SPP and the EPA Clean Power Plan. Carl A. Monroe Exec VP & COO

Transcription

1 SPP and the EPA Clean Power Plan Carl A. Monroe Exec VP & COO

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3 2013 Energy Capacity and ConsumpCon Capacity ConsumpCon 12% annual planning capacity requirement 3

4 SPP Footprint October

5 Annual Average Wind Speed - 80 meters 5

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7 Solar in the U.S. 7

8 Integrated Transmission Planning Develops 345 kv+ backbone for 20- year horizon Studies broad range of possible futures Analyzes transmission system for 10- year horizon Establishes Cming of ITP20 projects Annual Near- Term plan Reliability is primary focus IdenCfies potencal problems and needed upgrades Coordinates with ITP10, ITP20, Aggregate and GeneraCon InterconnecCon study processes 8

9 Total Investment Per In- Service Year $2,000 $1,800 $1,600 $1,400 GI Studies TSS ITP As of May 2015 $ Million $1,200 $1,000 $800 High Priority Balanced Portfolio STEP Reliability $600 $400 $200 $0 9

10 Projects Constructed May

11 Transmission Build Cycle Transmission Planning Process Planning Study (12-18 mo.) NTC Process (3-12 mo.) ConstrucCon (2-6 yr.) 3 ¼ yr. 8 ½ yr. GI and Transmission Service Process GI Study (12 mo.) TS Study (6 mo.) NTC Process (3-12 mo.) ConstrucCon (2-6 yr.) 3 ½ yr. 8 ½ yr. 1 1

12 SPP Second lowest Market Spot Price Graphic FERC 2014 State of the Market report delivered to FERC Commissioners on March 19,

13 EPA s Proposed Glide Path *Includes states with IS generation that will be in SPP by 2015 (N. Dakota, S. Dakota, Montana, and Wyoming) 13

14 Clean Power Plan Milestones June 2, 2014 Drad rule issued June 2015 Final rule expected June 2017 State plans due (with one- year extension) January Interim goal in effect Dec 1, 2014 June 2016 June 2018 January 2030 Comments due to EPA State Plans due MulC- state plans due (with two- year extension) Final goal in effect 14

15 EPA s 2030 Goals for States in SPP 3,000 Fossil Unit CO2 Emission Rate Goals and Block ApplicaCon (lbs/mwh) SPP State Average 2012 Rate = 1,699 2,500 2,000 1, SPP State Average 2030 Rate = 1,045 1, Montana N. Dakota Wyoming Kansas S. Dakota Nebraska Missouri New Mexico Arkansas Oklahoma Louisiana Texas Final Goal Energy Efficiency Renewable Nuclear Redispatch CCs Heat Rate Improvement *Includes Future States with IS Generation in SPP (N. Dakota, S. Dakota, Montana, and Wyoming) 15

16 SPP s CPP Impact Assessments SPP performed two types of assessments Transmission system impacts Reserve margin impacts Both assessments modeled EPA s projected EGU re]rements within the SPP region and surrounding areas Transmission system impact assessment performed in two parts Part 1 assumed unused capacity from exis]ng and currently planned generators would be used to replace re]red EGUs Part 2 relied upon both currently planned genera]on and addi]onal new genera]on needed to replace re]red EGUs 16

17 Transmission System Impact Assessment Results Part 1 what happens if CPP compliance begins and EGU re]rements occur before genera]on and transmission infrastructure is added Extreme reac]ve deficiencies of approximately 5,200 MVAR across SPP system Will result in significant loss of load and viola]ons of NERC reliability standards Part 2 what happens during CPP compliance acer replacement genera]on capacity is added but before requisite transmission infrastructure is added Loading on 38 facili]es in SPP exceeds equipment ra]ngs Some overloads so severe that cascading outages would occur Would result in viola]ons of NERC reliability standards 17

18 EPA s Projected EGU ReCrements *Excludes committed retirements prior to 2016 **Extracted from EPA IPM data ***THESE RETIREMENTS ARE ASSUMED BY EPA NOT SPP! 18

19 New GeneraCng Capacity Added in Part 2 of SPP s TSIA 19

20 Reliability Risks IdenCfied by TSIA 20

21 SPP Reserve Margin Assessment Used current load forecasts, planned generator re]rements, planned new generator capacity, and EPA s assumed re]rements SPP s minimum required reserve margin is 13.6% By 2020, an]cipated reserve margin would be 4.7%, a capacity margin deficiency of approximately 4,600 MW By 2024, an]cipated reserve margin would be - 4.0%, a capacity margin deficiency of approximately 10,100 MW 21

22 SPP s Conclusions Significant new genera]ng capacity not currently planned will be needed to replace EPA s projected re]rements EPA projects about 9,000 MW of re]rements in the SPP region by 2020 almost 6,000 MW more than SPP is currently expec]ng! New transmission infrastructure will be needed, both to connect new genera]on to grid and to deliver energy reliably Currently takes up to 8.5 years to study, plan, and construct transmission in SPP Up to $2.3 million per mile for 345 kv transmission construc]on More comprehensive reliability analysis is needed before final rules are adopted Sufficient ]me is needed to comply in a reliable fashion 22

23 ObjecCves of SPP s 2015 CPP Assessment Evaluate the impact of the EPA Clean Power Plan Act SecCon 111(d) on exiscng resources and resource expansion plans to meet compliance on a regional and state level Model, monitor, and report on compliance final goal through... o The uclizacon of carbon pricing to drive generacon towards the carbon emission goals o A reasonable resource plan that meets the carbon emission goals o Other measures Develop an indicacve Cmeline of accons and accvices that need to take place in order to ensure reliable compliance 23

24 SPP Regional Emission Goal EsCmate 3000 Fossil Unit CO2 Emission Rate Goals and Block ApplicaCon (lbs/mwh) Final Goal Energy Efficiency Renewable Nuclear Redispatch CCs Heat Rate Improvement *SPP States with applicable Existing Generating Units 24

25 Reference Case Resource Plan Capacity (GW) 5 0 CPP BAU 2015 ITP

26 Average Capacity Factor by Unit Type Capacity Factor (%) $0 $15 $30 $45 $60 $75 $100 Carbon Cost ($/Ton) Combined Cycle CT Gas Internal CombusCon ST Coal ST Gas 26

27 Rate of Change of Emission Rate Rate of Change $0 $15 $30 $45 $60 $75 $100 Carbon Cost ($/Ton) 27

28 Resource Plan Comparison Capacity (GW) 5 0 CPP Compliance CPP BAU ITP

29 SPP Carbon Emission Rate Results Regional Goal (1309 lbs/mwh) 29

30 Coal Capacity Factor Comparison Capacity (GW) >80% 60%- 80% 40%- 60% 30%- 40% <30% ReCred Base 2030 $45/Ton 2030 Compliance 30

31 EsCmated Costs of Compliance Costs of Uncommioed BAU Resources Type New GW 2015 $B (Total) 2015 $B (1- Year) Wind CC CT Solar Total * Uncommitted represents resources that do not have SPP Generation Interconnection Agreements Incremental Costs of Compliance Scenario Type Capacity (GW) 2015 $B (Total) 2015 $B (1- Year) New Wind New CC New CT CC to CT Conversion Produc]on Cost Total Incremental *Does not consider cost of transmission additions, transmission congestion, gas infrastructure, and market enhancements 31

32 Process Timelines (Yr) GI Study GIA Process CT NGCC Wind Gas Infrastructure Intrastate Interstate TS Study NTC Process Rebuild New <300 kv New >300kV ITPNT Study NTC Process Rebuild New <300 kv New >300kV ITP10 Study NTC Process Rebuild New <300 kv New >300kV Markets Design 32

33 Next steps Perform state- by- state analysis using comparable assumpcons - results expected in early June Refine regional analysis as necessary based on learning generated from state- by- state approach development Share results with members, uclity regulators, and environmental agencies 33

34 2017 ITP20 Futures In October 2014, the SPP BOD directed SPP For the three year planning cycle commencing in January 2015 request a waiver from FERC of 1) the requirements to perform the ITP20 and 2) the Cming requirements related to the ITP10 to permit SPP to commence the ITP10 in January 2015, to be completed no later than January EPA Clean Power Plan seccon 111(d) impacts, naconwide 30% reduccon of C0 2 by 2030, final rule expected June, 2015 ESWG has discussed how to approach the scope and Cmeline for the next 2017 ITP10 34

35 Future 1 Regional Clean Power Plan SoluCon Assumes that the EPA Clean Power Plan will be implemented at a Regional level by meecng emissions targets within the SPP footprint. AddiConal significant features include: CompeCCve Wind (Sub $24/MWh prices) High availability of natural gas due to hydraulic fracturing (fracking) Large scale solar generacon development Load growth as expected 3 5

36 Future 2 State Level Clean Power Plan SoluCon Assumes that the EPA Clean Power Plan will be implemented at a State level under the following condicons: Each state has its own compliance plan and each uclity meets the EPA determined emission rate CompeCCve Wind (Sub $24/MWh prices) High availability of natural gas due to hydraulic fracturing Large scale solar generacon development Load growth as expected 3 6

37 Future 3 No Clean Power Plan SoluCon Assumes that the EPA Clean Power Plan is not implemented, and also assumes the following significant features: CompeCCve Wind (Sub $24/MWh prices) High availability of natural gas due to hydraulic fracturing (fracking) A mix of large- scale solar generacon development along with smaller scale solar generacon methods such as roodop Increased load growth 3 7

38 Carl A. Monroe Exec VP and COO