FERC Demand-Side Roadmap

Document Sample
FERC Demand-Side Roadmap Powered By Docstoc
					      Overview
 Vermont Power Supply

      University of Vermont
          January 27, 2004
         Dave Lamont
Vermont Public Service Department
Overview
Where are we?
   Utility structure
   Regional Context
   Vermont’s current power mix and needs
Where are we going?
   Vermont’s future power needs
What might it look like when we get
there?
   Utility resource acquisition options
As usual, things are more complicated
than they seem:
Vermont Electric Utility
Structure
22 Electric Utilities (Soon to be 21)
 CVPS, Green Mountain Power, Citizens and
  Rochester Electric are IOU’s
 WEC and VEC are Coops

 16 Municipal Utilities
Vermont Utility Structure
Vertically Integrated
 Each guaranteed a geographic service territory
 Obligation to Serve
 Earn a reasonable rate of return
 Subject to regulation



The Rest of New England is heading in a
different direction
         Vermont Participates in the
         Regional Marketplace




www.iso-ne.com \ Data & Reports   \ LMP Map
Vermont’s Electric Needs
 1,000 MW peak demand now
     Growing at about 2 MW per year since 1992; 100 MW 1984-92
     550 MW will need to be replaced in 2012- 2015 timeframe!!

 Current Sources
     Vermont Yankee - about 1/3 of annual demand and energy
        Contract Expires 2012
     Hydro Quebec - about 1/3 of annual demand and energy
        Contract expires from 2012 to 2020, most expiring in 2015
     Owned Renewables – 7-10% of energy
     Independent Power Producers - about 10% demand and 5% energy
         Contracts expire 2008 to 2020+


 Other sources - about 20% of energy
VT Electric Energy Supply Mix
 2001 Vermont Own Load Electric Energy
               Supply

                    System
                    14.4%

                                                    Nuclear
                                                    36.3%




     Hydro Quebec
        34.9%
                                               Renewable
                              OilGas
                               Coal    Hydro     4.9%
                             1.6%
                               0.0%
                                1.0%   6.9%
Electricity sales- slow growth
                                 VERMONT STATE LOAD - POWER PERIOD
                                    FOR YEAR ENDED DECEMBER 31




 7000                                                                                                                                          100.00%




                                                                                                                                               90.00%



 5000
                                                                                                                                               80.00%




                                                                                                                                                         State Load Factor
                                                                                                                                               70.00%

 3000

                                                                                                                                               60.00%




                                                                                                                                               50.00%
 1000



                                                                                                                                               40.00%




 -1000                                                                                                                                         30.00%
         59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02

                                                                CALENDAR YEAR - MWH
                                                                State Load Factor
Slow growth in annual peak,
summer peak rising faster
                                                            VERMONT STATE PEAK LOAD - POWER PERIOD
                                                                                                     PERIOD NOVEMBER 1, TO OCTOBER 31


                 1,100                                                                                                                                                                                                                          1.70




                 1,000



                                                                                                                                                                                                                                                1.60
                  900




                  800


                                                                                                                                                                                                                                                1.50
                  700




                  600
     Thousands
KW




                                                                                                                                                                                                                                                1.40

                  500




                  400
                                                                                                                                                                                                                                                1.30


                  300




                  200
                                                                                                                                                                                                                                                1.20
                                                                                     Power Year Peak                    Summer Peak                   Ratio - Winter Max / Summer Minimum

                  100

                                                                                                                              Powe r Ye ar Pe ak - 997,020 - Decem ber 1999
                                                                                                                              Powe r Ye ar Pe ak - 967,846 - Decem ber 1989
                     0                                                                                                                                                                                                                          1.10

                         59        61        63        65        67        69        71        73        75        77        79        81        83        85        87        89        91        93        95        97        99        01
                              60        62        64        66        68        70        72        74        76        78        80        82        84        86        88        90        92        94        96        98        00
   Positive steps:
  Since 1984 peak demand in VT has risen by ~125
MW, all met by new, in-state renewables
       40 MW - small hydro, IPP, WEC, GMP
       73 MW - McNeil and Ryegate wood chip plants
       6 MW - Searsburg wind project
       small landfill gas projects – Brattleboro and Burlington

Vermont utilities’ energy efficiency efforts, including
Efficiency Vermont, have saved over 80 MW of demand
Bottom line – current portfolio mix is very high in
renewables, and America’s lowest in CO2
BUT – VT still imports a large % of our electricity
   Major Resource Options
   Where Can We Go From Here?

 VT Yankee                 Add Renewables

 Shift to Fossil Plants    Imported Hydro (HQ or

 New Cogen and
                             Lower Churchill)
                            Connecticut and
  Distributed Gen in VT      Deerfield River Dams
 Efficiency and Load
  Management
                            Blended Balance
 Ride the Spot Market

    Different Solutions May be Viewed
        Differently by Each Utility
      Other Resource Alternatives
Transmission
   Exports the generation siting
    issue
   Creates a new siting issue
Demand Side Resources
   Energy efficiency
   Demand response
   Customer-sited generation
Can local resources avoid
power lines?
                     Efficiency is Cheaper

                                                 Power Costs vs. Efficiency Vermont Costs for 2002 & 2003
                                                                                      NE-ISO Average Monthly Price
                           12.0

                                                                                                 Delivered Cost of Wholesale Power *
                                                                                                 Wholesale Spot Market Price
                           10.0
                                                                                                 Efficiency Vermont, Contract Commitment
Cents per Killowatthour




                               8.0




                               6.0                                                                                                                                       Efficiency
                                                                                                                                                                         Savings:
                                                                                                                                                                        1 cent/KWh
                                                                                                                                                                        (Jan 2002),
                               4.0                                                                                                                                       more than
                                                                                                                                                                       6 cents/KWh
                                                                                                                                                                        (Mar 2003).
                                                                                                                                                                          Currently
                               2.0                                                                                                                                    3.6 cents/KWh




                               0.0
                                                                     2




                                                                                               02




                                                                                                                      2
                                                           2




                                                                                                                      2




                                                                                                                                                                  3
                                         2


                                                   2




                                                                                                                                                3


                                                                                                                                                          3
                                                                                                         02




                                                                                                                                2
                                                                                        2
                             02




                                                                            02




                                                                                                                                       03
                                                                   -0
                                                        r-0




                                                                                                                   -0




                                                                                                                                                               r-0
                                                                                                                   -0
                                       -0


                                                 -0




                                                                                                                                              -0


                                                                                                                                                        -0
                                                                                                                             -0
                                                                                    l-0


                                                                                             g-


                                                                                                       p-
                           n-




                                                               ay


                                                                          n-




                                                                                                                                     n-
                                                                                                                ct
                                             ar




                                                                                                                ov




                                                                                                                                                    ar
                                        b




                                                                                                                                               b
                                                                                                                          ec
                                                       Ap




                                                                                                                                                              Ap
                                                                                 Ju


                                                                                            Au
                                     Fe




                                                                                                                                            Fe
                                                                                                    Se
                          Ja




                                                                         Ju




                                                                                                                                    Ja
                                                                                                              O
                                             M




                                                               M




                                                                                                                                                    M
                                                                                                              N


                                                                                                                          D
  Lots of Uncertainty

Fuel prices, particularly   Old Approach
                               Make one assumption for each
Natural Gas                     area of uncertainty. Calculate a
Nuclear and Hydro               least-cost mix.
conditions                  New Risk Analysis Approach
Load Growth                    Calculate probability-
                                weighted portfolio cost,
Production Tax Credit           volatility, and standard
CO2 Taxes                       deviations; use judgment with
                                final results.
Interest Rates
Efficiency potential
                         Natural Gas Futures Price ($/MMBtu)




                         0
                             1
                                 2
                                     3
                                         4
                                             5
                                                 6
                                                     7
                                                         8
                                                             9
                                                                 10




Source: NYMEX
                Apr-90
                Apr-91
                Apr-92
                Apr-93
                Apr-94
                Apr-95
                                                                      Increased



                Apr-96
                Apr-97
                Apr-98
                Apr-99
                Apr-00
                Apr-01
                Apr-02
                Apr-03
                Apr-04
                Mar-05
                                                                      Natural Gas Prices Have




                Mar-06
                Mar-07
                Mar-08
                Feb-09
 Decision-making:
 Potential Benefits of Wind
Mitigates Fuel Price Risk
Reduces Natural Gas Prices
Reduces Wholesale Power Prices (through
“bid stack effect”)
Displaces Emissions & Mitigates Future
Environmental Compliance Risk
Promotes Local Economic Development
National and Global Contributions
But…Concerns
Is it a higher priced resource?
Intermittent resource – not reliable?
Can Vermont wind make a difference or
would we be better doing something else?
Siting: electrical, aesthetic, and environmental
impacts
Local economic harms?
How Would the Benefits of a Wind
Project Flow Through to Ratepayers?
     Depends on Ownership
 Ownership    Risk      Reward
   Type
 Merchant     Low        Low

 Long Term   Limited    Limited
  Contract
   Utility    High      100%
 Ownership
         Reliability and Wind Power

 All Types Generation Need Back Up
 Reliability Guidelines Dictate Operating
  Reserves at Any Particular Time
      Large Plants Require Most Reserves
 The Variability in Output from a Wind Turbine
  Installation is Insignificant Compared to the
  Variability in the Load
 Every KiloWatt-hour generated by a wind plant
  will offset generation from a fossil fueled plant
      Most Likely Located in New England
  Conclusions
Looking at the state, Vermont needs to make a
major commitment for new power sources before
2015
Some smaller utilities have more immediate needs
From an energy planning point of view, there is no
reason wind power can’t be an option
 The allocation of benefits and costs will depend
on ownership
 The devil is in the details




“But what if we do switch to gas,
and then the cost goes through the roof?”
Questions for discussion
            What do we want in the portfolio?
               Not just wind v. gas & nukes
               Wind, hydro, biomass, CHP, efficiency are
                all competing for our investment $
               Whose needs are we trying to meet?
            Who is taking what risks?
               Utility-based or market-based ?
               Can we move to risk-based analysis?
            Can we be creative with the siting
            process and community solutions?

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:5
posted:9/1/2012
language:Unknown
pages:22