de-carbonization – how is it impacting the natural gas and
TRANSCRIPT
De-carbonization – how is it impacting the natural gas and
electricity sectors?
CAMPUT 2018
May 2018 1
Canada’s international GHG commitments
• A party to UNFCCC since December 1992 – Objective of “stabilization of GHG concentrations in the
atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system ….”.
• Enthusiastic Party to the Paris Agreement (2015) – Objective of “Holding the increase in the global average
temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels …”
– “Each Party's successive NDC will represent a progression beyond the Party's then current NDC and reflect its highest possible ambition …”
– NDC to be communicated every 5 years • Canada’s nationally determined contribution (NDC)
– Minus 30% of 2005 levels by 2030 (524 Mt)
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Pan-Canadian Framework (2016) • Outcome of federal\provincial negotiations • Commitment to adopt an economy wide price for carbon
– $10 per tonne, 2018; rising by $10 per year to $50 in 2022 – Approach subject to review by 2022 – Apply to “a common and broad set of sources” – Each jurisdiction able to select means e.g. carbon tax or cap and
trade – Revenues accrue to provinces – All jurisdictions signed on except Saskatchewan & Manitoba – SK posed a reference to its Court of Appeal, April 25
• Federal backstop legislation – Greenhouse Gas Pollution Pricing Act (part of Bill C-74) – Provides for a carbon tax plus an output-based allocation system
for LFEs
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https://www.canada.ca/en/environment-climate-change/services/environmental-
indicators/greenhouse-gas-emissions.html 4
Canada’s 2030 target 524 Mt
FINAL, September 8, 2017 5
Greenhouse gas emissions by province and territory, Canada, 1990, 2005 and 2015
Source: https://www.ec.gc.ca/indicateurs-indicators/default.asp?lang=en&n=18F3BB9C-1&wbdisable=true
Decarbonization–impacts to Alberta’s electricity sectors
Pauline McLean Director, Legal and Regulatory Affairs,
Associate General Counsel May 8, 2018
03/06/2018 Public
Alberta’s Climate Leadership Plan
• Government of Alberta announced its Climate Leadership Plan in November 2015 – Wide range of carbon and energy
sector initiatives
• By 2030, achieve two key goals for Alberta’s electricity sector : – Obtain 30% of power from
renewables – Phase out of coal-generated
electricity (decarbonization)
7 Public
AESO core responsibilities
8 Public
Where does Alberta’s power currently come from?
9 Public
High industrial load makes Alberta unique
61% 18%
13%
5% 3%
IndustrialCommercialResidentialLossesFarm
• Average of the year-over-year percentage growth since 2000 has been 2.6% Public 10
REP Round 1 sets Canadian renewables pricing record
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REP Rounds 2 and 3 now open
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• AESO will run parallel competitions in 2018 for Rounds 2 and 3
• REP Round 2: 300 MW procurement target – Objective to encourage Indigenous participation through
equity ownership
• REP Round 3: 400 MW procurement target
Public
Capacity market recommendation
• AESO concluded a capacity market is best fit for Alberta to meet objectives of: – ensuring reliability as generation mix
evolves – supporting implementation of
initiatives and ensuring flexibility for future policy evolution
– increasing price stability – maintaining competitive market forces,
driving innovation and cost discipline
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Capacity market timeline
14 Public
Exploring power system needs to 2030
• The AESO is investigating the value that dispatchable renewables and electricity storage can bring as we progress to 30% by 2030
– Determine power system needs for dispatchable resources out to 2030
– Determine various approaches to address future dispatchable resource needs
– Determine potential value dispatchable renewables and storage can bring to addressing those needs and the best approach to procure them, if beneficial
15 Public
Thank you
Stay Connected
03/06/2018 Public
The information contained in this document is for information purposes only, and the AESO is not responsible for any errors or omissions. Further, the AESO makes no warranties or representations as to the accuracy, completeness or fitness for any particular purpose with respect to the information
contained herein, whether express or implied. Consequently, any reliance placed on the information contained herein is at the reader’s sole risk.
@theAESO
DEPARTEMENT OF DECISION SCIENCES Pierre-Olivier Pineau
De-Carbonization: Global and Local Impacts on the Electricity Sector
Thursday, May 10th 2018 / 8:30 am – 10:00 am De-carbonization – how is it impacting the natural gas and electricity sectors? CAMPUT 2018 The Fairmount Royal York, Toronto
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Outline: Impacts on the Electricity Sector 1.More Global 2.More Local 3.Regulatory Implications
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47 Carbon Pricing Initiatives in 2017
World Bank (2017)
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Value of Energy Products becomes Global
• RNG gets paid for RINs under US RFS US EPA Renewable Fuel Standard (RFS) gives value to Renewable Natural Gas (RNG) through Renewable Identification Numbers (RINs)
• California LCFS also pays for RNG • Renewable Energy Credit (or Certificate) • Clean Energy RFP (Massachusetts)
20-yr contract for 9.45 TWh/yr
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Global Consumers Come to De-Carbonized Sources
• Server farms
• Bitcoin mining
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Global Solutions Become Accessible
• Ancillary Services: obsolete regulation Batteries, Demand Response, Wind Power Plants
• Load Following • Peak Capacity Requirements
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Denmark: 14 GW of Capacity 5.6 GW of Peak Load
IEA (2017)
30 TWh 42.5% wind
18% biofuels 2.5% solar
28.8% coal 7.3% gas
1% oil
500 MW
1,500 MW
1,500 MW
500 MW 500 MW
Netherland 700 MW
400 MW 1,000 MW
UK 1,400 MW
Interconnections: 4.5 GW + 3.5 GW planned
2. MORE LOCAL
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Distributed Generation: Impact on Revenues
Forbes (2013)
Daily Load Profiles (kWh)
Traditional Full Service Customer
DG Customer
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Network Tariff Options: Avoiding the Death Sprial Capacity tariffs
Volumetric tariffs
• Flat: $/kVA or $/kW • Variable • Time-of-use
• Flat: $/kWh • Progressive (↑ with kWh) • Regressive(↓ with kWh) • Time-of-use
Głowacki (2017)
3. REGULATORY IMPLICATIONS
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De-Carbonization, not a Choice (Better Ready than Sorry) • Open-up to regional planning/regulation
(RTO model)
• Network Tariff Reform: Fixed costs → Fixed price
How is De-carbonization Affecting Natural Gas?
CONTEXT
• Terminology and ‘pace’ matter • What we are really talking about is emission reductions. Let us focus on that, not ‘carbon’. • We need to talk about pace - 2030, 2050, 2100? – the costs depend on the pace, and the costs matter
• Natural Gas Challenges • 2050 pathways suggest electrification is the way. But should we pick a favourite? Is this ever prudent?
And what about cost, and resiliency, and innovation, and choice?
• Natural Gas Solutions • Low Cost Input Fuel – gas supports new low emission innovation from CNG/LNG freight to hybrid gas-
electric home heating, and everything in between • Renewable Gases – the untold, but emerging renewable story is a piped one, supported by renewable
natural gas and hydrogen.
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How is De-carbonization Affecting Natural Gas?
RECOMMENDATIONS
• Reframe the policy debate • Let us talk about emission reductions, not decarbonisation. Ensure our GHG targets and timelines
are realistic.
• Put Consumers First • Utilities and regulators serve customers. Customers will pay for future energy decisions. Let us put
the consumer first in our policy debate.
• Support a New Utility Framework • Long term emission reductions can be achieved with smart utility investments. Existing utility
legislation and Utility Acts must be modernized to enable the needed investments of the future.