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QUADRENNIAL ENERGY REVIEW | Second Installment
1
QUADRENNIAL ENERGY REVIEW
Karen G. Wayland, Ph.D.
Energy Policy and Systems Analysis
US Department of Energy
September 12, 2016 | Washington, DC
QER 1.1 and1.2 Update for NASEO
QUADRENNIAL ENERGY REVIEW | Second Installment
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Linking QER 1.1 and 1.2
Fuels
Waste
QER 1.1
QER 1.2
QUADRENNIAL ENERGY REVIEW | Second Installment
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QER 1.1: 63 Recommendations
• Increasing Resilience, Reliability, Safety and Asset Security
• Modernizing the Electric Grid
• Modernizing US Energy Security Infrastructure
• Shared Transportation
• Integrating N. American Energy Markets
• Workforce
• Siting and Permitting
QUADRENNIAL ENERGY REVIEW | Second Installment
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QER 1.1: Implementation
QER 1.1 Implementation Report Card
• Provides detailed analysis of the QER’s 63 recommendations
• Assesses progress achieved in the time following the QER’s release
• Determines what additional actions are required for implementation to occur
Implementation Breakdown:• Executive Action
• Existing authorities – 43
• Legislative Action (Congress)• New appropriation – 13 • New statute – 10
Highlights:• 12 recommendations are complete• 21 recommendations are reflected
in law following Congressional action
• $2 billion to modernize the Strategic Petroleum Reserve
QUADRENNIAL ENERGY REVIEW | Second Installment
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QER 1.2: Electricity Generation to End Use
QER 1.1 documented major transformation of Electricity Sector:
• Changing generation mix• Low load growth• Increasing vulnerability to severe weather/climate• New technologies, services and market entrants• Cyber/physical threats• Aging infrastructure and workforce• Growing overlap between jurisdictions
Given the centrality of electricity to the Nation, this transformation merits a closer examination in the next
installment of the QER.
QUADRENNIAL ENERGY REVIEW | Second Installment
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The QER 1.2 Focus
• QER 1.2 will analyze how the electric power system as a whole is evolving, including:
• Integrating new technologies• Changing market conditions• Grid operations• Financing and valuing• Changing role of the customer• Jurisdictional challenges
• Physical structures and the roles of a range of actors, institutions and industries:
• Maintaining reliability of supply• Ensuring electricity affordability• Adapting to dramatic changes in technology and
services• Fuel choice• Distributed and centralized generation• Physical and cyber vulnerabilities• Federal, state, and local policy direction • Expectations of residential and commercial
consumers• Reviewing existing and evolving business models
for a range of entities, throughout the system
QUADRENNIAL ENERGY REVIEW | Second Installment
State and Local Resources / July 13, 2016 / Washington, DC7 7
Stakeholder Process
• State-Tribal QER Listening Sessions: NARUC, NASEO, NCSL, STEAB, ICEIWG
• Public Comments
Stakeholder Meetings: energy.gov/qer
Boston
Washington
Atlanta
Des Moines
Austin
Salt Lake City
Los Angeles
QUADRENNIAL ENERGY REVIEW | Second Installment
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State, Local, and Tribal Products
National Academies Workshop:
Electricity Use in Rural, Isolated and Islanded CommunitiesFebruary 2016
• Incorporating efficiency• Increasing resilience, reliability• Rate design• Generation alternatives for CO2 reduction• Technology and operational innovation• Modernization of planning paradigm• Transportation linkages to electricity system• Microgrids
QUADRENNIAL ENERGY REVIEW | Second Installment
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State, Local, and Tribal Products
Resources for Timely Answers to Analytical Questions
Categories: Policy Levers:
Electricity Rate Design for Clean Energy Gubernatorial Actions
Decoupling Legislative Actions
Lost Revenue Adjustment Mechanisms (LRAM) Agency Actions
Net-metering and Stand-by Rates
New Solar Tariff
Straight Fixed Variable Rates All actions are considered "completed" unless noted.
Performance Based Regulation (includes NY, HI, more comprehensive efforts) Does not include proposed legislation or proposed regulations.
Performance Incentives for energy efficiency
Energy System Resilience Resources: State Resiliency Plans State Clean Energy Actions Database
Energy Assurance Plans NCSL (Energy & Environmental and CPP Reactions)
Cybersecurity Efforts F&C stories (published and internally pitched)
Energy Transmission and Distribution States’ press release pages
Smart Grid Initiatives Executive Orders
Microgrid Development NASEO state news stories
Transmission Planning and Siting Public Utilities Fortnightly
Interconnection Standards E&E newsletters
Energy Storage ACEEE database
Incorporate Storage into State Energy Resilience Planning DSIRE database
Require Utility Procurement of Energy Storage Capacity
Clarify storage’s treatment in the state utility regulatory process
Incorporate storage into energy assurance efforts
Promote research and development of energy storage
Energy Policy Innovation Consortium: State Policy ActionsState Policy Actions from 2008- June 2016
QUADRENNIAL ENERGY REVIEW | Second Installment
1010
New York (38), Virginia (36), Oregon (35), California (34) and Maryland (30) have the most legislation, incentives, and policy directed at clean energy economic development.
Case Studies:• Nevada GigaFactory• Oregon Pacific Northwest
Manufacturing Partnership• Maryland Clean Energy Center
Establishing the Playing Field: Surveying Clean Energy-related Economic
Development Policy across the States
State, Local, and Tribal Products
QUADRENNIAL ENERGY REVIEW | Second Installment
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Breakdown of Alternative Energy References by State and
Proportion of Municipalities by State to Reference at least One Alternative Energy Keyword
State, Local, and Tribal Products
QUADRENNIAL ENERGY REVIEW | Second Installment
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State, Local, and Tribal Products
Front-Line Resilience PerspectivesFigure 4. Key Hazards and Vulnerabilities: Electric Power Distribution*
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State, Local, and Tribal Products
Figure 2. Proposed State Energy Resilience Framework
Principles and Frameworks for State Energy Resilience (w/ Case Studies)
Includes Case studies for:- New York – Fuel New York- California – Substations
- Oregon – Cascadia Fault
QUADRENNIAL ENERGY REVIEW | Second Installment
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State, Local, and Tribal Products
Electricity Emergency Response Capabilities
Figure 1: Local/Regional/National Restoration Escalation Process
QUADRENNIAL ENERGY REVIEW | Second Installment
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• Figure 8 (Left) – Resource Availability Summary, depicts regional differences for
• Bulk and Distribution outages
• Impacted customers
• Recovery resources
• Other Figures (Not Shown)
• Table 12 Representative Catastrophic Events That Could Require a National-Level Response
• Table 13 Resources and Restoration Time for Representative Catastrophic Events That Could Require a National Level Response
60-27: Electricity Emergency Response Capabilities
Summary of Customer Outages and Availability of Resources
Total Number of Customers Affected by NERC Region
Percent Distribution of Spare Transformers
Number of Manufacturers of
Electric Utility Pole and Cross Arm Lineman per 1,000 Customers
FRCC6%
MRO3%
NPCC22%
RFC21%SERC
24%
SPP11%
TRE3%
WECC10%
0
0.2
0.4
0.6
0.8
1
1.2
FRCC MRO NPCC RFC SERC SPP TRE WECC
0
10
20
30
40
FRCC MRO NPCC RFC SERC SPP TRE WECC
Utility Poles Crossarms
State, Local, and Tribal Products
QUADRENNIAL ENERGY REVIEW | Second Installment
Policy Drives Generation Capacity Additions
Additions (GW) by Fuel Type, 1950-2015
Coal Natural Gas Petroleum Biomass Nuclear Hydro
Wind Solar Geothermal Other
ITC for Solar 2006DOE Org Act 1977 PTC for Wind
21 states enact Renewable Portfolio
Standards
QUADRENNIAL ENERGY REVIEW | Second Installment
24,65134,296 39,135 45,676
59,075 60,481
Utility Scale Wind(Mw)
08 09 10 11 12 13
Utility Scale Wind, 2008-2013 : 245 % increase in capacity
Renewables Capacity Increasing, Costs Declining...
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
0.0
2000.0
4000.0
6000.0
8000.0
10000.0
12000.0
14000.0
2008 2009 2010 2011 2012 2013
Cu
mu
lati
ve s
ola
r P
V m
od
ule
d
ep
loym
en
t M
W
Deployment and Cost for U.S. Solar PV 2008-2013
U.S. Solar(PVmodule)-($/W)
U.S. Solar(PV)- (MW)
2020 goal: $0.5
Sources: Department of Energy, Office of Energy Efficiency and Renewable Energy analysis, GTM, SEIA, LBNL, NREL
536 619 8661,524
3,170
6,460
Utility Scale Solar PV & Thermal
(Mw)
08 09 10 11 12 13
Utility Scale Solar, 2008-2013 : 1200 % increase in capacity
826 1,1491,820
2,889
4,715
6,351
Distributed Solar(Mw)
08 09 10 11 12 13
Distributed Solar, 2008-2013 : 769 % increase in capacity
17
QUADRENNIAL ENERGY REVIEW | Second Installment
Top 10 Solar Generation States
Source: Energy Information Administration, September 2015
18
QUADRENNIAL ENERGY REVIEW | Second Installment
About 43 GW of capacity currently under construction in the United States (as of May 2016)
Gas CC53%
Gas CT6%
Nuclear13%
Solar9%
Wind18%
Other1%
US capacity under construction: 43 GW
Source: IHS and ABB Velocity Suite © 2016 IHS
0 5,000 10,000 15,000
Northeast
West
Mid-Continent
ERCOT
Southeast
PJM
Natural gas Nuclear Wind Solar Other
US capacity under construction by region
Source: IHS and ABB Velocity Suite © 2016 IHS
MW
Generation Capacity Under Construction
QUADRENNIAL ENERGY REVIEW | Second Installment
U.S. Power Plant Retirements, 1995-2025
0
5,000
10,000
15,000
20,000
25,000
1995 2000 2005 2010 2015 2020 2025
Other Nuclear Natural gas Coal
Source: IHS and ABB Velocity Suite © 2016 IHS
MW
2016–25:Coal retirements: 43 GWTotal retirements: 90 GW
1996–05:Coal retirements: 4 GW
Total retirements: 36 GW
2006–15:Coal retirements: 43 GWTotal retirements: 98 GW
Other Nuclear Natural Gas Coal
Source: IHS North American Power Market Outlook | June 2016
QUADRENNIAL ENERGY REVIEW | Second Installment
Capacity Additions, 1995-2025
21
I
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
1995 2000 2005 2010 2015 2020 2025
Other Wind Solar Nuclear Natural gas Coal
Source: IHS and ABB Velocity Suite
Notes: Additions exclude coal-to–natural gas or biomass conversions.
© 2016 IHS
MW
Age of Natural Gas
Age of Gas & Wind Age Solar
& Wind?
Age of Gas, Wind & Solar
QUADRENNIAL ENERGY REVIEW | Second Installment
Distributed Energy Storage
2015
364 MW
2015
29.6 GW
Source: DOE Global Energy & Storage Database. Accessed September 2015.
• Continued decreases in storage technology costs, driven by greater production of batteries for electric vehicles and state-level storage mandates, are likely to increase distributed storage growth.
• From an end-use perspective, distributed electricity storage can reduce peak load and facilitate adoption of distributed generation
22
QUADRENNIAL ENERGY REVIEW | Second Installment
Rates Vary by Class and Utility Type
23
Average U.S. Electricity Rate and its Components
Residential Commercial Industrial Total
Ce
nts
pe
r ki
low
att-
ho
ur
• Generation is by far the largest component of retail rates.
• Industrial customers typically pay the lowest rates, partially determined by cost differentials, but also by policy goals such as economic development or income-rate progressivity.
• Rates for public utilities are slightly lower than those of IOUs for residential and commercial customers, but higher for industrial customers.
• Averaged across consumer classes, IOUs have higher rates than municipal and cooperative utilities. IOUs are for profit entities and include profits as an additional cost.
IOU
Co-op
Muni
Retail Power Marketer (energy only)
QUADRENNIAL ENERGY REVIEW | Second Installment
Natural Gas
Transportation
Lifeline Network Interdependencies
Electricity
Oil
WaterTelecom
Power for Pumping Stations, Storage, Control Systems
Power for Pumping Signaling Switches
Power for Compressors, Storage, Control Systems
Power for Switches
Power for Pump/LiftStations, Control Systems
Ship
pin
g
Fuel Transport, Shipping
Fuel Transport, Shipping
Fuel for Generators
Shipping
Heat
SCADA Communications
SCA
DA
Co
mm
un
icat
ion
s
SCA
DA
Co
mm
un
icat
ion
s
SCADA Communications
Fue
l fo
r G
en
era
tors
Wat
er
for
Pro
du
ctio
n,
Co
olin
g,
Emis
sio
ns
Re
du
ctio
n
Water for Cooling, Emissions Reduction
Fuel for Generators, Lubricants
Fuels. Lubricants
Water for Cooling, Emissions Reduction
SCA
DA
Co
mm
un
icat
ion
s
Fuels. Lubricants
QUADRENNIAL ENERGY REVIEW | Second Installment
Growing Digitization
QUADRENNIAL ENERGY REVIEW | Second Installment
50 Million Installed Smart Meters
2626
Obstacles to Smart Grid Technology Adoption
reliabilityefficiency
Cost reductionCustomer empowerment
outage recovery
tech immature
funding
customer resistance
Internal expertise
Value of Smart Grid Technology
QUADRENNIAL ENERGY REVIEW | Second Installment
Speed of Information
QUADRENNIAL ENERGY REVIEW | Second Installment
Internet of Things
QUADRENNIAL ENERGY REVIEW | Second Installment
Policy Implications of Smart Grid
• (Opportunities) More efficient use of infrastructure
• (Opportunities) Development of innovative services
• (Challenges) Expansion of attack surfaces
• (Challenges) Changing privacy concerns
• (Uncertainties) Impact on electricity demand
• (Uncertainties) Increasing interdependencies vs. Increasing resilience to N-1
• (Uncertainties) Changing employment opportunities
QUADRENNIAL ENERGY REVIEW | Second Installment
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QUADRENNIAL ENERGY REVIEW
Karen G. Wayland, Ph.D.
Energy Policy and Systems Analysis
US Department of Energy
September 12, 2016 | Washington, DC
QER 1.1 and1.2 Update for NASEO