2017 IRP Update. Analyses Update Portfolio & Sensitivity Results Preliminary Findings. Commission Briefing August 22, 2017

Transcription

1 2017 IRP Update Analyses Update Portfolio & Sensitivity Results Preliminary Findings Commission Briefing August 22, 2017

2 Agenda 1. Analyses Updates 2. Portfolio Results by Scenario Planned Additions Portfolio Scorecard Comparison 3. Portfolio Resiliency 4. Key Insights and Findings Key Insights and Findings Climate Change Policy and IRP EIA Compliance and IRP 5. Schedule Snohomish PUD 2017 Integrated Resource Plan 2

3 2017 IRP Process IRP Inputs IRP Outputs Establish Conservation Avoided Cost Test Portfolio Resiliency Create scenarios, load, price, carbon, resource forecasts Establish Planning Standards Develop New Conservation Potential Assessment (Supply Curves) Integrate Renewable, Non-renewable & Conservation Resources Establish Biennial Conservation Targets Elect Renewables Compliance Method Compare Portfolios and Identify Least Cost and Least Risk Develop Portfolios Preferred Portfolio Reference Document Action Plan Snohomish PUD 2017 Integrated Resource Plan 3

4 2017 IRP Scenarios IRP Study Period Scenario Load Forecast Natural Gas Price Forecast Carbon Costs Business as Usual (BAU) Base Case Base Case Current Law ($.32/MWh) through 2037 Base Case Base Case Base Case Low Growth Case Low Low High Growth Case High High Carbon Costs beginning 2022 (California Levels, $14 to $60/ton) EPA s Societal Cost of CO2, Low (Social Cost of Carbon (SCC) Low Case, $12 to 30/ton) EPA s Societal Cost of CO2, Mid-High (SCC Mid-High Case, $42 to $90/ton) Snohomish PUD 2017 Integrated Resource Plan 4

5 Analyses Updates: - Conservation - Demand Response Snohomish PUD 2017 Integrated Resource Plan 5

6 Conservation Potential Assessment (CPA) CADMUS has completed: District s 2017 CPA Augmented 2017 CPA draft 2016 Regional Building Stock Assessment (RBSA) with District sampling for some measures. New conservation supply curves were created (measures grouped into bundles by cost). The preliminary 2016 RBSA data and PUD service area sampling resulted in CPA results that show: Slightly less annual conservation available over the 20 year study period. Slightly larger contribution of conservation to winter on-peak period, depending on scenario. Portfolios selected the necessary conservation bundles needed to fill either a winter and/or annual load resource balance deficit. 6

7 amw 20-Year Cumulative Conservation Supply Curve with draft 2016 RBSA Data Comparison of 20 Year Cumulative Conservation Potential Annual vs Winter On-Peak Conservation measures up to $75.00 are expected to produce total cumulative savings over 20 years of: 1) 107 amw in annual energy savings; 2) 137 amw in winter on-peak savings.* Annual Contribution Winter On-Peak Contribution <$45 <$55 <$65 <$75 <$85 <$100 <$120 >$120 Annual Dec HLH * The 2017 CADMUS study indicates the District s ratio of annual conservation to winter capacity contribution is approximately 1: Snohomish PUD 2017 Integrated Resource Plan

8 Demand Response (DR) Potential Demand Response (DR) Program Cumulative DR Potential thru 2037 for December Peak Week (in amw) 20-Year Program Net Present Value (NPV)* $ per Peak MW (in $/MW-Year) Smart Thermostats 12.8 $16,221,880 $148,347 Commercial/Industrial Controls 6.3 $12,025,108 $179,086 Thermostats & Water Heaters 83.3 $153,938,733 $216,233 Water Heaters (<80 gallons) 78.4 $249,071,654 $371,788 Smart Water Heaters (>80 gallons) 34.3 $152,309,616 $728,778 * The NPV for the DR measures listed above assume that no AMI is needed to implement the measure or program. 8 Snohomish PUD 2017 Integrated Resource Plan

9 amw amw Contribution of DR to Winter Need 250 DR Contribution to December Peak Week (Mon-Fri, On-peak hours for one week) Total Cumulative DR by 2037 of 218 amw (Peak Week) 250 DR Contribution to December On-Peak (Mon-Sat, On-peak hours for the Month) Total Cumulative DR 68 amw (Month) "Smart" Thermostats Water Heaters (< 80 gallons) "Smart" Water Heaters (> 80 gallons) Thermostats & Water Heaters Commercial/Industrial Controls "Smart" Thermostats Water Heaters (< 80 gallons) "Smart" Water Heaters (> 80 gallons) Thermostats & Water Heaters Commercial/Industrial Controls 9 Snohomish PUD 2017 Integrated Resource Plan

10 amw Annual Load vs. Existing/Committed Resources before New Conservation by Scenario (in amw) 1,400 1,200 1, BPA Block Jackson Hydro Packwood Customer-Owned Generation (Hampton, Qualco) Low Load BPA Slice Wind Contracts PUD Owned Hydro Base Load High Load 10

11 amw amw Winter Loads vs. P5 Existing/Committed Resources before New Conservation by Scenario (in amw) December On-Peak by Scenario December Peak Week by Scenario 2,000 1,800 2,000 1,600 1,400 1,500 1,200 1, , Short-Term Market PUD Owned Hydro Wind Contracts BPA Slice Base Load High Load Customer-Owned Generation (Hampton, Qualco) Packwood Jackson Hydro BPA Block Low Load Short-Term Market PUD Owned Hydro Wind Contracts BPA Slice Base Load High Load Customer-Owned Generation (Hampton, Qualco) Packwood Jackson Hydro BPA Block Low Load 11

12 Portfolios New Resources Additions 800 Portfolio Results by Scenario Snohomish PUD 2017 Integrated Resource Plan 12

13 Planning Standards Annual Load/Resource Balance (LRB) at expected levels, or P50 metric Winter Monthly On-Peak (Energy) December On-Peak LRB at P5 metric with no more than 100 amw on peak forecast market purchases Winter Peak Week (On-Peak Capacity) December Peak Week LRB at P5 metric with no more than 200 amw on peak forecast market purchases Regulatory Energy Independence Act (Initiative 937) Board s Climate Change Policy 13

14 amw Business-As-Usual Case (Current carbon law) BAU New Portfolio Additions- December On-Peak Total Portfolio Net Present Value $ 702,088, st Year amw 2037 Cumulative amw Total New Annual Conservation 7 92 New December HLH Conservation Year Total Total Added Portfolio Emissions (Metric Tons of CO2) 1,648,107 - Conservation Short-Term Capacity Contract SCCT Snohomish PUD 2017 Integrated Resource Plan 14

15 amw Base Case (Carbon costs start in 2022) Base Case New Portfolio Additions December On-Peak Conservation DR DLC - Smart Stat DR C&I Curtail U/S Solar 1 (W WA) U/S Solar 1 (W WA) Dual Fuel Reciprocating Engine 1 Dual Fuel Reciprocating Engine 2 Total Portfolio Net Present Value $481,360,736 1st Year amw 2037 Cumulative amw Total New Annual Conservation New December HLH Conservation Year Total Total Added Portfolio Emissions (Metric Tons of CO2) 305,528 Snohomish PUD 2017 Integrated Resource Plan 15

16 amw Low Case Low Case New Portfolio Additions December On-Peak Total Portfolio Net Present Value $ 317,088, st Year amw 2037 Cumulative amw Total New Annual Conservation New December HLH Conservation Year Total Total Added Portfolio Emissions (Metric Tons of CO2) 10,965 Conservation 25MW Contract C&I Curtail Snohomish PUD 2017 Integrated Resource Plan 16

17 amw High Case High Case New Portfolio Additions December On-Peak Total Portfolio Net Present Value $1,368,599, st Year amw 2037 Cumulative amw Total New Annual Conservation New December HLH Conservation Conservation DR DLC - Smart Stat DR DLC - Air & H20 Heat DR C&I Curtail BioMass 1 BioMass 2 WA Wind Partial Simple Cycle Engine Simple Cycle Engine Dual Fuel Reciprocating Engine Geothermal 1 Geothermal 2 20 Year Total Total Added Portfolio Emissions (Metric Tons of CO2) 6,140,291 Snohomish PUD 2017 Integrated Resource Plan 17

18 Portfolio Comparisons by Scenario Scenario 1 st Yr Supply-Side Resources Added after New Conservation Net Present Value of Portfolio Incremental Emissions (Avg Annual) Incremental Emissions (20 year Total) Total Cumulative New Conservation 2018 (in amw) Total Cumulative New Conservation Added 2037 (in amw) Low Case 2018 $ 317,088, , Business-As-Usual Case 2018 $ 702,088,729 82,405 1,648, Base Case 2029 $ 481,360,736 15, , High Case 2019 $ 1,368,599, ,014 6,140, Snohomish PUD 2017 Integrated Resource Plan 18

19 Climate Change Snake Dam Removal Sensitivity Results (Portfolio Resiliency) Renewables Only (Green Premium) Snohomish PUD 2017 Integrated Resource Plan 19

20 Climate Change Weather Expectations: Warmer overall (~3 degrees F by 2037) Less winter load, increase in summer loads Wetter winter more precipitation, less snowpack Shift in hydro generation and runoff timing; in some cases increases in annual production Portfolio Impacts: Reduces Annual Energy Need (increased winter generation) Decreases Winter Need (reduction in winter demand) Increases Summer Need (reduction in hydro)

21 amw amw 50 0 Seasonal Changes with Climate Change Comparison of December On-Peak Load Resource Balance Base Case vs Climate Change (P5) 50 0 Comparison of August On-Peak Load Resource Balance Base Case vs Climate Change (P5) Climate Change: Decreased Load, Increased Precip (rain not snow) Climate Change: Increased Load, Reduced hydro supply Base Climate Change Base Climate Change

22 Monthly P5 in amw Transition to a Dual-Peaking Utility Due to Climate Change (100.0) (200.0) (300.0) (400.0) HLH 2037 HLH

23 amw Climate Change Loads and Resources BAU Case Climate Change New Portfolio Additions Loads & Resources BAU BAU Climate Change Total BAU Total 400 Portfolio Net Present Value $ 651,916,671 Portfolio Net Present Value $ 702,088, st Year amw 2037 Cumulative amw Total 1st Year amw 2037 Cumulative amw Total New Annual Conservation 7 92 New December HLH Conservation New Annual Conservation 7 92 New December HLH Conservation Year Total 20 Year Total Conservation DR C&I Curtail Short-Term Capacity Contract Simple Cycle Engine Eastern WA Solar U/S Solar 1 (W WA) Total Added Portfolio Emissions (Metric Tons of CO2) 958,062 Total Added Portfolio Emissions (Metric Tons of CO2) 1,648,107 U/S Solar 2 (W WA) U/S Solar 3 (W WA) Snohomish PUD 2017 Integrated Resource Plan 23

24 amw Snake Dams Removal BAU Case No Snakes New Portfolio Additions December On-Peak BAU - No Snakes BAU Load Forecast Total Total Portfolio Net Present Value $759,594,343 Portfolio Net Present Value $702,088, st Year amw 2037 Cumulative amw Total 1st Year amw 2037 Cumulative amw Total New Annual Conservation New Annual Conservation New December HLH Conservation New December HLH Conservation Year Total 20 Year Total Conservation SCCT Short-Term Capacity Contract DLC - Smart Stat Total Added Portfolio Emissions (Metric Tons of CO2) 1,757,250 Total Added Portfolio Emissions (Metric Tons of CO2) 1,648,107 C&I Curtail Snohomish PUD 2017 Integrated Resource Plan 24

25 amw No Fossil Fuel Portfolio- BAU Case BAU No Fossil New Portfolio Additions December On-Peak BAU- No Fossil Fuels Total BAU Load Forecast Total Portfolio Net Present Value $ 890,726,393 Portfolio Net Present Value $ 702,088,729 1st Year amw 2037 Cumulative amw Total New Annual Conservation st Year amw 2037 Cumulative amw Total New Annual Conservation New December HLH Conservation New December HLH Conservation Year Total 20 Year Total Total Added Portfolio Emissions (Metric Tons of CO2) 1,781,405 Total Added Portfolio Emissions (Metric Tons of CO2) 1,648,107 New Conservation 1st Landfill Gas 2nd Landfill Gas Pump Storage Snohomish PUD 2017 Integrated Resource Plan 25

26 Supply Side Resources Winter Capacity Preliminary Insights & Findings Renewables Compliance Avoided Costs & Cost Effective Conservation Snohomish PUD 2017 Integrated Resource Plan 26

27 Supply Side Resource Insights 1. Load growth impacts timing of resource need, after conservation. 1 st Year Need after New Conservation BAU Base Low High Energy N/A N/A N/A 2035 Capacity Capacity resources are attractive/needed in all scenarios, except Low Growth Case. Fossil fuel resources more cost competitive capacity resources. Demand response can be competitive depending on level of carbon costs, or in the absence of fossil fuel resources. Pumped hydro and battery storage resources provide capacity and are attractive choices, absent fossil fuel resources. 3. I-937 eligible renewable resources only selected when both an energy and REC need exists (e.g., High Growth Case). Snohomish PUD 2017 Integrated Resource Plan 27

28 Winter Capacity Need 1. Portfolios developed to meet winter capacity needs that had no access to fossil fuel resources satisfied all planning standards and required additional investment in: Demand Response Pumped Hydro Conservation (BAU Case only) 2. Portfolios without access fossil fuel peaking resources often yielded higher emissions and costs: Portfolio BAU Base Case Low High NPV without Fossil Fuels $ 891 MM $ 653 MM $ 317 MM $ 2,433 MM NPV with Fossil Fuels $ 702 MM $ 481 MM $ 317 MM $ 1,369 MM Portfolio No Fossil Premium $ 189 MM $ 172 MM $ - $ 1,064 MM Annual Emissions with Fossil Fuels 82,405 MT 15,276 MT 548 MT 307,015 MT Annual Emissions without Fossil Fuels 89,070 MT 142,365 MT 548 MT 189,848 MT Snohomish PUD 2017 Integrated Resource Plan 28

29 REC Modeling Assumptions Staff assumes that the district will need to meet the 15% renewables target 2020 through 2037 The District can meet Energy Independence Act (EIA) Renewable Portfolio Standard (RPS) targets by buying Renewable Energy Credits (RECs), eligible renewable resources or a combination of the two Modeled REC prices are based on the modeled cost to build a REC Generator REC Price = Levelized Cost of Wind Levelized Cost of Energy ~$43/REC in 2018 to $53/REC in 2037

30 EIA Renewables Compliance REC Modeling Assumptions 15% renewables target 2020 through 2037 REC Price = Levelized Cost of Wind Levelized Cost of Energy ~$43/REC in 2018 to $53/REC in 2037 Models cost to build a REC Generator 1. Lower cost portfolios select unbundled RECs, no energy added. Exception is High Growth Case that has an energy need; bundled resources are part of the optimal portfolio. 2. Compliance costs to satisfy 15% RPS target are high. Exploring use of the financial cost cap may be a future option, depending on future rulemaking. The Alternate Resource for 4% cost cap remains lower of District s embedded costs or market price. Alternate resource capacity costs should be based on lowest cost capacity resource given Board policy. REC Adds through 2037 BAU Base Low High Forecast REC Need 900, , , ,000 NPV for RECs $512 MM $464 MM $454 MM $129 MM Percent of Total Costs 73% 96% 143% 9% Snohomish PUD 2017 Integrated Resource Plan 30

31 MWh (RECs) Forecast EIA Compliance with RECs 1,200,000 9% Target 15% Target 1,000, , , , , , , , , , , , , Wind Contracts Other Renewables Incr. Hydro (Woods Creek) BPA Tier 1 RECs Banked RECS from Prior Year Forecast REC Purchase Target in Total RECs (in MWh) 31

32 Discussion Snohomish PUD 2017 Integrated Resource Plan 32

33 Climate Change Policy and the IRP From the Climate Change Policy: Utilize integrated resource planning standards that: a) Consider the long-term costs and risks associated with greenhouse-gas-emitting generation sources and b) Consider a diversity of resource options that provide the optimum balance of environmental and economic elements. Staff Findings: In many scenarios, the least-cost and least-emission portfolio included a fossil fuel resource to address capacity needs. Portfolio BAU Base Case Low High NPV without Fossil Fuels $ 891 MM $ 653 MM $ 317 MM $ 2,433 MM NPV with Fossil Fuels $ 702 MM $ 481 MM $ 317 MM $ 1,369 MM Portfolio No Fossil Premium $ 189 MM $ 172 MM $ - $ 1,064 MM Annual Emissions with Fossil Fuels 82,405 MT 15,276 MT 548 MT 307,015 MT Annual Emissions without Fossil Fuels 89,070 MT 142,365 MT 548 MT 189,848 MT Snohomish PUD 2017 Integrated Resource Plan 33

34 EIA Compliance: Renewables RCW : (2)(a) Except as provided in (j) of this subsection, each qualifying utility shall use eligible renewable resources or acquire equivalent renewable energy credits, or any combination of them, to meet the following annual targets Staff Findings: A strategy of procuring renewable energy credits was the most cost-effective way for the PUD to meet EIA compliance standards under the target methodology. Ongoing monitoring is needed to assess the potential cost-effectiveness of EIA compliance through Cost Cap, and No Load Growth methodologies. REC Adds through 2037 BAU Base Low High Forecast REC Need 900, , , ,000 NPV for RECs $512 MM $464 MM $454 MM $129 MM Percent of Total Costs 73% 96% 143% 9% Snohomish PUD 2017 Integrated Resource Plan 34

35 Schedule September 19, 2017 Oct/Nov 2017 Present draft 2017 IRP, start SEPA process Schedule public hearings for adoption of Conservation biennial targets and 2017 Integrated Resource Plan Snohomish PUD 2017 Integrated Resource Plan 35

36 Questions? Snohomish PUD 2017 Integrated Resource Plan 36