Economic Value of Long-Lead Streamflow Forecasts for Columbia River Hydropower

Abstract

Recent advances in long-lead climate forecasting have made it possible to produce useful streamflow forecasts for the Columbia River basin roughly six months earlier than current forecasts that rely on snowpack measurements. The resulting increase in forecast lead time facilitates considerable improvements in system operating performance, especially in years of expected above average flows. In the current reservoir operating system, the so called “critical” and “assured refill” rule curves that restrict releases for hydropower generation in the period from August to December are based on the critical (most severe low flow) and third lowest flow sequences of record, respectively. These rule curves provide appropriate protection of energy capacity and reservoir refill in extreme low flow conditions, but are restrictive in normal and high flow years until midwinter when operational streamflow forecasts based on observed snowpack become available, and the climatological constraints are relaxed to account for expected summer streamflows. The use of long lead time streamflow forecasts allows current operating constraints to be relaxed in years when there is a high likelihood of ample streamflow. In these years, more spot market energy sales can be made in the late summer and fall/early winter because of increased available water for releases, and spill from reservoirs in wet years is also reduced. Reservoir model simulations using alternative reservoir rule curves based upon retrospective long-lead streamflow forecasts from water years 1931 to 1987 show that the proposed alternative operating system based on climate forecasts can increase nonfirm energy production from the major Columbia River hydropower dams by as much as 5.5 million MW/h/year, resulting in an average increase in annual revenue of approximately $153 million per year in comparison with the status quo. Other uses of the Columbia River are largely unaffected by the proposed changes in the operating system. In particular, firm energy, the reliability of storage reservoir refill, and the frequency of meeting of streamflow targets for salmon protection would be essentially unchanged in comparison with the status quo. The increased hydropower revenue is therefore directly attributed to use of long-lead forecast information and does not represent a trade-off among other management objectives.