Presentation is loading. Please wait.

Presentation is loading. Please wait.

Energy and Electricity Markets 101

Similar presentations

Presentation on theme: "Energy and Electricity Markets 101"— Presentation transcript:

1 Energy and Electricity Markets 101
Community Choice Energy Advisory Committee June 25th,2015

2 About Pacific Energy Advisors
50+ Years of collective experience w/in California’s electric utility industry Leading advisors for all technical matters related to the Community Choice Aggregation service model CCA feasibility assessments for over 40 municipalities since 2003 Exclusive professional focus on “non-IOU” service models Current Clientele (sample): Marin Clean Energy (CCA) Lancaster Choice Energy (CCA) City and County of San Francisco (CCA) City of Moreno Valley, Electric Utility Division (POU) School Project for Utility Rate Reduction (Direct Access) Primary service offerings: resource planning and procurement, financial and economic analysis, contract negotiation and administration, legislative and regulatory analysis/compliance, rate-setting, utility operations support Formed in 2013; based in Folsom, CA (PEA principals engaged in CCA since 2003)

3 PEA’s CCA EXPERIENCE Unique, unparalleled experience with CCA evaluation, implementation and operation PEA has provided key technical consulting services in support of ALL California CCA’s, which have filed certified Implementation Plans with the CPUC CCA Key Activities/Responsibilities Analytical Highlights Sample of Work Products Marin Clean Energy Examined costs/benefits of CCA formation Proposed program structure and governance Developed retail product options/rates Created Implementation Plan and Joint Powers Agreement (“JPA”) Drafted supply agreements/contracts and assisted in supplier negotiations Cost-benefit analysis Risk scenario analysis Load study analysis Rate analysis Supply portfolio evaluation Marin Clean Energy Implementation Plan(s) Rate and Load Studies Customized Confirmation Agreements and Exhibits Sonoma Clean Power Developed procurement strategies Sonoma County CCA Feasibility Study SCP Implementation Plan Lancaster Choice Energy Recommended retail product options and developed related rate structure Developed Net-Energy Metering Program Implementation advisory services Net-Energy Metering Tariff

4 How “The Grid” Works

5 How “The Grid” Works (continued)
How does power get to CCA/PG&E customers? California residents and businesses receive their power from a networked grid: Western U.S. + parts of Canada and Mexico. Physically, all electricity is the same – the energy received by customers is determined by power flows rather than contract rights. A utility’s power mix is determined by the amount of electricity injected into the grid from generation resources it owns or controls (under contract).

6 Who Manages the Grid? Various “Balancing Authorities” (BAs) are responsible for real-time balancing of supply (generating resources) and demand (load) BAs are responsible for ensuring grid reliability. There are five BAs in California, with the largest being the California Independent System Operator (CAISO). A CCA serving San Mateo County and surrounding areas would be operating within the CAISO BA.

7 Hourly CAISO Electricity Pricing
Within CA, prices are established for over 5,000 “nodes” every 5-minutes. The difference in price between two nodes is referred to as “congestion”.

8 California’s Generating Fleet
More than 1,000 electric generating units over 1 MW in CA. A typical 1 MW generator will serve the annual energy needs of approximately 1,000 homes. 79,000 MW of generating capacity. ≈58% of capacity is natural gas. 70% of CA’s energy is produced in-state. ≈20% of CA’s generating capacity uses renewable fuel sources. 2,400 MW of distributed solar has been installed in CA.

9 Energy Products & Services for CCAs
Scheduling Coordinator Services (“SC” services) Electric Energy Renewable Energy Resource Adequacy Capacity Other Specified Energy Products

10 Electricity Contracting
Bilateral Contracts Contracting parties – Buyer/Seller Term length Price Product(s) Delivery parameters/schedules Credit terms Market Purchases

11 Renewable Energy Procurement
Mandatory renewable energy (RE) procurement: California’s Renewables Portfolio Standard (RPS) Program Specified renewable energy (RE) procurement mandates through 2020 RPS mandates apply to all Load Serving Entities (LSEs), including CCAs Only California Energy Commission-certified generators are RPS-eligible Various RE products are procured to demonstrate compliance Compliance is demonstrated via retirement of RECs Compliance measured over multi-year periods

12 Renewable Energy Procurement (cont.)
Voluntary RE procurement: Responsive to local goals and objectives Accommodates green pricing programs Not subject to RPS rules General Information: ALL renewable energy production is substantiated via REC ownership RECs are created, tracked, transferred and retired through WREGIS

13 Renewable Energy Products
Various RE contracting mechanisms/products under RPS: Bucket 1 – In-state or dynamically scheduled into CA (RECs delivered contemporaneously with electric energy) Bucket 2 – Firmed/shaped imports into CA (delivered REC and energy quantities are balanced annually) Bucket 3 – Unbundled RECs (RECs are sold separately from energy) Increasing interest in maximizing Bucket 1 product use Variety of contracting options are available Voluntary RE products (example: Green-e)

14 Resource Adequacy Capacity
Reserve capacity promotes grid reliability LSEs must secure/procure capacity at 115% of peak demand Reserve capacity is referred to as “Resource Adequacy” or “RA” Additional RA requirements: generator location and operational flexibility RA capacity is transacted bilaterally (i.e., no organized market)

15 Sources of Power Generation – Hydro
In California, < 35MW = RPS-eligible; > 35 MW = “large hydro” Drought conditions have reduced hydropower production (and increased natural gas generation): During the first half of 2014 ~ 10% of CA’s total electricity generation Average 2004 – 2013 ~ 20%

16 Sources of Power Generation – Wind
In CA, highest installed capacity amongst all renewable resource types Intermittent power supply Relatively low cost resource

17 Sources of Power Generation – Biogas
Power produced through the anaerobic digestion of biodegradable materials Uses material that is already part of the carbon-cycle Power production process results in overall decrease in emissions

18 Sources of Power Generation – Solar
Rapidly growing and “preferred” renewable resource Different technologies: photovoltaic, thermal Power supply is intermittent with predictable near-term delivery profile

19 Sources of Power Generation – Geothermal
Very low-carbon emitting generating process Electricity generated using heat from the earth’s core Generating potential is regionally isolated Typically requires considerable water use

20 California CCA Overview
CCA provides for: Local control/accountability Competitive rates (based on current market conditions) Customized power supply Locally focused energy programs Economic development benefits Opt-out model CCA’s are self-regulating entities Three operating CCA’s in California: Marin Clean Energy (2010) Sonoma Clean Power (2014) Lancaster Choice Energy (2015)

21 Pertinent California Regulatory Agencies
California Public Utilities Commission (CPUC): Regulates the investor owned utilities (i.e., PG&E, SCE, and SDG&E), but also regulates capacity reserve requirements of CCA’s California Energy Commission (CEC): Primary energy policy and planning agency in California – long-term forecasting, planning for energy emergencies, generator permitting and certification as well as promoting energy efficiency and renewable technologies California Air Resources Board (ARB): Objectives are to maintain healthy air quality and to promote approaches for compliance with air pollution rules/regs

Download ppt "Energy and Electricity Markets 101"

Similar presentations

Ads by Google