Download - Perspectives on Energy Policy Today on Energy Policy Today Melanie Kenderdine U.S. Department of Energy November 16, 2016 | New York, NY 1. QUADRENNIAL ENERGY REVIEW | Second Installment

QUADRENNIAL ENERGY REVIEW | Second Installment

Perspectives on

Energy Policy Today

Melanie KenderdineU.S. Department of Energy

November 16, 2016 | New York, NY1


255 MIndonesia

204 MBrazil

199 MPakistan

168 MBangladesh

182 MNigeria

143 MRussia

99 MEthiopia

121 MMexico

68 MThailand

82 MIran

81 MGermany

94 MVietnam

79MCongo

80 M Turkey

Source: World Bank and CIA World Factbook

238 M

164 M

69 M

93 M

398 M

188 M

92 M

322 M

1.36 BChina

309 M

202 M

120 M

62 M

100 M

20 Most Populous Nations in 2015/2050

These countries will see a 24 percent increase in population by 2050

195 M

321 MUS

126 MJapan

101 MPhilippines

1.2 BIndia

88 MEgypt

148 M

390 M

151 M

108 M

1.34 B

1.7 B

2


Source: Human Development Index – 2010 data United Nations; Annual Per Capita Electricity Consumption (kWh) - 2007 data World Bank. Updated: 4/11

Annual Per Capita Electricity Consumption (kWh)

Hu

man

Deve

lopm

ent

Index

The Human Development Index is a

comparative measure of life expectancy,

literacy, education, and standards of living.

Countries fall into four broad categories

based on their HDI: very high, high,

medium, and low human development.

4,000 kWh per person per year is the

dividing line between developed and

developing countries.

Annual Per Capita Electricity Consumption

3


4Deliberative draft—Not for distribution

Climate Goals/COP 21 Temperature Targets

Source: Fawcett et al 2015


Global Water Stress, 2040

Ratio of withdrawals to supply

Low (< 10%)

Low to medium (10-20% )

Medium to high (20-40% )

High (40%-80% )

Extremely high (> 80% )

Water Stress by Country: 2040

* World Bank, 2014, Huffman

Currently, 28% of the world lives in water-scarce countries. Experts estimate that by 2080, this number will climb to between 43-50%*

5


COP-21 Commitments Could Drive Demand For Natural Gas In The Mid-term

China aims to achieve a peaking of its CO2

emissions in 2030. China also aims to reduce its CO2 emissions per unit of GDP by 60-65% on 2005 levels by 2030.

India has pledged it would target 40 percent cumulative installed power capacity from non-fossil fuel sources by 2030 cut the intensity of its carbon emissions by 33 to 35 percent by 2030 from 2005

Korea plans to reduce its greenhouse gas emissions by 37% from the business-as-usual (BAU, 850.6 MtCO2eq) level by 2030 across all economic sectors.

Japan’s INDC, submitted in advance of COP-21 aims for a 26% reduction of greenhouse gas emissions by 2030 relative to 2013 levels (ie -18% compared to 1990)

The United States intends to achieve an economy-wide target of reducing its greenhouse gas emissions by 26-28 per cent below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28%.

The EU and its Member States are committed to a binding target of an at least 40% domestic reduction in greenhouse gas emissions by 2030 compared to 1990, to be fulfilled jointly…

Source: UNFCCC. INDCs as Communicated by Countries6


Source: World Bank, EIA

Mission Innovation: Focus on Clean Energy Innovation

UnitedStates

Canada

Mexico

Brazil

Chile

NorwaySweden

UK

FranceGermany

Italy

Saudi Arabia India

China

Japan

Indonesia

Australia

UAE

South Korea

Denmark

• 4 of 20 countries get 60-92% of their electricity from hydro• 6 get 30-91% of power from natural gas (UAE 98%)• 6 get 40-76% of their power from coal. (China, 76%, India,

74%, Australia, 68%, Indonesia, 49%, Germany, 46%, US, 40%)

• Mission Innovation partners span five continents • They represent nearly 60% of the world’s population and

include the top five most populous countries in the world• Coalition emits two-thirds of the world’s total greenhouse gas emissions and

nearly 3/4ths of the CO2 emissions from electricity• GDP in these countries represents almost 70% of the global total• Mission Innovation countries represent over 80% of all government investment in clean energy R&D 7


8

5% of US production

in 2004

56% of US production

in 2014

Source: EIA

US Shale Gas Production Has Changed Energy Profile


Population Density & European Shale Development

Source: EIA, World Shale Resources , 2011

Poland Shale Basins

Marcellus/Pennsylvania

Poland Population Density

9


2,633769

723

581

6,616

Turkmenistan

211900

231

200Other Asia Pacific

233

341

Bolivia

Azerbaijan

187

Qatar

Russia

Myanmar

Libya

Nigeria

Trinidad & Tobago

708111

406

205

469

832

571

511

1,117

Malaysia

514

Pipeline

LNG

New LNGby 2020*

3,504

3,905530

Significant New LNG Export Capacity By 2020 (bcf)

Algeria

New LNG capacity by 2020: 7939 bcf

(only includes capacity already under construction)

481

284

625

4125 bcf 7014 bcf

2713 bcf

581 bcfTo SA

406 bcf

To Europe1,662 bcf

To, w/in Asia5282 bcf

Source: BP*Plants under construction10


QER 1.1: Geography of Supply/Infrastructure Changing Rapidly

2010 Crude Oil by Train Loading (red) and Offloading (blue) Facilities

2013 Crude Oil by Train Loading (red) and Offloading (blue) Facilities

11

Source: U.S. DOE. Office of Energy Policy and Systems Analysis. 2015.


400ft

4

0

f

t

Hull 1 Hull 2

100ft

4

0

f

t Hull

• In 2012, crude oil, refined petroleum products, and coal were 55% of all U.S. waterborne cargo traffic by weight.

• Nearly 15 percent of all petroleum products consumed in the U.S. are shipped on inland waterways.

• DOT’s Beyond Traffic 2045 report concludes that ”... several critical trends will have a major impact on the performance of critical marine links in our transportation systems. They include:

Increasing imports and exports and containerized freight will lead to greater congestion on America’s coastal and inland ports.

Investment in ports, harbors and waterways will be essential to meet the demand of increased trade and competition.”

Lake Charles Ship Channel designed for two tankers to pass

Current channel conditions reduce cargos, idle until high-tide, or, be subject to one-way traffic restrictions

Port Channel System

Crude

and

Petroleum

Products

Coal Total Energy

Percent

Energy

Shipments

Lower Mississippi (LA) 161 47 208 48%

Houston/Galveston (TX) 200 3 203 69%Beaumont/Port Arthur

(TX) 115 - 115 89%

Port of NY/NJ 80 0 80 59%

Delaware River 62 - 62 82%

Corpus Christi (TX) 58 - 58 77%

Port of Virginia 2 50 52 66%

Lake Charles (LA) 49 - 50 88%

LA and Long Beach (CA) 46 2 47 33%

Huntington - Tristate (WV) 8 32 41 87%

QER 1.1: Waterways of the U.S.

12Sources: U.S. DOE. Quadrennial Energy Review 1.1


Leak Prone Pipes in Local Distribution Systems• Methane Emissions from Natural Gas Distribution

Systems in Indianapolis and Boston (2013)

• Expected Replacement Horizons for Select Utilities for Leak-Prone Mains (Forecasted

Timeframe in yrs)

• Select Findings Safety incidents are relatively infrequent, but increase as

systems age

The most leak-prone distribution pipeline materials are cast iron and bare steel

Many companies, states, and localities have taken action to improve safety by accelerating distribution pipeline replacement

Methane leak mapping in Indianapolis and Boston show effect of newer vs. older pipelines

Select Recommendation

Establish a $2.5 - $3.5 B competitive financial assistance program to accelerate pipeline replacement and enhance maintenance programs for natural gas distribution systems

States With Most Bare

Steel Pipelines

Ohio

Pennsylvania

New York

Texas

Kansas

California

West Virginia

Oklahoma

Massachusetts

New Jersey

States with Most Cast and

Wrought Iron Pipelines

New Jersey

New York

Massachusetts

Pennsylvania

Michigan

Illinois

Connecticut

Maryland

Alabama

Missouri

.

13

13 Sources: U.S. DOE. Quadrennial Energy Review 1.1


S-1 briefing draft/Pre-decisional 20140623

14

Cushing, OK Facility

Recorded Tornado Paths

14


Transporting Clean Energy Components on Shared Infrastructure

15 Source: DOE. “Wind Vision: A New Era for Wind Power in the United States.” Chapter 2. March 2015.


Linking QER 1.1 and 1.2

Fuels

Waste

QER 1.1

QER 1.2

16


Policy Drives Generation Capacity Additions

Additions (GW) by Fuel Type, 1950-2015

Coal Natural Gas Petroleum Biomass Nuclear Hydro

Wind Solar Geothermal Other

ITC for Solar 2006DOE Org Act 1977 PTC for Wind

21 states enact Renewable Portfolio

Standards

17 Source: EIA


About 43 GW of capacity currently under construction in the United States (as of May 2016)

Gas CC53%

Gas CT6%

Nuclear13%

Solar9%

Wind18%

Other1%

US capacity under construction: 43 GW

Source: IHS and ABB Velocity Suite © 2016 IHS

0 5,000 10,000 15,000

Northeast

West

Mid-Continent

ERCOT

Southeast

PJM

Natural gas Nuclear Wind Solar Other

US capacity under construction by region


MW

Generation Capacity Under Construction

18


Capacity Additions

19

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1995 2000 2005 2010 2015 2020 2025

Other Wind Solar Nuclear Natural gas Coal

Source: IHS and ABB Velocity Suite

Notes: Additions exclude coal-to–natural gas or biomass conversions.

© 2016 IHS

MW

Age of Natural Gas

Age of Gas & Wind Age Solar

& Wind?

Age of Gas, Wind & Solar


U.S. Power Plant Retirements, 1995-2025

0

5,000

10,000

15,000

20,000

25,000

1995 2000 2005 2010 2015 2020 2025

Other Nuclear Natural gas Coal


MW

2016–25:Coal retirements: 43 GWTotal retirements: 90 GW

1996–05:Coal retirements: 4 GW

Total retirements: 36 GW

2006–15:Coal retirements: 43 GWTotal retirements: 98 GW

Other Nuclear Natural Gas Coal

Source: IHS North American Power Market Outlook | June 201620


Fuel Switching And CO2 Emissions Reductions

CO2 emissions reductions from increase in non-carbon generation 2006-2014: 789 million metric tons

Total CO2 emissions reductions from fuel switching 2006-2014:

1963 billion tons61% from coal to gas, 39% from no-carbon

sources

CO2 emissions reductions in fossil fuel generation from shift to gas, 2006-2014: 1254 million metric tons

Source: EIA

21


Lifeline Network Interdependencies

Natural Gas

Transportation

Electricity

Oil

WaterCommunications

Power for Pumping Stations, Storage, Control Systems

Power for Pumping Signaling Switches

Power for Compressors, Storage, Control Systems

Power for Switches

Power for Pump/LiftStations, Control Systems

Ship

pin

g

Fuel Transport, Shipping

Fuel Transport, Shipping

Fuel for Generators

Shipping

Heat

SCADA Communications

SCA

DA

Co

mm

un

icat

ion

s

SCA

DA

Co

mm

un

icat

ion

s

SCADA Communications

Fuel

fo

r G

ener

ato

rs

Wat

er f

or

Pro

du

ctio

n, C

oo

ling,

Em

issi

on

s R

edu

ctio

n

Water for Cooling, Emissions Reduction

Fuel for Generators, Lubricants

Fuels. Lubricants

Water for Cooling, Emissions Reduction

SCA

DA

Co

mm

un

icat

ion

s

Fuels. Lubricants

Source: Adapted figure from “State Energy

Resilience Framework” by Argonne

National Laboratory. Prepared for the Office

of Energy Policy and Systems Analysis,

U.S. DOE

22


IoT: By 2020 50 Billion Devices, All Rely on Electricity

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

ELECTRICITY GENERATION: Generation, Total, TWh

ELECTRICITY CONSUMPTION: Consumption, Net Consumption, TWh

Connected Devices

More devices demand electricity

Efficiency improvements (including those from connected devices) moderate demand

Millions of DevicesTWh

Rapid global deployment could exceed efficiency improvements going forward

Electricity Generation, Total TWhNet Electricity Consumption, TWhConnected Devices

SCADA CommunicationsSource: EIA and CISCO data

23

23


Primary data centers for IBM, Microsoft, Amazon, and Google and estimated interregional public internet bandwidth

Microsoft

Google

Amazon

Planned

IBM

Primary subsea Cable Routes

6-25k>20k

5-20k

Tbps

Primary Data Centers for Major Service Providers

Sources:

• Telegeography submarine cable map and Mckinsey and Co. Interregional public internet bandwidth for 2014. http://www.slideshare.net/McKinseyCompany/digital-globalization-the-new-era-of-global-flows/3-McKinsey_Company_2Used_crossborder_bandwidthCrossborder• Amazon: https://aws.amazon.com/about-aws/global-infrastructure/• IBM: https://www-03.ibm.com/press/us/en/photos.wss?topic=460• Google: https://www.google.com/about/datacenters/inside/locations/index.html• Microsoft: https://msdn.microsoft.com/en-us/magazine/mt573712.aspx 24

http://www.slideshare.net/McKinseyCompany/digital-globalization-the-new-era-of-global-flows/3-McKinsey_Company_2Used_crossborder_bandwidthCrossborder


25

October 21 Hack Attack had Global Reach

Source: Down Detector, Accessed 11/1/2016.


New Requirements for Reliability, Time Scales for System Operations

“Electricity grid performance and power reliability matters, since the cost of outages can be crippling. Some grids are more reliable than others. When choosing data center locations, power grid reliability should be one of the factors considered.”

Renewable technologies are direct-current (DC) and must utilize an “inverter” that converts DC to AC. To do this they must switch on and off very fast… hundreds of times faster than an AC signal varies and as such these technologies operate at time scale that are in the microsecond range – 15 orders of magnitude shorter than the timescales associated with the environmental impacts of carbon emissions, and 1 million time faster than the timescales involved in second-by-second dispatch of generators.

Survey conducted by Dimensional Research, 2015

Source: Alexandra von Meier, “Challenges to the Integration of Renewable Resources at High System Penetration,” California Institute for Energy and Environment (2014). http://uc-ciee.org/all-documents/a/441/113/nested

26


Top 10 Solar Generation States

Source: Energy Information Administration, September 201527


Net Metering

Source: EQ Research, 2015

28


70 Million Installed Smart Meters

29

Obstacles to Smart Grid Technology Adoption

ReliabilityEfficiency

Cost reductionCustomer empowerment

Outage recovery

Tech immature

Funding

Customer resistance

Internal expertise

• Utilities’ motives for implementing enabling technologies prioritize immediate benefits to operations; reliability, efficiency, and cost reduction. Customer empowerment, outage recovery, demand management, and safety trail behind.

• Technological immaturity and lack of funds are the two leading causes for resistance to adopting advanced technology.

Value of Smart Grid Technology

Source: EPSA Analysis: Warwick, W.M., Hardy, T.D., Hoffman, M.G., Homer, J.S., December 2015. Electricity System Distribution Report. Report for U.S. Department of Energy by PNNL. Not yet published.29


Increasingly Complex Two-Way Linkages

Between Grid and Consumer:

30 Source: DOE, EPSA


Demand Response Capacity by Region/Sector

NERC Region

Total DR Capacity (MW)

Residential Commercial Industrial Transportation

AK 27 19.0% 48.0% 33.0% 0.0%

FRCC 1,924 42.0% 39.0% 19.0% 0.0%

HI 35 57.0% 43.0% 0.0% 0.0%

MRO 4,264 44.0% 19.0% 37.0% 0.0%

NPCC 4678.0% 55.0% 34.0% 3.0%

RFC 5,362 29.0% 13.0% 58.0% 0.0%

SERC 8,254 16.0% 10.0% 74.0% 0.0%

SPP 1,594 13.0% 20.0% 66.0% 0.0%

TRE 459 19.0% 74.0% 7.0% 0.0%

WECC 4,681 22.0% 24.0% 50.0% 3.0%

Unspecified 28 100.0% 0.0% 0.0% 0.0%

Totals 27,095 25.8% 18.9% 54.6% 0.6%

“Electric Power Sales, Revenue, and Energy Efficiency Form EIA-861 Detailed Data Files,” EIA-861 Demand_Response_2013 and Utility_Data_2013 data files, EIA, accessed October 20, 2015; FERC (Federal Energy Regulatory Commission). Assessment of Demand Response & Advanced Metering Staff Report. Washington, D.C., 2015. https://www.ferc.gov/legal/staff-reports/2015/demand-response.pdf.31

https://www.ferc.gov/legal/staff-reports/2015/demand-response.pdf


Role of the Aggregator

32

Source: EPSA adaptation of figure from: Scott Burger, Jose Pablo Chaves-Avila, Carlos Batlle, Ignacio Perez-Arriaga, “The Value of

Aggregators in Electricity Systems,” MIT Center for Energy and Environmental Policy Research, January 2016. https://energy.mit.edu/wp-

content/uploads/2016/01/CEEPR_WP_2016-001.pdf.

https://energy.mit.edu/wp-content/uploads/2016/01/CEEPR_WP_2016-001.pdf


Smart grid will rely on processing exponentially more data at exponentially faster speeds

0

200

400

600

800

1000

Terabytes

AMI Deployment

Distribution Automation

Substation Automation System

Demand Response/DSM

Distributed Energy Resources Management

Distribution Management

Advanced Distribution Automation

Home Energy Management

New Devices in the Home Enabled by the Smart Meter

Source: IEEE, 2014Time

Grid Visualization and GIS

Operations Systems Integration

Smart Grid: More Data, More Speed

33


New Services Including Grid Services Create Vulnerabilities

Source: Figure based on Industrial Control System Cyber Emergency Response Team’s (ICS-CERT) “Understanding Control System Vulnerabilities.”

https://ics-cert.us-cert.gov/content/overview-cyber-vulnerabilities#under34

https://ics-cert.us-cert.gov/content/overview-cyber-vulnerabilities#under


Jurisdictional Overlaps

IOUs

PMAs

NERC Regions

RTOs/ISOs

States Munis

FERC Planning RegionsCo-ops

35


Jurisdictional Challenges

Federal Power Act (1935)

Federal Jurisdiction• Wholesale sales• Interstate commerce and

transmission

State Jurisdiction• Retail sales• Local distribution• Facility siting• Generation adequacy

“Bright Line”

“Hazy Bright Line”• Distributed generation resources • End-users adjusting retail demand in response to price signals• Aggregation of individual retail transactions • New technologies (e.g., microgrids, storage, load controls for demand response)

and commercial practices • New market entrants seeking different business models• Need for more integrated transmission and distribution planning and potentially

new rules between Federal and state governments (e.g., resource adequacy)

36

Download - Perspectives on Energy Policy Today on Energy Policy Today Melanie Kenderdine U.S. Department of Energy November 16, 2016 | New York, NY 1. QUADRENNIAL ENERGY REVIEW | Second Installment

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