The Effect of Energy Efficiency and Distributed Generation on T&D Planning

Transcription

1 The Effect of Energy Efficiency and Distributed Generation on T&D Planning USAEE National Capital Area Chapter Lunch Series Michael Goldman 1

2 Northeast Utilities Massachusetts Operating Companies NSTAR Gas & Electric Western Massachusetts Electric Company 2

3 Massachusetts Energy Efficiency Rankings # ACEEE State Energy Efficiency Scorecard - Massachusetts # ACEEE State Energy Efficiency Scorecard - Massachusetts # ACEEE State Energy Efficiency Scorecard Massachusetts # ACEEE City Energy Efficiency Scorecard Boston NSTAR Electric, 2.49% WMECo, 2.48% 3

4 What Effects are Increased EE and DG Having on the T&D System? What are the effects and associated benefits/challenges of increased energy efficiency (EE) efforts and distributed generation (DG) installations on the transmission and distribution system? Potential implications can be massive updated transmission & distribution planning can lead to the deferment of projects resulting in cost savings of hundreds of millions of dollars or more Possibly negate the need for new generation sources Why is this such an area of interest now? 4

5 Investment in Energy Efficiency Has Been Rapidly Increasing Stakeholders are interested in understanding what additional benefits energy efficiency is providing EE Program Spending or Budgets ($ Billions) Annual Electric and Natural Gas Energy Efficiency Spending or Budgets $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $ ACEEE State Scorecard Gas Electricity 5

6 Increased Pace of Oil/Coal Power Plant Retirements Approximately 8,300 MW of coal and oil capacity in New England is over 40 years old Capacity (MW) Age of Coal/Oil Generators in ISO New England 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, ,906 4,044 1,336 Coal Oil yrs yrs 60+ yrs Recent Retirements / Announcements Brayton Point 1,535 MW Norwalk Harbor 342 MW Vermont Yankee 604 MW Salem Harbor 749 Almost 3,300 MW will be gone in next 5 years ISO New England 2014 Regional Electricity Outlook 6

7 Load Forecasting Ties EE to the T&D Planning Process Load forecasting is the first place where EE and DG can have an effect on T&D planning Internal Process of Incorporating EE into Planning Energy Efficiency Bottoms up forecast of measures to be installed and corresponding level of expected savings Load Forecasting Reduces anticipated system load by expected EE savings T&D Planning Forecast of required infrastructure to meet load uses load forecast adjusted for EE External Process of Incorporating EE into Planning Energy Efficiency EE Dept ensures numbers are in accordance with submitted M&V plan ISO Planning ISO develops its long term forecast 7

8 More Precisely Incorporating EE into Load Forecasts Has A Large Impact ISO-NE ISO-NE forecast methodology is a good example of how altering EE assumptions can have a large impact on anticipated system wide load Forecasting equations used for Yrs 4-10 (post-fcm) MWh = [ (1-BU) * Budget $ ] / [ $/MWh * PCINCR ] MW = MWh*PER Where: BU = Budget uncertainty Budget $ = Estimated EE budget dollars $/MWh = Production cost PCINCR = Production cost increases PER = Peak to energy ratio Final 2014 Energy-Efficiency Forecast , Energy Efficiency Working Group, 5/1/2014 8

9 Effects of EE and Other Demand Side Resources Show Up in ISO Forecasts Forecast is used for long-term transmission planning studies, economic planning studies, CELT report and Regional System Plan ISO-NE 10 Yr Summer Peak (90/10) Forecast with EE Difference due to known EE in FCM Difference due to long term EE forecast Approximately 3000 MW difference due to including EE in long term forecast Business as usual With FCM With EE Forecast Final 2013 Energy-Efficiency Forecast , Energy Efficiency Working Group, 2/22/2013 9

10 More Precisely Incorporating EE into Load Forecasts Has A Large Impact MISO Midwest ISO s long term EE forecast reveals the sensitivity of peak demand savings to EE acquisition rates Scenario Description Peak Demand Savings by 2030 GEP Scenario Declining avg EE savings from 1% in 2015, 0.9% in 2020, 0.3% in 2025, 0.1% in ,233 MW Modified GEP Scenario 1% EE savings throughout forecast period 19,373 MW Synapse State s Avg Avg EE savings increases from 1% through 2015 to 1.4% from ,392 MW Synapse Best Practices Avg EE savings jumps to 2% from ,618 MW Altering a few EE assumptions resulted in a difference of over 18,000 MW in peak demand savings over the forecast period. Global Energy Partners. (Draft) Assessment of Demand Response and Energy Efficiency Potential for Midwest ISO, Report No Peterson, Paul., Sabodash, Vladlena., Takahashi, Kenji Demand Side Resource Potential A Review of Global Energy Partners Report for Midwest ISO 10

11 Hypothetical Example of Effect of Including Long Term EE Forecasts on PJM Loads Impact of EE Forecast on 2014 PJM Non-Coincident Peak Load Forecast 8,900 MW Difference due to including long term EE in forecast Jeff Schlegel, Doug Hurley, and Ellen Zuckerman, Accounting for Big Energy Efficiency on RTO Plans and Forecasts: Keeping the Lights on While Avoiding Major Supply Investments ACEEE Summer Study 11

12 Hypothetical Example of how Transmission Year of Need Shifts with Inclusion of EE in Forecast Demonstration of Deferral of Transmission Project Year of Need in PJM Jeff Schlegel, Doug Hurley, and Ellen Zuckerman, Accounting for Big Energy Efficiency on RTO Plans and Forecasts: Keeping the Lights on While Avoiding Major Supply Investments ACEEE Summer Study 12

13 Transmission Projects are Being Delayed/Deferred Due to Lower Load Growth Over 5,000 circuit miles of transmission projects were considered delayed or deferred in 2013 with the majority due to reassessment of load growth Current Transmission Project Delays and Deferrals Reasons for Transmission Project Delays and Deferrals kv 15% kv 9% kV 28% Budget / Cost Issues, 3% Construction / Equipment Related, 4% Permitting / Siting or Environmental Litigation / Opposition, 21% kv 7% kv 34% NERC 2012 Long-Term Reliability Assessment kv 7% Other, 28% Deferral Based on Reassessment of Load Growth, 44%

14 Quantified Benefits of EE and DG Quantified Benefits Deferred projects ISO-NE identified 10 projects in Vermont and New Hampshire that could be deferred Avoided/deferred line upgrades and capacitor additions resulted in cost savings of $260 million Deferred need for new 345 kv line resulted in $157 million savings Total ISO-NE savings of ~ $420 million Con Ed substation project serving Brooklyn and Queens Total cost would be $1.1 billion to get it online by 2019 If project can be deferred to 2024, savings of $400-$500 million Tiverton substation upgrade Deferring construction of 3 rd feeder at this substation through DR would result in savings of $653,273 14

15 Less Congestion And Outages Could Result in Lower LMPs Real time LMPs from Midwest ISO, 2/17/2014 Real time LMPs from Midwest ISO, 2/18/2014 Increased DG, co-location of generation and demand, or more transmission infrastructure could help reduce congestion and line losses, smoothing prices across a region Midwest ISO (MISO) Contour Map and Table, accessed 2/17/2014 and 2/18/

16 Effects of Transmission Constraints ERCOT CREZ Infrastructure 577 instances of negative wholesale prices Average negative price was -$

17 Effects of Transmission Constraints ERCOT CREZ Infrastructure 144 instances of negative wholesale prices Average negative price was -$

18 Effects of Transmission Constraints ERCOT CREZ Infrastructure 21 instances of negative wholesale prices Average negative price was -$

19 Effects of Transmission Constraints ERCOT 19

20 EE Effect on Energy vs. Demand ISO- NE Energy Efficiency Forecast through 2023 reveals the different effects that EE has on energy growth and demand growth Demand Energy Energy forecast is flat while demand forecast is still increasing suggests system is becoming peakier. Final 2014 Energy-Efficiency Forecast , Energy Efficiency Working Group, 5/1/

21 Growth in System Demand is Declining The NERC-wide 10-year compound annual growth rate (CAGR) for on-peak summer demand is expected to fall for the 11th consecutive year Peak demand is still increasing but at a decreasing rate. This national trend is in line with the trends seen in the New England area. NERC 2013 Long-Term Reliability Assessment 21

22 EE and DG May Be Able to Offset the Need for Some Transmission But Not All It is important to understand where EE and DG may be able to offset new transmission projects and where it cannot Primary Drivers for New Transmission Projects Where Can EE/DG Make a Difference? Economic or Congestion Related, 11% Other, 12% Renewable Integration, 18% Yes No Maybe Economic / Congested Related Renewable Integration Other Reliability Reliability, 59% Reliability is key driver is it due to load growth or contingencies? 2013 NERC Long-Term Reliability Assessment 22

23 Drivers of T&D Construction Pose Challenges for EE and T&D Energy Efficiency is unlikely to have an effect on transmission planning or capital expenditures in the short term Transmission build out and capital spend is often driven by concerns other than load in short term: Reliability Compliance (satisfy N-1-1 conditions) Hardening the infrastructure against weather events Compensate for generation retirements As load grows on Cape Cod, existing distribution infrastructure needs to be supplemented with transmission to ensure reliability

24 Demand Side Resources May Not Be Able to Meet Contingency Requirements for Planning Purposes ISO-NE Market Resource Alternative Analysis shows how large a load reduction would be necessary to meet contingencies Greater Hartford Market Resource Alternative (MRA) Analysis Sub-area Manchester/Barbour Hill Sub-area Load* (in MW) Required MRA MW Reduction Percentage of Reduction % Middletown % Greater Hartford 1, % Load would have to be reduced by nearly 50% in the greater Hartford area to resolve all N-1 and N-1-1 issues Northwestern Connecticut % Total 2,894 1,350 47% *Sub-area Load= Remaining load after forecasted Energy Efficiency and cleared Demand Response reductions from FCA #1 FCA #6 have been accounted for Market Resources Alternative Analysis Demand-side Results, Greater Hartford and Central Connecticut Area, ISO New England Demand Resource Working Group, January 30,

25 DG Interconnection Timing in Massachusetts The time necessary to process interconnection has implications for customers finances and system planning assumptions Average Days to Process Distributed Generation Interconnection Application Time* 128 All Applications 53% of MW 47% of MW 229 Requires System Modification MA DOER website Distributed Generation and Interconnection in Massachusetts 357 Projects Above 2 MW 677 Largest Project 7.5 MW * Will not total to 100% as projects can fall into multiple categories 25

26 Radial vs. Network Systems Network systems are normally utilized in densely populated urban areas, meaning that T&D will still be needed to get DG to major load centers Network Distribution Systems in Massachusetts Location Pop. Massachusetts 6,692,824 Boston 645,966 Bedford 95,078 Cambridge 107,289 Brockton 94,089 Fitchburg 40,383 Lynn 91,589 Pittsfield 44,057 Springfield 153,703 W. Springfield 28,684 Worcester 182,544 Total 22% System engineers usually do not allow large DG systems on networked systems due to concerns over power backflow 26

27 DG vs. Transmission Comparison Large kv transmission lines are able to transport quantities of electricity equal to hundreds, thousands, and in some cases hundreds of thousands of DG units Technology Size (kw) $/MW Units to Displace 765 kv line 765 kv Line 2,770,000 $1,083,032 n/a Microturbine 65 $3,100,000 42,615 Microturbine 185 $3,000,000 14,973 Fuel Cell 300 $5,600,000 9,233 Fuel Cell 1,200 $4,820,000 2,308 Gas Turbine 3,000 $2,450, Gas Turbine 10,000 $1,520, Reciprocating Engines 100 $2,750,000 27,700 Reciprocating Engines 3,000 $1,450, Residential Solar PV 5 $4,965, ,000 Commercial Solar PV 35 $4,475,000 79,143 Residential Small Wind 3 $6,983, ,333 Commercial Small Wind 35 $4,717,000 79,143 U.S. Energy Information Administration, (2013). Updated Capital Cost Estimates for Utility Scale Electricity Generating Plants This is a simplified example but illustrates cost and scale In some instances, hundreds of thousands of DG units would need to be installed at 6-7x times the cost of comparable transmission ICF International on behalf of the California Energy Commission, (2012). Combined Heat and Power: Policy Analysis and Market Assessment 27

28 Closer Integration and Collaboration with System Planning Illustrative example of how closer collaboration between system planning and energy efficiency could help promote geo-targeting 2014 Substation Loading Capacity 2016 Substation Loading Capacity Substation Loading Key Does Not Exceed Firm Capacity 75% Firm Capacity At Firm Capacity Bi-annual update from system planning of substation loading limits Focus EE and DG efforts in constrained areas Issues still remain with timing and step loads 28

29 Rhode Island Demand Response Pilot National Grid is running a pilot in Rhode Island to determine if substation upgrades can be avoid using energy efficiency and demand response kw Reduction Necessary to Defer Substation Upgrade Year Load Reduction Needed (kw) Progress to Date Year Unique Accounts Central AC thermostats installed Window AC plug load devices installed % of 2014 savings goal achieved % of total savings goal achieved % 5% % 30% Total % 35% Abigail Anthony, and Lindsay Foley, Energy Efficiency in Rhode Island s System Reliability Planning ACEEE Summer Study 29

30 How Can We Continue to Better Integrate EE into T&D Planning? Designing CHP incentives in a way that could increase reliability might lead to smaller planned loads Technology Group Size Availability (%) Avg Mean Down Times (hrs) Reciprocating Engines <100 kw Reciprocating Engines kw Reciprocating Engines 800 kw 3 MW Gas Turbines 500 kw 3 MW Gas Turbines 3-20 MW Gas Turbines MW Installing multiple, smaller units instead of one large unit, decreases the chances of a whole facility going offline and requiring full support from the grid Energy and Environmental Analysis, Inc Distributed Generation Operational Reliability and Availability Database Oak Ridge, Tenn: Oak Ridge National Laboratory 30

31 Final Thoughts Is EE and DG making a difference? Yes How big is the effect? Difficult to quantify It s the result of a compounded effect, not discrete events No readily available counterfactual 31