Electricity Price Forecast Sensitivity Analysis
Jeff King
Regional Technical Forum
January 9, 2001
Northwest Power Planning Council, January 2001
Basic Assumptions
• New projects are developed by private, independent developers • Projects under construction are completed; additional projects are market-driven. • Projects scheduled for retirement are retired; additional retirements are market-driven. • Constant “Mean Price” water conditions. • Average loads. • No transmission upgrades. • Pre-ISO transmission rates (“pancaked”). • Bid margin set at 5% of variable cost. • Operating reserves set at 6.5%.
Northwest Power Planning Council, January 2001
RTF Sensitivity Study Assumptions
Natural gas Prices
Request: NYMEX futures contracts in near-term; $3.75/MMBtu by end of study period. This run: as requested.
Renewables incentives/environmental externalities
Request: 2 c/kWh renewables incentive; phased to equivalent CO2 tax 2005 - 2015. This run: 1.5 c/kWh renewables incentive; phased to $20/ton CO2 tax 2005 - 2015.
NOx Offsets
Request: NOx offset prices consistent with current offset market. This run: A&R study assumptions ($0.80 cents/lb, all hours)
Northwest Power Planning Council, January 2001
Gas Price Forecast (Henry Hub)
7.00 6.00
1997 $/MMBtu
5.00 4.00 3.00 2.00 1.00 0.00
BPA Prelim , extended NWPPC A&R Moderate EIA Prelim AEO 2001wellhead + EIA-HH BD RTF Request 12/12/00
1995
2000
2005
2010
2015
2020
Northwest Power Planning Council, January 2001
Forecast Resource Development: Pacific Northwest
2000 1750 1500 1250
Capacity (MW)
1000 750 500 250 0 -250 -500 -750 -1000
00 01 20 20 20
Coal steam Wind NG Combined-cycle Biomass & other low-cost renewable
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 19
Northwest Power Planning Council, January 2001
Forecast Resource Development: WSCC
5000
NG Simple-cycle FO Simple-cycle Coal steam Wind NG Combined-cycle Biomass & other low-cost renewable
Annual Capacity Additions (MW)
4000 3000 2000 1000 0 -1000 -2000
20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19
Northwest Power Planning Council, January 2001
Forecast Mid-Columbia Prices
55.0 50.0 45.0 40.0
(1997$/MWh)
35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0
Adequacy & Reliability Study (022500) RTF Sensitivity Analysis (120700) RTF Sensitivity Analysis (010501)
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Northwest Power Planning Council, January 2001
Levelized Mid-Columbia Forecasts
$45.00 $40.00
Levelized Price 2001 - 17 ($/MWh)
$35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Adequacy & Reliability Study (022500) RTF Sensitivity Analysis (120700) RTF Sensitivity Analysis (010501)
Northwest Power Planning Council, January 2001
Four-segment Monthly Averages
Monthy Average Prices by Load Segment
100 90 80
1: 2: 3: 4: M-F 0800-1800 M-F 0400-0800, 1800-2200; S&S 0400-2200 M-F 0000-0400, 2200-2400 S&S 0000-0400, 2200-2400
(1997 $/MWh)
70 60 50 40 30 20 10 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Northwest Power Planning Council, January 2001
Comparison of Monthly Averages
140 120 100
(1997 $/MWh)
Run 120700 Seg 1 Run 120700 Seg 4 Run 010501 Seg 1 Run 010501 Seg 4
80 60 40 20 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Northwest Power Planning Council, January 2001