Hydropower Modeling at EIA

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1 Hydropower Modeling at EIA For Northwest Hydroelectric Association s 2015 Annual Conference Portland, OR By Operations Research Analyst, Renewables Analysis Team Michelle.Bowman@eia.gov U.S. Energy Information Administration Independent Statistics & Analysis

2 Agenda About EIA EIA s three main products modeling hydropower Short-Term Energy Outlook Hydropower Forecasting Pacific Northwest Rest of the U.S. Suggestions for improvement? 2

3 About EIA The U.S. Energy Information Administration (EIA) is an office in the U.S. Department of Energy that collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment policy-neutral: EIA does not develop, endorse, or implement policy Three Primary Energy Projections: AEO Annual Energy Outlook IEO International Energy Outlook STEO Short-Term Energy Outlook 3

4 EIA s main products modeling hydropower AEO - Annual Energy Outlook Domestic annual energy projections through 2040 Projects: production, imports, conversion, consumption, prices Model: National Energy Modeling System (NEMS) IEO International Energy Outlook International annual projections through 2040 Projects: generation, capacity, consumption and electricity prices Globally, by 16 regions Model: World Energy Projection System Plus (WEPS+) STEO - Short-Term Energy Outlook Domestic monthly energy forecasts through end of next calendar year Model: Regional Short-Term Energy Model (RSTEM) 4

5 STEO Hydropower Forecasting Non-Pacific Northwest uses historic multi-year averages Pacific Northwest Correlation based on Dalles Dam Outflow Forecasted PacNW Gen month,year = PacNW Gen month, year-1 * Dalles outflow month, year Dalles outflow month, year-1 Dalles Dam outflow pulled from o History - NWRFC runoff data o Current calendar year Current water year: NWRFC water supply forecast Outside current water year: 30-year monthly average, adjusted by % change - aggregate water-year NWRFC forecast - YTD run-off o Next calendar year: 30-year monthly averages OR analyst s judgment based on historical multi-year averages 5

6 STEO Pacific NW Forecasting Dalles Dam Outflow vs. Pacific NW Generation,

7 STEO Pacific NW Hydropower Forecast vs. Actuals,

8 % error STEO Pacific NW Hydropower % Error vs. # Months-out Forecast # months-out forecast 8

9 STEO Non-PacNW U.S. Hydropower Forecast vs. Actuals,

10 % error STEO Non-PacNW U.S. Hydropower % Error vs. # Months-out Forecast # months-out forecast 10

11 Suggestions for improving the STEO hydro forecasting methodology? On-going areas for improvement Pacific NW Predictive variables: Dalles Dam outflow currently; Are there others? Forecasting beyond current water year Non-Pacific NW what can we use besides historic averages? Potential Predictive Variables Reservoir elevation data Grand Coulee dam Dworshak dam Forecast of these reservoirs elevation? From USGS: tidal storage temperature sunlight duration 11

12 For more information U.S. Energy Information Administration home page Short-Term Energy Outlook Annual Energy Outlook International Energy Outlook 12

13 Thank you! 13

14 Supplemental Slides 14

15 Avg. % error STEO PacNW & Non-PacNW Hydropower Average % Error vs. # Months-out Forecast # months-out forecast 15

16 STEO Pacific NW Hydropower Dalles Dam Outflow vs. Dalles Dam Generation,

17 STEO Pacific NW Hydropower Forecast vs. Actuals and Averages,

18 STEO U.S. (including PacNW) Hydropower Forecast vs. Actuals,

19 STEO Pacific NW Hydropower Forecast vs. Actuals with % error,

20 STEO Non-PacNW U.S. Hydropower Forecast vs. Actuals with % error,

21 STEO U.S. (including PacNW) Hydropower Forecast vs. Actuals with % error,

22 AEO modeling system: NEMS Computer-based, regional energy-economy modeling system of U.S. through 2040 Electric power sector uses an LP that minimizes cost, while meeting demand, availability, and regulatory criteria Projects: Production Imports Conversion Consumption Prices of energy Subject to assumptions on: Macroeconomic and financial factors World energy markets Resource availability and costs Behavioral and technological choice criteria Cost and performance characteristics of energy technologies Demographics 22

23 NEMS Hydropower Model: Conventional Hydroelectric Submodule Provides available supply of new conventional hydroelectric generating capacity that can be built at known and wellcharacterized sites > 1 MW, < $0.10/kWh Based on list of known conventional hydro sites 1299 sites, 22 GW potential 3-step supply function by year, region Average cost Performance characteristics Aggregate capacity List of known sites assembled from INEEL (2003) based on FERC license applications and other surveys EIA modified site list in 2006 Updated site list Replaced generalized capacity factors with site-specific ones for > 100MW 23

24 Conventional Hydroelectric Submodule Exclusions Plants < 1 MW Pumped storage Sites excluded from development by Federal statute and policies Off-shore hydro In-stream hydro Additional potential from refurbishing existing hydro capacity Increased output from efficiency, operational improvements 24

25 Basic NEMS Structure 25

26 Electricity Market Module Balances seasonal/time-of-day demand for electricity generation and capacity with existing supply and future expansion plans 13 U.S. Regions (lower 48) Plant-level detail for planning and dispatch Four modules Capacity Planning Fuels and Dispatch Finance and Pricing Load and Demand-side Management 26

27 EMM Structure 27

28 Electricity Capacity Planning Capacity planning module looks for least-cost mix of existing and potential capacity options to satisfy projected load growth 4-year planning horizon covering 20 years of operation 3 season, 3 time-of-day load duration curve Uses future expectations for fuel prices New capacity is assumed to be non-utility owned Reserve margins depend on regulatory regime in each region Constrained by environmental or other policies Has market-sharing algorithm for technologies that are near to least-cost mix 28

29 Electricity Fuels and Dispatch Dispatch module looks for least cost utilization of existing capacity 36 segment load duration curve 4 seasons X 3 time-of-day X 3 demand levels Environmental and policy constraints Feedback with fuel supply and electricity demand modules Inter-regional trading allowed on economic and transmission constrained basis 29

30 Renewables in the EMM NEMS represents several renewable technologies Co-firing -Landfill Gas -Geothermal Solar PV - Solar CSP - Wind Biomass IGCC - Dist. PV - Hydro In the ECP, renewables compete with other generation resources based on least-cost supply mix Most renewable resources have upwardly sloping supply curves Some have additional constraints based on intermittency or fuel supply issues Dispatch for planning generally on a priority basis In the EFD, renewables are generally dispatched on a priority basis Subtracted from load before dispatch algorithm is run Reflects low cost to operate (except biomass) 30

31 Hydro in the EMM EFD Dispatch of hydro is on a priority basis Plants are dispatched in highest demand segments until seasonal energy is exhausted Energy available in each LDC segment is based on seasonal hydro capacity factors for each region Use of historical capacity factors assumed to account for regional water supply restrictions and other water uses 31

32 Conventional Hydro in NEMS Pumped Storage Separately Considered, Not Renewable AEO99 (Annual Energy Outlook,1998) Introduced Placeholder Regional Supplies based on Hydropower Evaluation Software (HES), assumed general cost & performance; designed none competitive <5 cents/kwh. No builds. AEO2005 Conventional Hydroelectricity Submodule (CHS) Introduced 32

33 Conventional Hydroelectricity Submodule (CHS) CHS provides EMM Potential Hydro Supply by region, year, (a) quantities megawatts of available new conventional hydro (b) capital and O&M costs, and (c) capacity factors by NEMS region Based on INEEL (Doug Hall, Dick Hunt) Work Completed for DOE/EIA in

34 IHRED (Idaho Hydropower Resource Economics Database) Based On 1998 DOE HES (Hydropower Evaluation Software) Derived from FERC Hydropower Resource Assessment HPRA Data Vintage: Primarily 1960s 1980s HES Checked by Individual States HES Excludes Existing Capacity IHRED Eliminated 38% of HES Capacity, Most of it Excluded by Wild and Scenic Rivers, etc. 34

35 HES Added Suitability Factors (PESF Project Environmental Suitability Factors) Account for 19 Environmental, Legal, & Institutional Constraints (0.1, 0.25, 0.5, 0.75, 0.9) Derived 1 Composite Factor Per Site Factors 0.10: Prohibited/Highly Unlikely (Wild & Scenic Rivers) 0.25: Key Fisheries, Recreation, Protected Fish/Wildlife 0.50: National Forest, Wild & Scenic Tributary, Threatened Fish/Wildlife 0.90: Least Impediment 35

36 INEEL Report: Estimation of Economic Parameters of U.S. Hydropower Resources For Report (Idaho National Engineering and Environmental Laboratory, INEEL/EXT , June 2003) For IHRED Database - Contact Doug Hall ( ) or Douglas.Hall@inl.gov 36

37 Basic CHS Methodology Arrays Potential Least to Highest Cost by NEMS Region (Regional Supply Curve) When New Capacity is Needed, CHS Submits Only Hydro Capacity at or Below Highest Avoided Cost in Prior Cycle Submits to EMM as Three Increasing Average Cost Blocks, Not as Individual Sites Capacity-weighted (a) Capital Cost, (b) O&M Cost, and (c) Capacity Factor NWHA 2015 Annual Conference Portland, OR 37

38 Available Supply ($/MWh) Excluded Sites (above avoided cost) Hydro Supply Curve Final Supply Curve Evaluated in ECP Third Supply Segment First Supply Segment Second Supply Segment Available Capacity (MW)

39 World Energy Projection System Plus (WEPS+) Model used to generate EIA s International Energy Outlook (IEO) yearly: projecting global energy consumption, prices and production through 2040 Model granularity 16 world regions 5 primary energy sources nuclear renewables liquids natural gas coal 5 energy consumption sectors residential commercial Industrial transportation electric power (by fuel) 39

40 WEPS+ Schematic Start Preprocessor Macroeconomic Not Converged Main Converged Greenhouse Gases De mand Mode ls Residential Postprocessors (Reports) Finish Supply Models Refinery (Part 2) Commercial Coal Natural Gas Industrial Petroleum Transportation Refinery (Part 1) Trans formation Mode ls Electricity Generation District Heating 40

41 World Electricity Model (WEM) Overview Inputs Electricity demand from demand models (Model driven by generation requirements) Fuel prices from supply models Outputs Electricity generation Electric generating capacity Fuel consumed to generate electricity Retail electricity prices Three-tiered precedence Exogenous nuclear projections Exogenous renewable projections Logit algorithm uses levelized cost to allocate generation among fossil fuels 41

42 WEM characteristics Electricity generation is the model s focus LCOE, prices, capacity, consumption calculated from generation Fixed retirement rate No economic dispatch, but pseudo-dispatch order Exogenous nuclear and renewables fulfill generation requirements first If additional generation is required, fossil fuel-fired generation is built Logit algorithm used to allocate fossil fuel-fired generation based on levelized cost 42