ERCOT PUBLIC 6/17/2014 1 2014 LTSA Scenario Results June, 2014.

ERCOT PUBLIC6/17/2014 1

2014 LTSA Scenario Results

June, 2014


Agenda

• Discuss Stringent Environmental Scenario differences

• Stringent Environmental results

• Discuss High Economic Growth Scenario differences

• High Economic Growth results

• Scenario comparisons

• Next scenarios


Stringent Environmental Scenario Highlights

• ERCOT’s Current Trends load forecast was adjusted for increased EE and 2,400 MW of Solar DG by 2029

• Current Trends NG forecast was increased by $1.50/mmBtu in each year

• Costs for SO2, NOx, and CO2 were added

– CO2 costs ranged from $25/ton in 2018 to $61/ton in 2029

– At these CO2 costs ERCOT exceeds current GHG emission levels goals for both 2020 and 2030

• PTC and ITC were added to Wind and Solar expansion

• Demand response was increased an additional 3% per year over Current Trends amounts

• DC Ties were increased by 3,000 MW to represent new connections to external ERCOT markets


• Thru 2029 –11,050 MWs of CCs, 13,291 MW of wind and 16,500 MWs of solar were built

• 11,729 MWs of economic retirements and 8,789 MWs of fixed retirements

• 9,850 MW of economic coal retirements

Stringent Environmental Results

CC Adds MW - 2,000 650 2,000 6,400 CT Adds MW - - 190 - - Coal Adds MW - - - - - Nuclear Adds MW - - - 1,100 1,100 CAES Adds MW - - - - - Geothermal Adds MW - 120 120 120 120 Biomass adds MW - - 80 80 80 Solar Adds MW - 4,500 4,500 4,500 3,000 Wind Adds MW 2,627 4,337 5,614 413 300 Annual Capacity Additions MW 2,627 10,957 11,154 8,213 11,000 Cumulative Capacity Additions MW 2,627 13,584 24,738 32,951 43,951 Retirements MW 3,854 2,086 2,379 11,223 977 Residential Demand Response MW 300 318 337 358 373 Industrial Demand Response MW 1,200 1,273 1,351 1,434 1,492 Reserve Margin % 11.96 9.84 10.90 14.49 13.52 Coincident Peak MW 76,557 79,931 82,692 85,457 87,321 Average LMP $/MWh 69.39 84.78 106.59 100.97 109.67 Natural Gas Price $/mmbtu 6.52 6.57 7.43 7.53 7.85 Average Market Heat Rate MMbtu/MWh 10.64 12.90 14.35 13.41 13.97 Natural Gas Generation % 51.6 54.9 54.1 54.5 56.7 Coal Generation % 24.5 16.5 12.0 8.3 3.7 Wind Generation % 13.8 16.5 19.9 18.7 18.2 Solar Generation % - 2.6 4.9 7.1 8.4 Scarcity Hours HRS - 2.0 8.0 1.0 2.0 Unserved Energy GWhs - 1.5 6.1 0.8 2.1 SO2 Tons 253,868 169,839 123,993 86,700 41,523 CO2 (k) Tons 206,849 184,529 166,290 153,662 132,129 NOx Tons 106,910 92,600 80,318 74,607 69,006

2027 2029Description Units 2018 2021 2024


High Economic Growth Scenario Highlights

• High load forecast

• Capital cost change

• Increase CT and CC capital cost by 25%

• Solar starts from 3000 $/kW in 2013 and decreases 5% every year;

• All the other technologies the same as in Current Trends

• LNG Medium assumption

• Gas price is 1.5 $/MMBtu higher than in Current Trends

• 13.75% reserve margin target


• Thru 2029– 8,250 MWs of CCs, 6,020 MW of CTs, 16,500 MWs of solar and 1,551 MWs wind were built

• Reserve margin increases through out the entire planning period to 15.11% in 2029.

• 73 MWs of economic retirements and 8,789 MWs of fixed retirements

High Economic Growth Results

CC Adds MW 1,300 1,200 3,000 800 1,950 CT Adds MW 190 3,150 590 2,090 - Coal Adds MW - - - - - Nuclear Adds MW - - - - - CAES Adds MW - - - - - Geothermal Adds MW - - - - - Solar Adds MW 600 4,200 4,500 4,300 2,900 Wind Adds MW - - - 1,551 - Reliability Adds MW - - 1,330 - Annual Capacity Additions MW 2,090 8,550 9,420 8,741 4,850 Cumulative Capacity Additions MW 2,090 10,640 20,060 28,801 33,651 Retirements MW 922 2,086 2,439 2,453 950 Residential Demand Response MW 300 18 19 21 14 Industrial Demand Response MW 1,200 73 78 83 58 Reserve Margin % 8.70 10.16 13.84 13.86 15.11 Coincident Peak MW 78,133 83,071 86,747 90,551 93,176 Average LMP $/MWh 65.72 70.01 68.31 81.47 86.40 Natural Gas Price $/mmbtu 6.52 6.57 7.43 7.53 7.85 Average Market Heat Rate MMbtu/MWh 10.08 10.66 9.19 10.82 11.01 Natural Gas Generation % 43.6 45.8 45.7 46.5 45.3 Coal Generation % 33.6 31.0 29.8 27.3 27.6 Wind Generation % 11.9 10.8 10.3 10.4 9.9 Solar Generation % 0.4 2.8 5.1 7.1 8.3 Scarcity Hours HRS 11.0 12.0 4 10 11 Unserved Energy GWhs 12.9 16.3 3.0 14.3 18.7 SO2 Tons 385,249 389,772 394,315 352,381 343,199 CO2 (k) Tons 235,962 248,608 254,845 255,117 262,601 NOx Tons 128,472 135,170 139,121 138,903 144,093

2027 2029Description Units 2018 2021 2024


Scenario Comparisons


Next Scenarios

• High Efficiency/DG• High Gas Price• Global Recession


Questions?

Doug [email protected]

Julie [email protected]


Economic Conditions•Moderate economic growth – (some limits on oil & gas development)•Less oil and gas production than under Current Trends•Less LNG exports than under Current Trends•Population growth same as under Current Trends at ~1.5%/yr, in the I-35 corridor and Houston areas but decrease in the Valley (Midland) area•Increase in industrial production of alternative energy and efficiency-related technologies

Weather & Water•More extremes helps convince public and politicians to take action•Higher water costs than under Current Trends, increasing dry-cooling for new generators

Natural Gas Prices•Moderate increase than under Current Trends •Same amount of LNG exports as under Current Trends

Oil Prices•Higher oil prices than under Current Trends•But growth in oil exploration and development limited by stringent environmental regulations

End – Use Customers / Policies•Continued stringent building code – 10% improvement every 3 years•More onsite solar penetration –

• 1000 MW by 2022• 3000 MW by 2032

•Existing buildings retrofits – 20% improvement in existing buildings efficiency

Transmission Regs•More DC ties such as Tres Amigas / El Paso / Cross Wind•Solar CREZ to west Texas to take advantage of Pecos / Brewster / El Paso•Potential ties w/ Mexico

Enviro Regs / Energy Policies•Federal greenhouse gas emission standard implemented•Federal standard of 25% renewable / energy efficiency•More stringent ozone standard implemented•Toxic emissions standards implemented•Some limits on drilling and associated disposal wells•Government imposes some water usage limits, raising cost of water•More dry cooling for natural gas generators•Moderate carbon tax / price materializes•Increase nuclear safety concerns than under Current Trends•Expedited retirements / repowering / upgrades

Story:•Aggressive action on mitigating environmental impacts of energy sector, including electric generation and oil & gas sectors•Higher gas, oil, electricity prices, and lower solar, wind, storage costs.•Assumes more DC ties with neighboring regions and the development of concentrated solar regions that will require solar-CREZ lines to and from west Texas.•Higher electricity prices drive more adoption of energy efficiency and customer-sited solar PV.•Uncertain development of new nuclear & geothermal

Implications for ERCOT:•Challenge in matching generator w/ load•Reserve & integrate issues•Potential need for new ancillary services to provide faster & flexible resources•More transmission for solar CREZ•Need to develop rules for integrating storage & distributed generation•Need to address issues associated with adding DC ties to neighboring regions (including NERC and FERC-related issues)

6. Scenario: Stringent Environmental Regulations / Solar Mandate

Alt. Generation Resources •Continued PTC/ITC through 2020, reducing over time•Continued decrease capital costs for solar: 3-5% /yr•Wind capacity factors increase due to technological improvements•Cap on annual wind generation•Increased development of storage due to cost reductions for batteries & compressed air•More financing mechanism are available (e.g.: real estate investment trusts, property-assessed clean energy financing, and others]


Transmission Regs/Policies•Same as under Current Trends•Higher cost for Transmission (for both materials and labor)

Economic Conditions•High Texas GDP growth •High population growth (2.5%/yr)•Pro-business environment•Industrial growth concentrated in Houston, I-35 corridor, Midlands/Odessa, Lower Rio Grand Valley•Higher LNG exports than under Current Trends •Capital is available to support new generation and transmission

Weather / Water•Higher water costs, but does not limit growth (e.g., potentially more dry cooling for new generation)

Oil/Gas Prices•Higher (but still relatively low) gas prices than under Current Trends (~$1.5/mmbtu higher than in Current Trends)•Same oil prices as under Current Trends

End-Use •Growth of household income•However, more energy-efficient new homes •Overall efficiency gains are similar as under Current Trends•Fast adoption of new demand-side technologies

Alt. Gen. Resources•Renewables are economic and growth occur due to higher gas prices•More technological improvement than under Current Trends for renewables and storage•Cap on annual wind capacity growth

Gen Resource Adequacy Standards•Likely to impose a resource adequacy requirement

Environ. Regs/Energy Policy•Continued modest environmental regulations, no significant changes from assumptions under Current Trends•U.S. more focused on developing domestic energy sources

Story:Higher economic growth than under Current Trends. Growth occur throughout Texas driven in large part by oil and gas sector and related upstream and downstream industries.

Implications for ERCOT:•High load growth•High urban growth •High industrial growth, concentrated through I-35 corridor, Midlands/Odessa, and Lower Rio Grand Valley•Higher costs for new generation and transmission due to high commodity prices•Potential challenges with generation portfolios keeping pace with load profile changes

3. Scenario: High Economic Growth

ERCOT PUBLIC 6/17/2014 1 2014 LTSA Scenario Results June, 2014.

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Transcript of ERCOT PUBLIC 6/17/2014 1 2014 LTSA Scenario Results June, 2014.