Transcript www.irwaonline.org

Building the Electric Grid
of the Future in Texas;
aka the CREZ Projects
Barry T. Smitherman
Chairman, Public Utility Commission of Texas
January 27, 2010
Current Policies
• Despite the theater in Copenhagen, and the
misguided efforts in Washington to enact
meaningful energy and climate change
policies…
• Texas is leading the nation in:
– Renewable energy capacity and generation,
– New and innovative technologies,
– Deployment of “smart grid” elements, and
– Reducing emissions of CO2 and other
pollutants.
2
Texas Electric Market
A Puzzle with Four Pieces
North Tie
200 MW
East Tie
600 MW
WSCC
ERCOT
SERC
ERCOT – Electric Reliability
Council of Texas
SPP - Southwest Power Pool
SERC - Southeastern Electric
Reliability Council
WSCC - Western Systems
Coordinating Council
Eagle Pass
36 MVA
Laredo
100 MW
McAllen
150 MW
3
Current SPP Transmission System, With Additional 345-kV Construction
Commitments, Approved Balanced Portfolio, Projects, Pending Priority Projects,
and Proposed EHV Overlay (Under Study)
Balanced
Portfolio
Projects
EHV
Overlay
Pending
Priority
Projects
4
ERCOT Competitive Market
• In 1999, the Legislature
passed SB 7, which
“unbundled” utility
services by breaking
companies up into
three parts:
1.
2.
3.
Generation
Companies
Transmission and
Distribution Utilities
(TDUs)
Retail Electric
Providers
5
Transmission & Distribution Utilities in
ERCOT
• Own and operate transmission lines—which provide
high-capacity transport of electricity—and distribution
lines—which bring electricity to individual homes and
businesses.
• Build new lines to connect new power generation,
relieve congestion, increase reliability, and meet the
growing demand for power in Texas.
• Maintain transmission and distribution lines to ensure
continued system reliability.
• Read meters and collect usage information.
– OVERSIGHT: TDUs are fully regulated by the PUC.
6
ERCOT – A “Goldilocks” Moment
• Smart grid
implementation
• CREZ Transmission
approval, and process
build-out
• 9000 MW Wind, going
to 18,500 MW
• Robust resource
margins
• Low electric prices
• Reduction of CO2
emissions between
2004 and 2007
7
Elements of the Smart Grid
• First, build the grid.
– In 2008 and 2009, ERCOT transmission service providers have
completed improvement projects of approximately 1,137 circuit miles
of transmission and about 8,511 MVA of autotransformer capacity,
with an estimated capital cost of over $1.38 billion.
– Though 2013, planned projects are estimated to cost approximately $3
billion and are expected to improve or add about 3,400 circuit miles of
transmission lines.
– Additionally, the Public Utility Commission has approved the
construction of more than 2,300 miles of high-capacity transmission
lines from West Texas, allowing more than 18,000 MW of renewable
generation, at a capital cost of nearly $5 billion.
• Then, make it smart.
– The Commission recently approved the deployment of smart meters in
the Oncor, CenterPoint , and AEP service areas, putting more than 6
million smart meters into service over the next several years.
– Implementation of the nodal system will allow for more efficient
dispatch of generation in ERCOT.
– Incent the development and incorporation of PHEV into the grid.
9
The CREZ Process is a New Process
• Typically, transmission is built from generation or
to load when there are no lines or when current
lines get congested.
• Designating the zones and building transmission
before the generation is in place is the reverse of
what normally happens; removes “the chicken or
the egg” problem.
• The PUC approved different transmission
providers to build the CREZ lines to encourage
new market participants rather than the rely
exclusively on traditional monopoly utilities.
10
Transmission Line Approval Process
•
•
•
•
•
•
Utilities must apply to the PUC for a certificate of convenience and necessity (CCN)
before it can build a power line.
Under PURA, the PUC must consider factors such as the community, historical, and
aesthetic values, and the environmental integrity associated with the transmission
line.
Additional factors in PUC rules are whether the routes:
– utilize existing compatible rights-of-way, including the use of vacant positions
on existing multiple -circuit transmission lines;
– parallel existing compatible rights-of-way;
– parallel property lines or other natural or cultural features; and
– conform with the policy of prudent avoidance.
As all customers eventually pay for transmission lines, cost is also a factor.
A CREZ transmission line must be approved within 180 days, rather then 1 year for
other transmission lines, or the application is deemed approved.
A CCN gives utilities the power of eminent domain to obtain the use of private
property easements for the power lines.
11
Wind Generation in ERCOT
(Does not include 867 MW in SPP in Texas)
12
ERCOT System
The CREZ projects will
involve the construction of
more than 2,300 miles of
345 kV transmission lines,
enable a total of more than
18,000 MW of wind
capacity in Texas, and cost
nearly $5 billion
Oncor is currently installing more than
3 million smart meters across its
service area.
Area of best
wind generation
in Texas
AEP will install 1.1
million smart
meters in its
service areas
The nodal market design will be implemented for
ERCOT, allowing for more efficient pricing,
dispatch, and siting of generation
CenterPoint is
currently installing
more than 2
million smart
meters in its
service area. 13
2007-2009 Energy Generated in ERCOT
by Fuel Type
100%
2.9
6.2
4.9
13.6
13.2
36.6
37.1
42.1
43
45.5
2009
2008
2007
90%
13.4
80%
70%
60%
37.4
50%
40%
30%
20%
10%
0%
Natural Gas
Coal
Nuclear
Wind
Water
Other
14
ERCOT in 2009
2009 ERCOT Generation Capacity
by Fuel Type
Hydro
1% Other
2%
Nuclear
6%
Coal
16%
Wind
10%
Natural Gas
65%
15
ERCOT in 2013
Assuming 18,000 MW of wind, approximately 5,600 MW of new coal, 4,300 MW of new natural gas
2013 Installed Capacity
2013 Energy Generation
Water Other
0%
1%
Water Other
1%
1%
Wind
18%
Nuclear
5%
Coal
21%
Nuclear
12%
Wind
16%
Natural Gas
27%
Natural Gas
54%
Coal
44%
16
Peak Summer Week Generation by Fuel Type
Nuclear
Coal
CombCycle
GasSteam
PrivateGas
[ACTUAL]
GasTurbine
Wind
Other
80,000
Sunday
07/12/09
Monday
07/13/09
Tuesday
07/14/09
Wednesday
07/15/09
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
17
Thursday
07/16/09
Friday
07/17/09
Saturday
07/18/09
2013 Peak Load Week - Generation by Fuel Type
Nuke
Coal
Combined Cycle
Gas Steam
Private
Gas Turbine
Wind
Other
80,000
Thursday
08/01/13
Friday
08/02/13
Saturday
08/03/13
Sunday
08/04/13
Monday
08/05/13
Tuesday
08/06/13
Friday
08/07/13
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Note – no changes to existing reserves requirements were assumed for this analysis
18 August 2009
18
ERCOT Public
Typical Spring Week Generation by Fuel Type
Nuclear
50,000
Sunday
04/19/09
Coal
Monday
04/20/09
CombCycle
Tuesday
04/21/09
GasSteam
PrivateGas
Wednesday
04/22/09
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
19
[ACTUAL]
GasTurbine
Thursday
04/23/09
Wind
Friday
04/24/09
Other
Saturday
04/25/09
2013 High Wind Week - Generation by Fuel Type
Nuke
Coal
Combined Cycle
Gas Steam
Private
Gas Turbine
Wind
Other
50,000
Monday
03/11/13
Tuesday
03/12/13
Wednesday
03/13/13
Thursday
03/14/13
Friday
03/15/13
Saturday
03/16/13
Sunday
03/17/13
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Note – no changes to existing reserves requirements were assumed for this analysis
18 August 2009
20
ERCOT Public
The American Clean Energy and Security Act of
2009, “Waxman-Markey Bill” and the Clean Energy
Jobs and American Power Act, “Boxer-Kerry Bill”
Issues
House Version
Senate Version
CO2 reduction
(Greenhouse gas
emission reduction
by using a cap and
trade program)
3%
17%
42%
83%
3%
20%
42%
83%
Renewable Energy
Standard
6% in 2012 and increases to 25% by
2025.
Not addressed
Energy Efficiency
Utilities must reduce “electricity
consumption, relative to business-asusual projections,” by 1% in 2012,
increasing to 15% by 2020.
Requires creation of energy
efficiency building codes.
2012
2020
2030
2050
2012
2020
2030
2050
21
Reduction of CO2 in Texas
• A recent report by Environment Texas, “Too Much Pollution,” highlights
the decrease of CO2 emissions in Texas over the past several years.
• Between 2004 and 2007, Texas saw the second highest total decline in
CO2 emissions in the United States.
• “On a per capita basis, emissions from electric generators in Texas fell by 4
percent between 2004 and 2007—the result of reduced reliance on coal
and an increase in the share of power produced by natural gas and wind.”
• “Texas-which is now America’s number one producer of wind power-has
been able to use its growing wind power portfolio to reduce the need for
additional fossil fuel generation, keeping emission growth from the
electricity sector at bay.”
• “Texas, meanwhile, has led the nation in wind energy installations, helping
to stabilize emissions from its power sector…[showing] that switching
from highly polluting fuels such as coal and oil to cleaner sources of
power, including renewable energy, can lead to rapid and substantial
reductions in emissions.”
22
Change in Total Carbon Dioxide Emissions
from Fossil Fuels, 2004 to 2007
23
Preparing for Electric Vehicles
•
•
•
•
•
Use of EV/PHEVs can help lower emission of pollutants, utilize less fossil fuels as
the amount of wind generation in Texas grows, and help address energy security
issues by reducing the amount of imported oil.
Powering a car on electricity would result in 93 percent less smog-forming volatile
organic compounds and 31 percent less nitrogen oxide emissions than powering a
car on gasoline.
Operating costs of plug-in cars are likely to be significantly lower than those of
gasoline-powered cars. Electricity costs three to five cents per mile with average
electric rates, or the equivalent of $0.75 to $1.25 per gallon of gasoline.
Market participants, such as Reliant, Oncor and TXU, have announced support for
deployment of EVs in Texas.
Use of smart meters, with time-of-use products, could help insure that customers
charge their vehicles with inexpensive off-peak energy and take advantage of wind
energy generated at night.
24
ERCOT Reserve Margin Changes
May 2007
December 2007
May 2008
December 2008
May 2009
December 2009
2009
2010
2011
2012
2013
2014
2015
10.1%
12.1%
16.5%
15.8%
16.8%
n/a
8.3%
14.0%
17.3%
21.2%
20.1%
21.8%
6.7%
11.2%
15.0%
18.7%
18.8%
19.9%
5.9%
10.5%
14.5%
17.8%
17.0%
18.1%
n/a
8.2%
12.3%
17.9%
16.3%
14.7%
n/a
n/a
n/a
15.8%
13.9%
12.3%
n/a
n/a
n/a
n/a
n/a
10.2%
•
The following units have recently begun commercial operation, are under construction, or have
been announced: JK Spruce 2 for 750 MW (expected completion date of June 2010), Oak Grove 1
(completed) and 2 (mid 2010) for 1710 MW, Sandy Creek for 925 MW (2012), Nueces Bay for 112 MW
(1Q 2010), Barney Davis for 348 MW (1Q 2010), Sandow 5 for 581 MW (completed), Limestone 3 for
800 MW (2012) and more than 2,200 MW of wind generation with signed interconnection agreements.
•
The reduction of the reserve margin in 2013-2015 reflects the exclusion of the Cobisa Greenville
Project, a 1,792 MW natural-gas fired plant that was scheduled for completion in 2013, after the
company announced a delay in the construction of the facility.
•
ERCOT only counts 8.7% of wind generation nameplate capacity when calculating reserve
margins.
25
Load Zone Price Data
Total Load Weighted Average Price ($/MWH)*
[MCPE weighted by Total Zonal Load]
Load
Zone
Nov
2009
Oct
2009
Sept
2009
Aug
2009
July
2009
June
2009
May
2009
April
2009
March
2009
Feb
2009
Jan
2009
South
$27.77
$31.22
$30.82
$32.51
$35.67
$82.81
$32.97
$24.27
$26.35
$27.27
$34.69
North
$27.75
$30.25
$26.96
$32.47
$35.81
$35.15
$32.99
$24.82
$32.21
$27.89
$32.32
Houston
$27.72
$31.61
$31.25
$32.81
$35.68
$61.82
$32.70
$24.58
$29.11
$27.19
$32.78
West
$27.02
$27.84
$24.32
$29.84
$33.75
$32.95
$24.57
$12.93
$25.70
$19.93
$24.04
Load
Zone
Nov
2008
Oct
2008
Sept
2008
Aug
2008
July
2008
June
2008
May
2008
April
2008
March
2008
Feb
2008
Jan
2008
South
$41.11
$55.19
$46.77
$88.47
$97.86
$147.24
$171.09
$83.65
$64.34
$63.26
$60.24
North
$40.69
$48.98
$45.38
$89.19
$97.08
$104.37
$86.41
$74.92
$69.64
$59.05
$62.31
Houston
$40.88
$56.01
$48.61
$88.40
$97.30
$129.48
$152.76
$100.00
$68.19
$60.06
$60.16
West
$34.62
$41.16
$43.72
$84.92
$90.98
$82.22
$58.01
$58.59
$38.52
$56.84
$52.04
*Represents the average price for loads within the zone
26
Current Residential Retail Prices in ERCOT
Lowest Offers Available
(Average price based on use of 1000 kWh, January 12, 2010, from www.powertochoose.com)
Service Area Fixed-Price
Offers
(term of at
least 3
months)
Variable
Price
Offers
Renewable
Generation
Offers (100%
renewable)
Dec. 2001
prices
(Not adjusted
for inflation)
Dec. 2001 prices
(inflation
adjusted)
AEP – TCC
9.9¢/kWh
9.1¢/kWh
9.6¢/kWh
9.6¢/kWh
11.7¢/kWh
AEP – TNC
9.0¢/kWh
8.8¢/kWh
9.3¢/kWh
9.6¢/kWh
12.2¢/kWh
CenterPoint
9.6¢/kWh
8.7¢/kWh
9.2¢/kWh
10.4¢/kWh
12.7¢/kWh
Oncor
9.2¢/kWh
8.2¢/kWh
8.7¢/kWh
9.7¢/kWh
11.8¢/kWh
TNMP
9.2¢/kWh
8.3¢/kWh
8.9¢/kWh
10.6¢/kWh
12.9¢/kWh
Austin: 9.0¢/kWh; San Antonio: 8.7¢/kWh (based on 1000 kWh)
27
Questions?
For this and other presentations, go to
http://www.puc.state.tx.us/about/commissioners/index.cfm
and follow the link for Chairman Smitherman.