K E Y F I NDI NGS AND RE SOURCE ST RAT E GY T he Co unc - PowerPoint PPT Presentation

K E Y F I NDI NGS AND RE SOURCE ST RAT E GY

T he Co unc il’ s Po we r Pla n  Goal - Ensure an adequate, efficient and affordable regional power system  Major Components  Forecast of regional electricity demand over the next 20 years  A “least cost with acceptable risk” Resource Strategy  Regional action plan to implement Resource Strategy  Use  By statute, plan guides Bonneville Power Administration’s resource decisions  By tradition, plan serves as an independent reference for all of the region’s utilities, regulatory commissions and policy-makers 2

T he Se ve nth Po we r Pla n – Ma jo r I ssue s Boardman – North Valmy – 522 MW 550 MW Centralia 1 & 2 – 1340 MW Impact of announced coal-plant retirements on need for new resource development Implications of and options for addressing EPA’s Clean Power Plan How to best meet regional need for capacity (i.e., peaking) resources 3

T he Re g io n’ s Po pula tio n a nd E c o no my Are E xpe c te d T o Gro w 136% 140% 127% 126% 120% 114% Percent Growth 2015 to 2035 120% 100% 80% 60% 40% 20% 0% Population Employment Households Commercial Industrial Floor Space Output 4

K e y F inding  Energy Efficiency and Demand Response can meet nearly all growth in energy and capacity needs 5

Ke y F inding: E ne r gy E ffic ie nc y Me e ts L oad Gr owth Ove r T he Ne xt T wo De c ade s Regional Load Growth Met with Energy Efficiency 30,000 Regional Load (Average Megawatts) Load Reduction from Federal Standards 25,000 Adopted Post-Sixth Power Plan 20,000 15,000 Regional Load Net of Energy Efficiency 10,000 5,000 - 2015 2020 2025 2030 2035 6

Northwe st L oa ds Afte r Ac c ounting for E ne rg y E ffic ie nc y Are F ore c a st T o Re ma in At or Be low Curre nt L e ve ls Until 2035 25,000 20,000 Annual Electricity Loads (average megawatts) 15,000 7th Plan Net Load After Energy Efficiency 6th Plan Net Load After Energy Efficiency 10,000 Actual Loads 5,000 0 2001 2006 2011 2016 2021 2026 2031 7

Ke y F inding: L e ast Cost Re sour c e Str ate gie s Re ly on Conse r vation and De mand Re sponse to Me e t Ne ar ly All F or e c ast Gr owth in Re gional E ne r gy and Capac ity Ne e ds 6,000 Wind Renewable Resources 16,000 Demand Response Solar Cumulative Resource Development (aMW) Cumulative Resource Development (MW) Natural Gas Geothermal 14,000 5,000 Energy Efficiency Natural Gas 12,000 Energy Efficiency 4,000 10,000 3,000 8,000 6,000 2,000 4,000 1,000 2,000 - 0 2015 2020 2025 2030 2035 2015 2020 2025 2030 2035 8

Why the Se ve nth Po we r Pla n Re lie s o n E ne rg y E ffic ie nc y a nd De mand Re spo nse Re so urc e s Because they cost less! 9

All Re so urc e Co st – E ne rg y Natural Gas - Aero GT East Natural Gas - Recip Engine East Solar PV- S. ID w/ Transm. Expan. Natural Gas - Frame GT East Wind - Colum. Basin Wind - MT w/ Transm. Upgrade Wind -MT w/ new transm. Solar PV - S. ID Natural Gas - CCCT Adv2 Natural Gas - CCCT Adv1 Solar PV - Low Cost S. ID Energy Efficiency (Average Cost w/o T&D Credit) Energy Efficiency (Average Cost w/ T&D Credit) $0 $20 $40 $60 $80 $100 $120 $140 $160 Real Levelized Cost (2012$/MWh) Capital O&M + Property Taxes + Insurance Fuel + Transmission 10

All Re so urc e Co st – Pe a k Ca pa c ity Wind - MT w/ Transm. Upgrade Wind -MT w/ new transm. Solar PV- S. ID w/ Transm. Expan. Wind - Colum. Basin Solar PV - S. ID Natural Gas - CCCT Adv2 Natural Gas - Aero GT East Natural Gas - Recip Engine East Demand Response Price Block 4 Natural Gas - CCCT Adv1 Natural Gas - Frame GT East Solar PV - Low Cost S. ID Demand Response Price Block 3 Demand Response Price Block 2 Demand Response Price Block 1 $0 $50 $100 $150 $200 $250 $300 $350 $400 Real Levelized Cost (2012$/kW-yr) Capital O&M + Property Taxes + Insurance Fuel + Transmission 11

K e y F inding  Demand Response resources should be developed to meet regional peak demands 12

Ke y F inding: T he r e is a high pr obability that at le ast 600 MW of De mand Re sponse should be de ve lope d ac r oss all sc e nar ios te ste d 3,000 Cumulative Development (MW) 2,500 2,000 1,500 1,000 500 - 2015 2020 2026 2031 Existing Policy Social Cost of Carbon - MidRange Retire Coal and Inefficient Gas Retire Coal Retire Coal w/SCC MidRange Retire Coal w/SCC MidRange and No New Gas Regional RPS @ 35% 13

Ke y F inding: T he Pr o bability and Amo unt of De ma nd Re sponse De ployme nt Va rie s Ove r a Wide Ra ng e , But T he re is a Ve ry Hig h (70% +) Proba bility of Ne e ding a t le a st 600 MW 90% Minimum Probability of 600 MW 80% Probability of Deployment DR Deployment by 2021 is 70% 70% 60% 50% 40% 30% 20% 10% 0% Deployment Level (Winter Peak MW) Existing Policy SCC - MidRange Retire Coal Retire Coal w/SCC_MidRange Retire Coal w/SCC_MidRange No New Gas Increase Market Reliance No Demand Response Regional RPS @ 35% Lower Conservation 14

K e y F inding  Retiring coal plant generation can be replaced by greater reliance on existing natural gas plants very limited development of new gas- fired generation 15

Ke y F inding: E xisting Natur al Gas Offse ts Announc e d Coal Plant Re tir e me nts, Re sulting in L owe r CO2 E missions 5,000 4,500 Existing Gas Dispatch (aMW) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - 2015 2020 2025 2030 2035 Lower Conservation Existing Policy Social Cost of Carbon - Mid-Range Retire Coal Retire Coal w/SCC_MidRange Regional RPS @ 35% 16

K e y F inding  No immediate need to acquire or build new generating resources  Unless, regional energy efficiency and demand response goals are not achieved OR  Unless, additional coal plants are retired 17

Pro b a b ility o f Ne e ding Ne w Na tura l Ga s Ge ne ra tio n b y 2021 Social Cost of Carbon - MidRange Increased Market Reliance Existing Policy Regional RPS @ 35% Retire Coal and Inefficient Gas Retire Coal Lower Conservation Retire Coal w/SCC_MidRange No Demand Response 0% 25% 50% 75% 100% 18

K e y F inding  Resource strategies that maximize the use of existing regional resources to satisfy the region’s resource adequacy standards are lower cost, require less resource development and produce fewer emissions 19

Ke y F inding: Ne t E xpo r ts (E xpor ts- Impor ts) Ar e Str ongly Influe nc e d By Re gional Re sour c e De ve lopme nt 6,500 6,000 5,500 5,000 4,500 Net Exports (aMW) 4,000 3,500 3,000 2,500 2,000 2015 2020 2025 2030 2035 Existing Policy Social Cost of Carbon - Mid-Range Retire Coal and Inefficient Gas Retire Coal Retire Coal w/SCC_MidRange Regional RPS @ 35% 20

K e y F inding  EPA carbon emission reduction regulations can be met regionally  However, some states, especially Montana, face significant challenges 21

Ke y F inding: Re gional Annual Ave r age CO2 E missions for L e ast- Cost Re sour c e Str ate gie s Ar e Be low E PA’s E mission L imits 40 Annual Average CO2 Emissions (MMT) 35 30 25 20 15 10 5 - 2015 2020 2025 2030 2035 No Coal Retirement Existing Policy Social Cost of Carbon - Mid-Range Reire Coal w/SCC MidRange & No New Gas 22

Key Findings: Annual Regional power system CO2 emissions could be reduced by 70 % by retiring all existing coal plants, and 80% if these plants were replaced with Renewable Resources PNW Power System Historical Emissions… 54 No Coal Retirement* 47 Develop 55% Less Energy Efficiency 41 Existing Policy 36 Regional RPS at 35% 26 70% SCC - Mid-Range 21 Retire Coal w/SCC_MidRange 18 Retire Coal 16 Retire Coal and Inefficient Gas 16 Retire Coal w/SCC_MidRange & No New Gas 10 - 20 40 60 CO2 Emissions in 2035 (MMT) *Scenario assumes Centralia, Boardman and North Valmy are not retired. 23

Key Finding: The Lowest Cost Policies for Reducing Regional Power System CO2 Emissions Impose A Cost on Carbon, The Highest Increase Renewable Portfolio Standards SCC - Mid-Range ($11) Retire Coal w/SCC_MidRange $23 Retire Coal $78 Retire Coal w/SCC_MidRange & No New Gas $100 Retire Coal and Inefficient Gas $170 Regional RPS at 35% $349 ($50) $0 $50 $100$150$200$250$300$350$400 PV Carbon Emissions Reduction Cost ( 2012$/MT) 24

Key Finding: Increased renewable portfolio standards are not necessary to comply at the regional level with recently promulgated federal carbon dioxide emissions regulations, nor are they an element of a regional least cost resource strategy  Why Increasing RPS Isn’t the Least Cost Option for Reducing CO2 Emissions  RPS don’t reduce coal use  RPS don’t change the fact that the “wind don’t blow and the sun doesn’t shine all of the time”  RPS lower the amount of cost-effective energy efficiency 25