KEY FINDINGS AND
RESOURCE STRATEGY
The Council’s Power Plan
 Goal - Ensure an adequate, efficient and affordable
regional power system
 Major Components
 Forecast of regional electricity demand over the next 20
years
 A “least cost with acceptable risk” Resource Strategy
 Regional action plan to implement Resource Strategy
 Use
 By statute, plan guides Bonneville Power Administration’s
resource decisions
 By tradition, plan serves as an independent reference for
all of the region’s utilities, regulatory commissions and
policy-makers
2
The Seventh Power Plan – Major Issues
Boardman –
550 MW
North Valmy – 522 MW
Centralia 1 & 2 – 1340 MW
Impact of announced coal-plant retirements on need for new resource development
Implications of and options for addressing EPA’s Clean Power Plan
How to best meet regional need for capacity (i.e., peaking) resources
3
The Region’s Population and
Economy Are Expected To Grow
Percent Growth 2015 to 2035
140%
120%
114%
127%
126%
Households
Commercial
Floor Space
120%
136%
100%
80%
60%
40%
20%
0%
Population
Employment
4
Industrial
Output
Key Finding
 Energy Efficiency and Demand
Response can meet nearly all
growth in energy and capacity
needs
5
Key Finding:
Energy Efficiency Meets Load Growth Over The Next
Two Decades
Regional Load Growth Met with Energy Efficiency
Regional Load (Average Megawatts)
30,000
25,000
Load Reduction from Federal Standards
Adopted Post-Sixth Power Plan
20,000
15,000
Regional Load Net of Energy Efficiency
10,000
5,000
2015
2020
2025
6
2030
2035
Northwest Loads After Accounting for Energy
Efficiency Are Forecast To Remain At or Below
Current Levels Until 2035
Annual Electricity Loads
(average megawatts)
25,000
20,000
15,000
7th Plan Net Load After Energy Efficiency
6th Plan Net Load After Energy Efficiency
10,000
Actual Loads
5,000
0
2001
2006
2011
2016
7
2021
2026
2031
Key Finding:
Least Cost Resource Strategies Rely on Conservation and Demand
Response to Meet Nearly All Forecast Growth in Regional Energy and
Capacity Needs
6,000
Wind
16,000
Cumulative Resource Development (MW)
Cumulative Resource Development (aMW)
Solar
Geothermal
5,000
Natural Gas
Energy Efficiency
4,000
3,000
2,000
1,000
14,000
Renewable Resources
Demand Response
Natural Gas
Energy Efficiency
12,000
10,000
8,000
6,000
4,000
2,000
2015
2020
2025
2030
0
2015
2035
8
2020
2025
2030
2035
Why the Seventh Power Plan
Relies on Energy Efficiency and
Demand Response Resources
Because they cost less!
9
All Resource Cost – Energy
Natural Gas - Aero GT East
Natural Gas - Recip Engine East
Solar PV- S. ID w/ Transm. Expan.
Natural Gas - Frame GT East
Wind - Colum. Basin
Wind - MT w/ Transm. Upgrade
Wind -MT w/ new transm.
Solar PV - S. ID
Natural Gas - CCCT Adv2
Natural Gas - CCCT Adv1
Solar PV - Low Cost S. ID
Energy Efficiency (Average Cost w/o T&D Credit)
Energy Efficiency (Average Cost w/ T&D Credit)
$0
Capital
$20
$40 $60 $80 $100 $120 $140 $160
Real Levelized Cost (2012$/MWh)
O&M + Property Taxes + Insurance
10
Fuel + Transmission
All Resource Cost – Peak Capacity
Wind - MT w/ Transm. Upgrade
Wind -MT w/ new transm.
Solar PV- S. ID w/ Transm. Expan.
Wind - Colum. Basin
Solar PV - S. ID
Natural Gas - CCCT Adv2
Natural Gas - Aero GT East
Natural Gas - Recip Engine East
Demand Response Price Block 4
Natural Gas - CCCT Adv1
Natural Gas - Frame GT East
Solar PV - Low Cost S. ID
Demand Response Price Block 3
Demand Response Price Block 2
Demand Response Price Block 1
$0
Capital
$50
$100
$150 $200 $250 $300 $350
Real Levelized Cost (2012$/kW-yr)
O&M + Property Taxes + Insurance
11
Fuel + Transmission
$400
Key Finding
 Demand Response resources
should be developed to meet
regional peak demands
12
Key Finding:
There is a high probability that at least 600 MW of Demand Response
should be developed across all scenarios tested
Cumulative Development (MW)
3,000
2,500
2,000
1,500
1,000
500
2015
2020
2026
Existing Policy
Retire Coal and Inefficient Gas
Retire Coal w/SCC MidRange
Regional RPS @ 35%
2031
Social Cost of Carbon - MidRange
Retire Coal
Retire Coal w/SCC MidRange and No New Gas
13
Key Finding:
The Probability and Amount of Demand Response Deployment Varies Over a Wide
Range, But There is a Very High (70%+) Probability of Needing at least 600 MW
90%
Probability of Deployment
80%
70%
Minimum Probability of 600 MW
DR Deployment by 2021 is 70%
60%
50%
40%
30%
20%
10%
0%
Deployment Level (Winter Peak MW)
Existing Policy
Retire Coal
Retire Coal w/SCC_MidRange No New Gas
No Demand Response
Lower Conservation
SCC - MidRange
Retire Coal w/SCC_MidRange
Increase Market Reliance
Regional RPS @ 35%
14
Key Finding
 Retiring coal plant generation can
be replaced by greater reliance
on existing natural gas plants very
limited development of new gasfired generation
15
Key Finding:
Existing Natural Gas Offsets Announced Coal Plant
Retirements, Resulting in Lower CO2 Emissions
5,000
Existing Gas Dispatch (aMW)
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
2015
2020
2025
2030
Lower Conservation
Existing Policy
Social Cost of Carbon - Mid-Range
Retire Coal
Retire Coal w/SCC_MidRange
Regional RPS @ 35%
16
2035
Key Finding
 No immediate need to acquire or
build new generating resources
 Unless, regional energy efficiency and
demand response goals are not
achieved
OR
 Unless, additional coal plants are
retired
17
Probability of Needing New Natural
Gas Generation by 2021
Social Cost of Carbon - MidRange
Increased Market Reliance
Existing Policy
Regional RPS @ 35%
Retire Coal and Inefficient Gas
Retire Coal
Lower Conservation
Retire Coal w/SCC_MidRange
No Demand Response
0%
18
25%
50%
75%
100%
Key Finding
 Resource strategies that maximize
the use of existing regional
resources to satisfy the region’s
resource adequacy standards are
lower cost, require less resource
development and produce fewer
emissions
19
Key Finding:
Net Exports (Exports-Imports) Are Strongly Influenced By
Regional Resource Development
6,500
6,000
5,500
Net Exports (aMW)
5,000
4,500
4,000
3,500
3,000
2,500
2,000
2015
2020
2025
2030
2035
Existing Policy
Social Cost of Carbon - Mid-Range
Retire Coal and Inefficient Gas
Retire Coal
Retire Coal w/SCC_MidRange
Regional RPS @ 35%
20
Key Finding
 EPA carbon emission reduction
regulations can be met regionally
 However, some states, especially
Montana, face significant
challenges
21
Annual Average CO2 Emissions (MMT)
Key Finding:
Regional Annual Average CO2 Emissions for Least-Cost
Resource Strategies Are Below EPA’s Emission Limits
40
35
30
25
20
15
10
5
2015
2020
2025
2030
No Coal Retirement
Existing Policy
Social Cost of Carbon - Mid-Range
Reire Coal w/SCC MidRange & No New Gas
22
2035
Key Findings:
Annual Regional power system CO2 emissions could be reduced by 70 % by retiring
all existing coal plants, and 80% if these plants were replaced with Renewable
Resources
54
PNW Power System Historical Emissions…
47
No Coal Retirement*
41
Develop 55% Less Energy Efficiency
36
Existing Policy
26
Regional RPS at 35%
21
SCC - Mid-Range
18
Retire Coal w/SCC_MidRange
Retire Coal
16
Retire Coal and Inefficient Gas
16
10
Retire Coal w/SCC_MidRange & No New Gas
-
20
40
CO2 Emissions in 2035 (MMT)
*Scenario assumes Centralia, Boardman and North Valmy are not retired.
23
70%
60
Key Finding:
The Lowest Cost Policies for Reducing Regional Power System CO2 Emissions Impose
A Cost on Carbon, The Highest Increase Renewable Portfolio Standards
SCC - Mid-Range ($11)
$23
Retire Coal w/SCC_MidRange
$78
Retire Coal
$100
Retire Coal w/SCC_MidRange & No New Gas
$170
Retire Coal and Inefficient Gas
$349
Regional RPS at 35%
($50) $0 $50 $100 $150 $200 $250 $300 $350 $400
PV Carbon Emissions Reduction Cost ( 2012$/MT)
24
Key Finding:
Increased renewable portfolio standards are not necessary to comply at the
regional level with recently promulgated federal carbon dioxide emissions
regulations, nor are they an element of a regional least cost resource strategy
 Why Increasing RPS Isn’t the Least Cost
Option for Reducing CO2 Emissions
 RPS don’t reduce coal use
 RPS don’t change the fact that the “wind
don’t blow and the sun doesn’t shine all of the
time”
 RPS lower the amount of cost-effective energy
efficiency
25
Resource Strategy
 Energy Efficiency Development
 1400 aMW by 2021
 3000 aMW by 2026
 4300 aMW by 2035
 Expand Use of Demand Response
 Develop at least 600 MW of demand response resources by 2021
 Natural Gas
 Increase use of existing gas generation to offset coal plant retirements
 While there is a very low probability of regional need for new gas-fired
generation prior to 2021, individual utility circumstances and need for
capacity and other ancillary services may dictate development
26
Resource Strategy
 Renewable Resources
 Develop local renewable alternatives that are cost-effective now
 Develop solar PV systems to comply with existing renewable portfolio standards,
especially in areas with increasing summer peak loads
 Conduct research on and demonstration of renewable energy with a more
consistent output like geothermal or wave energy
 Carbon Policies
 Support policies that cost effectively achieve state and federal carbon dioxide
emissions reduction goals, while maintaining regional power system adequacy by:
 Develop the energy efficiency and demand response
 Replace retiring coal plants increased use of existing gas-fired generation.
 Dispatch existing regional generation to meet adequacy standards for energy and
capacity rather than to serve external markets
 No increasing the requirements of state renewable portfolio standards alone, since this
would not result in the development of the least cost resource strategy for the region
nor the least cost resource strategy for reducing carbon at the regional level.
27
Resource Strategy
 Regional Resource Use
 Continue to improve system scheduling and operating procedures across the region’s
balancing authorities to maximize cost-effectiveness and minimize the need for new
resources to integrate renewable generation
 Improve use of existing regional resource to meet regional adequacy standards
 Expand Resource Alternatives
 Energy efficiency
 Renewable with less variable output (e.g., enhanced geothermal, wave)
 Adaptive Management
28
Questions?
Backup Slides
30
Carbon Dioxide Emission Reduction Policies
 Council Tested Multiple Policy Options for Reducing Carbon
Emissions
 Non-Pricing Policies




Existing state and federal policies (RPS & CPP)
Retire Coal (all plants beyond those plants already announced)
Retire Coal and Inefficient Natural Gas (below 40% efficiency)
Increase Regional RPS to 35% of All Retail Sales
 Pricing Policies
 Assume carbon cost equivalent to Federal Government’s
estimate of the Social Cost of Carbon (SCC)
 Mid-Range SCC Estimate ($40/MT in 2016, escalating to $60/MT in 2035
 95th Percentile SCC Estimate ($160/MT in 2016, escalating to $180/MT in
2035
 Non-Pricing Combined with Pricing Policies
 Retire Coal w/MidRange SCC
 Retire Coal w/MidRange SCC and Restrict Development to
Renewable Resources
31
Key Finding:
Carbon Pricing Policies Drive Cumulative Emissions Reduction and System Cost
Present Value Average System Cost (2012$)
Cumulative CO2 Emission Reduction Over Existing Policy Scenario
$120
500
450
Present Value System Cost
(billion 2012$)
400
$100
350
300
$80
250
$60
200
150
$40
100
$20
$0
Cumulative Emssion Reduction (MMT)
$140
50
Existing Policy
Retire Coal
0
SCC - Mid-Range
Retire Coal w/SCC_MidRange
Retire Coal w/SCC_MidRange & No New Gas
32
Summary of Carbon Reduction Policy Costs and Impacts
CO2 Emissions - PNW System
2016 - 2035 (MMT)
Cumulative
Present
Value
Cumulative
Increment
Average
CO2 Emission
al Average Incremental
System Cost Reduction Over Incrementa System Cost of CO2
of Emission Existing Policy l Emission
Cost
Emission
Reduction
- Scenario
Reduction (billion Reduction
(2012$)
(MMT)
(MMT)
2012$) (2012$/MT)
Existing Policy
$82
0
0
$0
$0
Retire Coal
$98
197
197
$16
$81
SCC - Mid-Range
$78
351
154
($20)
($130)
Retire Coal
w/SCC_MidRange
$91
377
26
$13
$500
$126
430
53
$35
$660
Retire Coal
w/SCC_MidRange & No
New Gas
33
Key Finding:
Increased renewable portfolio standards are not necessary to comply at the
regional level with recently promulgated federal carbon dioxide emissions
regulations, nor are they an element of a regional least cost resource strategy
 Why Increasing RPS Isn’t the Least Cost
Option for Reducing CO2 Emissions
 RPS don’t reduce coal use
 RPS don’t change the fact that the “wind
don’t blow and the sun doesn’t shine all of the
time”
 RPS lower the amount of cost-effective energy
efficiency
34
Annual Average Dispatch (aMW)
Two Carbon Emission Reduction Policies Result in Significant
Renewable Resource Development
Average Annual New Renewal Resource Generation Dispatch 2015-2035
Under Alternative Resource Strategies
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
2015
2020
2025
2030
2035
Existing Policy
Social Cost of Carbon - MidRange
Retire Coal and Inefficient Gas
Retire Coal
Retire Coal w/SCC MidRange
Retire Coal w/SCC MidRange and No New Gas
Regional RPS @ 35%
35
Neither of These Policies Significantly Reduce Coal Use
Annual Average Dispatch (aMW)
Average Annual Coal Generation Dispatch 2015-2035
Under Alternative Resource Strategies
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
2015
2020
2026
2031
Existing Policy
Social Cost of Carbon - MidRange
Retire Coal and Inefficient Gas
Retire Coal
Retire Coal w/SCC MidRange
Retire Coal w/SCC MidRange and No New Gas
Regional RPS @ 35%
36
However, Increased Reliance on Renewable Resources
Does Reduce Reliance on Existing Natural Gas Generation
Annual Average Dispatch (aMW)
Average Annual Existing Gas Generation Dispatch 2015-2035
Under Alternative Resource Strategies
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
2015
2020
2026
2031
Existing Policy
Social Cost of Carbon - MidRange
Retire Coal and Inefficient Gas
Retire Coal
Retire Coal w/SCC MidRange
Retire Coal w/SCC MidRange and No New Gas
Regional RPS @ 35%
37
And, Increased Reliance on Renewable Resources Does
Decrease New Gas-Fired Generation Development
Annual Average Dispatch (aMW)
3,000
Average Annual New Natural Gas Generation Dispatch 2015-2035
Under Alternative Resource Strategies
2,500
2,000
1,500
1,000
500
2015
2020
2026
2031
Existing Policy
Social Cost of Carbon - MidRange
Retire Coal and Inefficient Gas
Retire Coal
Retire Coal w/SCC MidRange
Regional RPS @ 35%
38
Increased Reliance on Renewable Resources Produces Less
Energy Efficiency Development By Lower Market Prices
Cumulative Development (aMW)
Cumulative Energy Efficiency Development 2016-2035
Under Alternative Resource Strategies
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
2015
2020
2026
2031
Existing Policy
Social Cost of Carbon - MidRange
Retire Coal and Inefficient Gas
Retire Coal
Retire Coal w/SCC MidRange
Retire Coal w/SCC MidRange and No New Gas
Regional RPS @ 35%
39
Annual Carbon Dioxide Emissions
(MMT)
As A Result, Increased Reliance on Renewable Resources (Without Also
Retiring Coal Generation) Produces the Least Carbon Emission
Reductions of All Policies Tested
Average Annual Carbon Dioxide Emissions 2015-2035
Under Alternative Resource Strategies
45
40
35
30
25
20
15
10
5
2015
2020
2026
2031
Existing Policy
Social Cost of Carbon - MidRange
Retire Coal and Inefficient Gas
Retire Coal
Retire Coal w/SCC MidRange
Retire Coal w/SCC MidRange and No New Gas
Regional RPS @ 35%
40