Key takeaways Key takeaways Hydro is well suited for today's - PDF document

October 2016 The Value of Hydropower in an Energy Rich System The Value of Hydropower in an Energy Rich System PNUCC Board of Directors – October 7, 2016 1 October 2016 Key takeaways Key takeaways Hydro is well suited for today's Northwest power sector – Hydro can provide a full range of power products – Hydro’s CO 2 free attribute beneficial as carbon regulations mature H d ’ CO f tt ib t b fi i l b l ti t Capacity and flexibility, which hydro can provide, becoming more valuable more valuable – Coal unit retirements may increase value of peak capacity resources – More variable energy resources driving regional flexibility needs – Capacity and flexibility may become a large piece of the value of hydro 2

October 2016 Hydro can provide a full range of power products Hydro can provide a full range of power products Forecasted Jan 2017 F t d J 2017 40,000 • Energy one hour need • Capacity 30 000 30,000 • Flexibility MW • Other ancillary services 20,000 NW hydro one hour peak generation (Jan) 10,000 0 Hydro provides the bulk of Critical (8%) 50% hydro 1 hr the regions peak capacity hydro 1 hr peak peak 3 PNUCC NRF October 2016 Hydro keeps Northwest emissions low Hydro keeps Northwest emissions low 4 EIA data

October 2016 Capacity needs on the horizon Capacity needs on the horizon Year 2021 Group/report Group/report Metric Metric value 1 ‐ hour January load/resource PNUCC 2016 Northwest Regional (4,100) MW balance Forecast 10% (13% 10% (13% Council 2016 adequacy Loss ‐ of ‐ load probability (5% or without assessment under is the goal) Colstrip 1&2) 120 ‐ hour January load/resource (2,200) MW balance balance BPA 2015 White Book 1 ‐ hour January load/resource (900) MW balance The BPA White Book and PNUCC Forecast both focus on critical water planning but the White Book includes 3,000 MW of uncommitted independent power producer generation and the PNUCC Forecast does not 5 October 2016 Annual energy looks surplus Annual energy looks surplus 24,000 NRF firm resources NRF firm requirements NRF firm requirements 23,000 gy (MWa) 22,000 Annual energ 21,000 A 20,000 2002 2004 2006 2008 2010 2012 2014 Forecasted first year ‐ PNUCC Northwest Regional Forecasts The PNUCC Forecast, BPA White Book and Council Adequacy all see an energy surplus on the regional level see an energy surplus on the regional level 6

October 2016 Changing system affects value of hydro Changing system affects value of hydro • As power system needs change the value of energy, capacity, p y g gy, p y, and flexibility will change as well – Flexibility and capacity may become a large piece of the value of hydro Flexibility and capacity may become a large piece of the value of hydro – These values could be difficult to realize due to lack of formal markets 7 October 2016 Reworked flexibility discussion Reworked flexibility discussion • Expanded to discuss services flexible generators can provide p g p Resource is Resource is… Can provide Can provide… Time step Time step Spinning with frequency response Frequency control Momentary governor Spinning with automatic generation Spinning with automatic generation Sub minute Sub minute Regulation reserves control to 10 min Spinning Operational reserves, load Minute to following, contingency reserves, g, g y , Non spinning (but can be online < 10 Non ‐ spinning (but can be online < 10 h hour etc. min) 8

October 2016 Added data from regions with flexibility markets Added data from regions with flexibility markets 9 Figure from CAISO 2015 Annual Report on Market Issues & Performance October 2016 Key takeaways Key takeaways Hydro is well suited for today's Northwest power sector – Hydro can provide a full range of power products – Hydro’s CO 2 free attribute beneficial as carbon regulations mature H d ’ CO f tt ib t b fi i l b l ti t Capacity and flexibility, which hydro can provide, becoming more valuable more valuable – Coal unit retirements may increase value of peak capacity resources – More variable energy resources driving regional flexibility needs – Capacity and flexibility may become a large piece of the value of hydro 10

October 2016 Next steps Next steps • Send any input to Tomás ASAP y p • Seeking approval from PNUCC System Planning Committee on October 14 • Posted on website by end of October (will send an • Posted on website by end of October (will send an announcement via email as well) 11