supplying our region’s electric power
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Supplying our Region’s Electric Power. Choices, Money and Policy Tom Ferguson 3M McKnight Professor Department of Electrical and Computer Engineering. Key Points. Demand is growing Climate change is disrupting status quo Many policies, but no energy policy - PowerPoint PPT PresentationTRANSCRIPT
Choices, Money and Policy
Tom Ferguson3M McKnight Professor
Department of Electrical and Computer Engineering
Demand is growing Climate change is disrupting status
quo Many policies, but no energy policy Alignment of policy, capital and
technology is essential UMD has potential to shape this
alignment
Source: EIA
Electric Energy Demand in Minnesota
Source: CapX2020 Certificate of Need Filing with MPUC
Energy Sources Energy Uses
Source: EIA
In quadrillion Btu
Plosses= I2R
• Most electricity generated by use of fuel to produce steam
• Steam turns the blades of a turbine that spins a generator • Rotating
magnet in generator turns inside stationary coils of copper wire and generates flow of current
Future demand will be met primarily with non-renewable fuels (given today’s policy and economics)
Source: EIA
Non-Renewables• Fossil (coal, gas, oil)• Nuclear
Renewables• Biomass• Geothermal• Hydro• Solar• Wind
Future demand will be met primarily with non-renewable fuels (given today’s policy and economics)
Upper Midwest
Southeast US
Texas
California
Source: EIA
Fuel and technology costs are significant factors . . .
Source: EIA
. . . leading to questionable predictions of reasonable future prices
But, how will new policies change this outlook?Source: EIA
OPENING REMARKS, UN High Level Event on Climate Change – 24 September 07 Mr. Rajendra Pachauri Chairman of the Intergovernmental Panel on Climate Change (IPCC)
“. . . As far as mitigation is concerned the costs are going to be much lower than what was anticipatedearlier. If we stabilize the concentration of these gases at 445 to 490 parts per million of CO2equivalent which will give us an equilibrium increase, limit the equilibrium increase to 2 to 2.4degrees centigrade, that will cost the world less than 3 per cent of the GDP in the year 2030. Thismeans that the prosperity that we would normally achieve by 2030 may be postponed by a few
monthsat the most.
And as the honorable Secretary General has told us, we have up to 2015 if we want to stabilize at thatlevel, after which we will have to ensure that emissions go down substantially.There are several measures that we have assessed in terms of policy actions: incentives for
technologydevelopment; a price on carbon is absolutely crucial. Technology by itself will not do unless there is apricing framework that ensures that low carbon technologies are developed and disseminated on alarge scale. Investments in energy infrastructure have to be in a manner that is going to be climate
friendlybecause these investments will serve society for a long time to come. Lifestyle and behavioralchanges are important and in very simple terms that means the use of walking, cycling, all of whichwill make human beings healthier and so also the planet. . .”
Source: IPCC
Source: Intergovernmental Panel on Climate Change
Example: Minnesota Power’s Boswell 3 Coal Unit, near Grand
Rapids$200 million project; reductions of
81% in nitrous oxides emissions 90% in sulfur dioxide 93% in particulate matter Up to 90% in Mercury
Aggressive, early, costly enoughExpected increase in residential rates by 2010:
6.7%
Source: Minnesota Power Web Site
Minnesota Power’s Boswell 3 Coal Unit
Assume all CO2 from Unit is captured:
$45-$225 million/yr cost24% to 122% increase in rates
How does this compare with the cost of substituting a renewable technology?
Sources: IPCC, author calculationsAssumes $15-75/ton capture cost
Some important energy acts and policies:
Federal Power Act, 1935: Hydro, transmission regulation
PURPA, 1978: Birth of non-utility generators EPACT92: Exempt wholesale generators;
transmission access EPACT05: Incentives for nuclear, renewables Minnesota’s Next Generation Energy Act of 2007
. . . And Minnesota Is Heavily Affected
Sources: American Wind Energy Association
Installed Megawatts of wind
Who is influencing energy decisions? Hollywood, activists, politicians, business Jane Fonda MRI versus NMR Activist agency staff Vocal citizens with personal agendas
Who is missing? Informed, strategic thinkers good at debate
Long-term Investment Uncertainty
By 2020, Minnesota needs $2 Billion in new transmission
Perhaps $20 Billion in new generation
Some success with legislation
161 kV230 kV
345 kV
500 kV
Overloaded Line
Transmission Facilities
Source: PowerWorld Simulation from CapX2020
Not Green=Not OK
Finding 1: Electric capacity margins continue to decline — action needed to avoid shortageSome improved, some decreased. Fair progress overall
Finding 2: Construction of new transmission is still slow and continues to face obstaclesAlmost 2,000 miles of transmission were added in the past year. Fair
progress.
Finding 3: Fuel supply and its delivery to electric generation are vital to maintaining reliabilityStudies but no action in the critical, natural gas-dependent areas of FL,
CA, and New England. Poor progress.
Finding 4: Aging workforce presents challenges to future reliabilityIndustry largely uncommitted to investing in university programs to
meet 25% increase. Poor progress.1North American Electric Reliability Corporation (NERC) 2007 Long-term Reliability Assessment, 2007-2016; October 16, 2007
Progress on 2006 Findings
Finding 1: Capacity margins are still inadequateDemand will exceed committed capability early in next ten years
Finding 2: Integration of wind, solar and nuclear resources require new planning approachesIntermittent nature of renewables, and long lead times for nuclear, are challenges
Finding 3: High reliance on natural gas in some areas of US must be properly managed to reduce the risk of supply and delivery interruptions
Finding 4: Transmission situation improves, but more still requiredDouble whammy of aging infrastructure and limited new construction is number one
reliability concern
Finding 5: Aging workforce still a challengeOn all types of positions. Blame demographics, cost cutting, early retirements, fewer
programs
1North American Electric Reliability Corporation (NERC) 2007 Long-term Reliability Assessment, 2007-2016; October 16, 2007
10-Year Outlook
Public Understanding of Energy Elasticity of Public Behavior on Energy International Response to Climate
Change Availability of Skilled Professionals and
Craft Reliability, Robustness, Security of Supply Global Competitiveness that Results
Regardless,
Investment and Employment Opportunities Are Immense,
Particularly in Technologies That Are Deemed “Sustainable”
Courses in Catalog: Anth 4631: Human Ecology Biol 1089: Northland Environmental Issues Biol 1096: Science, Policy, Environment Econ 4721: Natural Resource and Energy
Economics Geog 2306: Environmental Conservation Geol 3100: Earth’s Climate and Environment Geol 5220: Global Climate Change Phil 3325: Environmental Ethics Phys 5561: Astrophysics
New Courses: Environmental Science Degree and courses ECE 5995: Energy Conversion Systems
Demand is growing Climate change will impact choices
significantly The U.S. has failed to create comprehensive
policy; state efforts are not sufficient Alignment of policy, capital and technology is
essential to long-term energy policy UMD has growing potential to shape this
alignment through its graduates and faculty