The Wisconsin Energy Picture

Transcription

1 The Wisconsin Energy Picture By Amanda Mott Wisconsin State Energy Office February 18, 2015

2 Agenda Wisconsin Energy Snapshot Why we believe Wood Energy is a valuable resource for Wisconsin Wisconsin Rural Energy Use Propane Crisis and Avoiding another one! What the future looks for fossil fuel prices (propane, oil, natural gas) Brief introduction to wood energy in Wisconsin Statewide Wood Energy Team (SWET) Webinar Series

3 Poll Do we have any naturally occurring energy sources in the Wisconsin?

4 Wisconsin Energy Snapshot Source: iea.org Source: energybook.info Source: huffingtonpost.com Source: imgkid.com Source: psc.wi.gov Source: energycres.org

5 Poll What do you use to heat your home? a. Electricity b. Natural gas c. Propane d. Fuel oil e. Wood

6 Winter Heating Fuels

7 Residential Heating Fuels

8 Regulated and Unregulated Fuels Unregulated Fuels Propane and Heating Oil Sold by private enterprise Not subject to the Winter Moratorium (no guaranteed access to fuel) Prices set by the market Subject to some regulation from DATCP and DOT. HO subject to the petroleum inspection fee tax ($.02/gallon). Propane not taxed. Regulated Fuels Natural Gas and Electricity Sold by utilities Subject to the Winter Moratorium for customers with an account in good standing on November 1 st Prices regulated by the Public Service Commission

9 Fuel Characteristics Propane Residential and agricultural customers Seasonal demand Price set by commodities market Unregulated fuel Heating Oil Similar to on-road diesel fuel; more sulfur and red dye Prices generally follow the crude oil market Demand is seasonal Unregulated fuel Subject to a $.02/gallon petroleum inspection fee.

10 Natural Gas Service Territories

11 Fuel Characteristics Natural Gas Most popular, least expensive fuel for space heating in Wisconsin. Lowest emissions of all fossil fuels lbs of CO 2 /MMBtu. HO, lbs/mmbtu; propane, 139 lbs/mmbtu. Regulated fuel Utility price set by commodities market Electricity Available across the state Most expensive fuel for space heating Seasonal consumption more apparent in the summer with air conditioning Regulated fuel

12 Winter Heating Fuels

13 Residential Energy Prices

14 Residential Energy Prices

15 Pricing The primary ingredients in the pricing recipe are: Supply and demand Seasonality, and Regulation

16 Supply and Demand

17 Midwest LP Supply Disruptions Midwest terminals unable to replenish supply after large demand for crop drying Rail delivery disruptions Cochin Pipeline reversal

18 Seasonality

19 Result? High Propane Prices Very Cold Winter Reduced Inventories High LP Prices High Domestic Demand Supply Disruptions Exports

20 Regulation and Pricing Regulated Price increases are less dramatic Unregulated Price spikes are more dramatic Datasets Danger of high prices Demand destruction Source: cartoonstock.com

21 Avoiding a Crisis Wisconsin Division of Energy Services Encouraging summer fills, price locking Outreach to propane retailers Funding set aside for 2015 summer fill program (questions to: heat@wisconsin.gov). Monitoring LP variables Issuing weekly Risk Assessment during the heating season Midwest Governor s Association Private Industry CHS rail terminal at Hixton

22 Role of Biomass? Biomass as space heating fuel Fuel switching Primary vs. secondary thermal source Costs Emissions Resource proximity and availability

23 Pros and Cons Homegrown fuel, supports Wisconsin and the Midwest economy, and adds jobs Carbon neutral Displaces fossil fuels Sustainable and renewable fuel with relatively stable pricing Variable energy content Requires physical presence to tend the unit Requires physical strength to load wood or pellets Emissions must be controlled

24 the Crystal Ball Says Natural gas prices are expected to be stable through the end of the Heating Oil prices are truly market-dependent, but are expected to stay lowish as the price for oil is not expected to go above $68/bbl. Propane prices are expected to stay lowish due to robust propane stocks nationwide, and the end of the season is fast approaching. Electricity prices are expected to continue a steady climb, with the Midwest seeing the largest (2.6%) increases nationwide in the residential sector.

25 Statewide Wood Energy Team (SWET)

26 Statewide Wood Energy Team Source: Hyperbole and a Half

27 Statewide Wood Energy Team Education and Outreach Webinars Workshops Website DNR Woody Biomass Supplier and End User Database Consultations Cluster Project development Greenhouse Wood Energy Development Feasibility Study Grant Program Create a sustainable model for increasing wood energy usage in Wisconsin

28 What will I learn? Webinar Schedule (All webinars will run from 1:00 PM to 2:15 PM CST) Feb 25 Types of Wood Fuels & Appliances March 4 Pre-Feasibility Assessment Tools & Grant Funding March 11 Residential/Commercial Project Examples & Economics March 18 Overview of Industrial Wood Heating & Power Systems March 25 Case Study of Large Scale Wood Energy Projects April 1 Wood Fuel Supply and Distribution Business April 8 Wood Energy Cluster Development /District Heating

29 Thank you! Questions? Amanda Mott