2018-2019 Integrated Resource Plan Key Inputs & Portfolios ... · High Efficiency Windows,...
Transcript of 2018-2019 Integrated Resource Plan Key Inputs & Portfolios ... · High Efficiency Windows,...
2018-2019 Integrated Resource PlanKey Inputs & Portfolios Update
December 10, 2018
Outline
Updated IRP Schedule “Going-In” Position IRP Inputs Review
Load Forecasting Fundamental Commodity Forecasting DSM/EE Assumptions Cost of Resource/Technology Options
Portfolios to be considered
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Updated Stakeholder Process
Meeting Date Topic
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February 15, 2018Northeast Indiana Innovation
Center3211 Stellhorn Road
Fort Wayne, IN 46815
2018 IRP Kick-off Meeting - Stakeholder Process & Scenario Discussion
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April 11, 2018 Barnes & Thornburg
11 S. Meridian St.Indianapolis, IN 46204
Considerations for Modeling DSM in the 2018 IRP & Update on the IRP
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February 13, 2019I&M South Bend Service Center
2929 Lathrop St.South Bend, IN 46628
Updated Inputs, Portfolios, Scenarios & Initial Modeling Results
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March 22, 2019Minnetrista Gathering Place1200 N. Minnetrista Pkwy.
Muncie, IN 47303
Modeling Results, Preferred Portfolio Discussion & Final Inputs
Portfolio Assumptions – I&M Going In Capacity Position
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Capacity position based on excluding from the portfolio: • RP2 (2022), RP1 (2028) • DCCNP1(2034), and DCCNP2 (2037)• No new resource additions
Portfolio Assumptions – I&M Going In Energy Position
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Energy position based on excluding from the portfolio: • RP2 (2022), RP1 (2028) • DCCNP1(2034), and DCCNP2 (2037)• No new resource additions
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I&M Load Forecast Summary
• I&M’s load has been relatively flat over the past decade and is not expected to grow over the next decade.
Compound Growth Rates
Peak Historical 10-Yr (2008-18) -0.1%Forecast 10-Yr (2019-29) -0.4%
Energy Historical 10-Yr (2008-18) -0.3%Forecast 10-Yr (2019-29) -0.5%
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Economic Outlook
.
Gross Regional Product for the I&M service territory is expected to grow in line with the US over the next decade. However, growth in population and non-farm employment are expected to lag the US.
Source: Moody’s Analytics
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Load Growth by Jurisdiction
There are a number of wholesale contracts that are expiring in the next couple of years that are not expected to renew (-308 MW in total). Partially offsetting the decline in wholesale load are a number of announced Industrial expansions in IN and MI (+15 MW in total).
-0.2%-0.6%
0.0%
0.2%
-0.1%
-3.9%-4.5%-4.0%-3.5%-3.0%-2.5%-2.0%-1.5%-1.0%-0.5%0.0%0.5%
IN Retail MI Retail Wholesale
I&M Long Term Sales Growth Rates by Jurisdiction
Historical 10-Yr (2008-18)Forecast 10-Yr (2019-29)
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Retail Load Growth by Class
.
The Residential and Commercial class sales are expected to be essentially flat over the next decade while Industrial sales are expected to see modest growth.
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1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2000 2005 2010 2015 2020 2025 2030
Annu
al G
Wh
Sale
s
I&M GWh Sales(Weather Normalized History & Forecast)
Residential Commercial
Industrial
Historical (2008-18)
Forecast (2019-29)
Residential -0.8% 0.0%Commercial -0.7% 0.1%Industrial 0.4% 0.3%
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Adjustments for DSM Programs
The load forecast was adjusted for company sponsored DSM/EE programs that are in the current plan filed with the Commission (through 2020).
Long term DSM/EE amounts are optimized in the IRP modeling (using Plexos).
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I&M Load Forecast Scenarios
Based on stakeholder request, an extreme weather scenario was developed assuming cooling degree days increase by 2% per year. The Extreme Weather scenario was within the High and Low Economic scenario boundaries that are evaluated in the IRP modeling.
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Fundamentals
Forecast Process:
Forecast requires iterative solution to satisfy all constraints
LT Capacity Expansion Fuel Forecast
Load Forecast
Emissions Forecast
Capital Costs
Input Aurora Run
Existing Unit Modifications
Yearly Runs (8760 hrs dispatch)
Generate Reports
Emission ConstraintsFuel Burn
Market Price
Output
Recycle
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Fundamentals
Forecast Process:
30 Year Normal Weather vs Actual Weather
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Analysis and Insight
. The Long-Term Forecast The centerpiece is the Reference Case, referred to internally as the “Consensus
Case”. It contains:o Objective input assumptions and output analysiso Fuel sensitivities used to portray cause-and-effect and provide regulatory
bounding of power priceso Comparisons with the EIA and other retained consultancies (names
redacted) featured along with a cursory gap analysis
“Scenarios” Collaborative scenarios
o Distributed as a supplement to the Reference Case.o Highlights internal concerns and observations that deviate from
“sensitivities” in that contributing/concurring factors must harmonize
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Fundamentals
Fundamental Forecast – 2018H2:
Base Fundamental Forecast High, Low and Status Quo Carbon impacts effective 2028
Future Considerations:
Natural Gas Fundamentals Evolving State of Carbon Mitigation
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Commodity Prices (2018 Forecast – Nominal $)(Prices are not location specific but reflect trading hubs)
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Commodity Prices (2018 Forecast – Nominal $)(Prices are not location specific but reflect trading hubs)
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Planning assumptions for I&M IRP development – Energy Efficiency
AP = Achievable Potential HAP = High Achievable Potential; EE bundles are made available as resource options
Residential
Commercial / Industrial
BundleLCOE
($/MWh)
Installed Cost
($/kWh)
Yearly Potential Savings (MWh)
2020-2024
Yearly Potential Savings (MWh)
2025-2029
Yearly Potential Savings (MWh)
2030-2039
Yearly Potential Savings (MWh)
2040-2045
Bundle Life
R - HVAC Equipment - AP $88.01 $0.60 8,759 10,256 11,790 12,346 10.00R - HVAC Equipment - HAP $132.02 $0.90 1,777 1,956 1,799 1,770 10.00
R - Building Shell - AP $162.66 $1.65 1,516 1,623 1,786 1,834 20.00R - Building Shell - HAP $243.99 $2.48 696 615 525 - 20.00
R - Appliances - AP $45.17 $0.26 4,520 4,720 4,969 5,087 8.00 Air Purifier, Dehumidifier, Refrigerator/freezer recyclingR - Appliances - HAP $67.75 $0.40 2,238 2,004 1,689 1,627 8.00
R - Water Heating - AP $34.41 $0.24 6,340 7,232 6,226 5,295 10.00R - Water Heating - HP $51.62 $0.35 3,225 3,304 2,184 1,617 10.00
R - Lighting - AP $88.21 $0.64 - - 1,954 1,866 11.00R - Lighting - HP $132.32 $0.97 - - 592 1,029 11.00
R - Behavioral - AP $108.66 $0.10 28,500 28,500 28,500 28,500 1.00Achievable Potential Sum 49,634 52,331 55,225 54,928
High Achievable Potential Sum 4,711 4,575 4,014 3,398
Measures
Air Source Heat Pump, Geothermal Heat Pump, Ductless Minisplits, Central AC Maintenance, CAC Maintenance, Wifi Thermostats High Efficiency Windows, Reflective Film-Windows, Insulation Sealing
Heat Pump Water Heater, Pipe Insulation, Low Flow Showerhead
Screw-In Lighting to LED (interior and exterior, speciality)
Enhanced Bill Presentation
BundleLCOE
($/MWh)
Installed Cost
($/kWh)
Yearly Potential Savings (MWh)
2020-2024
Yearly Potential Savings (MWh)
2025-2029
Yearly Potential Savings (MWh)
2030-2039
Yearly Potential Savings (MWh)
2040-2045
Bundle Life
C - VFD - AP $6.88 $0.06 5,411 5,748 6,484 6,629 14.00C - VFD - HAP $10.31 $0.09 2,599 2,444 2,150 2,200 14.00
C - INDUSTRIAL MEASURES - AP $15.55 $0.11 6,417 5,688 4,636 4,361 10.00C - INDUSTRIAL MEASURES - HAP $23.32 $0.16 2,624 2,003 1,190 999 10.00C - HVAC & REFRIGERATION - AP $10.62 $0.10 10,216 9,875 9,757 9,625 17.00
C - HVAC & REFRIGERATION - HAP $15.93 $0.15 3,921 3,407 2,278 1,970 17.00C - COMMERCIAL OUTDOOR LIGHTING - AP $11.89 $0.10 3,093 3,463 2,688 2,347 14.00
C - COMMERCIAL OUTDOOR LIGHTING - HAP $17.84 $0.15 1,109 1,388 906 738 14.00C - COMMERCIAL INDOOR LIGHTING - AP $11.95 $0.10 20,482 22,707 19,885 17,912 13.00
C - COMMERCIAL INDOOR LIGHTING - HAP $17.93 $0.15 5,707 6,936 4,674 3,591 13.00C - BUILDING MANAGEMENT SYSTEM - AP $28.25 $0.19 4,036 4,253 4,606 4,735 10.00
C - BUILDING MANAGEMENT SYSTEM - HAP $42.37 $0.29 1,770 1,608 1,380 1,325 10.00Achievable Potential Sum 49,656 51,733 48,056 45,609
High Achievable Potential Sum 17,729 17,785 12,579 10,822
Screw-in, High-Bay Fixtures, Interior Lighting - Occupancy Sensors, Linear Lighting
Ventilation - Demand Controlled, RTU - Advanced Controls, Process - Timers and Controls, Compressed Air - Leak Management Program,
Screw-in, High-Bay Fixtures, Interior Lighting - Occupancy Sensors, Linear Lighting
Measures
Ventilation VSC, Pumping System VSD, Compressed Air VSD
Water Cooled Chiller, Chilled Water Reset, Air Cooled Chiller, Ventilation upgrade, HVAC economizer
Retrocomission, Fan System Flow optimization, Pumping system optimization, Water heat upgrade, insulation wall cavity
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Demand Response Resources: The Company’s DR resources are based on a “BYOT”
Residential program and the Commercial program is a “EIS” light interface with existing customer equipment
Four blocks of each DR resource can be selected per year
DSM/Energy Efficiency
Sector ParticipantsDemand Savings
(kW)
Energy Savings(kWh)
Enrollment/Installation
Cost
Total First Year Cost
Ongoing Annual Cost
Service Life(Years)
Residential 3,375 3,299 837,540 $1,932,250 $1,971,408 $89,158 15
Sector ParticipantsDemand Savings
(kW)
Energy Savings(kWh)
Enrollment/ Installation
Cost
Total First Year Cost
Ongoing Annual Cost
Service Life(Years)
Commercial 44 954 200,647 $468,963 $507,138 $214,524 15
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DSM/Energy Efficiency
Volt VAR Optimization Resources: I&M has 68 MW of demand reduction potential from VVO; 33 circuits
installed, 15 circuits in process; 18 circuits planned in 2019
Tranche No. of CircuitsCapital
InvestmentAnnual O&M
Demand Reduction
(kW)
Energy Reduction
(MWh)1 32 $10,688,000 $320,640 8,066 33,2112 32 $10,688,000 $320,640 6,443 26,5293 33 $11,022,000 $330,660 6,185 25,4644 33 $11,022,000 $330,660 5,701 23,4735 33 $11,022,000 $330,660 5,413 22,2866 33 $11,022,000 $330,660 5,115 21,0587 33 $11,022,000 $330,660 4,793 19,7348 33 $11,022,000 $330,660 4,574 18,8349 33 $11,022,000 $330,660 4,397 18,10110 33 $11,022,000 $330,660 4,223 17,38611 33 $11,022,000 $330,660 4,004 16,48412 33 $11,022,000 $330,660 3,668 15,10013 33 $11,022,000 $330,660 3,264 13,43914 32 $10,688,000 $320,640 2,549 10,49415 32 $10,688,000 $320,640 1,733 7,137
One Tranche of VVO may be selected per year, based on planning and implementation constraints
IRP Inputs and Assumptions
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• Supply Side Resource Costs –• Nuclear• Coal with 90% Carbon Capture• Natural Gas Combined Cycle – with & without
Carbon Capture• Natural Gas Simple Cycle• Wind• Solar• Storage• Combined Heat & Power
AEP SystemNew Generation Technologies
Key Supply-Side Resource Option Assumptions (a)(b)(c)
Installed Full Load Fuel Variable Fixed CapacityCapability (MW) (d) Cost (c,e) Heat Rate Cost O&M O&M Factor LCOE (f)
Type Std. ISO Summer Winter ($/kW) (HHV,Btu/kWh) ($/MBtu) ($/MWh) ($/kW-yr) (%) ($/MWh)
Base LoadNuclear 1,610 1,560 1,690 7,900 10,500 0.91 6.24 145.43 80 176.3Pulv. Coal with Carbon Capture (PRB) 540 520 570 9,200 12,500 2.28 5.60 91.79 75 230.6Combined Cycle (1X1 "J" Class) 540 700 720 1,000 6,300 2.94 1.97 10.81 75 62.3Combined Cycle (2X1 "J" Class) 1,080 1,410 1,450 800 6,300 2.94 1.73 9.16 75 57.5Combined Cycle (2X1 "H" Class) 1,150 1,490 1,530 700 6,300 2.94 1.63 8.65 75 55.8
PeakingCombustion Turbine (2 - "E" Class) (g) 180 190 190 1,200 11,700 2.94 3.94 17.60 25 145.9Combustion Turbine (2 - "F" Class, w/evap coolers) (g) 490 500 510 700 10,000 2.94 6.07 15.77 25 114.0Aero-Derivative (2 - Small Machines) (g,h) 120 120 120 1,400 9,900 2.94 2.44 18.93 25 143.8Recip Engine Farm 220 220 230 1,300 8,300 2.94 2.61 6.32 25 123.0Battery 10 10 10 1,900 87% (i) 0.00 0.00 38.99 25 175.8
Notes: (a) Installed cost, capability and heat rate numbers have been rounded(b) All costs in 2018 dollars, except as noted.(c) $/kW costs are based on summer capability(d) All Capabilities are at 1,000 feet above sea level(e) Total Plant Investment Cost w/AFUDC (AEP-East rate of 5.5%,site rating $/kW)(f) Levelized cost of energy based on capacity factors shown in table(g) Includes Dual Fuel capability and SCR environmental installation(h) Includes Black Start capability(i) Denotes efficiency, (w/ power electronics)
IRP Inputs and Assumptions
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• Combined Heat and Power resource is assumed to be 15MW, with a full load net heat rate of ~4,800 Btu/kWh and an installed cost of ~$2,100/kW
• Stakeholder requested, AEPSC Generation Engineering developed a Class V estimate for a NGCC with Carbon Capture resource: Highlights include: Overnight Installed cost: $2,050/kW; Full Load Heat Rate: 7,600 Btu/kWh; Controlled CO2 rate: 11.7 lb./mmBtu
IRP Inputs and Assumptions
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Wind Resources for the IRP
• Installed Cost based on Bloomberg New Energy Finance’s H1 2018 Renewable Energy Market Outlook• Two Tranches Available as a Modeling Constraint – Tranche A & Tranche B both reflect impact of the
Production Tax Credit• 300MW of Wind Available per year; 150MW for each Tranche, with a maximum build over the planning period
of 2,100MW• Expected Capacity Factor: 40.5% for Tranche A & 35% for Tranche B
Source: AEP Based on Bloomberg New Energy Finance H1 2018 US Renewable Energy Market Outlook
• Two Tranches Available as a Modeling Constraint – Tier 1 and Tier 2 Pricing with Normalized Investment Tax Credit impact
• 300MW of Solar Available per year; 150MW at Tier 1 & 150MW at Tier 2, with a maximum build over the planning period of 1,700MW
• Expected Capacity Factor ~24.4%, from Single Axis Tracking system• For a 2021 Commercial Operation Date ~LCOE $62 to $68/MWh
IRP Inputs and Assumptions
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Solar Resources for the IRP
Source: AEP Based on Bloomberg New Energy Finance H1 2018 US Renewable Energy Market Outlook
IRP Inputs and Assumptions
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Energy Storage – 10MW/40MWh Resource
• Based on Lithium Ion technology, Energy Product• Cost Estimates based on Internal Estimates and information from EPRI and Storage Suppliers
IRP Inputs and Assumptions
26Forecast is based on PJM’s November 27, 2018 Distributed Solar Forecast
Modeling Portfolios Under Consideration
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• Current Modeling Portfolios to be Considered:1. Base, Low, High, Status Quo (no carbon price), High
I&M Load and Low I&M Load Optimizations2. Rockport Scenarios -3. Company Scenarios -4. Stakeholder Scenarios –
Modeling Portfolios Under Consideration: continued
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• Current Modeling Portfolios to be Considered:1. Base, Low, High, Status Quo (no carbon price), High
I&M Load and Low I&M Load Optimizations• I&M will analyze portfolios based on the Fundamental Commodity forecasts
shown on pages 16 & 17 as well as the Base, High and Low Load forecasts shown on page 11
Modeling Portfolios Under Consideration: continued
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• Current Modeling Portfolios to be Considered:2. Rockport Scenarios:
• I&M will analyze scenarios based on various assumed outcomes related to the potential future of the Rockport plant• Rockport Unit 1 retires EOY 2028 and Rockport Unit 2 has no lease
extension with I&M• Rockport Unit 1 has an FGD in 1/2026 and Rockport Unit 2 has no
lease extension with I&M• Rockport Unit 1 has an FGD in 1/2029 and Rockport Unit 2 has no
lease extension with I&M• Rockport Unit 1 retires EOY 2025 and Rockport Unit 2’s lease is
extended and an FGD is installed by 1/2029• Furthermore, for all scenarios that included an FGD the unit is
operated for an additional 10 years
Modeling Portfolios Under Consideration: continued
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• Current Modeling Portfolios to be Considered:3. Company Scenarios:
• I&M will analyze scenarios based on various assumed resource constraints as described below:1. Conventional Portfolio
• Meet energy demand through economically selected resources including universal solar, wind, storage and DSM/EE programs
• Add peaking capacity (CT or capacity purchase) in 2022, NGCC in 2028, 2034, & 20372. 12 - Year Peaking Plan
• Meet energy demand through economically selected resources including universal solar, wind, storage and DSM/EE programs
• Add peaking capacity (CT or capacity purchase) in 2022 & 2028, NGCC in 2034 & 2037
3. 15 - Year Peaking Plan• Meet energy demand through economically selected resources including universal
solar, wind, storage and DSM/EE programs• Add peaking capacity (CT or capacity purchase) in 2022 & 2028, & 2034, NGCC in
2037
Modeling Portfolios Under Consideration: continued
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• Current Modeling Portfolios to be Considered:4. Stakeholder recommended:
A. DSM/EE “Sommer” Decrement Approach:• I&M will analyze various assumed impacts on potential future
incremental DSM/EE levels based on a Stakeholder’s recommendation:1. Assumed Residential EE achieved 0.25% annual reduction throughout the analysis period2. Assumed Commercial EE achieved 0.50% annual reduction throughout the analysis period3. Assumed Industrial EE achieved 0.25% annual reduction throughout the analysis period
B. High Renewables Plan – Including high DG adoption, additional detail needed
C. No New Fossil generation – Additional detail neededD. Extreme Weather Scenario – See Slide 11, Aligns with High Load
sensitivity E. Others To be determined…
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Next Steps and Timing of Stakeholder Input
• By January 4, 2019, stakeholders are asked to provide comments on: The portfolio components (resources) that should be considered The attributes of resources (cost and performance) to be considered Considerations for additional scenarios Considerations for evaluating risk
• I&M plans to finalize the evaluation by early February to prepare for the 3rd Stakeholder meeting
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Follow-up Steps in the Stakeholder ProcessMeeting Date Topic
1
February 15, 2018Northeast Indiana Innovation
Center3211 Stellhorn Road
Fort Wayne, IN 46815
2018 IRP Kick-off Meeting - Stakeholder Process & Scenario Discussion
2
April 11, 2018 Barnes & Thornburg
11 S. Meridian St.Indianapolis, IN 46204
Considerations for Modeling DSM in the 2018 IRP & Update on the IRP
3
February 13, 2019I&M South Bend Service Center
2929 Lathrop St.South Bend, IN 46628
Updated Inputs, Portfolios, Scenarios & Initial Modeling Results
4
March 22, 2019Minnetrista Gathering Place1200 N. Minnetrista Pkwy.
Muncie, IN 47303
Modeling Results, Preferred Portfolio Discussion & Final Inputs
• Further questions or stakeholder comments can be made at: https://www.indianamichiganpower.com/info/projects/IntegratedResourcePlan