2019 long-term outlook - aeso · • generation forecast includes 5 scenarios and 1 sensitivity •...
TRANSCRIPT
2019 Long-term Outlook Information Session October 3, 2019
10/03/2019 Public
Notice
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In accordance with its mandate to operate in the public interest, the AESO will be audio and video recording this session and making the recording available to the general public at www.aeso.ca. Video recording will be limited to shared screen presentation slides. The accessibility of these discussions is important to ensure the openness and transparency of this AESO process, and to facilitate the participation of stakeholders. Participation in this session is completely voluntary and subject to the terms of this notice. The personal information being collected by the AESO will be used for the purpose of capturing stakeholder feedback on the 2019 Long-term Outlook for AESO planning purposes. This information is collected in accordance with Section 33(c) of the Freedom of Information and Protection of Privacy Act. If you have any questions or concerns regarding how your information will be handled, please contact the Director, Information and Governance Services at 2500, 330 – 5th Avenue S.W., Calgary, Alberta, T2P 0L4 or by telephone at 403-539-2528.
Introduction Nicole LeBlanc Director, Market & Tariff Design
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• Introductions • Context • Key Results • Load Forecast • Generation Forecast • Q&A
Agenda
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Presenters and Q&A Panelists
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Name Title
Nicole LeBlanc Director, Market & Tariff Design
David Johnson Manager, Forecasting & Market Simulation
Chad Ayers Senior Market Simulation Analyst
Noeline Kanagalingam Senior Generation Forecast Analyst
Lars Renborg Load Forecast Analyst
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Context and Key Results David Johnson Manager, Forecasting and Analytics
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• The 2019 Long-term Outlook (2019 LTO) is AESO’s view of Alberta’s load and generation development for next 20 years – Used for transmission planning and market assessments to
ensure a reliable supply of power now and in the future • Considers Alberta’s economy, provincial and federal policy,
technology, and expected electricity consumption patterns – We continually monitor changes that could affect the forecast
• While Alberta’s competitive electricity market determines future generation investment, the LTO provides a view of the expected type and location of generation
• A scenario-based approach tests a range of future outcomes
2019 LTO Context
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AESO’s main corporate forecast
tests increased cogeneration adoption at
existing and future oilsands sites
tests higher renewable target
or policy
tests higher economic and generation growth
due to strong oilsands growth
tests greater penetration of new technologies in an
economy not driven by oilsands
tests lower economic and generation growth
due to limited oilsands growth
Scenarios
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Reference Case High Cogeneration Sensitivity
Alternate Renewable Policy
High Growth Scenario Diversification Scenario Low Growth Scenario
• Alberta load is forecast to grow at a compound annual growth rate of 0.9% until 2039 – Half the rate of growth experienced in the past 20 years
• Expected generation development in next 20 years: – 13 GW of new generation capacity totalling ~ 23 GW by 2039 – Natural gas becomes dominant generation source
• 5,275 MW of coal-fired capacity will co-fire or convert to natural gas beginning in 2021
– Renewables will develop from recent government support programs in the near term and through market mechanisms and corporate PPAs in the longer term • Additional 1,050 MW of wind, 100 MW of solar by 2030 • Incremental 550 MW of wind and 250 MW of solar by 2039
Reference Case Key Results
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2019 LTO Load Forecast Lars Renborg Load Forecast Analyst
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• 2019 LTO Reference Case – Relies on Conference Board of Canada’s 20-year GDP forecast of
1.9% annual real GDP growth – Results in 0.9% load growth over the next 20 years – Similar load outlook to the 2017 LTO Reference Case
• The 2019 LTO load scenarios consider a broad set of outcomes to account for economic uncertainty in Alberta – Low Growth Scenario: Alberta’s oilsands industry stops expanding
and load growth flattens out as a result – High Growth Scenario: Oilsands production continues at the pace
seen historically between 2010 and 2014, and new load drivers such as electric vehicles further increase load
– Diversification Scenario: Alberta successfully diversifies away from oil and gas and new industries increase load in urban areas
Economic and Load Outlook
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0
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2017 LTO Winter Peak Historic 2019 LTO Winter Peak
AIL Winter Peak Values (MW) Compound Annual Growth Rate
Load: Reference Case
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• 2019 LTO uses SAS LTLF tool – Linear regression used to forecast point of delivery (POD),
area, region and AIL – Variables empirically shown to drive load are used as inputs for
POD, area, region, and AIL – Examples of variables used for AIL model:
• Real GDP, population, employment, oilsands production, time of day, week and year
Methodology Update from 2017 LTO
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Forecasting Technique Used 2019 LTO 2017 LTO
POD level econometric models? Yes No
Area and regional econometric models? Yes No
Econometric model for AIL? Yes Yes
DFO forecast used as a direct input? No (consulted) Partially 10/03/2019 Public
Reference Case Load Growth Breakout
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104,114
85,330
19,431
1,890 350
2,186
80,000 82,000 84,000 86,000 88,000 90,000 92,000 94,000 96,000 98,000
100,000 102,000 104,000 106,000 108,000
2018 Historic AILEnergy
EconomicVariables
Electric Vehicles,Cannabis,
Cryptocurrency Rooftop PV SolarEnergy Efficiency
2039 ForecastTotal Energy
GWh
Annu
al E
nerg
y (G
Wh)
2018 Historic AIL Energy
Economic Variables
EVs, Cannabis, Cryptocurrency
Rooftop PV Solar
Energy Efficiency
2039 Forecast Total Energy
(GWh)
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eak
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Historic High Growth Scenario Reference Case Scenario
High Growth Scenario Comparison
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• Increased GDP/oilsands production due to additional export capacity and high oil prices
• High Growth grows by 1.8% CAGR (2018-2039); Reference Case grows by 0.9% CAGR (2018-2039)
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High Growth Scenario Assumptions
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• Significant oilsands development driven by strong North American oil prices and increased pipeline export capacity
• Commensurate condensate demand and value of other NGLs results in increased drilling and completion activity in northwest Alberta
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Scenario Reference Case High Growth Forecast GDP growth (CAGR from 2018 to 2039) 1.9% 3.3%
Energy Efficiency Assumption – Winter Peak demand savings by 2039 (MW) 251 302
Maximum Rooftop Solar Output by 2039 (MW) 241 241
Oilsands Production – Growth from 2018 to 2039 (kbbl/day) 1,297 3,272
Load Forecast Growth Rate (CAGR from 2018 to 2039) 0.9% 1.8%
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eak
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Historic Reference Case Scenario Low Growth Scenario
Low Growth Scenario Comparison
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• Economy slows beginning in 2019 with oilsands growth stopping after 2021
• Energy Efficiency offsets all economic load growth after 2021
• Low Growth grows by 0.1% CAGR (2018-2039); Reference Case grows by 0.9% CAGR (2018-2039)
• Low Growth Scenario tests what the impact on load growth would be from four factors: – Reduced GDP growth in Alberta – Flat oilsands growth after 2021 – Higher energy efficiency – Higher rooftop solar adoption in Alberta
Low Growth Assumptions
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Scenario Reference Case Low Growth Forecast GDP growth (CAGR from 2018 to 2039) 1.9% 1.1%
Energy Efficiency Assumption – Winter Peak demand savings by 2039 (MW) 251 936
Maximum Rooftop Solar Output by 2039 (MW) 241 728
Oilsands Production – Growth from 2018 to 2039 (kbbl/day) 1,297 329
Load Forecast Growth Rate (CAGR from 2018 to 2039) 0.9% 0.1%
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eak
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Historic Diversification Scenario Reference Case Scenario
Diversification Scenario Comparison
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• Increase in Calgary and Edmonton load replaces flat oilsands output
• Diversification grows by 0.9% CAGR (2018-2039); Reference Case grows by 0.9% CAGR (2018-2039)
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• Alberta’s oil industry slows however Alberta successfully diversifies to other industries and continues to grow
• Diversification scenario’s economic outlook for Alberta is based on Manitoba’s economic outlook
• Manitoba was used because it currently has a highly diversified economy
Diversification Narrative/Assumptions
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Scenario Reference Case Diversification Forecast GDP growth (CAGR from 2018 to 2039) 1.9% 1.7%
Energy Efficiency Assumption – Winter Peak demand savings by 2039 (MW) 251 474
Maximum Rooftop Solar Output by 2039 (MW) 241 241
Oilsands Production – Growth from 2018 to 2039 (kbbl/day) 1,297 329
Load Forecast Growth Rate (CAGR from 2018 to 2039) 0.9% 0.9%
0
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Historic High Growth Scenario Diversification ScenarioReference Case Scenario Low Growth Scenario
Load: Scenario Comparison
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Scenario Low Growth
Reference Case
High Growth Diversification
20 year Winter Peak CAGR (2018 - 2039) 0.1% 0.9% 1.8% 0.9%
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2019 LTO Generation Forecast Noeline Kanagalingam Senior Generation Forecast Analyst
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• Generation forecast is based on: – Forecast load growth and assumed retirements – Known and assumed policies – Alberta generation resource availability – Economics of various generation technologies
Generation: Forecast Methodology
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• Key Assumptions: – REP 1, 2 and 3 and Alberta Infrastructure projects are included – Majority of coal units are assumed to co-fire or convert to gas – $20/tonne carbon price in 2020 with assumed TIER – 675 MW of new cogeneration development – 50 MW of storage development – Reference Case load forecast – Gas prices $1.58 – 3.54/GJ
Generation: Reference Case
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Levelized Cost of Energy Results for Projects in Service in 2020
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Capital Costs Fuel Costs O&M Carbon Other
0
20
40
60
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120
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160
Simple-cycle Combined-cycle Wind Solar
$202
0/M
Wh
Levelized Cost of Energy for Wind and Solar at Different Time Intervals
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Capital Costs O&M Other
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$20
$40
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Wind 2020 Wind 2021 Wind 2026 Solar 2020 Solar 2021 Solar 2026
$202
0/M
Wh
• Generation forecast includes 5 scenarios and 1 sensitivity • Common in all scenarios and sensitivity:
– Natural gas is dominant fuel source – Renewables continue to develop after REP projects through
competitive market forces – Coal-to-gas contributes to near-term supply mix
Generation Forecast Overview
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• ~13 GW of generation additions (excluding coal-to-gas conversions) • Natural gas accounts for 75% of generation capacity in 2039 • Renewables account for ~19% of energy demand in 2030 • Net additions by 2039: ~2.5 GW wind and ~0.5 GW solar
Generation: Reference Case
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Cogeneration Gas-fired (CC, SC, CtG) Wind Renewables (Non-Wind) Coal-fired
Installed Generation Capacity Mix
• Coke boiler replacements and increased cogeneration at existing and future sites • ~2.3 GW of cogeneration additions (~1.6 GW higher than Reference Case)
Generation: High Cogeneration Sensitivity
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• Wind additions post-REP are lower compared to the Reference Case • Cogeneration defers and displaces gas-fired capacity
Cogeneration Gas-fired (CC, SC, CtG) Wind Renewables (Non-Wind) Coal-fired
Installed Generation Capacity Mix
• Driven by a renewable energy target or policy to support greater renewable development
Generation: Alternate Renewable Policy
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• Net additions by 2039: ~6 GW wind and ~1 GW solar • Large amount of renewable generation compared to the Reference Case
Cogeneration Gas-fired (CC, SC, CtG) Wind Renewables (Non-Wind) Coal-fired
Installed Generation Capacity Mix
• Uses Low Growth load scenario
Generation: Low Growth
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Cogeneration Gas-fired (CC, SC, CtG) Wind Renewables (Non-Wind) Coal-fired
Installed Generation Capacity Mix
• ~9 GW of generation additions (excluding coal-to-gas) • Firm gas additions replace coal and coal-to-gas retirements • Net additions by 2039: ~1.7 GW wind (~0.8 GW lower than Reference Case)
• Uses High Growth load scenario • ~2.3 GW cogeneration develops (~1.6 GW higher than Reference Case)
Generation: High Growth
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Cogeneration Gas-fired (CC, SC, CtG) Wind Renewables (Non-Wind) Coal-fired
Installed Generation Capacity Mix
• ~17 GW of generation additions (excluding coal-to-gas) • Increased firm gas-fired generation additions
• Tests the impact of a more diversified generation capacity mix • Cost reduction for solar and support for other renewables and storage • Net additions by 2039: 350 MW hydro, 500 MW storage, ~3.2 GW solar, ~3.2 GW wind
Generation: Diversification
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Cogeneration Gas-fired (CC, SC, CtG) Wind Renewables (Non-Wind) Coal-fired
Installed Generation Capacity Mix
• ~40% of fleet capacity is renewables in 2039
• More flexible gas-fired fleet than Reference Case
Generation Capacity – 2039
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Cogeneration Gas-fired (CC, SC, CtG) Wind Renewables (Non-Wind)
High Growth
Diversification Reference Case
High Cogeneration
Alternate Renewable
Policy
Low Growth
• Visit our website at aeso.ca/grid/forecasting for: – 2019 LTO – 2019 LTO data file – AWS TruePower
Wind and Solar Assessment – Webinar recording
• Questions? Email us at: [email protected]
Resources
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Q&A Period
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– Twitter: @theAESO – Email: [email protected] – Website: www.aeso.ca – Subscribe to our stakeholder newsletter for updates
Contact the AESO
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Thank you
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