today’s trends, tomorrow’s - wpuiwpui.wisc.edu/wp-uploads/2016/06/david-boyd.pdf · today’s...
TRANSCRIPT
Today’s Trends, Tomorrow’s
Energy Needs
Wisconsin Public Utility Institute
David Boyd
VP, Government & Regulatory Affairs
May 20, 2016
Executive Summary
2
• A snapshot of today’s generation portfolio
• The system is changing quickly, for many reasons
• How do we plan for uncertainty and associated
risks?
• What might generation look like in the future?
• What else will we need to consider to deliver
electricity in the future?
MISO is an independent, non-profit organization in 15
U.S. States and one Canadian Province
MISO by-the-numbers
High Voltage Transmission 65,853 miles
Installed Generation 177,388 MW
Installed Generation 1,594 Units
Peak System Demand 127,125 MW
: MISO North
: MISO Central
: MISO South
3
MissionDrive value creation through efficient
reliability / market operations, planning
and innovation
4
Average Market Capacity by Resource Type
13%
42%37%
8%
Coal
Nuclear
Renewables
Natural Gas
5
Hourly Fuel Mix Snapshot
This chart represents the percentage of total megawatts supplied by the listed resources in the MISO footprint. The
category listed as “Other” is the combination of Hydro, Pumped Storage Hydro, Diesel, Demand Response
Resources, External Asynchronous Resources and a varied assortment of solid waste, garbage and wood pulp
burners. Charts like this are updated every five minutes.
6
Environmental / Regulatory
• Mercury & Air Toxics Standards (MATS)
• Air-quality standards for ozone, SO2, etc.
• Potential greenhouse gas regulations
Economics
• Low-cost natural gas
• Economic recovery
• Demand growth shift
• Infrastructure investment
State & Federal Policy
• Renewable portfolio standards
• Energy efficiency/demand-side management programs
• Tax credits
• FERC orders addressing demand response participation in wholesale energy markets
Evolving Technologies
Electric Industry
While EPA’s Clean Power Plan (or other carbon rules) may affect the electric
industry in the future, many other forces are already having major impacts
• Wind power • Energy storage • Load-modifying resources
• Solar energy • Distributed generation
7CO2 Modeling in MISO Planning Studies (5/11/2016)
8
MISO’s analysis is now shifting beyond the CPP alone to the
broader impacts of the evolving resource portfolio
Feb 2016
SCOTUS votes to
stay EPA’s CPP
Sep 2015 - Feb 2016
Near-term
Analysis
(Understanding
CPP compliance
pathways)
Jul 2016 - Nov 2018
Long-term analysis
(Developing
transmission overlay)Jan 2016 - Jun 2016
Mid-term
Analysis
(Prep. for transmission
overlay development)
Aug 2015
EPA releases
final CPP
& proposed
Federal Plan
CPP Rule Timeline (through 2018)
MISO’s Timeline for analyzing fleet transitions (through 2018)
MISO’s goal in this on-going analysis is to enable the reliable, efficient implementation of policy decisions made by our member-states and asset-owners.
In light of the stay, the CPP rule
timeline is currently unclear.
The final rule study evaluates CPP compliance pathways
and will inform the transmission planning process
MISO’s near-term analysis does not attempt to recommend compliance pathways,
optimize the resource mix, identify optimal electric transmission expansion, or
identify optimal gas pipeline expansion.
9CO2 Modeling in MISO Planning Studies (5/11/2016)
10
Mid-term analysis indicates that the CPP would drive coal
retirements with wind and gas replacement
CO2 Modeling in MISO Planning Studies (5/11/2016)
11
Study started with a resource forecasting screening analysis to determine
effective compliance strategies and a range of compliance costs
*Compliance costs are the difference between production and supply/demand side resource costs from reference case costs.
This does not include carbon costs or transmission costs.
CO2 Modeling in MISO Planning Studies (5/11/2016)
12
Regional compliance is less costly than
state-by-state compliance
Key observations of MISO’s analysis of the CPP rule
The MISO region sees a mass-based compliance advantage unless a regional heavy penetration of renewables and energy efficiency is achieved
New capital investment will be needed to achieve reliable, cost-effective compliance
1. REGIONAL
2. MASS-BASED COMPLIANCE
3. NEW INVESTMENT
The resource portfolio in the MISO region is evolving, with gas-
fired generation growing…
Historicals per MISO Data Services group. Gas prices per SNL
2016 YTD March
6%
11%
8% 7%
12%
16%
17%
23%
27%
0%
5%
10%
15%
20%
25%
30%
2011 2012 2013 2014 2015 2016 (YTD)
MISO North/Central
MISO Total (including MISO South)
Gas Share (%) of MISO Electric Generation (MWH)
How much further can gas grow in MISO?
$4.00 $2.76 $3.73 $4.37 $2.63Henry Hub $/MMBtu $1.99
• 2015 significantly eclipsed prior gas utilization…and the trend continues in 2016 (YTD)
― Though MISO South historically has high gas reliance, gas increased appreciably from 46% in 2014 to
55% in 2015 and 58% in 2016 YTD
1 - Forecast figure based on MISO MTEP16 assumptions and models for “Regional Clean Power Plan” scenario (assumes 26 GW coal retirement, 14 GW new gas-fired combined
cycle, carbon cost $32/ton in 2025, solar and wind include an economic maturity curve to reflect declining costs over time). The gas price forecast applicable to year 2025 has
been updated to reflect recent outlooks with Henry Hub gas prices assumed at ~$4.45/MMBtu.
6%
11%
8% 7%
12%
40%
0%
10%
20%
30%
40%
50%
2011 2012 2013 2014 2015 2025
Gas Share (%) of Electric Generation (MISO North/Central)
A changing generation mix will propel gas utilization even higher
in the coal-heavy Midwest portion of MISO’s footprint
Shift driven by increased gas-fired
capacity and increased capacity factors
Historical Actuals
Regional CPP Planning Scenario Forecast1
………………………..
In addition to gas replacing coal, MISO expects significant growth in
future wind generation …
0
40,000
80,000
120,000
160,000
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
Actuals Projections
Wind was 9% of total
generation in 2015;
15,000 MW Capacity
GWH
MISO Wind Generation: Past and Future
Growth Scenario
(2-3X Wind Capacity of Today)
States’ RPS requirements (existing)
…providing additional opportunities for gas as a complement to
intermittent resources
70,000
75,000
80,000
85,000
90,000
95,000
0
5,000
10,000
15,000
20,000
25,000
1 2 3 4 5 6 7 8 9 101112131415161718192021222324
Load
MWWind
MW
February 12, 2015
Winter Hourly Wind Profile
• Wind production can fall off
just as load is rapidly
increasing in early winter
mornings
• In the future, MISO expects
the challenges of
intermittent renewables will
be amplified, requiring more
flexible gas-fired generation
Hour of Day
Solar penetration and ramping
17
Proposed MTEP17 Futures
18
Existing Fleet
Policy Regulations
Accelerated Alternative
Technologies
CO2 Modeling in MISO Planning Studies (5/11/2016)
MTEP17 Futures Key Assumptions
Future Existing Fleet Policy Regulations
Accelerated
Alternative
Technologies
Gross Demand & Energy
Growth Rates
Low
(High for LRZ 9 industrial)
Demand: 0.3%
Energy: 0.4%
Mid
Demand: 0.8%
Energy: 0.7%
High
(Low for LRZ 9 industrial)
Demand: 1.2%
Energy: 1.0%
Natural Gas Price Forecast Low Mid High
Max DR/EE/DG
Tech. Potential4
DR: 8 GW
EE: 9.6 GW
DG: 2.3 GW
DR: 9 GW
EE: 10.8 GW
DG: 2.8 GW
DR: 12.1 GW
EE: 25.6 GW
DG: 6.4 GW
RetirementsCoal: 9 GW1
Gas/Oil: 17 GW1
Total by 2031: 26 GW
Coal: 16 GW2
Gas/Oil: 17 GW1
Total by 2031: 33 GW
Coal: 24 GW2
Gas/Oil: 17 GW1
Total by 2031: 41 GW
Renewables Mandates + GoalsMandates + Goals
+ maturity cost curve
Mandates + Goals
+ maturity cost curve
MISO System CO2
Reduction TargetN/A All units target 25%3 All units target 35%3
Renewable Tax Credit Continues until 2022 Continues until 2022 Continues until 2022
19
1. Based on age-related retirement assumptions – total by year 2031
2. Coal retirements resulting from economics of carbon regulation derived from the CPP Mid-Term Analysis – total by year 2031
3. CO2 reduction on aggregate MISO fleet (measured by total of all units’ output) by 2030 from 2005 levels
4. Technical Potential represents the maximum feasible potential under each scenario. Only economically viable programs will be implemented in the
MTEP17 models (each program will be compared against supply-side alternatives)
CO2 Modeling in MISO Planning Studies (5/11/2016)
20
Focus is minimizing the total cost of energy
to consumers
Minimum Total Cost:
Energy, Capacity and
Transmission
High Generation Cost
Low Transmission Cost
Goal
High Transmission Cost
Low Generation Cost
Total
Cost
($)
Generation Costs
Transmission Expansion
H
L
L
H
CO2 Modeling in MISO Planning Studies (5/11/2016)
CO2 Modeling in MISO Planning Studies (5/11/2016) 21
Since 2011, actual and queued wind siting has been
consistent with RGOS Zone assumptions
CO2 Modeling in MISO Planning Studies (5/11/2016) 22
Other Issues
• Where will generation be sited?
– Renewables
– Coal to gas?
– New gas
– Interconnection
• Reliability---what does the word mean in the future?
• Dispatch and operations altered?
• Ramping events?
• Balancing costs?
• Fuel issues?
• Newer new technologies?
