A COMPREHENSIVE GUIDE TO ELECTRICITY GENERATION OPTIONS IN CANADA. Allan Fogwill, President & CEO CERI Breakfast Overview Series February 28, 2018

Transcription

1 A COMPREHENSIVE GUIDE TO ELECTRICITY GENERATION OPTIONS IN CANADA Allan Fogwill, President & CEO CERI Breakfast Overview Series February 28, 2018

2 Canadian Energy Research Institute Overview Founded in 1975, the Canadian Energy Research Institute (CERI) is an independent, registered charitable organization specializing in the analysis of energy economics and related environmental policy issues in the energy production, transportation, and consumption sectors. Our mission is to provide relevant, independent, and objective economic research of energy and environmental issues to benefit business, government, academia and the public. CERI publications include: Market specific studies Geopolitical analyses Commodity reports (crude oil, electricity and natural gas) In addition, CERI hosts an annual Petrochemicals Conference.

3 Canadian Energy Research Institute CERI receives financial support from its core funders which include Natural Resources Canada, Alberta Energy and the Canadian Association of Petroleum Producers. In addition, the institute benefits from funds provided by donors which include: Alberta s Industrial Heartland Chemistry Industry Association of Canada Government of Saskatchewan Ivey Foundation University of Calgary CERI also receives in-kind support from the following contributors: Alberta Energy Regulator Lithuanian Energy Institute Deloitte Canada Ltd. Atlantic Institute for Market Studies Petroleum Services Association of Canada Advisian Worley Parsons Group

4 Presentation Outline Background Methodology and Assumptions Generation Options Provincial Results

5 Background Canadian electricity supply is being seen as a key element in various policies to reduce carbon emissions in the country. Electricity generation in Canada varies by province. Each has unique characteristic of resource availability and demand requirements. Under normal growth forecasts we see modest growth in electricity demand (1% to 2% annually). Under scenarios which encourage electrification this growth rate could be much higher. Technologically, we have available many resource options the key is how much we are willing to pay for them. Canada already has a low emissions electricity system where approximately 80% of generation comes from zero emissions options.

6 Background: Capacity

7 Background: Generation

8 GHG Emissions Intensity of Generation

9 Study Objectives 1. What is the annual electricity generation potential? 2. What is the cost of electricity generation (measured in cents/kwh): In stand-alone mode of operation? In baseload mode of operation? As a peak load asset? 3. What is the emissions abatement cost (measured in $/tco2eq) by province?

10 The Challenge 1. Lack of information regarding resource potential and specific services 2. Incorporation of non-traditional electricity system options Renewables Distributed generation X Carbon capture Electricity storage Small modular reactors Demand management X Interprovincial trade X

11 Methodology Levelized cost of electricity includes all costs and is assessed from a project economics perspective over a period of years. What costs to include? Stand-alone costs? Development costs? Transmission connection costs? Waste Disposal costs? Site Reclamation costs? Costs to transform the electricity into the proper quality for the grid? Direct costs incurred for a project to provide base load or peaking service to the transmission back bone

12 Generation Options 1. Coal with Carbon Capture and Storage No stand alone coal due to regulations Pulverized Coal (35%) Supercritical Coal (42%) Ultra-supercritical Coal (47%) 2. Natural gas Combined Cycle (51%) Simple Cycle (35%) Combined Heat and Power (60%)

13 Generation Options 3. Nuclear Large Reactors e.g. CANDU Small Modular Reactors (unproven technology) 4. Hydroelectricity Large Reservoir Hydro Run-of-river Hydro (limited grid use) Tidal (limited grid use)

14 Generation Options 5. Wind Onshore with firming from natural gas generation or compressed air storage Offshore 6. Solar Fixed PV with firming from natural gas generation or compressed air storage One axis tracking PV with firming from natural gas generation or compressed air storage

15 Generation Options 7. Biomass limited resource potential Agriculture Forest Urban waste 8. Geothermal Hydrothermal Enhanced geothermal system

16 LCOE of Hydroelectricity in Canada

17 LCOE of Wind Sites in Canada

18 Results: Newfoundland and Labrador Technology Stand-alone LCOE Stand-alone LCOE with Transmission Cost Firm Power LCOE with Transmission Cost Carbon Intensity (gco2/kwh) CO2 COSTS ($/tco2) Wind + Hydro NA Solar PV (Fixed) + Hydro NA Solar PV (Tracking) + Hydro NA Hydro NA Solar PV (tracking) + CAES NA Wind Not firm 0 NA Solar PV (Tracking) Not firm 0 NA Solar PV (Fixed) Not firm 0 NA

19 Technology Results: Nova Scotia Stand-alone LCOE Stand-alone LCOE with Transmission Cost Firm Power LCOE with Transmission Cost Carbon Intensity (gco2/kwh) Wind + NGCC CO2 COSTS ($/tco2) Wind + CAES NGCC Reference case Solar PV (Fixed) + NGCC Solar PV (Tracking) + NGCC Hydro NGCHP Higher LCOE and CO2intensity Offshore Wind Solar PV (Tracking) + CAES Wind Not firm Solar PV (Tracking) Not firm Solar PV (Fixed) Not firm

20 Technology Stand-alone LCOE Results: Ontario Stand-alone LCOE with Transmission Cost Firm Power LCOE with Transmission Cost Carbon Intensity (gco2/kwh) CO2 COSTS ($/tco2) Biomass Wind + NGCC NGCC Reference case Solar PV (Tracking) + NGCC Solar PV (Fixed) + NGCC NGCHP Higher LCOE and CO2 intensity Nuclear - SMR (300MW) Hydro NGCC w/ccs Nuclear - Conventional (600MW) Coal (SCPC) w/ccs Wind + CAES Coal (USPC) w/ccs Solar PV (Tracking) + CAES Wind Not firm Solar PV (Tracking) Not firm Solar PV (Fixed) Not firm

21 Technology Stand-alone LCOE Results: Alberta Stand-alone LCOE with Transmission Cost Firm Power LCOE with Transmission Cost Carbon Intensity (gco2/kwh) CO2 COSTS ($/tco2) Biomass Wind + NGCC NGCC Reference case Solar PV (Fixed) + NGCC Solar PV (Tracking) + NGCC Higher LCOE and NGCHP CO2 intensity NGCC w/ccs Wind + CAES Hydro Nuclear - SMR (300MW) Nuclear - Conventional (600MW) Coal (SCPC) w/ccs Coal (USPC) w/ccs Solar PV (Tracking) + CAES Geothermal (EGS) Wind NA Solar PV (Tracking) NA Solar PV (Fixed) NA

22 Technology Results: British Columbia Stand-alone LCOE Stand-alone LCOE with Transmission Cost Firm Power LCOE with Transmission Cost Carbon Intensity (gco2/kwh) CO2 COSTS ($/tco2) Biomass Reference NGCC case Solar PV (Fixed) + NGCC Solar PV (Tracking) + NGCC Higher LCOE and NGCHP Wind + NGCC NGCC w/ccs CO2 intensity Hydro Wind + CAES Geothermal (Hydrogeothermal) Solar PV (Tracking) + CAES Geothermal (EGS) Wind NA Solar PV (Tracking) NA Solar PV (Fixed) NA

23 Province Least Cost Intermittent Power (cents/kwh) Conclusions Least Cost Firm Power (cents/kwh) Cost of Reduced CO2 Emissions of the Firm Power Option ($/tonne) NL Wind 6.1 Wind + Hydro 7.6 N/A PE Wind 6.3 Wind + NGCC NS Wind 6.4 Wind + NGCC NB Wind 6.8 Wind + NGCC QC Wind 6.8 Biomass ON Wind 6.6 Biomass MB Wind 6.4 Biomass SK Wind 5.6 Biomass AB Wind 5.7 Biomass BC Wind 7.5 Biomass

24 Observations Wind plus NGC or biomass are the least cost options. Sufficient low cost technology options with low emissions to allow for competitive bidding for projects. Avoided cost of new generation has dropped so the economic justification for energy efficiency programs has decreased. CERI work on data collection has advanced our understanding of renewable resource potential in Canada. Electricity system complexity requires a broad understanding (need to also consider interprovincial trade, distributed generation and demand management)

25 Thank You for Your Time CANADIAN ENERGY RESEARCH UPCOMING STUDIES: Economic Impacts and Market Challenges for the Methane to Derivatives Petrochemical Sub-Sector Economic and Environmental Impacts of Transitioning to Renewable Electricity or Cleaner Electricity Grids in Western Canada UPCOMING CONFERENCE: Petrochemical Conference: June , Kananaskis, AB Allan Fogwill President & CEO