11/4/02 NW Energy Coalition

Clean Electricity Options for the Pacific Northwest: An Assessment

of Efficiency and Renewable Potentials through the year 2020

October2002 Michael Lazarus, David von Hippel, Stephen Bernow

Tellus Institute, http://www.tellus.org for the NW Energy Coalition

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PNW Electricity generation resources, 2001

Hydro (15612aMW)

72%

Oil (196aMW)1%

Solar/Wind/ Biomass

(128aMW)1%

MSW/Black Liquor

(430aMW)2%

Natural Gas (2500aMW)

12%

Coal (1656aMW)8%

Other4%

Nuclear (851aMW)

4%

(Source: NPPC, 2001c)

• Natural gas and wind have grown since mid-2001

•CA gas, Interior West coal, and BC hydro also used to meet loads

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Schematic of Study Approach

Efficiency +CHP Supply

Curves

Council's 4th plan (1994-96)the "benchmark"

National studies (1997-2001)detailed (national) policy pathways ,

modeled interactions

Regional EE analyses (1998-2001)RTF/NEEA/CA/UT/DOE market studies Renewables Assessments

True Wind study (2002)WSU biomass (2002)

Changed market conditionsand technology developments

measures analysis(cost and potential)

RenewablesSupplyCurves

Study area: 3½ state BPA area

Basic assumptions: Regional Technical Forum

Demand forecast: adapted from Council 4th plan

Wind resource analysis: Brower/TrueWind Solutions

Biomass resource analysis: Jim Kerstetter, WSU

Advice and access to data: Power Council, NW Energy Efficiency Alliance, WSU Energy Center, OR Office of Energy, Pacificorp, BPA, RNP, Ecotope, NWSEED, Climate Solutions

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Changes to Load Projections

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End-Use Demands & Efficiency Measures

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Commercial efficiency savings to 2020

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Commercial measures: net annual costs & benefits

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Residential efficiency and fuel switch savings to 2020

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Residential measures: net annual benefits & costs

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Residential measures: net annual benefits & costs - w/o water heating measures

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Industrial/other efficiency savings to 2020

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Industrial measures: net annual costs and benefits

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Commercial Combined Heat & Power

• Evaluated 30 kW microturbines, 100 kW ICE and 800 kW ICE

• Assumed 30% penetration by 2020• Displace 1315aMW grid electricity by 2020• Ave. cost = 3.2 cents/kWh, 1.08 b/c

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Industrial Combined Heat & Power

• Evaluated 800 and 3000 kW ICE and 10 and 40 MW CTs

• Assumed 30% penetration by 2020• Displace 1031 aMW grid electricity -2020• Ave. cost = 3.7 cents/kWh, .92 b/c

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Overall Results: Efficiency, fuel switch, and combined heat and power (CHP) measures

Savings (aMW) Cumulative NPV Benefits

2010 2020 to 2020 to 2050 to 2050

(w/externalities) Residential 568 (7%) 1618 (18%) ($938) $131 $1,446 Commercial 1088 (19%) 2260 (36%) $530 $1,423 $2,190 Industrial 1079 (13%) 2365 (24%) $812 $1,189 $1,847 Other 33 (4%) 39 (4%) ($2) $14 $43 TOTAL 2768 (12%) 6283 (24%) $402 $2,755 $5,528

CHP by 2020 (included in the table): 1315 aMW commercial and 1031 aMW industrial

Fuel switching by 2020: 322 aMW from switching residential water heaters to high efficiency gas; 73 aMW to solar water heaters

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Wind Resource Cost and Potential (with and without Production Tax Credit)

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Regional Biomass Electricity Options

Near-term options:

• Cofiring biomass(residues) at coal stations

• Landfill gas

Longer-term options:• Modular, gasification combined cycle systems using residue streams

• High-efficiency cogeneration systems at paper & pulp mills

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Summary of renewable resource results (assuming 2010 costs)

Total 2020 Potential

Generation Cost (cents per kWh)

aMW

Percent of Regional Demand Range

Weighted Average

Wind 6433 23% 2.6 - 6.1 5.1

(3.7 w/PTC) Biomass 2880 10% 1.1 - 6.0 4.4 Geothermal 641 2% 5.0 - 7.0 5.8

Smaller resources such as distributed photovoltaics, small wind and hydro not considered

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A Combined Resource Scenario

• Identified (achievable) efficiency/fuel switch potential

• 20% of electricity production by (non-hydro) renewables by 2020

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CO2 emissions from electricity generation under combined resource scenario

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Conclusions

• Cost-competitive efficiency and renewable energy resources are more abundant than commonly assumed, and far more than being pursued

• Major reductions in (electricity) CO2 emissions are possible at limited cost or net economic benefit

• More in-depth understanding of demand patterns and markets (esp. industrial) would be beneficial

• The merits of specific policy instruments (offset requirements, portfolio standards, tax incentives, efficiency standards, etc.) need to be evaluated