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PacifiCorp IRP PacifiCorp IRP Operating Impacts Study UpdateOperating Impacts Study Update

Ken Dragoon ken.dragoon@pacificorp.com

Planning for Wind WorkshopPortland, OregonDecember 3, 2003

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BackgroundBackground

PacifiCorp integrates approximately 300 MW of wind PacifiCorp integrates approximately 300 MW of wind generation on system of 8,300 MW capacity (3.6%).generation on system of 8,300 MW capacity (3.6%).

At outset of IRP process, wind integration costs At outset of IRP process, wind integration costs thought to be small with low penetration, but rising thought to be small with low penetration, but rising in unknown ways with higher installed capacity.in unknown ways with higher installed capacity.

Analysis done for IRP exposed to public comment as Analysis done for IRP exposed to public comment as well as vetting with wind experts in field (DeMeo, well as vetting with wind experts in field (DeMeo, Milligan, Caldwell, Hirst).Milligan, Caldwell, Hirst).

Analysis suggested costs associated with holding Analysis suggested costs associated with holding additional reserves and system dispatch (imbalance additional reserves and system dispatch (imbalance costs).costs).

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Imbalance Cost Increases Imbalance Cost Increases with Installed Wind Capacitywith Installed Wind Capacity

Imbalance Cost as Function of Installed Wind Capacity

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Imb

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West Cost East Cost

P:\My Documents\IR P 2002\Wind\ [fla t hourly summary 9-30.x ls]East

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Reserve Requirements Increase Reserve Requirements Increase with Wind Capacitywith Wind Capacity

Incremental Reserve Requirement

y = 1.1179E-07x2 + 4.9970E-05xR2 = 9.9826E-01

y = 1.035E-07x2 + 1.532E-04xR2 = 9.977E-01

0%10%20%30%40%50%60%70%80%90%

100%110%

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Installed Wind Capacity (MW)

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East Side West Side Poly. (East Side) Poly. (West Side)

P:\My Documents\IRP 2002\Wind\[Incremental Reserve Requirements Calculation.xls]MWh Cost

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Reserve Requirement Cost FormulaReserve Requirement Cost Formula

Cw = Reserve requirement cost ($/MWh)Cw = Reserve requirement cost ($/MWh)

Pw = Installed wind capacityPw = Installed wind capacity

f = Wind capacity factorf = Wind capacity factor

A, B = constants (B/f~ $1/MWh)A, B = constants (B/f~ $1/MWh)

Formula assumes cost of reserves increases linearly with reserve requirement.Formula assumes cost of reserves increases linearly with reserve requirement.

fB

f

PAC w

w

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Site-Specific IntegrationSite-Specific Integration

System Capacity Factor Imbalance Reserve Total

East 500 MW 35% $1.75 $1.51 $3.26

West 500 MW 35% $2.10 $1.39 $3.49

East 1,000 MW 30% $3.25 $2.72 $5.97

West 1,000 MW 30% $2.95 $2.04 $4.99

Cost Calculation Examples

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IRP ResultsIRP Results

IRP identified 1,400 MW of additional IRP identified 1,400 MW of additional wind capacity (~14%) as part of lowest wind capacity (~14%) as part of lowest cost resource portfolio over first 10 cost resource portfolio over first 10 years of study.years of study.

PacifiCorp expects to release RFP for PacifiCorp expects to release RFP for renewables (not just wind) in renewables (not just wind) in December.December.

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Improving on IRP AnalysisImproving on IRP Analysis

Two pronged approach:Two pronged approach:• Improve analytical techniqueImprove analytical technique

– Improve modeling capabilityImprove modeling capability– Refine hourly sigma analysisRefine hourly sigma analysis– Address sub-hourly issuesAddress sub-hourly issues– Address capacity credit questionAddress capacity credit question

• Examine actual operating experienceExamine actual operating experience– Operators kept hourly log of wind affects Operators kept hourly log of wind affects

on system for couple months earlier this on system for couple months earlier this year.year.

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Value of Wind ForecastsValue of Wind Forecasts

Wind output can be forecastWind output can be forecast• Not as well as temperatureNot as well as temperature• Better than precipitationBetter than precipitation

PPM Energy sells wind output on a firm PPM Energy sells wind output on a firm basis, backed up with cash market basis, backed up with cash market transactions and options as necessary.transactions and options as necessary.

State of wind generation forecast State of wind generation forecast technology rapidly improving.technology rapidly improving.

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Sample Wind Forecast DataSample Wind Forecast Data

Data courtesy PPM Energy and 3Tier Group

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3 Tier Forecast Generation ("Day Ahead") Cash Market Estimate Actual

Day Ahead Forecasts were within 10% of Maximum Capability 26 of 31 days (84% )Day Ahead Forecasts were within 15% of Maximum Capability 28 of 31 days (90% )

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Logjam EffectLogjam Effect

Initially many severe skeptics-- but Initially many severe skeptics-- but experience is breeding acceptance.experience is breeding acceptance.• Operators beginning to understand that Operators beginning to understand that

their headache with accommodating their headache with accommodating wind earns money for the company.wind earns money for the company.

Our study is motivating others to Our study is motivating others to pragmatically study costs.pragmatically study costs.• Early studies were long on theory, Early studies were long on theory,

without resulting in actual costs without resulting in actual costs calculations.calculations.

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ConclusionsConclusions

Getting past analysis paralysis is Getting past analysis paralysis is resulting in real resource acquisition.resulting in real resource acquisition.

Much work to be done to improve the Much work to be done to improve the analysis-- want to keep analysis in analysis-- want to keep analysis in touch with operating experience.touch with operating experience.

Experience has helped wind resource Experience has helped wind resource to achieve acceptability among to achieve acceptability among operators and managers.operators and managers.

Wind forecast technology is improving Wind forecast technology is improving and providing significant help in and providing significant help in managing wind on power systems.managing wind on power systems.

1341 MW Combine Hills Project in NE Oregon