Transcript Future Energy Overview

Future Energy Overview
2009 GCAA Management Workshop
February 17, 2009
Jeff Burleson
Director, Resource Policy and Planning
Georgia Power Company
Current Situation
• Fuel prices have declined
– Retail gasoline
– Wholesale natural gas
– Central Appalachian coal
$4.00 vs 1.50 per gallon
$13 vs 6 per million btu
$120 vs 60 per ton
• But for the wrong reason
– Economic downturn lowering current and near term outlook for
demand
• Fuel prices will climb again in the future
– Only a matter of time
– Over half of U.S. oil consumption is from imports
– Natural gas imports projected to rise significantly over long term
– No single fix, nor quick fix
• Requires holistic, sustained efforts
• Environmental requirements will increase
US Electricity Generation by Region
History and projection, 1990-2030
Projected growth
2008-2030
120%
Southeast (SERC, FRCC: AL, AR, FL, GA, LA, W MO, MS, NC, SC, VA)
US
Change from 1990 .
100%
80%
34%
West (WECC: AZ, CA, CO, ID, MT, NV, NM, OR, UT, WA, WY)
Northeast (CT, DE, ME, MD, MA, NH, NJ, NY, PA, RI, VT)
Midwest (ECAR: IN, KY, MI, OH, WV)
25%
34%
60%
22%
11%
40%
20%
0%
1990
1995
2000
History
Projection
2005
2010
2015
2020
Data Source: Energy Information Administration, US Department of Energy
2025
2030
Fuel Price Risk
Coal vs. Gas Prices
Environmental Uncertainty
AMFA
ARPAA-88
AIA
ASBCAA-88
ESAA-88
FIRAA-88
TOSCAA-88
NWPAA-88
CPDRAA-88
NMSPAA-888
FCRPA
MMPAA-88
ODBA
SFA
FWLA-88
ICPBD
EDP
OPA
RECA
CAA-90
CCRA
CLFWRA
HMTUSA
NEEA
PPA
PPVA
IEREA
ANTPA
GLCPA
ASA
CZMAA-90
WRDA
FFCA
CERFA
CRAA-92
150
SDWAA-86
SARA-86
100
NEPA
EQIA
CAA
EPA
OSHA
FAWRAA-70
BLRA
ERDDAA
EAWA
NOPPA
PTSA
UMTRCA
ESAA-78
QCA
NCPA
AOA
RCRAA-84
WLDI
MPRSAA-82
NWPA
ESAA-82
CAAA-77
CWA
SMCRA
SWRCA
SDWAA-77
ARPA
ESA
TAPA
NHPA
PFW
FOIA
MBTA
YOS
VA
RTC
RHA
0
NBRA
AA
IA
LA
1862
1872
1882
1892
WA
1902
NPS
MBCA
OPA
1922
1932
FCMHSA
ESCA
FHSA
NFMUA
FWCAA-58
AEA FWA
FIFRA
FAWRA
NLR A
WPA
SCS
FEATH
1912
TA
FWCA AEPA
BPA
WQA
LLA-81
HMTA
WSRA
EA
RCHSA
50
NAWCA
BLBA
FWPCA
MPRSA
CZMA
NCA
FEPCA
FWSA
MMPA
TOSCA
FLPMA
RCRA
NFMA
CZMAA-76
AQA
WRPA
WLDA AFCA
CAA-55
PAA
WPCA
1942
1952
1962
1972
1982
1992
2001
APA
SWDA
CERCLA
CZMIA
COWLDA
FWLCA
MPRSAA-80
ANISCA
US Utility Industry Capacity Additions – 1970s
Coal / Pet Coke
37%
Nuclear
17%
Biomass
0%
Other
0%
Green Power
0%
Hydro
12%
Oil
14%
Gas
20%
US Utility Industry Capacity Additions – 1980s
Coal / Pet Coke
45%
Nuclear
31%
Other
0%
Biomass
3%
Green Power
2%
Oil
2%
Hydro
6%
Gas
11%
US Utility Industry Capacity Additions – 1990s
Biomass
4%
Green Power
2%
Hydro
5%
Other
0%
Coal / Pet Coke
14%
Nuclear
7%
Oil
5%
Gas
63%
US Utility Industry Capacity Additions – 2000s
Biomass
0%
Green Power
Hydro1%
Other
0%
Coal / Pet Coke
1%
Nuclear
Oil
0%
0%
0%
Gas
98%
Some Elements of a
Sound Energy Strategy
• More fuel efficient automobiles to reduce oil imports
– Plug-in hybrid electric vehicles
• Energy efficiency and demand reduction
• Increase fuel diversity of electric generation
– Fully develop all cost effective applications of
renewable generation
– Nuclear
Planning to Ensure a Reliable and
Economic Electric Supply
• Uncertainties include
– Long term fuel costs and availability
– Long term environmental requirements
– Customer response to Demand Side Management (DSM)
programs
• Long lead times for new resources
– Typically 3 to 10 years
– Resources typically last 30 to 60 years
• Robust, comprehensive planning process
– Integrated Resource Planning (IRP)
– Frequent validation and updates, as needed
Strategic Options for
Meeting Generation Needs
• Supply Decisions
– Pulverized coal
– Natural gas combined cycle
– Integrated gasification combined cycle
– Nuclear
– Renewable energy
• Demand Side Management
• 12-20% renewable and DSM
– Plant Mitchell conversion to
biomass
• One of largest wood
biomass plants in US
– Solar research project
• 2011 possible expansion
– Limited potential
• 69-76% natural gas capacity
Capacity (MWs)
Georgia Power Anticipated
Plan for the Next Decade
(50% add’l gas energy generation)
– Price and volatility
• 12% nuclear
– First U.S. nuclear planned
in 30 years
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20
Year of Plan
Demand Side Management & Renewables
New Generation
Existing Resources
Georgia Power Supply Capability by
Fuel Type
2008 Net Capacity by Fuel Type
Active
Hydro DSO
5.3% 3.4%
Gas & Oil
36.6%
2018 Net Capacity by Fuel Type
Active
Hydro DSO
4.3% 3.5%
Nuclear
10.2%
Coal
44.5%
Gas & Oil
46.3%
† Includes generics & PPAs
Nuclear
12.6%
Coal
33.4%
Contracts with Renewable Generators
700
MWs of Capacity
600
Notice of Intent
500
400
Capacity Additions Under
Contract
300
Operational Capacity
200
100
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
May invest more than $1 billion on capacity and energy from renewable
generation developers over next 10 years if all projects proceed
Nuclear Power Cost-Effective
when Compared to Alternatives:
• Significant lifetime savings
– $2 - $6.5 billion when compared to pulverized coal
– $1 - $6.5 billion when compared to natural gas combined cycle
• Reduces exposure to high natural gas prices and future
costs of potential carbon legislation
– Natural gas prices rose 400 percent between Jan 31, 2002 and Jun
30, 2008
– Future costs of potential carbon legislation could be significant for
coal
• Natural gas generation more sensitive to fuel price
fluctuations
– 60 to 80 percent of cost per kWh from natural gas plant is fuel
– About 10 percent of nuclear generation cost is fuel
Base Load Generating Capacity Needed:
• Georgia Power’s last base load plant was added in
1989
• Natural gas capacity increased from 7 percent to 37
percent since 1989
• New coal power plants less attractive
– Increased environmental requirements
– Coal fuel has more than doubled in a year
– Cost of potential carbon legislation could be significant.
Demand Side Management (DSM) will
Play a Key Role but Cannot Displace all
Generation Need
• Within 10 years, Georgia Power will have 1,900–2,200 MWs DSM
• DSM will play a key role, but not cost effective to achieve DSM
maximum potential of 3,000 megawatts
• DSM is less reliable
– Energy efficiency programs do not provide constant load
reductions in all hours of year
– Base load generation typically operates 24 hours per day, 7 days
per week, throughout entire year
Summary
• Planning to ensure an economic and reliable supply
of electricity
• Georgia Power pursuing diverse and economic
portfolio of new generation resources
– nuclear
– renewables and usage reduction
– natural gas