david howarth mrw & associates oakland, california dnh@mrwassoc
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JUST THE Facts: Resource planning and procurement independent energy producers annual meeting September 18, 2014. David Howarth MRW & Associates Oakland, California [email protected]. Overview of Presentation. - PowerPoint PPT PresentationTRANSCRIPT
David Howarth
MRW & AssociatesOakland, [email protected]
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JUST THE FACTS: RESOURCE PLANNING
AND PROCUREMENTINDEPENDENT ENERGY
PRODUCERS ANNUAL MEETING
SEPTEMBER 18, 2014
Update on 2012 long-term procurement plan (LTPP) proceeding and associated procurement
Introduction to 2014 LTPP proceedingReview of other resource planning and
procurement activitiesConclusions
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OVERVIEW OF PRESENTATION
System requirements (Track 2) deferred to 2014 LTPP Local capacity requirements (Track 1) expanded to address 2013
SONGS retirement (Track 4) CAISO modeling identified ~4600 MW of local need, assuming ~200 MW DR,
~980 MW incremental EE, and ~460 MW DG D.14-03-004 reduced CAISO’s need estimate to account for some
combination of load shedding, transmission, and incremental uncommitted EE, energy storage, demand response and customer PV resources to determine procurement authorization:
SCE also authorized to procure 215 -290 MW in Moorpark sub-area of Big Creek/Ventura
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2012 LTPP UPDATE
SCE (LA Basin)
SDG&E Total
Preferred Resources
550 - 950 175 725 - 1125
Storage 50 25 75
Gas-Fired 1000 1000
Any Source 300-500 300-600 600-1100
Total 1900-2500 500-800 2400-3300
SCE issued Track 1 LCR RFO in September 2013
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2012 LTPP UPDATE
Offers were due 12/16/13 Initially open to projects
within West LA area Expanded to include Track 4
authorization in March 2014 No new bids Eligible area revised to
include just the southern portion
Final offers 9/4/14 Final selections by 10/16/14 Application to CPUC
11/21/14
SDG&E negotiated bilateral contract with Carlsbad Energy Center for 600 MW peaker Application to CPUC for contract approval (A.14-07-009) filed
July 21, 2014
SDG&E issued Track 4 RFO seeking 800 MW on September 5, 2014 If approved, the 600 MW Carlsbad contract will count towards
the authorized need, leaving 25 MW of storage and 175 MW of preferred resources to be procured through the RFO
Offers due January 5, 2015 Application to CPUC for approval of contracts Q1 2016
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2012 LTPP UPDATE
2014 LTPP proceeding is focused on determining system reliability needs in 2024 CAISO & ORA filed testimony in August presenting deterministic
modeling results estimating reserve shortfalls for various scenarios
SCE performed stochastic modeling of the High Load Scenario only Expected shortfall of 8,500 MW, with 34-37 Stage 3 emergenciesand 1,000 GWh of expected dump energy
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2014 LTPP: PHASE 1A MODELING RESULTS
ScenarioUpward/
DownwardNumber of
Hours
Maximum Shortfall
(MW) Types of Reserve ShortfallCAISO/ORA: Trajectory Scenario
Upward 5 1,489Load Following,
Non-SpinCAISO: Trajectory without Diablo Canyon
Upward 19 3,730Load Following, Non-Spin, Spin
CAISO: High Load Scenario
Upward 34 5,353Load Following,
Non-Spin, Spin, Regulation, Energy
CAISO: Expanded Preferred Resource Scenario
N/A N/A 0 N/A
CAISO: 40% RPS in 2024 Scenario
Upward 9 2,242Load Following,
Non-SpinORA: Trajectory + PV Upward 4 1,188 Load FollowingORA: Trajectory + Tracks 1&4
Upward 1 164 Load Following
None of the modeling parties conclude that system reliability need can be determined from the Phase 1a results Shortfall amounts do not account for 2,315 MW of Track
1&4 authorization not included in the CPUC scenarios CAISO: unlimited renewable curtailment potentially
masking the need for flexible resources, need further study SCE: any need in 2024 can be addressed in 2016 LTPP,
other ways to mitigate over-generation ORA: given duration of shortfall, no need for additional
capacity or further study in this LTPP proceedingReply testimony due September 24th
Will include PG&E modeling testimonyCAISO and SCE to submit stochastic results for
Trajectory scenario in November 13th10
2014 LTPP: INITIAL CONCLUSIONS
Renewable Energy Procurement (R.11-05-005) 2013 RPS purchases: PG&E 23.8%, SDG&E 23.6%, SCE
21.6% Appear to be on track to reach 33% by 2020 Procurement expenditure limitation to be adopted by CPUC
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RESOURCE PLANNING AND PROCUREMENT ACTIVITIES
PG&E’s forecasted renewable net short (2014 RPS Procurement Plan)
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RESOURCE PLANNING AND PROCUREMENT ACTIVITIES
Source: PG&E 2014 Draft RPS Procurement Plan June 6, 2014
SCE’s forecasted renewable net short (2014 RPS Procurement Plan)
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RESOURCE PLANNING AND PROCUREMENT ACTIVITIES
Source: SCE 2014 Draft RPS Procurement Plan, June 6, 2014
SDG&E’s forecasted renewable net short (2014 RPS Procurement Plan)
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RESOURCE PLANNING AND PROCUREMENT ACTIVITIES
Source: SDG&E 2014 Draft RPS Procurement Plan, June 6, 2014
Comparison of SDG&E’s forecasted REC bank balances (2013 Plan vs. 2014 Plan)
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RESOURCE PLANNING AND PROCUREMENT ACTIVITIES
Energy Storage (R.10-12-007) October 2013 decision set specific energy storage targets
for each IOU totaling 1,325 MW by 2020 PG&E (580 MW); SCE (580 MW); SDG&E (165 MW)
First RFOs anticipated December 1, 2014Energy Efficiency (R.13-11-005)
Considering move to “rolling portfolios” with long term (10 yr.) funding approval
Would avoid program funding disruptions and embed EE in demand forecasts used for resource planning and procurement
Rolling portfolios will not be considered in time for setting 2015 goals and funding levels, which will continue as an extension of the 2013-14 budget cycle
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RESOURCE PLANNING AND PROCUREMENT ACTIVITIES
Demand Response (R.13-09-011) Demand Response Auction Mechanism (DRAM) proposal
Intended to create competitive procurement mechanism through reverse auction and to integrate DR supply resources into CAISO energy markets
Aim is to launch in 2015 and achieve 5% of peak by 2020 Settlement agreement proposes DRAM pilot auctions to be held
in 2015 and 2016, many details to be determined
CAISO/CPUC Joint Reliability Plan Multi-year RA requirement, market-based replacement of
CAISO backstop, unified long-term reliability planning Facing pushback from legislature over FERC role in
regulating RA market
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RESOURCE PLANNING AND PROCUREMENT ACTIVITIES
Residential Rate Design Rulemaking and Net Energy Metering (NEM) Will new rate design and NEM rules hinder further
expansion of residential solar?PG&E Gas Transmission and Storage
Combined with already approved pipeline safety enhancement plan (PSEP), likely to result in a significant increase in gas transportation costs for gas-fired generators
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REGULATORY PROCEEDINGS WITH IMPLICATIONS FOR PROCUREMENT
Procurement for local resources is under way Results of all-source RFOs will tell us if EE and DR can compete with
other supply resources to provide local capacity If incremental EE and DR fall short of levels assumed in the
procurement authorization, there will be implications for reliabilitySignificant modeling work remains to quantify system
reliability needs What level of forecasted shortfall justifies procurement? Long-term procurement of system resources appears at least 1-2
years awayRenewable procurement seems to be reaching a plateau,
but poised for new growth phase Will the RPS be expanded or will there be other drivers for
renewable procurement? What is future of RAM and FiT?
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CONCLUSIONS