MIT Laboratory for Energy and the Environment Scenario-Based Multi-Attribute Tradeoff Analysis: Vermont Public Service Board Presentation Stephen R. Connors Analysis Group for Regional Energy Analysis MIT Laboratory for Energy and the Environment One Amherst St. Room E40-465 Cambridge, MA 02139-4307, USA email: connorsr@mit.edu

Multi-Attribute Tradeoffs MIT “Framework” Originated in the late 1980s (IRP) // Not a “model” Designed as Extensive/Inclusive Approach for Multi-Stakeholder/Controversy-Laden Decision Environments Multi-Attribute ≠ Multi-Objective Calculate every imaginable attribute (automatically) Few “Decision Attributes”/Numerous “Performance Attributes” Used in Two Modes: Exploratory/Learning Mode [Joint Fact-Finding, Rough Consensus on Long-Term “Vision”] Decision/Negotiated Settlement Mode [Choose among superior portfolios of option]

Whose Attributes? The “Usual Suspects” The Black Sheep Attributes Rates vs. Bills vs. Revenues Price/Rate Volatility Costs vs. Investments Continuous vs. “Lumpy” Expenditures Three E’s: Efficiency, Equity, Employment The “Incalculable” Those Darn “Externalities” Indirect Economic Impacts Those Pesky Markets

“Markets Are Our Friends” Competition - Boston Style Who’s in Charge?

You Want to Predict This? $/MWh Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2000 2001 2002 2003 2004 2005

… And, the “Ability to Site” Common NIMBYs NIMBY Not in My Backyard NOTE / NOPE Not Over There Either Not On Planet Earth BANANA Build Absolutely Nothing Anywhere Near Anybody AGREA NIMBYs NUMBY Not Under My Backyard Originally for pipelines Equally good for carbon sequestration NIMO Not In My Ocean Ocean Disposal of CO2 NOMH (‘gnome’) Not On My Horizon Originally conceived for offshore wind Equally good for onshore-ridge wind

Direct Stakeholder Input A Structured Dialogue...

Tradeoff Analysis (1) Scenario-Based Multi-Attribute Tradeoff Analysis is a scenario planning approach developed to facilitate dialogue and learning among multi-stakeholder audiences. Large Number of Activities/Options (Multi-Option Strategies) Large Number of Uncertainties (Multiple Futures, Scientific Uncertainty) Large Number of Goal States/Attributes (Multiple Stakeholders, Conflicting Goals)

A multi-option strategy for a given future is a scenario Tradeoff Analysis (3) “Crafting” Scenarios to Help Guide Policymakers A multi-option strategy for a given future is a scenario

Tradeoff Analysis (2) “Features” Identifies “Good” and “Bad” Strategies Identifies Competing/Complementary Sets of Options Recognizes Different “Deployment Schedules” of Different Options Use to Identify “Robust/Flexible” versus “Optimal” Strategies Helps Facilitate Stakeholder Dialogues

Shandong Province Population ≈ 90 Million Area ≈ Size of Florida Installed Capacity (‘00) ≈ 18.5 GW (mostly coal)

Shandong Strategies Strategy Components (1008 strategies) Existing Generation Additional Unit Retirements (2) FGD Retrofits (2) Use of “Prepared” Coals (3) New Generation Baseload Technology Mix (7) Extra-Regional Generation (2) End-Use Options Peak Load Management (2) Improved End-Use Efficiency (EUE) (3) (Note: The first option in any option-set is by definition the “reference option.”)

Tradeoff Analysis Results

So, What Does It Cost?

Ann. SO2 & PM10 Emissions For the Strategy with Prepared Coal in Existing Units, Existing Unit Retirements and FGD Retrofits, Aggressive (20%) End-Use Efficiency, Peak Load Management and New Conventional Coal, Nuclear and Natural Gas Generation <- Sulfur Reductions from Fuel Switch (from Reference Strategy) <- PM Reductions from Fuel Switch Reductions from Fuel Switch, End-Use Efficiency & New Generation Choice -> Reductions from Fuel Switch, End-Use Efficiency & New Generation Choice -> Reference Future

Key Results (Shandong) Significant cost-effective opportunities exist for reducing power plant criteria pollutants (SO2, PM, NOx), and reducing increases of greenhouse gas emissions (CO2). The best performing strategies were a combination of the following options: Use of prepared coal to reduce PM and SO2 Select retirement or emissions retrofits of existing generation Implementation of peak load management and end-use efficiency programs Addition of non-carbon emitting generation technologies Do not forget the fuel supply infrastructure and markets

Demand-Side and CO2

Existing Units and PM10

What’s Required? Develop an “infrastructure management” perspective. What is the resulting “vision?” Explore options in greater detail Develop “in-depth” knowledge of energy consumption patterns and renewable energy resources Identify and implement “essential” robust options, and develop “promising” future flexible options.

Now Looking at Tougher Options Technology Development, Deployment and Use Renewable Resources… Non-dispatchable Variable across multiple time scales Temporal dynamics interact with other important dynamics (markets, consumer behavior) Decentralized Decisions Choice and use of distributed generation Energy efficiency options that use information technology to reduced demand (smart loads) Influenced by Market Prices and other Situational Aspects Example: Wind Resource Dynamics

Wind in Space and Time Electricity Demand Generation from Wind Source: Mass Renewable Energy Trust TrueWind Solutions

Seasonal & Daily Variability Generation Summed by Month and Hour-of-Day (2004) Hotel Buzzards Bay Boston Nantucket Logan

One Site for Many Years… Nantucket (Sleigh Ride?) Windspeed: SD: 1-2 m/s; CV: 10-20%. CF: SD: 10-20%; CV: 25-35%

Operating Modes and “Resource” Portfolios Renewable Resource Variability Wind and Sun (Magnitude and Timing) Rainfall (Hydropower, Biomass) Fuel Markets Fuel Prices/Price Differentials (esp. Natural Gas) Infrastructure Investments (Pipelines/Storage/LNG) Conventional Generation Nuclear Availability, Hydro Potential Power Market Structure (Capacity Markets, Bid Rules) Power Grid Operations (Reliability/Contingency Practices) Energy Demands Demand Growth – Relative to Supply Growth Heating Degree Days/Cooling Degree Days

Identifying Robust Strategies A Robust Strategy has Robust and Flexible Options Commonalities and Differences

Closing Observations/Questions At Which Stage Are You? Short/Medium-Term in the Context of a Long-Term Plan/Vision/Whatever Are All the Major Factors Been Included/Considered? Have the Major Organizational/ Institutional Factors Been Overlooked? (Brains and Bodies)

Have We Had It Too Easy? We need to develop the information, tools, implementable visions, and the policies and people to realize them.