 2.03 35 MOTOR FREIGHT AND WAREHOUSING 2.67 57 APPAREL AND ASSESSORIES 2.67 58 HOME FURNISHINGS 2.75 64 PERSONAL SERVICES 1- 2 To 1.42 9 AGRICULTURAL SUPPLIES 1.44 20 OTHER FOODS 1.78 *29 PRIMARY METALS 8 FOUNDRIES 1.70 34 OTHER MANUFACTURING 1.35 944 WHOLESALE- GROCERIES 1.36 49 WHOLESALE -GENERAL 1.76 52 HARDWARE HEATING a ELECTRICAL 1.30 *53 DEPARTNINT STORES 51 54 FOOD STORES .38 59 EATING & DRINKING ESTASS. 1.48 60 OTHER@ RETAIL 1.23 62 INSURANCE, REAL ESTATE, FINANCE 1.14 68 OTHER MISC. SERVICES 1.42 *69 MEDICAL 61 DENTAL 1.37 *70 EDUCATION 1.34 72 HOUSEHOLDS *DENOTES AN INDUSTRY IN "TOP TEN" PURCHASES OF ELEC. INDUSTRIES SPENDING MORE THAN ONE PERCENT OF BUDGET ON ELECTRICAL ENERGY TABLE V. 4D .188 Computing the Impact of Cooling Costs At the 1970 initial conditions, cooling related costs accounted for approximately 4. 6 percent of the cost of delivered electricity - i.e. , out of every $1.100 spent by the utility, 4. 6@ could be directly attributed to cooling (Figure V.4.1). Note that- this cost is for delivered electricity, and not just for the generation process. Such delivered costs include transmission, distribution, and the whole complex of related services routinely provided by an electric utility. While the cost varies substantially, generation cost normally is only about 40 percent of the total cost, therefore if CIcooling accounts for 4. 6 percent of the total cost, it would account for 11. 5 percent of generation costs. This 4. 6 percent is based on the CIpolicy. It is necessary to deter- mine how this value would increase under the C and C policies through 2 3 time. Table V. 4E shows the C, I C 21 and C 3 expenditures, plus the ratio of C 2/C Iand C 3/C Ifor each growth policy in 1970, 1980, 1990, and 2000. These ratios may be multiplied by the base 4. 6 percent to obtain the estimated percent expenditures f or C and C which are shown in Table V. 4F, f or 19 70, 2 3 1980, 1990, and 2000. This base 4. 6 percent is derived from the fact that the estimated CI policy cost for 1970 is $1.58 million. One-half the population in the area covered by the Region 7 Model is in the Coastal Bend area; therefore, the total Region 7 cooling expenditures would be $3.16 million (double $1.58 million). Total sales were $69.58 million, or 3.16/69.58 = 4.6 percent. In order to assess economic meaning from these data, as well as other data previously presented, several individual sectors will be examined. 189 YEAR GROWTH COOLING POLICY POLICY Cl c c m$(cl/cl) MA./w Os(cwc.) ZPG 1.580.00) 1.870.18) 1.890.20) 1970 INT 14 li coc of It :: .: 'I'l 0. 18)* (1 2-0@ ZPG 2.400.00) 2.970.23) 4.520.88) 1980 INT 2.470.00) 3.050.23) 4S50.88) coc 2560.00) 3.(80.24) 4.870.90) (1.23)* (1.89)* ZPG 3.090.00) 3.890.26) 6.52(2.11) 1990 INT 3.390.00) 4.280.26) 768(2.Z7) coc 3.670.00) 4.590.25) 8.53(2.32) (1.26)* (2,23f ZPG 3.090.00) 3.890.26) 6.52(2.11) 2000 INT 3.59(LOO) 4.590.27) 8.25(2.30) coc 4.140.00) 5.260.21) 9.66(2.33) 0. 27)* (2.25)* AVERAGE RATIO OF THE COST- OF Ce ANDC3POLICIES TO Cl POLICY FOR VARIOUS GROWTH PROJECTIONS TABLE V.4E 190 TIME PERCENT TOTAL COST DIFFERENCE cl C2 C3 C2 @cl C3 -cl 1970 4.6% 5.4% 5.5%, 0.8 0.9 19 80 4.6% 5.7% 8.7% 1.1 4.1 9.1 1990 4,.6% 5.8% 10.3 0. 1.2 5.7 7@11 0. 2000 4.6% 5.8% 10.4% 9016 1.2 5.8 @110.7 AVERAGE 4.6% 5-.7% 8.7% INDIVIDUAL VALUES SHOWN FOR ZPGIINT2 AND COC POLICIES PERCENT OF TOTAL ELECTRICAL COST ATTRIBUTABLE TO* COOLING UNDER @7 DIFFERENT POLICIES TABLE V.417 191 Households The initial question that most will ask is "How will this rate increase 'effect the m an-on-the- street, i.e. , the consumer? " The answer must be presented in two parts: (1) Direct Effects - How will the electric bill change? and (2) Indirect plus Induced Effects - How will the consumer ultimately "feel" the increased energy costs in the many goods and services he purchases? Determining the direct costs is rather straightforward; the percentage increase in electrical costs appears as the same.percentage increase in the monthly electrical bill. The percent increases in monthly (or annual) electric bills that a household (or any other sector) could expect for the C2 and C3 policies are shown in Figure VAB. These increases are in addition to the base 4. 6 percent cooling cost that is implicit in the C, . or "present practice" cooling policy. It is obvious that the direct impact of the C2 policy is never very great. Even the C31 or "zero-discharge" policy does not appear to have a greatly significant direct impact, since it would only increase the electric bill by approximately 5.8 percent. The next logical question is "How will the households react to this price increase?" The answer is not so straightforward. In fact, this question could keep an army of economists and sociologists arguing from now until the year 2000. One previous effort (Lesso, 1972) explored several possible reactions; based upon those efforts, this study will analyze the effect of .the "most likely" reaction strategy. This approach simply assumes that the households will, in the short run, pay this increased cost out of their discretionary or "residual" income. Thus, the impact of this direct cost increase on the discretionary household income must be examined. The decrease in household discretionary income resulting from direct increases 192 5.8 10.3) BASE 4.6 0/6 COST OF 5.7 POUCY C, 1.2 12 ------- / 1 5.4) 0.9 -R 2000 1990 1980 1970 C3 C2 Cl INCREMENTAL DIRECT INCREASE OF ELECTRIC BILCRESUJING FROM DIFFERENT COOLING POLICIES (PERCENTS) /'C 3 @C2C I FIGURE V. 4B 193 in electric rates as required to satisfy the C2and C3 cooling policies is shown in Figure V. 4C. The effect of C2 is relatively insignificant; however, in the future, meeting the direct costs of C3 could require almost 10 percent of the total household discretionary income. For some higher income families, with significant discretionary funds, this outlay probably would not be felt; however such an increase could cause a hardship on certain lower income families. Recalling that the average rent payment in the region is only $74.00 per month, and that the income of half the families is less than $6,000 per year helps provide some perspective. Table V.4G shows the total annual per capita and per family costs related to cooling. These costs include not only direct costs presented previously but all the cost increases hidden in the goods and services purchased by the household. The annual total per family costs attributable to cooling are shown in Figure V.4D. This figure indicates the additional costs required for C2 and C 3 in addition to the minimum base cost for C1 * The @data in Figure V. 4D indi - cate that for the 1990-2000 cases the estimated annual cooling cost to meet C 3 will be $74.43 per family as compared,with a C 1 cost of $33 .24 per family or $41.93 per family for the C2 case. These data indicate an average differ- ence of about $40.00 per family per year between the present practice policy and the z.ero-discharge policy. While this may not sound like much money, one must remember that the average rent payment if only $74.00. However, for the Mexican Americans, which constitute 46 percent of the regional popu- lation, average rent drops to only $55.00, and the average annual per capita income is only $749.00. Nothing definitive to a quantitative scientist can be extracted from these numbers; however, these data cannot help but provide a meaningful and valuable insight into the socio-economic character of the study area. Hopefully, such.numbers indicate that while such cost increases may seem almost trivial to many, such costs can be very significant to a sub- stantial portion of the residents in the service area. 194 DIRECT IMPACT 9.0 BASE CORRESPONDING TO Cl POLICY 5 1.9 1.9 9000 1990 1.7 1980 0.61 0.5 970 c 3 cz /cl DECREASE IN H OUSEHOLD RESIDUAL INCOME DUE TO DIRECT INCREASE IWELEGTRIC BILORESULTING FROM DIFFERENT COOLING POLICIES (PERCENT) 9. FIGURE V.4C TOTAL ANNUAL COOLING COST TOTAL ANNUAL COOLING COST YEAR GROWTH POP 17FAMILIES /CAPITA/ YEAR S/ CAPITA/ YEAR POLICY (XI03) (x 103) C, C2 C3 C, C 2 C3 1970 SAME 433.7 83.40 3.64 4.31 4.36 18.93 22.41 22.67 1980 ZPG 470.0 - 90.30 5.11 6.32 9.62 26.57 32.86 50.02 INT 483.3 93.13 5.10 6.30 9.60 26.52 32.76 49.92 COC 505.0 72.12 5.07 6.30 9.64 26.36 32.76 50.13 19 9 0 ZPG 475.0 91 .35 6.51 8.19 13.73 33.85 42.43 71.40 INT 540.0 103.85 6.27 7.93 14.22 32.60 41.24 73.94 COC 576.0 110.77 6.37 7.96 14.80 33.12 41.39 79.966 (33.19) (44.83) (74.10) 2000 ZPG 475.0 91 .35 6.51 8.19 13.73 33.85 42.43 71.40 INT 570.0 109.62 6.30 8.02 14.47 32.76 41.70 75.24 COC 655.0 125.96 6.37 8.01 14.80 33.12 41.65 76.65 THE TOTAL ANNUAL COST PER CAPITA AND PER FAMILY COSTS ARE COMPUTED BY DIVIDING THE ESTIMATED COOLING COSTS (FIGURE V.2D)BY POPULATION OR NUMBER OF FAMILIES AS APPROPRIATE. THIS ASSUMES THAT ALL THE COOLING COSTS, BOTH DIRECT. a INDIREC7 ARE BORNE BY TH E REGION. EVEN THOUGH SOME COSTS WILL BE EXPORTED WITH IN PRODUCTS EXPO IT IS REASONABLE TO ASSUME THATAN EQUAL AMOUNT OF SUCH HIDDEN COOLING COST 19 . IMPORTEffWIMIR-1915-ORT PRODUCTS TOTAL ANNUAL PER CAPITA AND PER FAMILY COOLING-RELATED COSTS cn TABLE V. 4G 196 74.43 ALL VALUES IN 4/FAMILY/YEAR.' 74.10 41.93 33.24 41.83 50.02 33.19 1 32.79 TOIrAL COSTS REQUIRED TO 26.48 StTISFY POLICIES C? &C3 22.67 22.41 18.93 ell DIFFERE@TlAlll C2ff4 +1 41.19 S. 69 /"33.2@ BETWEE9 Cl MD C2 OR C31 1 3, 19 +40.91 /"+8.641 2000 /1+23.54 + 6.31 12 6.48 '1990 "'o., 198'0 +3,74 + 3.48 19 70 BASE COSTS, ASSUMING C, IS TR"INIMUM COST C3 p- /c 1, UNDE R ANY CIRCUMSTANCE TOTAL PER FAMILY COSTS ATTRIBUTABLE TO COOLING FOR SATISFYING VARIOUS COOLING POLICIES (4/FAMILY/YEAR) FIGURE V.41) 197 Next, the effect of the total cost increase on discretionary household funds will be examined. For this case it is assumed that the increased costs of all goods and services affected by the rate increase, as well as the direct increase in the electric bill to the household, will be borne by discretionary funds. All three growth policies are aggregated and the average value is used. This aggregation makes the graphics easier to follow, and the unit values are close enough that no significant analytical resolution is lost. In order to ascertain the effect of such costs on future discretionary funds, two key assumptions are requisite, nam ely (a) the fraction (percent) of total household outlays going as residuals will remain constant over time as the economy grows, and (b) although dollar values will change, the relative interdependence among sectors will remain constant over the study period. The decrease in household residual income ca used by the total (direct and indirect and induced) increase in electric rates is shown in Figure V.4E which indicates that the total costs can require 22-23 percent of the total household discretionary income to meet the. C 3 policy, but only 4-5 percent to satisfy the C 2 conditions. These increases compare with 9-10 percent and about 2 percent, respectively to meet only the direct cost. (Compare Figures V. 4C and V. 4E to get a good perspective of the difference.) Thus the total economic impact on household residual income of meeting the C2 and C 3 requirements is approximately 2 V2 times the direct impact of satisfying the same environmental cooling criteria. Assessing the impact of widespread price increases on personal and family income is always somewhat speculative. This previous discussion has attempted to illustrate some of the ways to try and obtain a perspective of 198 TOTAL IMPACT /23.2 W", M/1 1 /0 22.8 13.3 4.7 4.7 2000 3.6 1990 1980 2.1 2.0 1970 C3 C2 //'c I DECREASE IN HOUSEHOLD RESIDUAL INCOME DUE TO OVERALL ECONOMIC IMPACT RESULTING FRCM DIFFERENT 1990 COOLING POLICIES FIGURE V. 4E 199 what such numbers may mean from a social or socio-economic viewpoint. Such numbers don't provide "answers" in the conventional sense sought by engineers; however, they do provide some information which is certainly better than nothing except verbal rhetoric. Processing Sector Impact The initial industrial reaction to increased electric rates will be to cover this added cost out of residual income; in the long run such costs will be passed on to purchasers of the various goods and services produced by the affected industries. For households, residuals are often referred to as "savings" , but the meaning for industry is different; here retained earnings, contributions to profit, funds available for dividends, etc. are all included. To obtain a concept of the impact of cooling cost increases on the processing sectors, the most expensive cooling condition, C V was assumed to occur. Each industry was expected to meet the resulting electrical increase of 5. 8 percent from its available residual income. (Sixteen sectors, mostly agricultural, showed either a negative or zero residual income in the model and will be discussed separately.) A list of the 71 processing sectors ranked according to the percent decrease in residual income is given in Table VAH and a plot of these same data is presented in Figure VAF. One thing becomes evident: the 5.8 percent cost increase required to meet the C3 Cooling policy does not have a significant, widespread impact on the residual incomes of the regional 'processing sectors. One industry,whole sale farm products (45) appears to be the hardest hit, with a 3 7. 8 percent decrease in residual income. However, a couple of associated facts must be brought out. First, during the year on which the 200 PERCENT SECMR NUMBER AND NAME REDUCTION 37.82 45 WHOLESALE FARM PRODUCTS 6.50 42 WATER AND SANITARY SERVICES 5.07 70 *EDUCATION 4.18 49 GENERAL WHOLESALE 1.80 25 CHEMICALS, DRUGS AND RELATED 1.71 58 FURNITURE AND HOME FURNISHINGS 1.57 63 LODGING SERVICES 1.36 29 PRIMARY METALS FOUNDRIES 1.19 56 GASOLINE SERVICE STATIONS 1.07 66 MOTION PICTURE AND AMUSEMENTS 1.00 9 AGRICULTURAL SUPPLY .84 64 PERSONAL SERVICES .77 47 WHOLESALE MACHINERY AND EOUIPMENT .71 30 FABRICATED STEEL AND OTHER PRODUCTS .50 11 AGRICULTURAL .45 57 APPAREL AND ACCESSORIES .43 24 NEWSFAPERS, PUBLISH ING AND PRINTING .42 68 MISC. REPAIRS SERVICES AO 20 OTHER FOOD AND KINDRED PRODUCTS .31 G2 FINANCE, INSURANCE AND REAL ESTATE .29 23 WOOD FURNITURE, PAPER AND RELATED .28 53 DEPARTMENT AND VARIETY STORES .26 65 ADVERTISING, DUPLICATING, PHOTO SERVICES .26 39 COMMUNICATIONS .24 19 FROZEN, CANNED, DRIED AND PRESERVED FOODS .23 44 WHOLESALE GROCERIES .23 21 BEVERAGES .22 69 MEDICAL AND DENTAL SERVICES .22 60 OTHER RETAIL 119 55 AUTO DEALERS AND REPAIR SHOPS .18 59 EATING AND DRINKING PLACES .14 54 FOOD STORES .14 26 PETROLEUM REFINING AND PRODUCTS .14 35 HIWAY MOTOR FREIGHT AND WAREHOUSING .11 71 PROFESSIONAL SERVICES .09 43 WHOLESALE AUTO PARTS (TABLE CONTINUED ON NEXT. PAGE) TABLE VAH 201 CONTINUATION OF TABLE V 4H) PERCENT SECTOR NUMBER AND NAME REDUCTION .08 13 MINING -PETROLEUM AND GAS .08 31 MACHINERY AND PROCESSING EQUIPMENT .08 51 FARM EQUIPMENT DEALERS .04 61 BANKING AND CREDIT AGENCIES .04 38 OTHER TRANSPORTATION .01 48 WHOLESALE PETROLEUM AND PRODUCTS SECTORS EXPERIENCING LESS THAN 0.01 PERCENT REDUCTIONS Is DAIRY MANUFACTURING 28 CEMENT AND CONCRETE PRODUCTS 32 ELECTRICAL AND ELECTRONIC EQUIPMENT 33 TRANSPORTATION EQUIPMENT 34 OTHER MANUFACTURING 36 WATER TRANSPORTATION 37 AIR TRANSPORTATION 40 GAS SERVICES 46 WHOLESALE LIVESTOCK 50 RETAIL LUMBERYARDS 52 HARDWARE, WALLPAPER, H EATI NG, ETC. 67 AUTO RENTALS AND PARKING SERVICES SECTORS HAVING AN INITIAL RESIDUAL INCOME OF ZERO OR A NEGATIVE VALUE(SEE TEXTFOR EXPLANATION) I IRRIGATED COTTON 2 IRRIGATED GRAINS 3 IRRIGATED VEGETABLES a CITRUS 4 DRYLAND COTTON 5 DRYLAND FEED GRAINS 6 OTHER DRYLAND CROPS 7 LIVESTOCK RANGE AND FEEDLOT 8 DAIRY, POULTRY AND EGGS 10 COTTON GINNING 12 FISHERIES 14 RESIDENTIAL CONSTRUCTION 15 COMMERCIAL a INSTITUTIONAL CONSTRUCTION 16 FACILITY & OTHER CONSTRUCTION 1.7 MEAT PRODUCTS 2.2 TEXTILE MILL PRODUCTS 2.7 CLAY, SHELL AND CUT STONE (TABLE CONTINUED ON NEXT PAGE.) 202 (CONTINUATION OF TABLE V 4 H FOOTNOTES I. EDUCATION SHOWS A DROP IN RESIDUAL INCOME 34,800, HOWEVER IT HAS AN INCREASE IN REVENUES OF 1 081,000 FROM UTILITY TAXES WHICH OFFSETS THE RESIDUAL LOSSEh MANY TIMES OVER. 2. THE UTILITY SECTOR,*41, IS THE ONLY PROCESSING SECTOR NOT SHOWN IN THIS TABLE. ITS RESIDUAL WOULD APPEAR TO INCREASE BECAUSE OF INCREASED REVENUES; HOWEVER THIS INCREASED INCOME IS EARMARKED FOR COOLING-RELATED EXPENSES. END OF TABLE V. 4H) 203 00 @p: 40 ww 30-- cn 00- U. oin 20 @_w zo W:5 cr 010 wa: CL a. 20-- U) cc co LL 0 Io__ o, -ve <.o 1 .01-.1 .1-.5 .5-1 1-5 5-10 10-30 > 30 REDUCTION IN RESIDUAL INCOME -PERCENT EFFECT ON RESIDUAL PROCESSING SECTOR TO M ET STRICTEST COOLING POLICY FIGURE V. 4F. 204 Input-Output model is based, the region suffered a late season hurricane which brought very heavy rains to the region and devastated many of the area's crops in the fields. This phenomenon would tend to make it a tough year for the wholesale farm products industry. Compounding this apparently very large impact further is the fact that this industry is rather small, (accounting for only 0. 4 of one percent of electrical purchases) and always operates on a narrow profit margin. However electricity is a major expense for this sector, with 6. 7 percent of i@all revenue being spent on electrical energy. It is also a sector in which prices often change rapidly to reflect fluctuations in costs, supply, and demand. Thus, to infer that an increase in power cost would consume the jresidual income and wipe out the industry would be most improper. It would be possible to suggest that some of the marginal and/or smaller operators might be driven out of business. On the basis of percent decrease in residual income, water and sanitary services (42), is the second most affected industry with 6.5 percent of its residual income being required to pay the cost of additional cooling. This sector is an intermediate consumer of electricity, ranking 13th and accounting for 1. 6 percent of the total regional Iblectrical demand. However electrical energy is one of this sector's major expenses, requiring 6.3 percent of total income. This sector includes both public and private water and wastewater fabilities but the great majority are public, non-profit operations, and because of their public nature, very little residual income is generated, in fact only about 4.4 percent of revenue goes to residuals as compared to 10-30 percent in other sectors. Thus, a small electrical cost increase, if allocated to residuals, could appear to have a devastating effect on the water and wastewater utility service, but to predict doom for this industry would be ridiculous. When costs increase in this sector, they are apt to be quickly passed along as rate increases to water and sewer customers. , Payments to water and sanitary services are genera Ily a very insignificant portion of other 205 sectors expenses. With the exception of lodging services (63), whose pay- ments to this sector constitute 3. 8 percent of its revenue, other sectors spend less than 0. 1 - 0. 2 percent for water and sanitary services. Thus, it is safe to say that increased electrical costs to the water and sanitary utility sector would not be significantly felt. Education (70) shows up third in Table VAH, but this.is also very deceptive. The costs for the Education sector will go up substantially, and devour a good portion of what residual income this sector has. However, the education sector will experience a marked increase in revenue, resulting from increased electric utility taxes, which will compensate for increased power costs several times over. The general wholesale sector (49) will use 4.18 percent of its revenue to meet the added cooling costs imposed by C 3. This sector has a substan- tial electrical demand totaling almost $1.5 million per year; this makes it the 7th largest electrical customer. This sector generally does not constitute a major item in budgets of other sectors, usually running under 1.0 percent of expenses. There is one exception: agricultural supplies (9) which spends 16.7 percent of its outlay on general wholesale, and next to households, this cost is the most expensive category for the agricultural supplies sector. However, agricultural supply is such a small sector (only four sectors, 27, 32, 46, and 67 are smaller) that even if general wholesale price increases hit agricultural supply, the effects would not have a significant effect beyond that single sector. Thus, it is reasonable to conclude that power cost increases would neither greatly affect the general wholesale sector nor trigger any related secondary impacts. The next ranking sector to be affected is chemicals, drugs, and related (25). The characteristics of this sector can be contrasted with the others pre- viously mentioned. To begin with, these industries buy and use 206 more electricity than any other processing sector, with annual purchases totaling $8.5 million or 13.5 percent of all electrical sales. Electrical energy accounts for 4. 9 percent of all expenses for this sector. Residual income is typically high for this industry, a fact that indicates the-type of investors who back this industry. Such investors expect sizable dividends and rates of return on their investments and such payouts must come from the residual sector. This sector's sales to others often constitutes a sizable portion (often 8-10 percent with some in excess of 20 percent ) of the purchasing sector's budget, thus making the operation of many other sectors sensitive to the price of chemicals, drugs, and related. Considering this fact, it is reasonable to. conclude that even a fairly small increase in elec- trical costs could cause a "jolt" in this sector that very possibly might be transmitted to other sectors of the economy. It could be logically argued that of the processing sectors discussed thus far, this sector is the first one where even small increases in the cost of electricity might produce sig- nificant or even detectable repercussions on the regional economy. Six other sectors, shown in Table V.411, will have their residual income decreased by more than 1. 0 percent to meet the cost of the C cooling 3 policy. However, by examining the sectors, it is reasonable to conclude that there will be no substantive regional economic impact. The same can be said for the remaining 43 sectors showing a reduction inresidual income of less than 1.0 percent. Table V.41I also shows 16 other sectors which had a zero or negative residual income in the initial Input-Output tables. Obviously it is not possible to assess their sensitivity to electricity costs by the above method, thus they must be examined separately. All of this group, with exception of textiles (22) are either agriculture or construction. As mentioned earlier the region experienced a wet, early fall hurricane in the year on which the Input- 207 Output model is based. The hurricane de'alt a devastating blow to the agri- cultural sectors that year byruining most crops in the fields, and thus, agricultural profits never occurred. However, it is worth mentioning that agriculture quickly recovered, and the revised model currently being developed will reflect this healthy state. The same natural disaster also dealt the con- struction industry a severe blow, but it too has quickly recovered, and is now more healthy than ever. No such simple explanation can be given for, textiles , but it is a minor activity whose fortunes tend to vary greatly. Another approach can be used to get some idea of the impacts electrical cost increases will have on the sixteen sectors s-howing a zero or negative residual income. The data shown in Table V.41 indicate the importance of electrical energy to other sectors by showing what fraction of their budget is spent on electricity. Fourteen spend less than 0. 5 percent on electricity. It is safe to conclude that they will be essentially unaffected by the 5. 8 percent cost increase necessary to cover policy C 3Costs . Cotton ginning (10) with 5. 6 percent of its budget going to electricity will be affected by rate increases; however, the cost of ginning is a minor fraction of the cost in cotton production and processing, and any added costs can be passed along. Ginning is usually a low-profit venture at best, and - such cost increases may drive a few marginal firms out of business; however, because of the ginning industry the effects of such closures would be localized. Clay, shell and cut stone (27), spends 4.6 percent of its budget on electricity. Most of this goes for making brick from clay. However, it is the smallest of the 71 processing sectors, and uses only one-tenth of one percent of the region's electricity. While this sector does sell to many other sectors, the dollar Values involved are very small, usually less than 1/1000 of one percent of the purchaser's' budget and never more than one half of one 20-8 SECTOR NUMBER PERCENT BUDGET AND NAME SPENT ON ELECTRICITY 1. IRRIGATED COTTON .24 2. IRRIGATED GRAINS .25 3. IRRIGATED VEGTABLES & CITRUS .21 4. DRYLAND COTTON .21 5. DRYLAND GRAINS .29 6. OTHER DRYLAND CROPS .24 Z LIVESTOC K, RANGE & FEEDLDT 15 .8. DAIRY, POULTRY & EGGS 19 10. COTTON GINNING 5.65 12. FISHERIES .34 14. RESIDENTIAL CONSTRUCTION' .21 15. COMMERCIAL a INSTITUTIONAL CONSTRUCTION .19 16.' FACIUTY S OTHER CONSTRUCTION 19 17. MEAT PRODUCTS .49 22. TEXTILE MILL PRODUCTS 4 6 27 CLAY, SHELL AND CUT STONE 4.60 ELECTRICAL ENERGY EXPENDITURES BY THOSE SECTORS SHOWING ZERO OR NEGATIVE RESIDUAL INCCMES. TABLE V. 4 1 209 percent. For these reasons it is safe to conclude that electricity cost increases would have no effect whatsoever@ on this sector or those to which it sells its products. From the above, it is apparent that while no processing sector will .completely escalpe being touched by cost increases in electricity, none should be devastated either. Several sectors initially appear to be very hard hit, but close scrutiny, thought, and independent inspection of the affected sector's general nature showed that initial fears were unwarranted. The one sector that might trigger secondary impacts was chemicals, drugs, and related (25). This situation was deduced from several facts: (a) it is the second largest purchaser of electricity, (b) electrical energy is a major item in its budget, (c) its residual income would be substantially affected , (d) investors backing this sector expect high returns, and possibly most importantly (e) this sector is a major supplier of other sectors . Thus, while it is not possible to predict just what might happen, it is possible to say that the chemical drugs, and related sector (25) deserves the most attention. While it is possible to say that no other sectors will be adversely affected as a whole, this is not true for certain firms within those sectors. It is only logical that if times get tight for any broad industrial category, the marginal firms will fold first and this is true here. Summary of Regional Economic Impact From the preceding analyses and discussions, several points can be concluded about the economic impacts of price increases on the regional .economy: (1) The Input-Output model, while it does have its limitations, can be manipulated so as to provide a general idea of what will occur and to identify which sectors will be the most affected. This enables one to concentrate on the significant 210 areas and avoid the unimportant. Also, if an Input-Output model is available, dnce the software to manipulate it, is developied, it is very easy to examine a large number of possibilities. (2) Households will not be particularly hard-hit by direct effects. However, the combined impact (direct plus indirect plus induced) could cost up to $72 .00 per family per year for "zero discharge" cooling. This -is equivalent to one month average rent and is approximately one-quarter of the average residual income. (3) No processing sector should eNperience a major adverse impact, although limited tertiary effects may be felt through the chemicals, drugs and related aebltor (25). Some individual firms who are already marginal may be put out of operation. (4) No "inflationary waves" will be triggered, although some localized effects are apt to be experienced. CHAPTER VI CONCLUSIONS AND RECOMMENDATIONS The principal objectives of this project are to develop a methodology for identifying and assessing the implications of alternative public policy deci- sions concerning the energy-environment dilemma, and to apply the methodology to a real-world situation in order to demonstrate its practicality. It is in the context of the above objectives that the following conclusions and recommenda- tions will be presented. These findings are arranged into three sections: VI.1, Conclusions; VI.2, Recommendations for Action; and VI.3, Suggestions for Further Research. VI. 1 CONCLUSIONS A. This project was successful in developing a realistic, feasible tech- nique capable of evaluating certain implications, including trade-offs, of alternative public policy decisions dealing with the energy-environment dilemma. 1 . The development and subsequent usage of such procedures for policy analysis depend upon the availability and reliability of proven analytical techniques and adequate information bases. This study could not have been done within the time and resources available if the Texas Input-Output Model had not been complete, and other data had not been previously compiled and analyzed on power plant sites and water resources. 2. Although the development of new, more sophisticated analytical tec hniques is desirable, meaningful policy analysis can be ac- complished through the application of existing techniques and the thoughtful interpretation and use of available information. 211 212 3. Procedures for analyzing alternative public policies, such as the one developed and demonstrated herein, do not produce the single, hard, quantitative answer that most people continually seek. No such "single answer" exists to this sort of complex problem. Rather, a careful analysis will provide valuable improved insight into the interactions, critical elements, principal linkages, and predominant forces that govern complex real-world systems in- volving energy, environment, and economics. For this reason, those developing and using such techniques must possess a thorough understanding of the policy aspects involved.and have a good understanding of the analytical techniques involved. B. The application of this procedure to the Coastal Bend region in South Texas demonstrated that this approach can produce realistic meaningful results. Moreover, this application provided some most enlightening insights into the problems of power plant cooling and growth in the study area: 1 . For the combinations of growth and cooling policies considered, natural resource availability will be a limiting factor in power plant siting and the selection of cooling systems. Cooling ponds are the most logical choice. Limited fresh water availability will constrain the use of evaporative towers; significant energy require- ments will discourage dry towers; and the need to protect the bays from large additional heated discharges will eliminate once-through estuarine cooling. Another possibility, though remote at this time, is the use of offshore power plants. 2. The economic cost of meeting. stringent heat discharge policies can be significant. Electric utilities are regulated monopolies, and it is customary to pass such increased costs along to the purchasers of electricity. The added cost of additional cooling will not cause any significant Ili nflationary waves" to be generated and permeated through the region's economy. However, certain. individual 213 establishments, which are already marginal' operators, are likely to be driven out of business, even though more healthy establish- ments in the same economic sectors will not be adversely affected. 3. The most pronounced socio-economic effect will be felt by certain households. Low income families are apt to be hit the hardest. The cost of implementing the "zero-heat-discharge" policy would cost the typical family one month's rent each year. The average per family total cost* of this policy would be $74 per year. While this may not sound like much money to many, according to the 1970 U.S. Census, this equals one month's average rent for this region. 4. Based on the preceding information it appears unwise to implement stringent environmental control policies without a careful evaluation of possible undesirable socio-economic implications. Extra caution should be exercised in severely economically depressed regions. The possibility of such socio-economic impacts cannot be disre- garded by responsible public officials --regardle s s of how admirable their other objectives may be. 5. Occasions are apt to arise when the apparent solution to one envir- onmental ill will create another problem that is worse than the original one. This would likely happen in the study area if evapora- tive towers were used for all cooling. These towers would require all available fresh water, and consequently eliminate fresh water inflows to the estuaries. Such.an occurrence would almost cer- tainly have a greater adverse ecological impact than the heated discharges. 6. From the experiences and results of this project, it can be concluded that there is a real need to utilize analytical techniques of the type presented here to assess the imp lications of alternative public policy decisions before any decision is implemented. This includes indirect and induced costs as well as the direct costs. 214 VI. 2 RECOMMENDATIONS FOR ACTION 1 . Expedite the implementation of the results of this effort by (a) keeping the presentation of results simple and utilizing graphical techniques whenever possible; (b) focusing on the application of such techniques to strategic-type policy decisions rather than to individual project decisions subject to estab- lished policies; (c) stressing the utility of the results and not the finer points of the analytical procedure; and (d) emphasizing the comparison of alternatives and not the absolute evaluation of each. 2. Instigate positive, aggressive measures to inform decision-makers that analytical procedures such as this do exist and that these procedures can be manipulated to provide insight into the implications of alternative public policies. Support the modification of institutional procedures that will bring about the application of this type of analytical technique to all proposed en- vironmental management policies. Emphasize evaluation of the impacts of such policies on other natural resources and socio-economic goals and/or constraints. 3. Work through the appropriate state entities to encourage the applica- tion of this approach to assess the implications of the Clean Air Act and the Water Pollution Control Amendments on the State of Texas. VI.3 SUGGESTIONS FOR FURTHER INVESTIGATIONS 1. An extension of this study should be undertaken in the Coastal Bend region to examine the effects of zero heat discharge applied to all industries. An expansion looking at the policy of zero-discharge for all wastes would be most valuable in order to examine the regional impact and to determine if such an expansion can be practically accomplished. Simultaneously, another investigation should be conducted for the purpose of identifying and quantify- ing the ecological benefits associated with such zero-discharge requirements. 215 2. This methodology should be applied state-wide for the utility industry to test the general applicability of the procedures, and to examine the effects over a larger and more complex economic system. 3. The Input-Output procedure should be modified to examine the ef- fects of differing elasticity assumptions so that stratifications of different sized firms can be handled. The 1-0 model should be continually updated to insure that the best available data are utilized. 4.. Studies should be initiated to evaluate the demand elasticity factors associated with electrical rates. 5. Basic research should be conducted to develop techniques for evalu- ating the social impact of policy decisions. Every possible effort should be made to enhance communications between the social and physical researchers with this goal in mind. 6. The methodology should be utilized to look at alternative land use allocation policies that are going to become a reality when the proposed National Land Use Polic y Act becomes law and is implemented. REFERENCES Anderson, E.R.; Water Loss Investigations: Lake Hefner Studies; U. S. Geological Survey; Professional Paper Number 269; Washington, D.C.; 1954. Cameron, Burgess; Input-Output Analysis and Resource Allocation; University Printing House; Cambridge, Mass.; 1968. Cheney, P.B. and F.A. Smith; A Systems Analysis of Aquatic Thermal Pollu- tion and Its Implications; National Coal Policy Conference; Washington, D.C.; 1969. 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