Value of Wind Energy: DOE Wind Vision Methodology Review

Transcription

1 Value of Wind Energy: DOE Wind Vision Methodology Review Ryan Wiser Lawrence Berkeley National Laboratory EXPERTS WORKSHOP: SYSTEM APPROACH TO ASSESSING THE VALUE OF WIND ENERGY TO THE SOCIETY 1 Program Name or Ancillary Text eere.energy.gov

2 U.S. DOE Wind Vision Overview U.S. DOE 20% Wind by 2030 report published in 2008: addressed whether high wind penetrations were feasible New effort currently underway to re-invigorate the vision: New wind penetration scenarios: 2020, 2030, 2050 Changes to assumptions: wind technology, natural gas prices, etc. Transparent & credible assessment of costs, benefits, impacts Roadmap for industry, government, academia, others First report draft expected in mid Wind and Water Power Program eere.energy.gov

3 Overview of Methods for Cost, Benefit, Impact Analysis Assessment of Wind Vision Scenario vs. No New Wind Scenario NREL ReEDS model (capacity expansion & dispatch model tuned to address unique aspects of RE) used to assess: Location and amount of generation capacity additions Displacement of fossil generation as result of Wind Vision Transmission and integration impacts Cost of achieving Vision in total $, and in cent/kwh rate impact Using ReEDS results, additional analysis will objectively assess other benefits and impacts of achieving the Wind Vision vs. No New Wind, seeking monetary quantification where possible Impact / benefit quantification has not fully begun; presentation focuses on what benefits are likely to be quantified and how, and which are not likely to be quantified [final decisions TBD] 3 Wind and Water Power Program eere.energy.gov

4 Impacts and Benefits Likely To Be Quantified Greenhouse gas emissions reduction Water use reduction Health and environmental impacts Energy diversity and risk reduction Economic development and workforce impacts Government incentives for energy [not covered here] Local impacts of wind project development 4 Wind and Water Power Program eere.energy.gov

5 Greenhouse Gas Emissions Reduction: Core Benefit of High Wind Penetrations ReEDS output for Wind Vision vs. No New Wind: change in combustion-related carbon LCA assessment used in concert with ReEDS to develop life-cycle GHG emissions impacts Impact of wind variability noted, not quantified Economic benefits of wind due to avoided damages from GHGs can be estimated based on social cost of carbon (SCC) U.S. Interagency Working Group used 3 IAMs to estimate global SCC under four different scenarios: we plan to use these Literature surrounding IWG estimates, and SCC more broadly, illustrates large uncertainties, but IWG estimates used widely in regulatory impact analysis in U.S. 5 Wind and Water Power Program eere.energy.gov

6 Water Use Reduction Three somewhat distinct issues, each impacting national and local water discussions: withdrawal, consumption, and dependence On operations and lifecycle basis, wind has much lower water requirements ReEDS used with typical water-use assumptions by plant type to estimate physical water use impacts Economic benefits include reduced vulnerability to the availability or temperature of water used for cooling, and also ability to use water for other productive purposes (e.g., agriculture, households, etc.) Available tools to estimate benefits are limited, so as a proxy, we propose to bound the benefit by considered wind as avoiding the possible need to otherwise employ dry cooling for thermal power plants (e.g., vs. wet cooling, around $2-6/MWh due to lower efficiency and larger capital cost) 6 Wind and Water Power Program eere.energy.gov

7 Health and Environmental Impacts Wind Vision leads to changes in thermal generation relative to No New Wind. ReEDS output provides: MWh High Estimate Reduction in Damages Assumes future regs do not limit pollution beyond todays standards, that cap-and-trade is non-binding Wind reduces pollution, with associated environmental & public health benefits Damages quantified with APEEP: mortality, morbidity, visibility & recreation, material degradation, agriculture & timber yields specific to SO 2, NOx, and PM 2.5 Lower Estimate Compliance Cost Savings Assumes future regulations further limit power sector pollution, and that those regulations are binding; wind does not reduce emissions Valuation based on reducing cost of compliance with regulations Savings estimated with EPAestimated allowance prices, representing avoided abatement costs for NOx and SO 2 7 Wind and Water Power Program eere.energy.gov

8 Energy Diversity and Risk Reduction Fossil generation relies on fuels that have substantial price volatility Variety of methods have been used to assess benefits of diversity: a single, standard and agreed upon approach has not emerged We propose to take straightforward and largely uncontroversial approaches to assess two distinct possible benefits: 1. By providing a long-term fixed-price source of supply, wind can directly offset the use of fuel streams with uncertain and variable prices: ReEDS fuel price scenarios show that total costs under Wind Vision are less sensitive to changes in fossil prices than are costs under No New Wind 2. By reducing demand for fossil fuels, wind can place downward pressure on fossil fuel prices, with benefits to energy consumers: reduced natural gas prices can provide consumer benefits in reduced fuel expenditures Caveats are critical: (1) nothing in neoclassical economics requires that reduced fuel price risk is a net benefit; (2) benefit to consumers from lower gas prices comes at cost to producers 8 Wind and Water Power Program eere.energy.gov

9 Economic Development and Workforce Impacts Focus on gross impacts: achieving the Wind Vision will support jobs directly or indirectly related to the U.S. wind industry in manufacturing, construction, and operations & maintenance Absolute number of wind-related jobs will be greatly influenced by the future competitiveness of U.S. manufacturing: conduct a bounding analysis with lower and higher estimates NREL Jobs and Economic Development Impacts (JEDI) model as core analytical tool: JEDI is inputoutput model that estimates gross economic impacts from energyrelated development 9 Wind and Water Power Program eere.energy.gov

10 Local Impacts of the Wind Vision Local Economics Potential local economic development of $XX and YY jobs provided on a state by state basis, with examples of community based benefits for offshore and land based development Land Use XX square miles of land impacted and breakout of direct and conditional use. Articulate local benefit of local land use and lease fees Wildlife To the extent possible quantify known impacts but include description of how difficult it is to determine this based on current knowledge for land based and offshore wind development Aviation and Radar Anecdotal description of the impact of larger and taller turbines on FAA and radar systems for land based and offshore wind technologies Public Acceptance Articulate the expanded siting consideration as turbines are implemented in the context of increased information, general public acceptance, and alternative assessment The impacts, when quantified, are predicated on numerous assumptions. Many other impacts are known generally but the tabulation of specific impacts and benefits will not be impossible based on existing information. In these cases the level of impact and the potential sources will be articulated with examples provided. 10 Wind and Water Power Program eere.energy.gov

11 What Impacts Will Likely Not be Quantified Wholesale Price Effects Net Economic Development Change in average wholesale prices = transitory In long term, avg price roughly same; temporal profile will change & become much more volatile If the effect does exist: (1) included in ReEDS model results; (2) represents a transfer payment rather than a net increase in economic wealth Tools to evaluate net economic development are not widely used in the US for RE analysis No economic reason to believe a net increase in jobs would occur, if the economy is in equilibrium If there were net gains/losses, likely very small Final Considerations Related to All Work of this Nature: (1) Level of benefit achieved influenced by policies used: must consider rebound & spillover, and caveat estimated impacts accordingly (2) Be careful when wind is not the least-cost strategy for achieving cobenefits: estimated net benefits might be over-stated 11 Wind and Water Power Program eere.energy.gov