cee cee 2012 friends power & gas cee_cee... · ©cee-beg-ut, 2 resource adequacy in texas •ercot

Download CEE CEE 2012 Friends Power & Gas CEE_CEE... · ©CEE-BEG-UT, 2 Resource Adequacy in Texas •ERCOT

Post on 03-Dec-2018

212 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 1

    CEE-BEG-UT, 1

    CEEAnalytics Power&GasCEEAnnualMeeting,December6,2012

    CEE-BEG-UT, 2

    ResourceAdequacyinTexas

    ERCOTisanenergyonlymarket Thereisareservemargintarget of13.75%(was12.5%)

    ERCOTsinterpretationof1loadshedeventin10yearsismorestringentthan1dayofoutagein10years

    Afterthesummerof2011,aconcernhasemergedthatgenerationcapacityexpansionwouldnotkeepupwithdemandgrowthinthefuture

    Systemwideoffercap(pricecap)wasraisedto$4,500(from$3,000)onAugust1,2012;andwillincreaseto$9,000by2015.

    Wetestedimpactsofthesepricecaps(AURORAxmp)

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 2

    CEE-BEG-UT, 3

    Departurefromnormaltemperature(F)8/2/2011 8/31/2011

    Wasthisaoncein100yearseventormoreofanewnormal?

    CEE-BEG-UT, 4

    ERCOTForecastsofReserveMargin

    2012CDRReport2012Update1

    2012Update2

    2%0%2%4%6%8%10%12%14%16%18%20%22%

    2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

    TargetReserveMargin 2005CDRReport 2006CDRReport

    2007CDRReport 2008CDRReport 2009CDRReport

    2010CDRReport 2011CDRReport RealizedReserveMargins

    2012CDRReport 2012Update1 2012Update2

    2012Update1:demothballedunits2012Update2:demothballedunits,lowerdemandgrowth,newresources

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 3

    CEE-BEG-UT, 5

    ResourceAdequacyinTX ReserveMarginunderPriceCaps

    2%

    0%

    2%

    4%

    6%

    8%

    10%

    12%

    14%

    16%

    18%

    20%

    22%

    2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

    $9,000 $4,500 $3,000 2012CDR CDRUpdate1 CDRUpdate2

    CEE-BEG-UT, 6

    ResourceAdequacy DemandCurtailmentunderPriceCaps

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 4

    CEE-BEG-UT, 7

    ResourceAdequacy AverageWholesalePriceofElectricity(nominal)

    CEE-BEG-UT, 8

    Conclusions

    Onaverage,thereservemarginwillbehighestunderthe$9,000pricecap 12.8%,12.4%,11.4%for$9,000,$4,500and$3,000,respectively(butlowerthan13.75%targetRM).

    The15year(20132027)averagenominalpriceisroughlythesameforall3scenarios Inrealterms,prices>averagepricessince2009butsimilartopricesseenbefore2009becausetheyreflectanincreaseinnaturalgaspricefromitslowsin20092012.

    Curtailmentishighestwith$3,000cap&increasesovertimewhileitislowandfairlystablewith$9,000cap.

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 5

    CEE-BEG-UT, 9

    Conclusions SensitivitytoNGPrice

    Reservemarginsslightlyhigher 12.9%,11.8%for$9,000and$3,000,respectively.

    Averagenominalpricesareslightlyhigher Slightlymorenewbuildsearlierbutlessoverall(alsolessretirements);lotmorewindgetsbuiltearlier.

    CEE-BEG-UT, 10

    OpenQuestions

    Whatistherightpricecap? Whatistheoptimalreservemargin? Whatrolecandemandresponseplay? WhatimpactexternalfactorswillhaveonresourceadequacyinTexas?

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 6

    CEE-BEG-UT, 11

    Gas/PowerLinkages

    CEE-BEG-UT, 12

    Gas/PowerLinkages

    ImpactonpowersectorgasuseofEPAregs (CSAPR,MATS),CO2 penalty,subsidiesforrenewables,CREZlinesinTexas,alternativeng pricescenario(AURORAxmp)

    Impactontheeconomyofelectricity&ng prices,andnewbuilds(REMIPI+)

    Tobeupdatedforpublication:stayofCSAPR,newcostsforrenewables,plantlevelcompliancecosts,comparisonwsimilaranalyses

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 7

    CEE-BEG-UT, 13

    Gas/PowerLinkages

    JointmodelingofmultiplefactorswithAURORAxmp EPACSAPRforNOX andSO2 EPAMACT/MATSformercury&otherhazardouspollutants CO2 ($14/tin2018to$40/tin2030) Renewableincentives($15/MWh to$30/MWh) Naturalgaspricecycle CREZtransmissionadditioninERCOT

    CEE-BEG-UT, 14

    NaturalGasPriceInputsCEE gas upstream

    economics research

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 8

    CEE-BEG-UT, 15

    IncreaseinGasUseforPower ResultsfromAModelingExercise*

    0

    1

    2

    3

    4

    5

    6

    7

    8

    9

    2030

    Qua

    ds

    Nuclearshutdowns

    ChangeinGasPriceForecast

    CSAPR/OtherCoalRisk

    *SeeU.S.GasPowerLinkages:BuildingFutureViews fordetails:http://www.beg.utexas.edu/energyecon/thinkcorner/Think%20Corner%20Gas

    Power%20Linkages.pdf

    CEE-BEG-UT, 16

    EmissionRegulationsForceCoalRetirements

    Over50GWretireby2030.Mostoccurbefore2020~40GW(consistentwithcurrentpredictions).

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 9

    CEE-BEG-UT, 17

    NewBuildsMostlyGasandsomeWind

    CEE-BEG-UT, 18

    GasConsumption

    Outeryears,greatergasconsumptionthanCSAPR. Coaldeclinesbyonly7%(asopposedto20%wEIAforecast).

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 10

    CEE-BEG-UT, 19

    PowerPriceChanges

    CSAPRwillincreasepowerpricesasretirementstaketimeforthemarkettoadjust.

    Howeveragaspricechangeofadollarcanresultinmuchmoreprolongedchangesinpowerprices.

    CEE-BEG-UT, 20

    ImpactofPowerPriceChangesonTexasEconomy(preliminary)*

    *UsingREMIPI+

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 11

    CEE-BEG-UT, 21

    FixedInvestmentsinGeneration

    Evenwithoutregulation~$750billion(includesControlEquipment,NewBuilds,O&M)isneeded.

    CSAPRcase:$1,300billion morethan$73billioninERCOT.

    CEE-BEG-UT, 22

    ImpactofGenerationInvestmentsonTexasEconomy(preliminary)*

    *UsingREMIPI+

  • _______________________________________________________________________________________________ Center for Energy Economics, Bureau of Economic Geology, University of Texas at Austin. All rights reserved. 12

    CEE-BEG-UT, 23

    CombinedEconomicImpact(preliminary)*

    *UsingREMIPI+

    CEE-BEG-UT, 24

    CREZandRenewableIncentives

    CREZbyitselfdoesnotleadtonewrenewablescapacity. CREZwithhighsubsidieswillresultinmorerenewables. Coincidentally,renewablebuildsstartwhenCO2 pricesareintroduced.