IRP 101 Intro to Integrated Resource Planning Scott Benson Manager, Resource & Transmission Planning March 23, 2017 1
What is an IRP? Definition Integrated resource planning is a process by which a power provider evaluates the full range of energy resources to ensure adequate and reliable service to its electric customers at the lowest system cost. Resource alternatives include: New generating capacity Power purchases Energy conservation and efficiency Cogeneration and district heating and cooling applications Renewable energy resources The process must account for the necessary features of system operation, such as diversity, reliability, dispatchability and other risk factors. The IRP must include the means to verify energy savings from energy conservation and efficiency measures, and projected savings from the measures over time; and shall treat demand and supply resources on an equal basis. Source: IRP Compliance Training Overview, WAPA, 7/13/2015 update 2
Why Does LES Conduct an IRP? Integrated resource planning mandated by Energy Policy Act of 1992. Energy Policy Act requires all Western Area Power Administration (WAPA) customers to submit IRP s to WAPA every 5 years, with annual status updates. LES conducted its last IRP in 2012, leading to the updated analysis in 2017. Source: Integrated Resource Planning Guidelines, WAPA, 9/19/2016 update 3
How Does LES Conduct an IRP? Requirements Identify and compare all practicable energy-efficiency and energy-supply resource options. Include action plan with timing set by customer. Describe efforts to minimize adverse environmental effects of new resource additions. Provide ample opportunity for full public participation. Conduct load forecasting. LES historically submits an IRP on behalf of the Lincoln Cooperative, including: Lincoln Electric System University of Nebraska - Lincoln (UNL) Lincoln Regional Center Nebraska State Office Building Nebraska State Penitentiary Source: IRP Compliance Training Overview, WAPA, 7/13/2015 update 4
Limitations of the IRP Historically, some significant decisions have come out of the 5-year IRP process, and we expect that to be the case again in 2017. However, any study, even something as broad and in depth as the IRP, still represents an analysis at only one point in time. To account for an ever changing landscape, LES is continually assessing and evaluating options as we move forward, constantly conducting similar analysis with regards to the decisions at hand. So although the IRP is a significant, strategic undertaking that helps to outline LES future, the truth is that the 5-year IRP isn t always a perfect indicator of what s to come. 5
What the 2012 IRP Foresaw Source: Lincoln Journal Star 6
and What it Didn t Source: Lincoln Journal Star 7
2012 LES Resource Portfolio Coal Hydro Natural Gas Gas Coal Landfill Gas Wind Renewable Nameplate 8
2017 LES Resource Portfolio Coal Hydro Natural Gas Gas Coal Landfill Gas Wind Solar Renewable Nameplate 9
2017 IRP Primary Decision Points Western Area Power Administration (WAPA) Contract LES current hydropower contract expires in 2020. LES expects to receive a contract extension offer in April, 2017 that would cover 2021 2050.» WAPA will allow a decision timeline that accommodates LES IRP schedule. Sustainable Energy Program (SEP) Metrics/Assumptions LES must determine which metric(s) to use for evaluating SEP programs, as well as assumptions to be used for related capacity and carbon emission inputs.» Decisions should be made in June to support analysis of the full SEP portfolio, which should be completed in August to support the 2018 budget process. Smart Thermostat Program Based on the results of its recently completed pilot program, LES must evaluate whether to proceed with a full smart thermostat program for the residential sector.» Decision should be made in August to support the 2018 budget process. 10
2017 IRP Timeline JAN FEB MAR APR Refine Scope SEP metrics SEP assumptions SEP Program Analysis Primary IRP decision points SEP/thermostat work to date MAY JUN JUL AUG SEP Program Analysis Assemble final report Generation/SEP Portfolio Analysis SEP OCT NOV DEC WAPA SEP portfolio Smart thermostat program Report approval Board meeting Public meeting IRP due to WAPA 11
Trends Impacting Energy Efficiency & Leidos Consulting Review March 23, 2017 Marc Shkolnick Manager, Energy Services
Sustainable Energy Program (SEP): A Brief Review. Emerging Trends. Smart Thermostat Demand Response Pilot. SEP Leidos Consulting Study Results.
SEP: A Brief Review.
SEP: A Brief Review Launched in 2009. Purpose: To financially incent energy efficiency measures that reduce summer peak demand. No formal state mandates, targets or technical resource manual to guide program development.
SEP: A Brief Review. Sustainability Target established in 2011: To meet LES five-year projected demand growth with sustainable generation and demand reduction resources.
SEP: A Brief Review. Residential Programs: Whole House Sealing and Insulation High Efficiency Heat Pump and Air Conditioning Energy Detective Kit Demand Response Field Study (2015-16) Appliance Recycling (2013-15) Commercial and Industrial Programs: Commercial and Industrial Lighting Replacement Commercial and Industrial Energy Efficiency
SEP: A Brief Review. Participants: > 8,000 customer projects Incentives: $18 million Gross peak demand reduction: 33 MW Cumulative gross energy savings: 112,000 MWh Enough energy to power more than 10,000 average homes for one year. Engaged more than 200 local, regional and national trade allies
Emerging Trends.
Emerging Trends. Flattening Load Growth. Impacts of Federal Energy Efficiency Standards. Changing Demographics. Dramatic Market Transformation of Energy Efficient Technology. Energy Efficiency Is Becoming the New Normal. Current Low Value of Avoided Capacity. Current Low Value of Avoided Energy.
Flattening Load Growth: Impacts of Federal Energy Efficiency Standards 2006 (Annual Savings Estimates) 2016 (Annual Savings Estimates) Air Conditioner (10 SEER) 2,700 kwh 3 kw at system peak Lighting (Incandescent) 2,353 kwh Air Conditioner (13 SEER) 2,047 kwh 2.27 kw at system peak Lighting (CFL/LED) 1,953 kwh Appliances 5,000 kwh Total 10,053 kwh 2,828 kwh 28% Savings Appliances (Energy Star) 3,225 kwh Total 7,225 kwh
Flattening Load Growth: Market Transformation. August/2011 $60/bulb July/2016 $3-$5/bulb
Relatively Low Value of Capacity and Energy. Value of generating capacity: 2009-capacity valued at the cost of building a generator ($1,000 to $1,500/kW*). 2016-capacity valued at market cost of capacity at ($375/kW**). SPP energy prices remain relatively low. *Estimated overnight construction costs ranging from a simple-cycle to a combined-cycle natural gas power plant. **Based on a NPV of $18.83/kW-year over 35 years.
Smart Thermostat Demand Response Pilot.
Pilot Objectives Understand Demand Reduction Impacts Understand Customer adoption levels, feedback, and thermostat interaction Technology Demonstration Inform Development of an Optimal Full-Scale Program
Overview Residential customer pilot involving a choice of a smart thermostat or air conditioner switch (professional installation included) What It Was Customers participate in summer demand response (DR) events Pilot Size ~200 customers with Honeywell 8000 Wi-Fi Thermostat ~200 customers with Air Conditioner Switch Offer Demand Response Events DR Impact Evaluation Approach Free Wi-Fi thermostat $35 gift card for switch $25 end of summer with 2 opt outs or less Jul to Sep 2015 (9 events) Jun to Sep 2016 (17 events) AC-level kw from event and non-event periods were used to estimate event impacts
Load Control Devices
Demand Impact on Peak Day-7/21/16 3 Hour LES Average kw 1st Hr. 2nd Hr. 3rd Hr. Outdoor Peak Relative Demand Opt Temp. MW Humidity Day Reduction 3 to 4 pm 4 to 5 pm 5 to 6 pm Outs 99 780 72.7 Thur. 1.34 1.68 1.39 0.94 10.3% 23 or 10% Opt out 34 or 15% Offline 6 or 3% New set point 1st hour 27 or 12% New set point 2nd hour 53 or 24% New set point 3rd hour 82 or 36% Off for 3 hour time period
Demand Impact on Peak Day-7/21/16 3 Hour Average LES kw 1st Hr. 2nd Hr. 3rd Hr. Outdoor Peak Relative Demand Temp. MW Humidity Day Reduction 3 to 4 pm 4 to 5 pm 5 to 6 pm Opt Outs 99 780 72.7 Thur. 0.63 0.59 0.61 0.70 1.0%
Overall Takeaways Connected thermostats provided more demand reduction than load control relay switch cycling: ~ -1.0 to -1.2 kw per customer (for thermostat offset events) ~ -0.4 to -0.5 kw per customer (for compressor cycling events) Precooling tends to increase events savings, reduce snapback, and leads to more tolerable events Customer overall satisfaction averaged 8.8 or better on a 1-10 scale Reliable Wi-Fi connectivity poses one of the primary challenges
SEP Leidos Consulting Study Results.
Not All Savings Directly Attributable to SEP Net-to-Gross adjustments account for: Free ridership Customers who receive an incentive but would have made the same decision without an incentive. Rebound effect Tendency of customers to use more energy after installing energy efficient equipment. Impact Reduced demand and energy savings directly attributable to SEP by 60% - 80%.
Not All Savings Directly Attributable to SEP Coincident Peak Factor adjustments account for: Portion of a measure s peak demand that occurs during LES system peak. Impact Reduced demand and energy savings directly attributable to SEP by 55% - 80%.
Leidos Study: Benefit-Cost Test Results Program Attribute Utility Cost Test Rate Impact Measure Test Total Resource Cost Test Participant Cost Test Program Benefits Customer Bill Savings Yes Avoided Utility Costs (Energy, Capacity, T&D, Emissions) Yes Yes Yes Program Costs Program Administrator Costs Yes Yes Yes Measure Cost - Incentive Yes Yes Yes Measure Cost - Participant Contribution Yes Yes Lost Revenues to the Utility Yes
What Planning Assumptions to Use? A Spectrum of Possibilities. UNCERTAINTY Development/Adoption of Energy Storage Clean Power Plan Load Growth No Value of Capacity Market Value of Capacity New Generation Value of Capacity No Value of Carbon Current to Mid Term Value of Carbon Mid Term to Long Term Adoption of Customer- Owned Generation Adoption of Electric Vehicles Natural Gas Prices
Additional Non Financial Benefits Customer Comfort. Control. Environmental Stewardship.
Additional Non Financial Benefits Utility Customer awareness, engagement and delightful experience improves overall customer satisfaction. Relationships with trade allies. Incenting and promoting energy efficiency is part of the public power mission. Community and broader social and environmental benefits.
Questions/Discussion
2017 IRP MEETING BOARDS
Resource Portfolio Coal Hydro Natural Gas Landfill Gas Gas Coal Wind Renewable Solar Nameplate Lincoln Electric System les.com
Primary Decision Points Western Area Power Administration (WAPA) Contract LES current hydropower contract expires in 2020. LES expects to receive a contract extension offer in April, 2017 that would cover 2021 2050. WAPA will allow a decision timeline that accommodates LES IRP schedule. Sustainable Energy Program (SEP) Metrics/Assumptions LES must determine which metric(s) to use for evaluating SEP programs, as well as assumptions to be used for related capacity and carbon emission inputs. Decisions should be made in June to support analysis of the full SEP portfolio, which should be completed in August to support the 2018 budget process. Smart Thermostat Program Based on the results of its recently completed pilot program, LES must evaluate whether to proceed with a full smart thermostat program for the residential sector. Decision should be made in August to support the 2018 budget process. Lincoln Electric System les.com
2017 IRP Timeline JAN FEB MAR APR Refine Scope SEP Program Analysis SEP metrics SEP assumptions Primary IRP decision points SEP/thermostat work to date MAY JUN JUL AUG SEP Program Analysis Assemble final report WAPA Generation/SEP Portfolio Analysis SEP portfolio SEP OCT NOV DEC Smart thermostat program Report approval Board meeting Public meeting IRP due to WAPA Lincoln Electric System les.com
Sustainable Energy Program: potential planning assumptions UNCERTAINTY Development/adoption of energy storage Clean Power Plan Load growth NO VALUE OF CAPACITY MARKET VALUE OF CAPACITY NEW GENERATION VALUE OF CAPACITY NO VALUE OF CARBON VALUE OF CARBON Current to mid term Mid term to long term Adoption of customerowned generation Natural Gas Prices Adoption of electric vehicles Lincoln Electric System les.com
Sustainable Energy Program: potential benefit/cost tests Program attribute Utility cost test Rate impact measure test Total resource cost test Participant cost test Program benefits Customer bill savings Yes Avoided utility costs (energy, capacity, T&D, Yes Yes Yes emissions) Program costs Program administrator Yes Yes Yes costs Measure cost - incentive Yes Yes Yes Measure cost - participant contribution Yes Yes Lost revenue to the utility Yes Lincoln Electric System les.com