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David Howarth MRW & Associates Oakland, California 1 JUST THE FACTS: RESOURCE PLANNING AND PROCUREMENT INDEPENDENT ENERGY PRODUCERS ANNUAL.

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Presentation on theme: "David Howarth MRW & Associates Oakland, California 1 JUST THE FACTS: RESOURCE PLANNING AND PROCUREMENT INDEPENDENT ENERGY PRODUCERS ANNUAL."— Presentation transcript:

1 David Howarth MRW & Associates Oakland, California 1 JUST THE FACTS: RESOURCE PLANNING AND PROCUREMENT INDEPENDENT ENERGY PRODUCERS ANNUAL MEETING SEPTEMBER 18, 2014

2  Update on 2012 long-term procurement plan (LTPP) proceeding and associated procurement  Introduction to 2014 LTPP proceeding  Review of other resource planning and procurement activities  Conclusions 2 OVERVIEW OF PRESENTATION

3 LTPP UPDATE

4  System requirements (Track 2) deferred to 2014 LTPP  Local capacity requirements (Track 1) expanded to address 2013 SONGS retirement (Track 4)  CAISO modeling identified ~4600 MW of local need, assuming ~200 MW DR, ~980 MW incremental EE, and ~460 MW DG  D reduced CAISO’s need estimate to account for some combination of load shedding, transmission, and incremental uncommitted EE, energy storage, demand response and customer PV resources to determine procurement authorization:  SCE also authorized to procure MW in Moorpark sub-area of Big Creek/Ventura LTPP UPDATE SCE (LA Basin)SDG&ETotal Preferred Resources Storage Gas-Fired1000 Any Source Total

5  SCE issued Track 1 LCR RFO in September LTPP UPDATE  Offers were due 12/16/13  Initially open to projects within West LA area  Expanded to include Track 4 authorization in March 2014  No new bids  Eligible area revised to include just the southern portion  Final offers 9/4/14  Final selections by 10/16/14  Application to CPUC 11/21/14

6  SDG&E negotiated bilateral contract with Carlsbad Energy Center for 600 MW peaker  Application to CPUC for contract approval (A ) filed July 21, 2014  SDG&E issued Track 4 RFO seeking 800 MW on September 5, 2014  If approved, the 600 MW Carlsbad contract will count towards the authorized need, leaving 25 MW of storage and 175 MW of preferred resources to be procured through the RFO  Offers due January 5, 2015  Application to CPUC for approval of contracts Q LTPP UPDATE

7 LTPP KICKOFF

8 LTPP: FORECAST OF LOADS & RESOURCES

9  2014 LTPP proceeding is focused on determining system reliability needs in 2024  CAISO & ORA filed testimony in August presenting deterministic modeling results estimating reserve shortfalls for various scenarios  SCE performed stochastic modeling of the High Load Scenario only  Expected shortfall of 8,500 MW, with Stage 3 emergencies and 1,000 GWh of expected dump energy LTPP: PHASE 1A MODELING RESULTS Scenario Upward/ Downward Number of Hours Maximum Shortfall (MW)Types of Reserve Shortfall CAISO/ORA: Trajectory ScenarioUpward51,489 Load Following, Non-Spin CAISO: Trajectory without Diablo Canyon Upward193,730 Load Following, Non-Spin, Spin CAISO: High Load ScenarioUpward345,353 Load Following, Non-Spin, Spin, Regulation, Energy CAISO: Expanded Preferred Resource Scenario N/A 0 CAISO: 40% RPS in 2024 Scenario Upward92,242 Load Following, Non-Spin ORA: Trajectory + PVUpward41,188Load Following ORA: Trajectory + Tracks 1&4Upward1164Load Following

10  None of the modeling parties conclude that system reliability need can be determined from the Phase 1a results  Shortfall amounts do not account for 2,315 MW of Track 1&4 authorization not included in the CPUC scenarios  CAISO: unlimited renewable curtailment potentially masking the need for flexible resources, need further study  SCE: any need in 2024 can be addressed in 2016 LTPP, other ways to mitigate over-generation  ORA: given duration of shortfall, no need for additional capacity or further study in this LTPP proceeding  Reply testimony due September 24 th  Will include PG&E modeling testimony  CAISO and SCE to submit stochastic results for Trajectory scenario in November 13th LTPP: INITIAL CONCLUSIONS

11 11 OTHER RESOURCE PLANNING AND PROCUREMENT ACTIVITIES IN CA

12  Renewable Energy Procurement (R )  2013 RPS purchases: PG&E 23.8%, SDG&E 23.6%, SCE 21.6%  Appear to be on track to reach 33% by 2020  Procurement expenditure limitation to be adopted by CPUC 12 RESOURCE PLANNING AND PROCUREMENT ACTIVITIES

13  PG&E’s forecasted renewable net short (2014 RPS Procurement Plan) 13 RESOURCE PLANNING AND PROCUREMENT ACTIVITIES Source: PG&E 2014 Draft RPS Procurement Plan June 6, 2014

14  SCE’s forecasted renewable net short (2014 RPS Procurement Plan) 14 RESOURCE PLANNING AND PROCUREMENT ACTIVITIES Source: SCE 2014 Draft RPS Procurement Plan, June 6, 2014

15  SDG&E’s forecasted renewable net short (2014 RPS Procurement Plan) 15 RESOURCE PLANNING AND PROCUREMENT ACTIVITIES Source: SDG&E 2014 Draft RPS Procurement Plan, June 6, 2014

16  Comparison of SDG&E’s forecasted REC bank balances (2013 Plan vs Plan) 16 RESOURCE PLANNING AND PROCUREMENT ACTIVITIES

17  Energy Storage (R )  October 2013 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)  First RFOs anticipated December 1, 2014  Energy Efficiency (R )  Considering move to “rolling portfolios” with long term (10 yr.) funding approval  Would avoid program funding disruptions and embed EE in demand forecasts used for resource planning and procurement  Rolling portfolios will not be considered in time for setting 2015 goals and funding levels, which will continue as an extension of the budget cycle 17 RESOURCE PLANNING AND PROCUREMENT ACTIVITIES

18  Demand Response (R )  Demand Response Auction Mechanism (DRAM) proposal  Intended to create competitive procurement mechanism through reverse auction and to integrate DR supply resources into CAISO energy markets  Aim is to launch in 2015 and achieve 5% of peak by 2020  Settlement agreement proposes DRAM pilot auctions to be held in 2015 and 2016, many details to be determined  CAISO/CPUC Joint Reliability Plan  Multi-year RA requirement, market-based replacement of CAISO backstop, unified long-term reliability planning  Facing pushback from legislature over FERC role in regulating RA market 18 RESOURCE PLANNING AND PROCUREMENT ACTIVITIES

19  Residential Rate Design Rulemaking and Net Energy Metering (NEM)  Will new rate design and NEM rules hinder further expansion of residential solar?  PG&E Gas Transmission and Storage  Combined with already approved pipeline safety enhancement plan (PSEP), likely to result in a significant increase in gas transportation costs for gas-fired generators 19 REGULATORY PROCEEDINGS WITH IMPLICATIONS FOR PROCUREMENT

20  Procurement for local resources is under way  Results of all-source RFOs will tell us if EE and DR can compete with other supply resources to provide local capacity  If incremental EE and DR fall short of levels assumed in the procurement authorization, there will be implications for reliability  Significant modeling work remains to quantify system reliability needs  What level of forecasted shortfall justifies procurement?  Long-term procurement of system resources appears at least 1-2 years away  Renewable procurement seems to be reaching a plateau, but poised for new growth phase  Will the RPS be expanded or will there be other drivers for renewable procurement?  What is future of RAM and FiT? 20 CONCLUSIONS

21 David Howarth MRW & Associates Oakland, California 21 QUESTIONS? THANKS!


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