Analysis of Beyond the Fence Solutions When the Fence Surrounds Four States

Transcription

1 Analysis of Beyond the Fence Solutions When the Fence Surrounds Four States Tom Eckman Director, Power Division Northwest Power and Conservation Council 2015 NASEO Energy Policy Outlook Conference February 5, 2015

2 Today s Topics Analytical challenges Locating the fence Locating the emissions reduction Is the goal of the CPP really different? 2

3 What Are the Analytical Challenges to Regional 111(d) Compliance Plans?

4 One Fence or Four Fences? Fact: As Proposed, 111(d) Assumed That Fences Are Placed Along State Boundaries 4

5 Inconvenient Fact: Electrons Don t Respect State Boundaries

6 Analytical Challenge Locating the Fence Line States are the regulatory unit under 111 (d) In fact, generation facilities (i.e. GHG emitters) are not always located where their output is used Regional compliance options require that the ability of electrons to jump state boundaries be accepted as fact

7 Oregon and Washington Use 85% of the Region s Electricity, But After 2025 Will Have No Utility Coal-Fired Generation, Yet They Will Still Rely on Major Coal-Fired Generation in Montana, Wyoming and Utah Retired Coal-Fired Generation Operating Coal- Fired Generation

8 Energy Efficiency Resources Are Very Strongly Correlated With Where Energy Is Used (duh!) Therefore, Analysis of Regional Solutions Must Assume That Energy Savings Within the fence All Produce Equivalent Emissions Reductions 8

9 Analytical Challenge: Locating the Emissions Reduction Analysis of regional fence lines solutions assumes EPA will accept system level emission reductions That is, EPA will not require energy savings to be attributed to a specific in state EGU emission reduction. 9

10 Annual CO2 Emissions (millions tons) Annual Generation (MWa) PNW Total Power System Carbon Emissions Are Strongly Correlated to Hydro-generation Output (i.e., precipitation!) CO2 Emissions (million tons) Hydro Gen (MWa) Fossil Fuel Gen (MWa) Wind Gen (MWa) 25,000 20,000 15,000 10,000 5,000 0

11 Tons of CO2/MWh The Northwest Power System Average CO2 Emissions Rate Is A Function of Rainfall That Is, It s Out of Our Control

12 CCCT Capacity Factor Hydrogeneration Outpur (amw) However, PNW System Level marginal CO2 Emissions Rates Are Very Stable 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% ,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 HydroGeneration Avearage CCCT Capacity Factor 12

13 Marginal CO2 Emissions Are The Most Appropriate Measure of Energy Efficiency Impacts Load decrements (i.e. savings) dispatch the most expensive generating unit in the system (with some exceptions) System modeling can be used to forecast the emission rates of EGUs on the margin This is close enough to the actual reductions 13

14 Analytical Challenge: Is the CPP Goal Really Different? PNW has been engaged in least cost planning since 1980 The goal of each plan has been to identify the least cost resource portfolio that also provided an acceptable level of risk Council s analysis for its 6 th Plan (adopted in 2010) recognized carbon control emission risk 14

15 Scenarios from the 6 th Plan Selected for Comparison Carbon Risk - The carbon- cost risk includes a range of carbon prices from zero to $100 per ton, which average to $47 per ton by All resources are available for development/dispatch - Existing (circa 2009) RPS, RECS and new plant emissions standard Coal Retirement - Roughly half of the existing coal-fired generation in the region is phased out between 2012 and With and without carbon-cost risk - Existing (circa 2009) RPS, RECS and new plant emissions standards

16 Average Megawatts Annual Northwest Resource Mix 35,000 Since ,000 25,000 20,000 15,000 10,000 5,000 - Geothermal Petroleum & Pet Coke Biomass Nuclear Wind Natural Gas Coal Energy Efficiency Hydro

17 Annual Energy Dispatch (MWa) Average Resource Mix in 2020 for 6 th Plan Scenarios 40,000 DR 35,000 30,000 25,000 New SCCT New CCCT New RPS Wind New Conservation 20,000 15,000 Existing Conservation Existing Non-Hydro Existing Must Run 10,000 5,000 - Resource Mix Carbon Risk Scenario Coal Retirement Scenario Existing Coal Existing Natural Gas Existing Hydro

18 Annual Energy Dispatch (MWa) Average Resource Mix in 2029 for 6 th Plan Scenarios 45,000 40,000 DR New SCCT 35,000 30,000 25,000 20,000 New CCCT New RPS Wind New Conservation Existing Conservation Existing Non-Hydro 15,000 10,000 5,000 - Resource Mix Carbon Risk Scenario Coal Retirement Scenario Existing Must Run Existing Coal Existing Natural Gas Existing Hydro

19 CO2 Emissions Rate by 2029 (Lbs/MWh) th Plan Carbon Risk Scenario Northwest Regional Power Sector CO2 Emission Rate 28% of Futures Have Emissions Rates Exceeding EPA 2029 Target th Plan 2029 EPA Target 2030 and beyond 19

20 CO2 Emission Rate by 2029 (Lbs\MWh) 6th Plan Coal Retirement Scenario Northwest Regional Power Sector CO2 Emission Rate % of Futures Have Emissions Rates Exceeding EPA 2029 Target th Plan EPA Target 20

21 GWH/Year 6 th Plan Relies Heavily on Energy Efficiency and Renewable Resources In Part, Because It Considered GHG Costs 250, , , ,000 PNW Load w/o Energy Efficiency PNW Loads w/energy Efficiency PNW Load Growth w/energy Efficiencty and Renewables 50,

22 CO2 Emissions (MMTE) As a Result Meeting the 6 th Plans Energy Efficiency and Renewable Resource Development Goals Will Reduce PNW Carbon Emissions 15% Below 1990 Levels by th Plan Average CO2 Emissions 1990 CO2 Emissions

23 Observations The 6 th Resource Portfolio has high probability of meeting EPA s proposed Section 111(d)CO2 emissions regulations at the regional level. If the region achieves of the 6 th Plan conservation targets and satisfies existing RPS, the region meets EPA s 111(d) interim targets in over 80% of the futures tested and EPA s final targets in over 70% of the futures tested Failure to achieve the 6 th Plans conservation goals significantly reduces the probability of meeting the EPA s proposed Section 111(d) CO2 emissions regulations at the regional level Strategies that produce zero carbon load service (e.g., energy efficiency and renewable resources) have a much larger impact on meeting EPA s proposed requirements than refiring/replacing existing fossil fuel generation with lower emitting fuels (i.e., natural gas)

24 Seventh Plan Scenarios Being Considered for Analysis Carbon Emission Reduction = 30 % below 2005 Levels ( goal of the CPP) Carbon Prices set at Interagency Estimate of Social Cost of Carbon Retire all coal and replace with existing technology EE, Renewable Resources (Wind and Solar PV) and Natural Gas 24

25 Any Questions?