Transcript Electricity Demand Resources and Assessment of Reliability

Preliminary Results with the
Regional Portfolio Model
Michael Schilmoeller
for the
Northwest Power and Conservation Council
Generation Resource Advisory Committee
Thursday, March 19, 2009
Overview
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Overview
Conservation
Renewable Portfolio Standards
Carbon, carbon, carbon
2
Prior Presentations to GRAC
 December 18, 2008
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Power plant cost uncertainty
 January 22, 2009
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Power plant cost uncertainty distributions
Natural gas price uncertainty
Electricity Price Uncertainty
Carbon penalty Uncertainty
Economic Retirement
Variable Capacity for Existing Units
3
Resources Available for
Selection by the Model
CCCT (415 MW Nominal)
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available 2011-2012
SCCT (94 MW Nominal)
available 2012
IGCC (518 MW Nominal)
with carbon capture and sequestration
available 2023
Five classes of demand response
total approaching 2000MW by the end of the study
1300 MW of this limited to 100 hours per year of operation
Wind generation (100 MW Blocks)
available 2011-2012
100 MW by the end of the study in excess of anticipated RPS requirements and consequently
available for REC credit
5500 MW without REC credit
Includes transmission, any production tax credit (PTC), and integration, and firming costs
Conservation
discretionary and lost opportunity
amount determined by wholesale electricity price and the costeffectiveness premium
4
Resources Available for
Selection by the Model
 Nuclear
 Biomass
 Imported Wind with new
transmission
5
Demand Response Programs
6
Early Returns
Higher costs due to greater likelihood and higher
limit on carbon penalty
More conservation
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Fifth Plan: 2,500 MWa
Preliminary Sixth Plan: 5,000 MWa
Cost effectiveness premium over wholesale electricity
price likely to go up
Current OR, WA, and MT RPS targets,
disregarding retail rate constraints, call for all of the
less expensive wind generation available (1,700
MWa)
Depending on the size and timing of any carbon
penalty, there may be a need for gas-fired turbine
capacity well in advance of adequacy
requirements.
7
Possible Studies
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Preliminary analysis of significance
of RPS compliance
Preliminary analysis of whether
particular resource technologies are
competitive (nuclear, solar) or
significant (non-wind renewables) 3 studies
Effect of carbon mitigation
approaches on resource choice (fuel
source penalty, renewable portfolio
standards, emission trading) - 3+
studies
Determination of whether a CO2
ramp or other penalty development
path results in plans distinct from
the current CO2 step function
penalty. 2+ studies
Effect of demand response ramp
rates
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8
Effect of discretionary conservation
ramp rates - 2 studies
Any additional studies subsequent
to analysis of regional resource
adequacy, power cost impacts
Effect of alternative assumptions
regarding natural gas price,
electricity prices, coal prices,
construction costs, and so forth
Effect of carbon mitigation controls
(e.g. carbon penalty) on emission
levels, with sufficient breadth to
examine both power industry-only
emission compliance and emission
compliance if other sectors (e.g.,
transportation) shared the burden of
meeting target. - ?? studies
Overview



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Overview
Conservation
Renewable Portfolio Standards
Carbon, carbon, carbon
9
Supply Curve for Discretionary
Conservation
4000
3500
3000
MWa
2500
2000
1500
1000
500
Cost - TRC Net Levelized Cost in $ per MWh ($2006)
Source: C:\Backups\Plan 6 Studies\Data Development\Conservation\Olivia
Conservation 090220.xls
10
>200
200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
0
Supply Curve for Lost Opportunity
Conservation
Achievable Lost Opportunity Conservation Potential Cumulative by 2029 Base Forecast - All Sector
3000
2500
MWa
2000
1500
1000
500
90
10
0
11
0
12
0
13
0
14
0
15
0
16
0
17
0
18
0
19
0
20
0
>2
00
80
70
60
50
40
30
20
10
<0
0
Cost - TRC Net Levelized Cost in $ per MWh ($2006)
Source: C:\Backups\Plan 6 Studies\Data Development\Conservation\Olivia
Conservation 090220.xls
11
Annual Availability for Lost
Opportunity Conservation
lost opportunity conservation
2010
2011
180
2012
2013
160
available MWa/year
2014
140
2015
120
2016
2017
100
2018
80
2019
2020
60
2021
2022
40
2023
20
2024
2025
0
Cost - TRC Net Levelized Cost in $ per MWh ($2006)
0
20
0
18
0
16
0
14
0
12
0
10
80
60
40
20
0
2026
2027
2028
2029
Source: C:\Backups\Plan 6 Studies\Data Development\Conservation\Olivia
Conservation 090220.xls
12
… And More On the Way
 900 MWa of lost opportunity
conservation not reflected in the prior
figures and values
 Primarily from replacing existing TVs
and computer monitors with higherefficiency units, assuming today’s
technology
13
Overview
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Overview
Conservation
Renewable Portfolio Standards
Carbon, carbon, carbon
14
Oregon RPS Obligations
R P S C lass
S h are of
A ffected U tilities an d
S ales
E lectricity S ervice S u p p liers
S tan d ard as of Y ear
2011
2015
2020
2025
5%
15%
20%
25%
E ugene W ater & E lec. B oard
Large U tilities
> 3%
P acifiC orp (P acific P ow er)
P ortland G eneral E lectric
C entral Lincoln P U D
< 3%
S m aller
U tilities
but
> 1.5%
C latskanie P U D
Idaho P ow er C o.
M cM innville W ater & Light
S pringfield U tility B oard
10%
N o Interim O bligations
U m atilla E lectric C oop
S m allest
U tilities
ESS
< 1.5%
A ny
A ll other utilities, i.e.
5%
31 consum er-ow ned utilities
A ny E lectricity S ervice
S upplier (E S S )
A n aggregate obligation as if each of the
custom ers served by the E S S w ere served
by that custom er’s usual host utility.
Source: Kip Pheil, Oregon Department of Energy, 10/29/08, for the Renewable Energy Working Group
(C:\Backups\Plan 6 Studies\Data Development\Resources\New Resource Candidates\RPS
Resources\REWG_29oct08-RPS_update-v2.ppt)
15
15
Renewable Energy Credit Banking
 Washington: 1 year
 Montana: 2 years
 Oregon: Indefinitely
16
Regional RPS Development
MWa RPS requirement
Deciles for RPS requirement
3500.0
100%
3000.0
90%
2500.0
80%
70%
2000.0
60%
1500.0
50%
1000.0
40%
500.0
0.0
2012
30%
20%
2017
2022
Sept of year
C:\Backups\Plan 6 Studies\L807\CO2 and RPS futures\L807 CO2 distribution 05.xls
17
2027
10%
0%
RPS Modeling
 Basecase – all obligated utilities in the
region meet their RPS targets
 RPS resource in the region depends on the
load requirement under each future
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Net of conservation in the future
Accounting for each state’s policy for RPS
banking of RECs
Costs for RPS resources currently tied to wind
and do not reflect construction cost uncertainty
No attempt to model cost caps
18
Modeling Regional RPS Activity
 The availability of REC sales for wind
generation is determined RPS requirements
and banking policy
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Wind generation can be constructed in advance
of RPS requirement. Surplus would be banked
or sold into the REC market
 In a study, uncertainty in development of
RPS capacity will be explored
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Capture some of the rate impact constraint effect
Wind will still be available as required
19
Modeling Regional RPS Activity
 Also remaining
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500 MWa of biomass to include as option
to meet RPS targets and other needs
More non-carbon resources
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Nuclear
Wind imported from Wyoming and Montana
over new power transmission lines
Geothermal
20
Overview




Overview
Conservation
Renewable Portfolio Standards
Carbon, carbon, carbon
21
State of the Distribution
Deciles for Carbon Penalty
120.00
100%
90%
$/ton CO2
100.00
80%
80.00
70%
60.00
60%
40.00
50%
40%
Period
C:\Backups\Plan 6 NEC\Council Presentations\081113 GoToMeeting P4 on Carbon,
PTC, REC Uncertainties\Carbon Tax stats for Maury and Jeff.xls
22
Sep-27
Sep-25
Sep-23
Sep-21
Sep-19
Sep-17
Sep-15
20%
Sep-13
0.00
Sep-11
30%
Sep-09
20.00
10%
0%
Average
Carbon Measurement for the
Regions Power Sector
 Economic end effects for carbon control
included
 Average and TailVaR90 carbon production
for two periods estimated
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Aug 2022 - Aug 2025
Aug 2026 - Aug 2029
 NPV cost of carbon penalty alone estimated
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Permits some evaluation of “transfer cost issues”
23
Carbon Measurement for the
Regions Power Sector –
Two Measures
 Ignoring imports and exports
 Accounting for imports and exports
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Firm contract and market transactions
Market energy assumed produced by
natural gas-fired CCCT with 9000
average heat rate (about ½ US ton of
CO2 per MWh)
24
Modeling
 Market and firm electricity purchases
and sales use an electricity price
adjusted upward by any carbon
penalty
 Adjustment is consistent with the
assumption for market power carbon
content
 Examining carbon content at higher
carbon penalty factors
25
Effect of Carbon Control Policy on
the Preferred Plan
 Different control policies have different
effects on regional cost
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for example, a regional cap and trade systems
on the power sector would keep most transfers
within the region, while a carbon tax may or may
not
 Much of the apparent difference in cost is
related to “transfer cost” issues
 What is the cost of modifying the merit order
of dispatch alone?
 For a quick, cheap, and incomplete
perspective….
26
Penalty
Costs
Study L807
Efficient Frontier without Penalty Costs
Risk (TailV@R90 NPV $M 2004)
232000
227000
222000
217000
212000
207000
128000
Source: C:\Backups\Plan 6
Studies\L807\Analysis of
Optimization Run_L807_looking
at lack of variation in costs with
DR.xls
130000
132000
134000
Cost (NPV $M 2004)27
136000
138000
End
28
Futures for Natural Gas Prices
20.00
18.00
16.00
$2206/MMBTU
14.00
12.00
10.00
8.00
6.00
4.00
2.00
Source: wks “NGP futures”, wkb “Illustrations and graphs from
L805 after extraction.xls”
29
Sep-28
Sep-27
Sep-26
Sep-25
Sep-24
Sep-23
Sep-22
Sep-21
Sep-20
Sep-19
Sep-18
Sep-17
Sep-16
Sep-15
Sep-14
Sep-13
Sep-12
Sep-11
Sep-10
Sep-09
0.00
Natural Gas Price Deciles
60.00
100%
90%
50.00
$2006/MMBTU
80%
70%
40.00
60%
50%
30.00
40%
30%
20%
20.00
10%
0%
10.00
Mean
input
Source: wks “NGP deciles”, wkb “Illustrations and graphs from
L805 after extraction.xls”
30
Jun-28
Mar-27
Dec-25
Sep-24
Jun-23
Mar-22
Dec-20
Sep-19
Jun-18
Mar-17
Dec-15
Sep-14
Jun-13
Mar-12
Dec-10
Sep-09
0.00
Natural Gas Price Deciles
14.00
90%
80%
12.00
$2006/MMBTU
70%
60%
10.00
50%
8.00
40%
30%
6.00
20%
10%
4.00
0%
Mean
2.00
input
Source: wks “NGP deciles”, wkb “Illustrations and graphs from
L805 after extraction.xls”
31
Jun-28
Mar-27
Dec-25
Sep-24
Jun-23
Mar-22
Dec-20
Sep-19
Jun-18
Mar-17
Dec-15
Sep-14
Jun-13
Mar-12
Dec-10
Sep-09
0.00
Natural Gas Price Deciles
40.00
100%
35.00
90%
80%
$2006/MMBTU
30.00
70%
60%
25.00
50%
20.00
40%
30%
15.00
20%
10%
10.00
0%
mean
5.00
input
Source: wks “NGP deciles”, wkb “Illustrations and graphs from
L805 after extraction.xls”
32
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0.00
Natural Gas Price Deciles
14.00
90%
12.00
80%
70%
$2006/MMBTU
10.00
60%
50%
8.00
40%
30%
6.00
20%
10%
4.00
0%
mean
2.00
input
Source: wks “NGP deciles”, wkb “Illustrations and graphs from
L805 after extraction.xls”
33
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0.00
Natural Gas Price Deciles
90%
14.00
80%
70%
12.00
$2006/MMBTU
60%
50%
10.00
40%
30%
8.00
20%
10%
6.00
0%
mean
4.00
input
NWPCC high case
2.00
NWPCC medium high case
NWPCC medium low case
Source: wks “NGP deciles”, wkb “Illustrations and graphs from
L805 after extraction.xls”
34
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
0.00
NWPCC low case