ENERGY AND ECONOMIC NARRATIVES

Transcription

1 ENERGY AND ECONOMIC NARRATIVES 2018 SEL Modern Solutions Power Systems Conference Chicago, IL, USA CAREY W. KING, PH.D. Assistant Director and Research Scientist, The University of Texas at Austin, Energy Institute

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3 Energy Narrative 1: Fossil fuels are the future 3

4 Energy Narrative 1: Fossil fuels are the future Energy Narrative 2: Renewables are the future 4

5 Economic Narrative A: Infinite substitutability, techno-optimism Energy Narrative 1: Fossil fuels are the future Energy Narrative 2: Renewables are the future 5

6 Economic Narrative A: Infinite substitutability, techno-optimism Energy Narrative 1: Fossil fuels are the future Energy Narrative 2: Renewables are the future Economic Narrative B: Finite earth, techno-realism 6

7 Economic Narrative A: Infinite substitutability, techno-optimism Energy Narrative 1: Fossil fuels are the future Energy Narrative 2: Renewables are the future 7 Economic Narrative B: Finite earth, techno-realism

8 Electricity Generation Comparison 8

9 Levelized Cost of Electricity (LCOE) of generation Great for narratives to talk with each other Has costs for Capital spending Discount rates Fuel Great for Narratives to talk past each other Has no costs for T&D Retail sales & servicing Grid management 9

10 Levelized Cost of Electricity (LCOE) of generation Great for narratives to talk with each other Has costs for Capital spending Discount rates Fuel Great for narratives to talk past each other Has no costs for T&D Real-time grid management Retail sales & servicing 10

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12 Capital cost Fuel price Lifetime of plant 12

13 Turn on air externalities and add $/tco 2 Capital cost Fuel price Lifetime of plant 13

14 Turn on air externalities and add $/tco 2 Turn on availability zones Capital cost Fuel price Lifetime of plant 14

15 LCOE per county NGCC NGCC PV Wind PV PV NGCC 15

16 Add in local air quality and 62 $/tco2 NGCC PV Wind Wind PV Wind 16

17 Add in availability zones NGCC PV Wind Wind NGCC PV NGCC PV 17

18 How much is the cheapest plant? 70s 110s 90s-110s 100s-110s 70s 50s-60s 80s-90s >150 $/MWh 140 $/MWh 130 $/MWh 120 $/MWh 110 $/MWh 100 $/MWh 90 $/MWh 80 $/MWh 70 $/MWh 60 $/MWh < 50 $/MWh 18

19 Generation is only part of it. How much does the grid cost? 19

20 ($2105/Customer-yr) 1000 Annual Utility Spending T&D utility spending around $700 $ /customer-yr Transmission Capex Distribution Capex T&D O&M Admin. Capex Admin. O&M Fares, Robert L. and King, Carey. W (2017) Energy Policy & Energy Institute white paper (2016)

21 2105 /kwh Annual Utility Spending 6 T&D utility spending in /kwh increasing since Transmission Capex Distribution Capex T&D O&M Admin. Capex Fares, Robert L. and King, Carey. W (2017) Energy Policy & Energy Institute white paper (2016) Admin. O&M

22 Age and size of power plants and links to broader trends 22

23 Percentage of Power Plant Capacity (%) Power plant fleet is aging Older than 20 years Older than 30 years Older than 40 years Older than 50 years 10 0 EIA Form

24 Capacity per plant (MW / listing) Power plants being built with less capacity EIA Form

25 Capacity per plant (MW / listing) Power plants being built with less capacity 1. Pre-1970s: high growth in energy consumption EIA Form

26 Capacity per plant (MW / listing) Power plants being built with less capacity 1. Pre-1970s: high growth in energy consumption 2. Post-1970s: low/no growth in energy consumption EIA Form

27 Capacity per plant (MW / listing) Power plants Coal and Nukes being built with less capacity 1. Pre-1970s: high growth in energy consumption 2. Post-1970s: low/no growth in energy consumption EIA Form

28 Capacity per plant (MW / listing) Power plants Coal and Nukes Wind, PV, and NG being built with less capacity 1. Pre-1970s: high growth in energy consumption 2. Post-1970s: low/no growth in energy consumption EIA Form

29 Narratives on the Future of the Electric Grid 29

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31 Set by: 1) Largest contingency: 2,750 MW nuclear plant 2) Speed of other resources Critical inertia: 94 GW s 31

32 Critical inertia: a systems concept ripe for energy narratives Fossil Narrative: Your new (small, uncontrollable) wind turbines are lowering my grid inertia! Renewable Narrative: Your old (large, high operating cost) thermal plants necessitate too much grid inertia! 32

33 but we ve solved these problems before + = 33

34 Carey W. King, Ph.D. Research Scientist & Assistant Director, Energy Institute Jackson School of Geosciences Lecturer, McCombs School of Business & LBJ School of Public Affairs energy.utexas.edu