The Role of Efficiency In Meeting PNW Energy Needs

Transcription

1 The Role of Efficiency In Meeting PNW Energy Needs Tom Eckman Manager, Conservation Resources Conservation Energy Efficiency As A Resource September 29, 2009 Conservation Slide 1

2 Today s Topics Energy Efficiency s Role in the PNW Power System Historical Impacts Projected Impacts of Future Energy Efficiency and Renewable Resource Development Can and Should More Be Done? The Draft 6 th Power & Conservation Plan s Assessment of the Remaining Energy Efficiency Potential and Regional Conservation Targets slide 2 Conservation Slide 2

3 The Evolution of Energy Policy October 11, 2002 President Carter Awarded Nobel Peace Prize April 18, 1977 Conservation means a cold dark house President Carter announces we are engaged in the moral equivalent of war (MEOW) December 5, Conservation declared a resource equivalent to generation President Carter signs Power and Conservation Act

4 For Those of You From Illinois, One Other Event Happened in 1980 Yea See, We re On A Mission from God. slide 4 Conservation Slide 4

5 Conservation Planning Act of 1980 (PL96-501) Authorized States of ID, OR, MT and WA to form an interstate compact (aka, The ) Directed the to develop 20-year load forecast and resource plan ( The Plan ) and update it every 5 years The Plan shall call for the development of the least cost mix of resources The Plan shall consider conservation (energy efficiency) its highest priority resource equivalent to generation with a 10% cost advantage over power generating resources Mandated public involvement in s planning process. slide 5 Conservation Slide 5

6 Power Act Priorities Served As Precedent for California s Loading Order Power Act Enacted - December Years Later California Energy Action Plan Adopted - April/May 2003 Priority shall be given: First, to conservation; Second, to renewable resources; Third, to generating resources utilizing waste heat or generating resources of high fuel conversion efficiency; and Fourth, to all other resources. slide 6 The Action Plan envisions a loading order of energy resources First, conservation and energy efficiency; Second, renewable energy resources and distributed generation; and Third, clean fossil fuel, central-station generation. Conservation Slide 6

7 How Has It Worked? slide 7 Conservation Slide 7

8 Utility Reaction to s First Plan Was Mixed slide 8 Conservation Slide 8

9 Three Decades of Utility Conservation Acquisitions (aka Mr. Toad s Wild Ride * for the PNW s Energy Efficiency Industry) Conservation Acquisitions (GWH/Year) See:

10 Nevertheless Since the Late 70s GHW/Year 35,000 30,000 25,000 20,000 15,000 Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Nearly 35,000 GWH/yr of Savings. 10,000 5, We ve Accomplished Mass Quantities BPA and Utility Programs Alliance Programs State Codes Federal Standards

11 So What s 35,000 GWH/Year? It s enough electricity to serve more than the entire state of Idaho and all of Western Montana It saved the region s consumers nearly than $1.8 billion in 2008 It lowered 2008 PNW carbon emissions by an estimated 15 million tons. slide 11 Slide Conservation 11

12 Since 1980 Energy Efficiency Resources Met 150% Half of Regional Load Growth Cumulative Share of Growth 125% 100% 75% 50% 25% 0% slide 12 Slide Conservation 12

13 Utility Acquired Energy Efficiency Has Been A BARGAIN! $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 May-96 Nov-96 May-97 Nov-97 May-98 Nov-98 May-99 Nov-99 May-00 Nov-00 May-01 Nov-01 May-02 Nov-02 May-03 Nov-03 May-04 Nov-04 May-05 Nov-05 May-06 Nov-06 May-07 Nov-07 slide 13 Levelized Cost of Utility Efficiency Acquisitions Monthly Average Wholesale Market Mid-C Trading Hub Slide Conservation 13 Wholesale Electricity Price (2006$/MWH)

14 Energy Efficiency Is The Region s Third Largest Resource Natural Gas 9% Energy Efficiency 12% Nuclear 4% Wind 1% Biomass 1% Petroleum & Pet Coke 0% Coal 18% Hydro 55% We ve Saved The Equivalent of Two Grand Coulee Dams

15 So What s Next? slide 15 Slide Conservation 15

16 slide 16 How Much Efficiency Should We Develop? Slide Conservation 16

17 The Region Has Exceeded the 5 th Plan s Targets Every Year Annual Savings (GWH/Year) 2,500 2,000 1,500 1, slide 17 5th Plan Goals Actual Savings Preliminary Projected Slide Conservation 17

18 Energy Efficiency is Still the Cheapest Option Levelized Lifecycle Cost (2006$/MWh) $300 $250 $200 $150 $100 $50 $0 Energy Efficiency Geothermal Emission (CO2) cost Transmission & Losses System Integration Plant costs Combined Cycle Col. Basin Wind AB Wind Advanced Nuclear Supercritical Coal (No CSS) Assumptions : Efficiency Cost = Average Cost of All Conservation in Draft 6 th Power Plan Under $100 MWh Transmission cost & losses to point of LSE wholesale delivery 2020 service - no federal investment or production tax credits Baseload operation (CC - 85%CF, Nuclear 87.5% CF, SCPC 85%) Medium NG slide and 18coal price forecast (6 th Plan draft) 6 th Plan draft mean value CO2 cost (escalating, $8 in 2012 to $47 in 2029). IGCC (No CSS) Reciprocating Engine Wood Residue (No CHP) MT Wind WY Wind CSP Parabolic Trough Utility Photovoltaic Slide Conservation 18

19 There s Still Mass Quantities 6th Plan Technically Achievable Conservation Potential by Sector Technicallly Achievable Potential (GWH/Year) 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Utility Distribution Agriculture Industrial Commercial Consumer Electronics Residential 0 < 0 <20 <40 <60 <80 <100 <120 <140 <160 <180 <200 Real Levelized Cost (2006$/MWh)

20 Two Methods for Setting Efficiency Goals Integrated Resource Planning (IRP) Systematic evaluation of the least cost/least risk portfolio of resource choices where energy efficiency is treated equivalent to generating resources Energy Efficiency Resource Portfolio Standards Mandated minimum share of energy efficiency resources slide 20 Slide Conservation 20

21 Uses Gump IRP Model The Future s Like A Box of Chocolates. You Never Know What You re Gonna Get.

22 IRP Analysis=> Test Lots of Chocolates Probability (%) 16% 14% 12% 10% 8% 6% 4% 2% 0% $25 0.8% 1.0% 1.3% 1.5% 1.8% 2.0% 2.3% Annual Load Growth Natural Gas Prices 2.5% 2.8% 3.0% 3.3% 3.5% 3.8% 4.0% Capacity (MW) Hydrosystem Ouput Real Levelized Cost (Cents/kWh $) Resource Supply Curve Cumulative Supply (MW) Portfolio ABCD 2006$/MMBtu $20 $15 $10 $5 $ Portfolio Analysis Model Frequency $50 $75 $100 $125 $150 $175 $200 $225 NPV System Cost (billion2006$) $300 Wholesale Market Electricity Price $120 Carbon Price $158 Efficient Frontier 2006$/MWH $250 $200 $150 $100 $50 $ $/Ton $100 $80 $60 $40 $20 $ NPV System Risk (2006$billions) $158 $157 $157 $156 $156 $155 $104 $104 $105 $105 $105 $105 $105 $106 NPV System Cost (2006$billions)

23 All Plans Along the Efficient Frontier Acquire Virtually the Same Amount of Energy Efficiency 60,000 Efficiency Resource Additions (GWH) slide 23 50,000 40,000 30,000 20,000 10,000 0 Least Cost Portfolios Efficient Frontier Portfolios Least Risk Portfolios Slide Conservation 23

24 Portfolio Analysis on One Slide $400 $350 $300 $250 Coal Conservation Gas Renewables Nuclear Generic coal, gas and nuclear units are shown at typical project sizes - more units could be built at comparable cost. 2006$/MWh $200 $150 $100 $50 $ MWa slide 24 Slide Conservation 24

25 Energy Efficiency s Role Does Not Depend on Climate Policy Assumptions 60,000 Savings (GWH/Year by 2030) 50,000 40,000 30,000 20,000 10,000 0 $0-$100 Carbon Current Policy No Climate Policy No RPS Retire Coal $100 Carbon $20 Carbon $0-$50 Carbon

26 Annual Savings (GWH/Year) Draft 6 th Plan Calls for A Doubling of Annual Energy Efficiency Savings Over Next Decade 3,500 Plan Goals 3,000 Historical Savings 2,500 2,000 1,500 1, slide Slide Conservation 26

27 Draft 6 th Plan Goal 1: Meet 90% of Load Growth with 250,000 Conservation 200,000 GWH/Year 150, ,000 PNW Load w/o Conservation PNW Loads w/conservation 50, slide 27 Slide Conservation 27

28 Draft 6 th Plan Goal 2: Meet 28% of Load Growth with Wind & Other Renewable Resources 250, ,000 GWH/Year 150, ,000 PNW Load w/o Conservation PNW Loads w/conservation PNW "Loads"w/Wind & Other Renewables 50, slide 28 Slide Conservation 28

29 What? You Can t Meet More Than 100% of Load Growth!

30 Why We Must: Meeting more than 100% of load growth with energy efficiency and renewable resources displaces existing carbon-based based generation

31 Meeting Our Goals Drops Carbon Emissions 15% Below 1990 Levels by 2020 CO2 Emssions (tons) Draft 6th Plan Average Emissions 1990 Emissions 10 0 slide Slide Conservation 31

32 Meeting Our Goals Will Require 2X 3x Our Current Investments in Energy Efficiency $1,000 Regional Utility/SBC Investment (Million 2006$) $900 $800 $700 $600 $500 $400 $300 $200 $100 $ slide 32 Slide Conservation 32

33 Meeting Our Goals Will Reduce Reliance on More Expensive Resources Regional Revenue Requirement (Million 2006$) slide 33 $700 $600 $500 $400 $300 $200 $100 $0 Cumulative Conservation Cost/Expenses Cumulative Cost of Equivalent Market Purchases Slide Conservation 33

34 In Fact, Meeting Our Goals Will Reduce Regional Revenue Requirements Below Today s Within Four Years 1.5% Cummulative Change 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% slide Year Slide Conservation 34

35 Accelerating Energy Efficiency Increases Rates But Decreases Consumers Bills 90 $/MWh and $/Month (2006$) slide 35 Draft Plan Rates Low Conservation Case Rates Draft Plan Bills Low Conservation Case Bills Slide Conservation 35

36 Accomplishing the 6 th Plan s Conservation Goals Will Stretch the Columbia River In 20 years, we will have added the equivalent of 50% to the output of all hydroelectric resources in the PNW...and reduced the power systems carbon-footprint 15% below 1990 levels

37 Conservation Cheap, But Worth It? Any Questions? slide 37 Slide Conservation 37

38 Thanks for Listening slide 38 Slide Conservation 38

39 Impact of Conservation on Regional Load Growth PNW Loads (Average Megawatt) 30,000 25,000 20,000 15,000 10,000 5,000 0 PNW Frozen Efficiency Load w/o Conservation PNW Frozen Efficiency Load minus "Baseline" Conservation PNW Load w/"baseline Conservation minus Incremental 6th Plan Conservation slide 39 Slide Conservation 39

40 Conservation s Cumulative Impact on Load Growth 120% 100% 80% 60% 40% 20% 0% slide Share of Cumulative Load Growth Met w/baseline Conservation & 6th Plan Share of Cumulative Load Growth Met w/baseline Conservation Slide Conservation 40