Preliminary Modeling Results
Rhode Island GHG Action Plan
Renewable Portfolio Standards
Presentation Overview
1. Modeling approach and input assumptions
2. Results for three RPS cases – 20%, 15%,
10% renewables by 2020
3. Results for natural gas sensitivity cases
4. Comparison with earlier analysis (treatment
of NYS renewables)
1
Stephen Bernow
Alison Bailie
Tellus Institute
January 24, 2002
Modeling Approach
2
•
Our approach is to consider RPS in MA, CT, and RI
together and model the NE power pool as a whole.
•
Cost and carbon reduction estimates are relative to the
EIA base case with no RPS in CT and only partial
fulfillment of MA RPS
•
Costs and carbon reduction are allocated to RI based
on fraction of new renewable generation required by
RI RPS, compared with total of MA + CT + RI
•
This approach shares costs rather than
assigning highest or lowest cost to RI
Modeling Approach
Assumptions for MA and CT RPS
3
•
Assume MA RPS has renewable targets increasing to
7% for new resources by 2012 and remains at this level
to 2020 (existing stays at 5% throughout)
•
Assume CT RPS increases to 4% class I and 7% class
II by 2011 and remains at 2011 levels until 2020,
assume standard offer loophole is corrected in CT
•
Assume that MA and CT do not allow purchase of
NYS renewable credits
Modeling Approach
Assumptions for Rhode Island RPS cases
4
•
Wind generation credits can be imported from New
York State with no extra cost and without importing
any electricity (unlike the GIS requirements analyzed
previously)
•
Three RPS cases for Rhode Island, with renewable
generation achieving 20%, 15% or 10% of total sales
by 2020
•
Also looked at 20% and 15% cases with higher natural
gas price assumptions
•
Compared results from 20% case with 20% case with
NYS wind meeting GIS requirements
(earlier analysis)
Input Assumptions
5
•
Wind resources in model adjusted based on recent
mapping analysis by TrueWind
•
Capital costs for wind decline with learning but
increase as best sites are used ($1200/kW in 2005,
$1500/kW in 2020 including interconnection costs)
•
Biomass prices based on EIA assumptions but
removed demolition debris from supply (biomass price
about $2.75/MMBTU in New England)
Cost of new wind plant
$/kW
2005
2010
2015
2020
NE
$1,232
$2,080
$2,951
$2,774
NYS
$1,232
$1,182
$1,358
$1,308
cents/kWh
NE
NYS
6.3
6.3
10.6
6.6
14.6
7.3
14.5
7.2
including interconnections costs to grid (approximately
$275/kW)
New England costs reflect new plant in that year under GIS
requirements (most wind development occurs in NE)
6
New York costs reflect new plant in that year under wind
credit purchases (most wind development occurs in NYS)
Input Assumptions, cont.
•
Natural gas prices based on EIA assumptions but
will fluctuate with natural gas demand
(sensitivities on gas prices discussed later)
Natural Gas Price ($/MMBTU)
5
4
3
2
1
0
2000
7
2005
2010
2015
2020
Renewable Generation in NE
RI fraction
Rhode Island Renewable Generation
2500
GWh
2000
1500
20% RPS
15% RPS
10% RPS
base case
1000
500
0
2000
8
2005
2010
2015
2020
Renewable Energy Credit Prices
Rhode Island Renewable Energy Credit Prices
Real levelized
credit prices
(cents/kWh):
2
1.8
Cents/kWh (2000$)
1.6
1.4
1.2
20%
15%
10%
1
0.8
0.6
0.4
0.2
0
2000
9
2005
2010
all price and costs in real 2000$
2015
2020
20%
15%
10%
1.46
1.22
0.81
Emission Reductions
Carbon Reductions
(thousand metric tons carbon)
400
350
300
250
20%
15%
10%
200
150
100
50
0
2005
10
2010
2015
2020
Changes in Electricity Prices
Estimate for Rhode Island (2000 cents/kWh)
2005
2010
2015
2020
11
20%
0.02
0.09
0.21
0.38
15%
0.02
0.07
0.11
0.24
10%
0.02
0.04
0.06
0.08
Changes in Average Residential
Energy Bill - monthly
Estimate for Rhode Island (2000 $)
Electricity Bill
2005
2010
2015
2020
20%
$0.17
$0.61
$1.48
$2.66
15%
$0.17
$0.48
$0.76
$1.71
Natural Gas Bill
10%
$0.14
$0.29
$0.43
$0.57
2005
2010
2015
2020
20%
-$0.02
-$0.04
-$0.14
-$0.21
15%
-$0.02
-$0.04
-$0.08
-$0.20
Current average residential monthly bills are $80 / month electricity,
$90/month natural gas
based on monthly consumption of 704 kWh electricity
and 9.5 MMBTU natural gas (typical of house in
RI heated with natural gas)
12
10%
-$0.02
-$0.01
-$0.04
-$0.04
Generation from New Renewables 2020
- Rhode Island Portion
Type of Renewable Generation
2500
2000
GWh
1500
1000
500
0
13
20%
15%
10%
Biomass NE
4
0
0
Landfill gas NE
2
0
0
Wind NE
17
0
0
Wind credits from NYS
1361
922
820
Biomass cofiring
500
500
0
Existing Hydro / biomass
172
172
172
• Most avoided generation is natural gas
Rhode Island RPS Impacts
regional
RPS 20% RPS 15% RPS 10%
Net Cost - cumulative
net present value, 20002020
CO2 reductions in 2020
(thousand tonnes)
Cost of Carbon
Reduction ($/tonneC)
14
-$362
-$301
-$86
366
236
31
($143)
($204)
($116)
CO2 emission reductions represent
9% (20% case), 6% (15% case)
and 1% (10% case)
of estimated total Rhode Island emissions
in 2020
Components of Costs and Benefits of
Rhode Island RPS
regional
(cumulative net present value, 2000-2020, million 2000$)
$500
$450
$400
NG feedback in NYS
NG feedback in NE
Fuel
Imports
Operating & Maintenance
New York Wind
Capital
$350
$300
$250
$200
$150
$100
$50
RPS 20%
15
RPS 15%
Benefits
Costs
Benefits
Costs
Benefits
Costs
$0
RPS 10%
Rhode Island RPS Impacts
on Rhode Island
RPS 20% RPS 15% RPS 10%
Net Cost - cumulative
net present value, 20002020
CO2 reductions in 2020
(thousand tonnes C)
Cost of Carbon
Reduction ($/tonneC)
$161
$132
$67
366
236
31
$64
$89
$91
• No NG price feedback in New York State
• Including NYS wind credit as cost to Rhode Island
16
Components of Costs and Benefits of
Rhode Island RPS
on Rhode Island
(cumulative net present value, 2000-2020, million 2000$)
$300
$250
NG feedback in RI
New York Wind Credits
Fuel
Imports
Operating & Maintenance
Capital
$200
$150
$100
$50
RPS 20%
17
RPS 15%
Benefits
Costs
Benefits
Costs
Benefits
Costs
$0
RPS 10%
Natural gas price –
Sensitivity cases
•
Adjusted model to use higher natural gas prices –
prices increase over time compared with the base case
•
Prices will change with natural gas demand
Natural Gas Prices - New England Electric Sector
7.00
6.00
5.00
4.00
basecase
3.00
High NG Prices
2.00
1.00
0.00
2000
18
2005
2010
2015
2020
•
Compared the
RPS 20% and
RPS 15% cases
Renewable Energy Credit Prices
Rhode Island Renewable Energy Credit Prices
2
Real levelized
credit prices
(cents/kWh):
1.8
Cents/kWh (2000$)
1.6
1.4
1.2
1
0.8
RPS 20%
RPS 15%
RPS 20% - high ng$
RPS 15% - high ng$
0.6
0.4
0.2
0
2005
19
2010
all price and costs in real 2000$
2015
2020
20%
15%
1.46
1.18
High NG price
20%
1.28
15%
1.15
Emission Reductions
Carbon Reductions
(thousand metric tons carbon)
400
350
300
250
RPS 20%
RPS 15%
RPS 20% - high ng$
RPS 15% - high ng$
200
150
100
50
0
2005
20
2010
2015
2020
Emission reduction depends on type of avoided generation, higher NG prices mean
less NG in avoided generation and more coal or more renewables –
more coal in base case = greater emission reductions
more renewables in base case = lower emission reductions
different mixes of avoided in different years
Changes in Electricity Prices Due to
NG price increase
Estimate for Rhode Island (2000 cents/kWh)
2005
2010
2015
2020
21
RPS 20% RPS 15%
0.02
0.02
0.09
0.07
0.18
0.11
0.35
0.22
Base Case
0.05
0.43
1.13
1.21
Changes in Average Residential Energy
Bill – monthly
Due to NG price increase
Estimate for Rhode Island (2000 $)
Electricity Bill
2005
2010
2015
2020
RPS 20% RPS 15%
$0.17
$0.17
$0.61
$0.48
$1.24
$0.76
$2.47
$1.57
Natural Gas Bill
Base Case
$0.38
$3.04
$7.94
$8.51
2005
2010
2015
2020
RPS 20% RPS 15%
-$0.03
-$0.03
-$0.63
-$0.63
$0.11
$0.36
-$0.20
$0.06
Base Case
$1.23
$7.70
$20.88
$24.37
Current average residential monthly bills are $80 / month electricity,
$90/month natural gas
22
based on monthly consumption of 704 kWh electricity
and 9.5 MMBTU natural gas (typical of house in
RI heated with natural gas)
Rhode Island RPS Impacts
regional
RPS 20%
Net Cost - cumulative net
present value, 2000-2020
CO2 reductions in 2020
(thousand tonnes carbon)
Cost of Carbon Reduction
($/tonneC)
RPS 15%
-$362
-$301
-$322
-$314
366
236
357
264
($143)
($204)
($237)
($264)
CO2 emission reductions for high NG
price cases represent 8% (20% case) and
6% (15% case) of estimated total Rhode
Island emissions in 2020
23
High NG prices
RPS 20% RPS 15%
Rhode Island RPS Impacts
in Rhode Island
RPS 20%
Net Cost - cumulative net
present value, 2000-2020
CO2 reductions in 2020
(thousand tonnes carbon)
Cost of Carbon Reduction
($/tonneC)
24
RPS 15%
High NG prices
RPS 20% RPS 15%
$161
$132
$63
$79
366
236
357
264
$64
$89
$46
$67
Changes in Electricity Prices – comparison of
treatment of NYS wind
Estimate for Rhode Island (2000 cents/kWh) for 20% RPS
2005
2010
2015
2020
Wind Credits
0.02
0.09
0.21
0.38
GIS req.
0.05
0.15
0.32
0.50
Wind credits refers to current analysis – RI can
purchase renewable credits from NYS without
importing the electricity
25
GIS requirements refer to earlier analysis –
RI must import equivalent electricity from
NYS, which increases the cost
Rhode Island RPS Impacts –
comparison of treatment of NYS wind
in Rhode Island
Wind Credits GIS req.
Net Cost - cumulative
net present value, 20002020
CO2 reductions in 2020
(thousand tonnes C)
Cost of Carbon
Reduction ($/tonneC)
26
$161
$130
366
171
$64
$246