integrated resource planning at tacoma power
TRANSCRIPT
Integrated Resource Planning at Tacoma Power
Ahlmahz Negash
EE 500E Energy & Environment Seminar
University of Washington
11-8-2018
• Public, cost-of-service organization; we don’t pay investors
• Part of the community since 1893
• Led by a 5-member Public Utility Board appointed by the mayor and confirmed by the Tacoma City Council
• Services include: Power, including Click! Water Rail
About Tacoma Public Utilities
Tacoma Power’s Resources
Tacoma Owned
36%
Bonnaville Contracts
51%
Conser-vation 10%
Other Contracts
3%
Resources Cushman Powerhouse
Mossyrock Dam
Tacoma's Load 60%
Wholesale Sales 40%
Sales to Customers
• Hydroelectric Power
• 97% Carbon-Free
• Surplus hydro power • Currently sold wholesale • Could be used (retail) for
electrification of transportation.
About the IRP
What is an Integrated Resource Plan? • A planning tool that
• Determines whether, when, and which new resources are needed to meet forecasted demand for electricity over the next 20 years.
• Plans how the utility will comply with conservation and renewable energy requirements of I-937.
• Required by law (RCW 19.280.030)
• to consider both supply-side resources (like utility-scale generation) and demand-side resources (like conservation) on an equal basis.
• Open to the public
2015 IRP public Process and Schedule Public Meeting #1 April 19th 1. Tacoma Public Schools 2. Tacoma Community
College 3. Bates College 4. WestRock 5. Pierce Conservation
District 6. Bonneville Power
Administration 7. WA State Department
of Commerce
Public Meeting #2 Sept 27th 1. Bates College 2. University of Puget Sound 3. Davita 4. Praxair 5. WestRock 6. Multicare 7. City of Tacoma – Office of Sustainability 8. Northwest Energy Coalition 9. Northwest Power and Conservation
Council 10. WA State Department of Commerce
Q1 Q2 Q3 Q4
Invitation to Participate
Present to Senior Management Oct 10
Present to PUB Oct 25
Request PUB Adopt IRP Nov 15
Stakeholder Process
5
Planning Process
Survey Landscape
• Resources
• Loads
• Policy
• Technology
Identify Need
• Load resource balance
• Resource adequacy
Define Resources
• Generation
• Conservation
• T & D
Analyze Uncertainty
• Sensitivity
• Scenario
• Stochastic
Develop Action Plan
• Portfolio strategy
• Monitor conditions
Repeat every 2 - 4 years!
2015 Annual Load-Resource Balance (2001WY)
0
100
200
300
400
500
600
700
800
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
aMW
BPA - Block BPA - Slice Other Resources
TPU Resources Load without Cons Load with Cons
Survey Landscape
Identify Need
Define Resources
Analyze Uncertainty
Develop Action Plan
7
2-Year Action Plan
1. Acquire 9.4aMW conservation
2. Continue evaluating BPA products
3. Learn from small-scale pilots
4. Monitor emerging technologies impacting retail
load
5. Explore methods to incorporate climate change
impacts
Survey Landscape
Identify Need
Define Resources
Analyze Uncertainty
Develop Action Plan
8
What has changed since 2015?
9
Changes since 2015
• Lower and declining load forecast
– Declining usage per customer
– Energy efficiency
– Codes and standards
– Adjusted large load assumptions
10
0
100
200
300
400
500
600
700
2018 2021 2024 2027 2030 2033 2036
aMW
Firm Energy Load Forecast w/ Conservation
2015 Forecast 2017 Forecast
Changes since 2015
• Lower and declining load forecast
• Lower natural gas price forecast
11 All price forecasts in 2016 dollars
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$/M
MB
TU
Natural Gas Price Forecasts
Fall 2016 Fall 2015 Fall 2014
Changes since 2015
• Lower and declining load forecast
• Lower natural gas price forecast
• Lower electricity wholesale market price forecast
12 All price forecasts in 2016 dollars
$-
$15
$30
$45
$60
2018 2021 2024 2027 2030 2033
$/M
Wh
Mid-C Wholesale Price Forecasts
2015 Forecast 2016 Forecast 2017 Forecast
Our forecasted surplus energy is increasing.
What do these changes mean?
The market value of surplus sales is declining.
What do these changes mean?
13
IRP Questions
• Resource Adequacy
– Can we meet annual energy needs under critical water conditions?
– Can we meet monthly/seasonal energy needs 95% of the time?
– Do we have capacity to meet a 72 hour peak?
• I-937 Compliance
– How should we meet our renewable portfolio standard obligation?
14
Annual Adequacy Metric
15
• Simulated energy supply under critical water conditions exceeds forecasted customer loads over a year.
• Ensures we have enough energy to meet retail demand.
0
100
200
300
400
500
600
700
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036
Ave
rage
Me
gaw
atts
Annual Load Resource Balance (Critical Water)
BPA - Block BPA - Slice
Other Resources TPU Resources
Load w/Conservation
Monthly Adequacy Metric
• Simulated energy supply exceeds forecasted customer loads in every month, 19 times out of 20.
• Ensures we have the capacity to meet customer need as it varies by season and month.
• Worst case scenario
16
-150
-100
-50
0
50
100
150
200
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
ave
rage
me
gaw
atts
Monthly Load Resource Balance: 5th Percentile
Peak Adequacy Metric
• Simulated energy supply exceeds the highest 72-hour average peak customer load in 19 out of 20 water year simulations.
• Ensures we have the capacity to meet the most pressing peak demand.
• Represents stressful conditions
17
0
200
400
600
800
1000
1200
1400
1600
Me
gaw
atts
Simulations of Retail Load and Hydro
72 Hour Peak Winter Capacity Analysis (2020)
Load Reserves Capacity
Renewable Portfolio Standard (RPS) Obligation
I-937 Renewable Energy Compliance Options:
1. Renewable generation resource
2. Renewable energy credits (RECs)
18
0
200,000
400,000
600,000
800,000
MW
h
I-937 Renewable Requirement and Compliance Strategy
Hydro Improvement BPA Wind RECs
Acquired RECs Excess RECs Banked
Banked RECs Used Projected Renewable Need
• Tacoma is not projected to need a new generation resource.
• Conservation continues to be Tacoma’s preferred resource.
19
2017 Action Plan:
1. Acquire target of 6.4 aMW of conservation as directed by the Conservation Potential Assessment
2. Investigate the value of flexible capacity
3. Explore distributed energy resource (DER) planning
4. Improve resource planning analytical methodologies
20
NAVIGATING CHANGE AND UNCERTAINTY Looking Ahead to the 2019 IRP
Sources of Change and Uncertainty
Loads Resources Fuel Costs Market Prices Energy Policies
Declining load growth is the new normal
-5%-4%-3%-2%-1%0%1%2%3%4%
-100
-50
0
50
100
1-Yr Change in Regional BA Loads
aMW Change % Change
23 Loads Resources Fuel Costs Market Prices Energy Policies
-5%
0%
5%
10%
15%
20%
1950 1960 1970 1980 1990 2000 2010 2020
US Load Growth (Annual & Decadal Average)
Annual Growth Decadal Average
Source: Ansergy, 2017 Source: EIA, 2016
Hydroelectric output depends on water conditions
24 Loads Resources Fuel Costs Market Prices Energy Policies
0
2
4
6
8
10
12
14
16
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
(ft^
3/s
ec)
Tho
usa
nd
s
Average Monthly Inflows
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Contracts represent 55% of our resources and expire by 2028.
25 Loads Resources Fuel Costs Market Prices Energy Policies
2022 - CBH (1.5 aMW)
2023 - CBH (0.55 aMW)
2024 - CBH (23 aMW)
2026 - CBH (5.5 aMW)
2028 - BPA (400 aMW)
• We assume CBH Contracts expire and BPA is renewed. • This keeps us surplus (on ave.) through the planning horizon.
Natural gas impacts prices and adds uncertainty
We assume a lower gas price forecast But economics or policy may change that
26 Loads Resources Fuel Costs Market Prices Energy Policies
$0
$2
$4
$6
$8
$10
$12
$/M
MB
TU
Henry Hub Spot Prices (2016$)
Reference case
High economic growth
Low economic growth
High oil price
Low oil price
High oil and gas resourceand technology
Low oil and gas resourceand technology
$0
$2
$4
$6
$8
$10
$12
De
c-1
6
Sep
-17
Jun
-18
Mar
-19
De
c-1
9
Sep
-20
Jun
-21
Mar
-22
De
c-2
2
Sep
-23
Jun
-24
Mar
-25
De
c-2
5
Sep
-26
Jun
-27
Mar
-28
De
c-2
8
Sep
-29
Jun
-30
Mar
-31
De
c-3
1
Sep
-32
Jun
-33
Mar
-34
De
c-3
4
$/m
mb
tu -
re
al
Henry Hub NG Forecast (2016$)
Spring 2016 Fall 2016 Spring 2017
Wholesale power prices impact customers
27 Loads Resources Fuel Costs Market Prices Energy Policies
$-
$15
$30
$45
$60
2006 2008 2010 2012 2014 2016 2018
Average Market Prices & BPA Contract Rates
BPA Priority Firm
Mid-C Actual
Mid-C Projected
Not all carbon policies are equal
Loads Resources Fuel Costs Market Prices Energy Policies
0
20
40
60
80
100
2013 2020 2035 2050
Actual Target
Washington GHG Emissions (MMT CO2e) Total Other Electricity Residential/Commercial/Industrial Use Transportation
Electrification Carbon Tax Innovation
Increased RPS Carbon Tax
Electrification Carbon Tax Renewable Pipeline
Source: WA Department of Ecology
Future of Resource Planning
• DOE Recommendations:
– Ensure consistent methods to evaluate a wide range of DERs (in addition to conservation) and utility scale generation
– Consider new investment drivers in addition to traditional resource adequacy, such as risk management, value-added services or cost reduction.
– Develop integrated models to systematically consider rate design, customer behavior, and distribution networks into the resource planning process.
29
Thank You 30