Overview of Regulated Hydroelectric Stations

Transcription

1 OPG Incentive Rate Mechanism Consultation Overview of Regulated Hydroelectric Stations December 17, 2014 Mario Mazza VP, Strategy & Business Support (Hydro Thermal Operations)

2 Presentation Outline Overview of Regulated Hydroelectric Stations Hydro Thermal Operations Organization Map of OPG Stations Historical & Forecast Production Regulatory Framework Multi-Stakeholder Environment Dam Safety Program Key Capital Expenditures OM&A Benchmarking Comments / Questions 2

3 Overview 54 OPG hydroelectric stations are subject to OEB regulation. Regulated generation capacity includes 6426 MW hydroelectric generation capacity with an average production of 33 TWh. This represents 38% of total OPG s generation capacity and supply nearly 40% of total energy. These assets are diverse in size, vintage, location, site configuration, infrastructure and regulatory regimes. The stations are geographically dispersed across the province, which provides operating flexibility and ancillary products for Ontario electricity system (voltage support, OR, AGC). The stations were designed for base load, intermediate, and peaking operations with capacity factors ranging from 15% to 70% (average is approx. 60%). For 2015 to 2020, OPG plans to invest approximately $1.3 billion. The stations operate in an environment involving multiple stakeholders (e.g. First Nations, local communities, regulators) and are constrained by numerous treaties, agreements, water power leases, and regulations. 3

4 Regulated Hydroelectric in the HTO Organization Hydro-Thermal Operations HTO Central Office Support Niagara Operations Eastern Operations Northwest Operations Northeast Operations Central Operations Capacity: 2277 MW Energy : 12.7 TWh Stations : 5 Units : 36 Dams : 25 River Systems : 2 Control Centres : 1 Work Centres : 3 Capacity: 2571 MW Energy : 12.5 TWh Stations : 10 Units : 59 Dams : 45 River Systems: 3 Control Centres : 2 Work Centres : 7 Capacity: 654 MW Energy : 3.7 TWh Stations : 9 Units : 34 Dams : 52 River Systems: 5 Control Centres : 1 Work Centres : 4 Capacity: 818 MW Energy : 2.4 TWh Stations : 5 Units : 17 Dams : 16 River Systems: 3 Control Centres : 1 Work Centres : 2 Capacity: 107 MW Energy : 0.5 TWh Stations : 25 Units : 62 Dams : 64 River Systems: 10 Control Centres : 1 Work Centres : 4 The HTO organization has been redesigned into a regional structure to increase efficiency and flexibility, while lowering operating costs. Specifically, Northwest Hydro and Thermal have been combined into Northwest Operations, and Ottawa St. Lawrence PG and Lennox GS combined into Eastern Operations. Engineering, Dam Safety, and business support is provided by HTO central office. The regional Operations groups are staffed to operate and maintain the plants and deal with local issues. They are operated and maintained consistent with the existing asset management framework using portfolio management and differentiated maintenance approach based on value, importance to system, operating profile and risk profile of each station. 4

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6 Net Energy (TWh) Historical & Forecast Production 40.0 Annual Regulated Hydro Generation Showing Contribution of Runner Upgrades Incremental Energy From Runner Upgrade (based on design efficiency) BP Forecast Historical average production for regulated stations is ~31.8 TWh (or 33.3 TWh with Niagara Tunnel) Energy production can vary significantly due to water variability (Mother Nature). There have been significant swings year over year (e.g. - 5 TWh from 2009 to 2010), especially for newly regulated stations 6

7 Regulatory & Legal Framework INTERNATIONAL Treaties International Joint Commission Boards, Orders of Approval Water Management FEDERAL Licenses (Trent & Rideau Rivers) Agreements with SLMC Legislation (Fisheries Act, Ottawa River Act) INTERPROVINCIAL Legislation (English/Winnipeg & Ottawa Rivers) Agreements (eg, Ottawa River Basin Regulation) PROVINCIAL Water Power Lease (Agreements) Crown Leases Licenses of Occupation Gross Revenue Charge Regulation (2001) Lakes & Rivers Improvement Act OEB Rate Regulation INTER-UTILITY AGREEMENTS With NYPA, Hydro Quebec, Manitoba Hydro (water sharing, energy sharing, cost sharing, diversions) WATER MANAGEMENT PLANS Approx. 200 water level and flow constraints were adopted at request of MNR, citizens groups, municipalities, First Nations, NUGs, etc. Benefits for fisheries, recreational users, erosion mitigation, flood control, municipal water intakes, commercial businesses. Most of above voluntary constraints and water levels have now been incorporated in the 14 Water Management s (legally enforceable). All Water Management plans have been completed/approved (except Montreal River-still with MNR) Water Management s do not apply to Inter-Provincial (e.g. Ottawa) and International rivers (Niagara and St. Lawrence). WMPs have had some impacts on operational flexibility and optimization of production/revenue. 7

8 Operating in a Multi-Stakeholder Environment AGENCIES Environment Canada Transport Canada Canada Parks Dept. Fisheries & Oceans MNR MOE & MOF IJC & Control Boards(CB) Intern. Niagara Committee LWCB & ORRPB Task Forces Committees USERS First Nations Other Utilities Shippers Riparians Ontario Power Gen. Tourist Industry Cottagers Industries Municipalities ACTIVITIES Recreational Boating Hydroelectric Generation Rowing Regattas Whitewater Rafting Navigation Fishing Wild Rice Growing Hunting Drinking Water Intakes Scenery Watching Power generation is one of many factors governing a watershed, behind navigation, drinking water intakes, tourism, recreation, etc. Many watersheds (Ottawa, English, Trent), are controlled by others and there are tight restrictions on operating water levels and flows (may limit peaking operations). 8

9 Dam Safety Program Hydro facilities and operations pose potential risks/hazards to the public associated with dam failure, spill/unit discharge, and site security breaches. These risks are being managed through an existing dam and public safety program. Director of Dam Safety provides program oversight and reports to OPG Board annually on program accomplishments and results of Independent Dam Safety Advisory Panel reviews. New Technical Guidelines issued in 2011 set a framework for a risk management approach for assessing dams failures. OPG is internationally recognized as an Industry Leader in Dam Safety. OPG has spent over $40 million since 2003 on public safety measures such as safety booms, fencing, etc. Potential cost risk driven by new dam safety guidelines (to be assessed over next few years). Public safety includes sharing information with local communities, and province-wide advertising with the Ontario Provincial Police. 9

10 Key Capital Expenditures Facility Project Description Category 2013 LTD Actual 2014 YE Proj Future Total Costs SAB PGS Reservoir Rehabilitation Sustaining RANNEY FALLS Expansion Project Value Enhancing SAB 1 G2 Frequency Conversion Value Enhancing SAB 1 G1 Frequency Conversion Value Enhancing SAB 1 G10 Major Overhaul & Upgrade Sustaining DECEW NF23 G2 Overhaul & Upgrade Sustaining R.H. SAUNDERS Station Service Replacement Sustaining LOWER NOTCH G2 Capital Upgrade Sustaining KAKABEKA FALLS Replacement of Shebandowan Dam Sustaining OTTO HOLDEN Replace Headgates Sustaining OTTER RAPIDS G1 to G4 Capital Upgrades Sustaining OTTER RAPIDS New Turbine Runners Sustaining OTTER RAPIDS Breaker and Exciter Replacement Sustaining OTTER RAPIDS Sluicegate Upgrades Sustaining STEWARTVILLE Generator Rewinds Sustaining NIPISSING Turbine and Generator Replacement Sustaining Balance of Capital Program Total Capital

11 Hydroelectric OM&A $M Actual 2011 Actual 2012 Actual 2013 Actual GRC Base OM&A Project OM&A Sources: EB Ex.F1-1-1 Tables 1 & 2, and Business Long Term Outlook Project OM&A costs are increasing due to civil rehabs (e.g. Saunders concrete growth mitigation), and major overhauls (e.g. Saunders, PGS). Base OM&A costs are increasing with inflation, headcounts are stable. Gross Revenue Charges continue to dominate direct operating costs. 11

12 # OPG ts per Quartile # OPG ts per Quartile Operational Benchmarking Benchmarking Generating Unit Availability (%) Availability (EUCG Benchmarking) 14 Hydro plants are in the top 2 quartiles. This accounts for 72% of the benchmarked Hydro capacity and 82% of Hydro production Q1 Q2 Q3 Q4 EUCG 2012 data, OPG pre and new Reg 25 plants out of 269 plants Benchmarking Forced Outage Rate (%) EFOR (EUCG Benchmarking) Hydro has 14 plants that are better than the median. This accounts for 65% of benchmarked Hydro Capacity and 77% of Hydro production. From 2010 to 2012, the number 4 th quartile stations reduced by 4 stations. 2 0 Q1 Q2 Q3 Q4 EUCG 2012 data, OPG pre and new Reg 25 plants out of 269 plants Notes: 1) 25 OPG Hydro stations are included in the EUCG benchmarking. 2) Benchmarking studies do not include small stations/units. 12

13 # OPG ts per Quartile Cost Benchmarking 16 Benchmarking OM&A unit energy cost in CAD/ MWh Q1 Q2 Q3 Q4 EUCG 2012 data, OPG 25 pre and new Regulated plants out of 269 plants OPG t Distribution Q1 Q2 Q3 Q4 total C A D / M Wh # plants TWh % TWh 86% 11% 2.3% 0.3% 100% OM&A unit energy costs continue to be competitive with other EUCG participating utilities. In 2012, 20 out of 25 stations benchmarked are in the top two quartiles. From 2011 to 2012, seven stations moved up from the second to first quartile. 13