Alternative Energy Update

Transcription

1 Alternative Energy Update Bob Orndorff Dominion August

2 Need for a National Energy Policy Voiced by every President since Nixon Gap between rhetoric and reality With regard to electricity: Only one percent from oil No problem free fuel Need for more capacity due to growing demand (more devices) and aging plants 2 2

3 Importance, Limits of Innovation Rather than just being a seller of dumb and dirty electrons, [the utility] would be an enabler of this whole smart grid-energy Internet system. And it would make its money from optimizing this system. Thomas L. Friedman, Hot, Flat, and Crowded: Why We Need a Green Revolution and How It Can Renew America, 2008 The industry invests less than 1 percent in R&D, the least innovative of any big industry in the world. Vijay Vaitheeswaran, author Power to the People: How the Coming Energy Revolution Will Transform an Industry, Change Our Lives and Maybe Even Save the Planet, March 2004 SmartMeters should be customers' choice 3 3

4 Natural Gas Pricing 14 Natural Gas Prices for Electricity Generation Monthly Average (Dollars per million Btu) Source: Energy Information Administration, Short-Term Energy Outlook, Electricity, Power Generation Fuels Costs. 4

5 Challenge 1: Costs of New Generation Renewables vs. Traditional Resources U.S. Average Levelized Costs (2009 $/megawatt hour) for Plants Entering Service in 2016 Plant Type Capacity Factor (%) Total System Levelized Cost* (2009 $/MWH) Conventional Coal 85% 95.1 Advanced Coal 85% Advanced Coal with CCS 85% Natural Gas-fired Conventional Combined Cycle 87% 65.1 Advanced Combined Cycle 87% 62.2 Advanced CC with CCS 87% 88.4 Conventional Combustion Turbine 30% Advanced Combustion Turbine 30% Advanced Nuclear 90% Wind 34% 96.1 Wind Offshore 34% Solar PV 25% Solar Thermal 18% Geothermal 91% 99.8 Biomass 83% Hydro 53% 90.5 *Includes levelized capital cost, fixed O&M, variable O&M (including fuel) and transmission investment. Source: Energy Information Administration, Annual Energy Outlook,

6 Challenge 2: Competing Priorities Capacity Factor Wind and Coal at Mount Storm Top 10 Days for Maximum Daily Temperature

7 Challenge 3: Siting Case Study Onshore wind site in Tazewell, Virginia Location opposition Viewshed Hurts coal Local Board of Supervisors adopted Ridgeline Protection Ordinance preventing wind farm 7 7

8 Challenge 4: Federalism Federal regulations can increase costs State regulatory commissions regulate rates, concerned about increasing costs "What you're seeing is EPA's renewed vigor in enforcement of the Clean Air Act," said Cynthia Giles, an EPA assistant administrator. "The controls we're seeking to make companies install cost money. There are reasons for the industry to be pushing back. It's our job to insist on compliance. - EPA Pursues Michigan's Largest Coal-Fired Plant, Associated Press, March 24, 2011 Rate impact on customers is a key statutory factor in the Commission's consideration of energy supply proposals, whether they be new generation projects, fuel costs, or RPS measures. - Virginia SCC Denies APCo s Purchased Power Contracts Due to Cost, June 2,

9 Challenge 5: Limited Means and Expensive Policy Ends Change in Electric Utility Bond Ratings 0% Federal Debt at the End of Fiscal Year: * (in billions of dollars) *Projected 9 9

10 Dominion: Balanced, Diverse Fuel Mix 2010 Electric Production by Fuel* *Total production by regulated and merchant units. Excludes non-utility generation (NUG) under contract

11 Dominion: Balanced, Diverse Energy Portfolio ~27,600 MW of electric generation New Generating Stations Planned/Under Development Coal/Biomass Natural Gas Wind Solar 6,200 miles of electric transmission 11,000 miles of natural gas transmission, gathering and storage pipeline 947 billion cubic feet of natural gas storage operated Cove Point LNG Facility 2.4 million electric customers in VA and NC 1.3 million natural gas customers in OH & WV 2.1 million non-regulated retail customers in 15 states Generating Stations in Operation Coal Natural Gas/Oil Nuclear Hydro Biomass Wind Coal/Oil/Gas Coal/Biomass Pending Sale 11 11

12 New Generation and Transmission Infrastructure Natural gas generation Bear Garden (580 MW) Warren County (1300 MW) Conversion of Bremo Bluff Power Station Coal-fired, waste coal and biomass facility Virginia City Hybrid Energy Center (585 MW) Biomass Conversions Converting three coal stations to biomass facilities Providing 150 MW renewable energy Transmission projects Two dozen major projects under construction throughout Dominion Virginia Power service territory 12 12

13 Dominion: Prudent Environmental Investments Actual Emissions Projected Emissions 13 13

14 Dominion: New and Traditional Technologies Alternative Energy Group Renewable Energy Generation Demand Side Management Programs Electric Vehicle Strategy Distributed Generation 14 14

15 Dominion: Renewable Energy Portfolio (Current and Future Generation) Cumulative In 2010 Development Renewable Utility Generation Fuel Region Capacity (MW) Capacity (MW) Pittsylvania Biomass PJM Altavista, Hopewell and Southampton Biomass PJM Virginia City Hybrid Energy Center* Biomass PJM Undisclosed New Biomass Biomass PJM Gaston (1-4) Water PJM Roanoke Rapids Water PJM Cushaw Water PJM 2 2 North Anna Water PJM 1 1 Virginia Wind Projects Wind PJM Halifax Solar Sun PJM 0 4 Renewable Merchant Generation NedPower (w/ Shell WindEnergy, Inc.) ** Wind PJM Fowler-Ridge (w/ BP Alternative Energy, Inc.) ** Wind PJM Prairie Fork Wind PJM 300 Total Renewable Generation 689 1,605 * Represents up to 20% of our proposed Virginia City Hybrid Energy Center 585 MW coal station ** Megawatt capacity values reflect Dominion's interest only Some development projects are not included in Dominion's current Capex Plan 15 15

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