flexpower bundle update (part 3)...jan 27, 2020 · mw nuclear wind solar landfill gas coal gas...
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FLEXPOWER BUNDLE UPDATE(PART 3)
PRESENTED BY:
John KosubSenior Director, Energy Portfolio Analytics
January 27, 2020
In fo rmat iona l Update
• DISCUSS OUR SEQUENCING FOR REPLACING AGING PLANTS
• DESCRIBE THE IMPORTANCE OF FIRMING POWER TO MEET RELIABILITY
• INCORPORATE AN ALL-SOURCE ELEMENT INTO OUR APPROACH
2
OBJECTIVES & TAKEAWAYS
3
AGENDA
• RECAP THE NEED TO ADD RESOURCES
• VALUE OF BUNDLED APPROACH
• “FIRMING POWER” FOR RELIABILITY
• LOOK AHEAD AND NEXT STEPS
4
FLEXIBLE PATH:INNOVATION & TRANSFORMATION JOURNEY
Present Future
Flexible Path:Traditional + Renewables +
Energy Storage + Smart Grid + “Fifth Fuel”
Technology Drives Timing Transitioning to Innovation
Transformation & Innovation:Flexible Path + New Products & Services
“Fifth Fuel” is composed of energy efficiency gains & demand response
5
OUR GUIDING PILLARS &FOUNDATION
All business decisions are based on our commitment to being one of the best-managed and most financially responsible utilities in the nation!
SecurityCustomer
AffordabilityReliability
EnvironmentalResponsibility Resiliency Safety
FINANCIALLYRESPONSIBLE
6
OUR PLANTS ARE AGING
5715
976
1454
560
1036
1242
447
0
1000
2000
3000
4000
5000
6000
0 - 9 10- 19 20 - 29 30 - 39 40 - 49 50+ All Years (Total
Capacity)
MBL 5-8Spruce 2
MBL 1-4Rio NogalesAvR
Spruce 1 STP 1STP 2
Sommers 1Sommers 2Braunig 3
Braunig 1 Braunig 2
Our team does a great job keeping our plants running. Sequencing of future capacity solutions continue to be a top priority.
Almost 30% of our capacity comes from plants that are
40+ years old
About 1700 MW capacity retiring within 10 years
• These aging plants run during summer peak, but are less reliable
• Failures at these plants carry high financial risk
FlexPower Bundle; envisions up to
• 900 MW solar,
• 50 MW storage
• 500 MW gas toll or equivalent technology that can meet the same requirements to firm up the solar and reliability of older units
7
THE NEED FOR FLEXPOWER BUNDLE
FlexPower Bundle replaces about half of our aging gas steam capacity while continuing our transition to cleaner energy.
THE VALUE OF A BUNDLED APPROACH
SOURCES OF GENERATION
SOLAR STORAGE GAS
BENEFITSZero emission
resource that aligns with load
Zero emission back-up resource
Mature technology that is controllable
CHALLENGES
Weather & time dependent resource
requires back-up generation
Limited duration to serve as a back-up resource; 4-6 hours
typically
Has emission profile with a carbon
footprint
Bundling resources improves performance and reliability for our customers under all conditions year round.
8
9
VOLATILE ERCOT MARKETWIND PRODUCTION VS INSTALLED CAPACITY
ERCOT declared an emergency when the wind production dropped
below 10% of the installed capacity leading to a supply shortage.
0
5000
10000
15000
20000
25000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
MW
Hour of the Day
ERCOT Wind Generation on August 15, 2019
Wind Production Installed Wind Capacity
$9,000/MWH prices occurred for two hours (about 80 times greater than typical residential retail rates).
10
PEAK DAYS FOR SAN ANTONIO IN 2019IMPORTANCE OF FIRMING POWER
The intermittent nature of solar and wind production shows the need
for firming power to provide around-the-clock reliability.
Note: CPS Energy wind and solar production in 15-minute intervals is shown in the stacked graphs
0
1000
2000
3000
4000
5000
6000
8/12/2019 8/13/2019 8/14/2019 8/15/2019 8/16/2019
MW
Total Renewable Production - Peak Summer Week
Solar
Firming Power for Around-the-Clock Reliability
Native Load Demand
Wind Risk Point
0
1000
2000
3000
4000
5000
6000
1/21/2019 1/22/2019 1/23/2019 1/24/2019 1/25/2019
MW
Total Renewable Production - Peak Winter Week
Solar
Firming Power for Around-the-Clock Reliability
Wind
Native Load Demand
Risk Point
21.4% 24.8% 25.2% 25.5%
8.8% 4.9% 3.0% 3.0%
5.2% 0.2% 0.2%
37.6%
45.1% 36.1% 35.5%
26.9%
24.9%35.7% 36.1%
0
1000
2000
3000
4000
5000
6000
Summer January 3 January 16 January 17
MW
Nuclear Wind Solar Landfill Gas Coal Gas
4,866 MW
4,250 MW
(6/23/17 5-6 PM)
4,216 MW
(1/16/18 6-7 PM) (1/17/18 7-8 AM)
4,316 MW
(1/3/18 7-8 AM)
11
Highest Usage Hour
Low: 23˚FHigh: 57˚FHDD*: 25
Low: 26˚FHigh: 43˚FHDD*: 30
Low: 22˚FHigh: 36˚FHDD*: 36
*HDD = Heating Degree Days
Our diverse generation portfolio provides
customers reliable
service & protects them from volatile
market pricing.
DIVERSITY = RESILIENCEPROTECTING OUR CUSTOMERS
12
Industry definition for All-Source RFP:
Any and all resources considered, requirement
driven, open to all approaches and technologies
What We Want:• Utility-scale assets• Introduce more storage• Solar power aligned with customer demand• Lower carbon resources• Firming capacity to meet customer needs• Maintain portfolio diversity
SOLAR
BATTERY STORAGE
GAS TOLL
ANOTHER FIRMING TECHNOLOGY THAT MEETS OR BEATS GAS
OR
OUR APPROACH TO AN ALL-SOURCE RFP
Our obligation to serve customers is best met by physical assets. We have a strategic interest in adding more solar & battery storage and will
consider our firming options.
• Up to 500 MW of gas toll or technology to beat
that provides reliable generation capacity with
availability:
oAll hours
oAll weather
oYear-round
oLow emissions
• Term of 4 to 10 years
13
FIRMING POWER SUPPLY REQUIREMENTS
Our obligation is to provide reliable power to our customers.
14
FLEXPOWER BUNDLE RFPCURRENT APPROACH
We continue our transition to more renewable power & have immediate needs for firming capacity. We are sequencing our RFP
to make sure we meet our customers’ needs.
Request For Proposal Profile
Solar Storage
Firming Gas Toll or Equivalent
Respondents would have option to bid on one or multiple resources
15
NEXT STEPS
As the process unfolds, we will be back to discuss progress at future Board meetings.
Continue to get feedback & study other markets
Finalize RFP development & selection process
NEXT 6-12 MONTHS
Next 6-12 months
LAUNCH RFP
Thank You
16
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