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The Mix: Facts, figures, and the future independent energy producers annual meeting September 26, 2013. William A. Monsen MRW & Associates Oakland, California [email protected]. Overview of Presentation. Key procurement issues in the California power markets - PowerPoint PPT Presentation
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THE MIX: FACTS, FIGURES, AND THE
FUTUREINDEPENDENT ENERGY
PRODUCERS ANNUAL MEETINGSEPTEMBER 26, 2013
William A. Monsen
MRW & AssociatesOakland, [email protected]
Key procurement issues in the California power markets
Regulatory issues related to procurementThe facts and figures related to
procurementThe unknownsQuestions?
OVERVIEW OF PRESENTATION
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KEY ISSUES
Local Resource ProcurementShutdown of SONGSPending shutdown of OTC UnitsDifficulty siting plants in load pocketsDifficulty siting transmission
System Level Procurement Increasing level of renewables and need for resources for renewable integration
Cross-Cutting IssuesRPS requirementsLoading order preferences
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KEY ISSUES
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REGULATORY ISSUES
Local and System Procurement Long-Term Procurement Plan (LTPP) (R.12-03-014)
Track 1: Local Reliability (completed) Track 2: System Needs (cancelled on 9/16/2013) Track 3: Bundled Procurement (completed) Track 4: SONGS-related Issues (ongoing)
Renewable and Storage Procurement Storage OIR (R.10-12-007)
September 2013 proposed decision set specific energy storage targets for each IOU totaling 1,325 MW by 2020
PG&E (580 MW); SCE (580 MW); SDG&E (165 MW)
RPS Proceeding (R.11-05-005) How to meet RPS requirements at a reasonable cost
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REGULATORY RESPONSE TO PROCUREMENT ISSUES
Alternatives to Grid-Based Generation Post-2008 Energy Efficiency Policies OIR (R.09-11-014)
D.12-05-015 established specific energy efficiency targets for each IOU totaling peak savings of 746 MW by 2014
2013 peak savings: PG&E (150 MW); SCE (187 MW); SDG&E (45 MW) 2014 peak savings: PG&E (139 MW); SCE (183 MW); SDG&E (42 MW)
Residential Rate Design Rulemaking and Net Energy Metering
New Demand Response Rulemaking Fallout from Shutdown of SONGS
SONGS Investigation (I.12-10-013) Determine if over $700 million in 2012 SONGS-related expenses should
be refunded to ratepayers Potential to review reasonableness of ongoing replacement power costs
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REGULATORY RESPONSE TO PROCUREMENT ISSUES
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THE FACTS AND FIGURES
(NEAR-TERM)
ELECTRIC DEMAND BEFORE EE OR DG
9Source: CEC Preliminary Demand Forecast 2013 Note: Includes self-generation
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FORECASTED DEMAND AFTER EE AND DG
Source: May 2013 CEC Demand Forecast
Total Peak before EE and DG
PV
Non-PV Self Gen
Non-Res EE
Res EE
Net Demand
Forecasted demandObserved demand
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SYSTEM RESOURCES NET OF RETIREMENTS
Other Non-Renewables
SONGS
OTC
Net Supply
Source: Appendix C, D.12-12-010 in 2012 LTPP R.12-03-014, December 20, 2012
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CAISO SYSTEM RESOURCES
Imports
Event-Based DR
Existing Supply Net of Retirements
RPS
Non-RPS
SCE SDG&E TOTAL
Transmission Additions? Yes YesGas-Fired Generation 1,000-1,200 308 1,308 – 1,508Storage (minimum) 50 n/a 50Preferred Resources (minimum) 150 n/a 150Storage or Preferred Resources 400 n/a 400All Sources (per IOUs) 500 500 - 550 1,000 – 1,050Total 2,300 808 - 858 3,108 – 3,158
CAISO Estimates* 3,022 - 3,722 1,485 - 920 4,507 – 4,64213
CURRENT VIEW ON 2022 LOCAL RESOURCE NEEDS (MW)
*Does not include any transmission additions
Preliminary Reliability Plan for LA Basin and San Diego prepared by the CPUC, CEC, and CAISO released August 30
Key recommendations: Consider procurement of about 1,000 MW of preferred resources—
local energy efficiency, DR, renewable generation, CHP, and storage—on top of 3,000 MW already targeted
Consider development of transmission, including infrastructure that supports resource sharing between Orange County and San Diego
Procure about 3,000 MW of conventional generation to meet the remaining needs in the SONGS area—above the 1,700-2,100 MW already authorized
Establish backstop permits so that OTC requirements can be quickly deferred and generation resources can be quickly deployed to
meet needs
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JOINT STAFF ASSESSMENT
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CURRENT VIEW ON SYSTEM RESOURCE NEEDS IN 2022
Preliminary Results from LTPP Proceeding CAISO (deterministic results)
Base case: 1,036 MW – 2,621 MW (for 2-4 hours per year) Replicating TPP case: 4,253 MW – 5,359 MW (12-16 hours per year) High DG/DSM case: 0 MW
CAISO (stochastic) No results yet
SCE (stochastic results) No need for flexible resources
Won’t know the final answers until next LTPP
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BIG UNKNOWNS
Can new transmission be built in time?Managed load growth?
Energy efficiency Behind-the-meter solar
Ultimate use of OTC plants?Will new project development models (such as
Energy Parks, conditional permitting, buying project development options) prove successful?
Failure rates for contracted resources?How will cost containment affect renewable
program?
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MAJOR WILDCARDS
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TRANSMISSION PROJECTS
Source: Southern California Reliability Preliminary Plan Presentation, CEC/CPUC/CAISO, September 9, 2013
Ability of uncommitted resources to provide significant amounts of reliable capacity in local areas?
Will changes in demand response prove effective?
New resources on the horizon?Will low gas prices continue, thereby putting
price pressure on non-gas resources?
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MAJOR WILDCARDS
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