The USA’s summer energy crisis proved something of a boom time for Caligornia’s State Water Project, a giant water pumping scheme designed mainly to transport water from the wet north of the state to a population of 20 million in the dry south. Although the project is California’s largest electricity user, consuming up to eight million MWh a year to pump water around the state, it is also one of its biggest electricity producers, capable of generating 2000 MW from hydropower.
The project is in a unique position to exploit soaring spot prices for peak electricity, since it has no direct residential customers and is not therefore price capped by the1996 State deregulation laws; but may choose freely (more or less) how and when it pumps its water around. It chooses to pump it into storage, particularly at the Oroville dam reservoir, during the night when electricity is cheap and release it down hill through turbines during the daytime when it can maximise revenues. This strategy has this year raised an extra $24 million or so, reducing its energy deficit to around $6 million.