the western flexibility assessment and implications for new … · 2020. 4. 17. · transmission...

1PageENERGY STRATEGIES © 2019 | New Mexico Grid Modernization Retreat | December 12, 2019

New Mexico Grid Modernization Retreat December 12, 2019

The Western Flexibility Assessment and Implications for New Mexico


RPS and Clean Energy Policies for Western States:Existing, Recently Enacted, and Conceptual Policies

15%35%80%

20%27%45%

33%44%75%

15%15%15%

0%28%64%

22%34%50%

10%15%60%

0%0%0%

0%0%0%

30%44%80%

20%30%65%

Existing policyRecently enacted policy

Conceptual policy

22%34%50%

202020262035

Assumed coordinated cap-and-trade in 2026

Key

Year

Clean Energy Target Based on

Assumed Policies

33% 64%

2026 2035

Clean/Renewable Penetration Requirements in Baseline Case


What does “flexibility” mean in the context of the Western Flexibility Assessment?

Given the changing

resource mix and new state energy

policies…

Flexibility Assessment

What resources do

we need?

What operational challenges

do we face?

When will they occur?

How are transmission

flows impacted?

How effective are integration solutions?


• Renewable resources are deployed to meet modeled state clean energy policy requirements

• Regionalization of energy markets occurs (i.e. no transmission service charges between BAAs)

• Load growth occurs consistent with recent regional and balancing area forecasts – 165 GW by 2035

• Assumed near-term integrated resource portfolios (IRPs) resources are constructed, then capacity expansion modeling (AURORA™) added resources for remainder of study period

• Announced and assumed coal retirements total 7 GW by 2026

• Assumes a small set of “near-term” transmission projects with a direct path to cost recovery are built

• 8.3 million new electric vehicles (EVs) are deployed by 2035 (3.7 GWa of added load)

Baseline Case represents “default” amount of system flexibility

2026

CoalNatural Gas

Hydro

Solar DG

Solar

Wind

- 50,000

100,000 150,000 200,000 250,000 300,000 350,000

Western States Cumulative Generation Capacity (MW)

-

Solar

Wind

-

20,000

40,000

60,000

80,000

100,000

2005 2010 2015 2020 2025 2030 2035

Cumulative New Wind and Solar Additions in Western US Since 2005 and During Study

(MW)


Scenarios consider flexibility levels higher and lower than the Baseline Case

Increases system flexibility

Decreases system flexibility

o y

Default level of system flexibility

Added to Baseline:

Removed from Baseline:

Regional Coordination


Summary of Key Study Metrics

$11.1 $10.0

$10.7 $7.8

$12.1

$11.3

-10%

0%

10%

20%

30%

40%

50%

2020 2025 2030 2035 2040

Curt

ailm

ents

(%)

Study Year

Baseline Case Integration Strategies Limited Regional Coordination

Annual production costvia bubble size and$2019 value in billions

Policy target met

Policy target not met

Flexibility “gains” through regional coordination

Flexibility “gains” from other strategies: transmission, storage, load management, diversity, etc.


In the 2020’s, interregional exchange is viable and a common flexibility strategy, however…

Southwest Region Operations for April Week in 2026

California Region for the same weekExport


Southwest Region Operations for April Week in 2035

California Region for the same week

…a lack of buyers for excess renewable power is partially to blame for the flexibility challenges apparent in the 2030s

No export


Transmission “shortages” increase into the 2030s and significant build-outs may be required

Circle size indicates

interconnected renewable

capacity

2035 Baseline

2035 IntegrationStrategies

Integration Strategies scenario included substantive transmission builds in California, Colorado, New Mexico, Wyoming/Utah, and

Montana, with minor upgrades in the rest of the NW region

Localized curtailments are caused by a lack of transmission


Study Findings and Potential Implications for New MexicoStudy Finding New Mexico Implication

West can achieve near-term (2020’s) policy targets. But over time policy targets become more difficult to achieve and more system flexibility is needed.

NM’s 2020 goals may be met with status quo system and plans, but 2030 targets will require additional actions.

An all-of-the-above approach to system flexibility is likely needed to hit policy targets (64% by 2035). If no action is taken, the West may lack sufficient grid flexibility to achieve state energy goals.

Start planning for regionalization, storage, diverse resources, and enhanced customer engagement now to meet aggressive long-term goals.

Economic transfers are one of the most effective tools for increasing system flexibility. Exporting and importing excess power saves $$$ on both sides of the transaction.

Consider how much you can rely on your neighbors for economic interchange when making investment decisions, and consider market and transmission options that make this possible.

Note of caution: This strategy,alone, fails in the long run!


Study findings and implications for New Mexico (continued)

Coordinated wholesale markets are effective at increasing system flexibility across the West and lead to operational cost savings and reduced emissions (both between 9-13% reductions).

While not technically required in the near-term, results indicate that might be difficult to efficiently achieve west-wide policy targets without enhanced market coordination.

Significant work must be undertaken to build out renewables (9 GW per year) to meet West-wide policy objectives.

New Mexico wind resources will continue to be a sought after resource across the West, given demand for renewable volume and diversity.

In the 2030s, the need for transmission becomes more obvious and resources face material grid constraints.

Consider local needs for infrastructure, including transmission, storage, and other assets that add flexibility to the system.

Study Finding New Mexico Implication

12PageENERGY STRATEGIES © 2019 | New Mexico Grid Modernization Retreat | December 12, 2019 12Page© 2017 ENERGY STRATEGIES. All rights reserved

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Contact

energystrat.com

Keegan Moyer, [email protected]

Presenters

The contents of this presentation represent the views of its presenter and do not necessarily represent

views of Energy Strategies or its’ clients.

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the western flexibility assessment and implications for new … · 2020. 4. 17. · transmission...

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