Transcript 2014 LTSA Data Inputs_V4_post

2014 LTSA Scenario and
Data Assumptions
February 14, 2014
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Outline
Background
Scenario description – “Current Trends”
Capital cost projections
Fuel price projections
Emission price projections
Additional information
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Background
 ERCOT initiated 2014 LTSA with facilitated stakeholder workshops
to develop key drivers and scenarios for long-term transmission
planning
•
Jan 13 workshop with expert presentations on key industry and
economic topics
•
Jan 23 workshop with TSP presentations, identification of key drivers
and initial scenarios
•
Jan 24 workshop to develop detailed descriptions for 6 (of 10) of the
identified initial scenarios
•
Feb 14 workshop to develop the remaining initial scenarios, possibly
consolidate some of them, and discuss input data options
 The remainder of these slides presents input data options for the
“Current Trends” scenario as a starting point for further stakeholder
input and discussion
•
See also Jan 23 handout
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Scenario: Current Trends
Economic Growth
• Migration to TX along I-35 corridor
• Growth in south Texas
• Industrial growth in Houston, I-35,
Midland/Odessa, Valley
• ~1.5% load growth – high growth in near
term then tapering off in long-term
• LNG growth based on permits existing –
needs review
• [What should we assume for future oil
production rates?]
Environmental Regulation
• MATS and 316B are implemented [by
2016]
• CSAPR Hybrid [need more specificity to
translate to costs for existing facilities]
• Greenhouse gas regulation set with
flexibility
• No other major changes in environmental
regulations
Alternative Generation
• Solar: 1000 MW / year
• Wind capacity addition limit: 3,000 MW/yr
• Capacity factor wind – rely on historical data
from ERCOT
• Capital cost wind ~$2,000/kW
• Capital cost solar ~4.4% reduction/year
• Overall renewable growth driven by economic
entry
• No production tax credit beyond 2013
• No change to existing investment tax policy
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Gas/Oil Prices
• EIA reference case
or best available gas and oil
2/4/2014
price forecasts
Story:
Same old, same old
[The recent population and economic growth in
Texas continues in the near future, fueled
largely by the continued growth of the oil and
gas sector and the relative robust Texas
economy compared to the rest of the U.S. World
oil prices high enough to keep increasing oil
production in the short-term, keeping domestic
natural gas prices relatively low. With low gas
prices, several LNG export terminals are built
between 2014 and 2024. Modest wind growth
continues based on economics without
production tax credits. Capital costs for solar
continues to decline at a slower rate than recent
history. No required reserve margin is set for
ERCOT and the environmental regulations
continues to be moderate, with no explicit
federal carbon tax or required national cap and
trade, but greenhouse gas emissions become
regulated beyond 2016.]
Implications for ERCOT:
• [Continued modest economic and therefore
load growth in Texas.]
• [Growth in oil production and population across
the state leads to new transmission needs
• [Continued] increased renewables leading to
reliability (inertia) issues
• [No major generation retirements triggered by
stringent environmental regulations.]
Transmission Regulation
/Policy
• Policy set to reduce constraints
• Increased DC-tie capacity with neighboring
region [has not yet been resolved]
• Higher reliability [standards are set by
NERC] to avoid load shedding
Generation Resource Adequacy
• No reserve margin set for ERCOT
• Maintain energy-only market
• Economic retirements continues based on
economics
End-Use
• Increased need for ancillary services
• Increase penetration of demand response
[need to specify how or why to be
consistent with no reserve margin]
• Increasing distributed generation [Need to
specify how much is added and why]
Weather / Water
• [No drought situation, but water supply
continues to be a concern to existing
and new generators.
• No specific increase in electricity
consumption due to drought conditions.]
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Capital Cost Projections
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Technology Price Projections - 2012$
•
Overnight capital cost estimates – EIA and Lazard
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Solar Capital Cost Projections
•
Source: 2013 Brattle ERCOT Study for Clean Energy Council
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Renewable Technology Price Projections
•
Average of cost estimates from 2013 DOE Study; Lazard LCOE Analysis; Ventyx
2013 Fall National Database; EIA AEO 2013; Bloomberg New Energy Finance, PV
Market Outlook.
•
GDP growth rate from EIA AEO 2014 Early Release - 2.4%
•
This information is still being researched and will be updated as additional data
becomes available
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Conventional Technology Price Projections
•
Average of cost estimates from 2013 DOE Study, Lazard LCOE Analysis, Ventyx
2013 Fall National Database, EIA AEO 2013
•
GDP growth rate from EIA AEO 2014 Early Release - 2.4%
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Fuel Price Projections
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Natural Gas Price Projections
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Coal Price Projections
Source: Annual Energy Outlook 2014 Early Release
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Oil Price Projections
Source: Annual Energy Outlook 2014 Early Release
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Emission Price Projections
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CO2 Price Projections
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SO2 Price Projections
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NOX Price Projections
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Mercury Price Projections
•
With EPA Mercury and Air Toxics Standards (MATS), 90% mercury emission from power plants
will be mandatorily removed from 2015.
•
No mercury emission allowance trade?
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Additional Information
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Wind Installations by Year
•
Average installations per year for all years is 801 MWs.
•
Average installations per year for the years 2006 thru 2009 is 1,766 MWs
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Total
MWs
116
700
161
196
212
469
1,021
1,910
3,220
911
484
204
803
806
11,213
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LNG Exports Overview
• Two DOE commissioned reports released
in 2012 addressed LNG exports.
• Key conclusions:
– Increased LNG Exports benefit the US
Economy
– Global Markets for LNG may limit natural gas
demand growth and domestic price increases.
– In no cases modeled did the U.S. wellhead
price increase by more than $1.09/Mcf due to
market-determined levels of exports.
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Appendix
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Henry Hub forecast by Wood Mackenzie
Source: Wood Mackenzie, “North America Natural Gas Outlook – ERCOT Planning Workshop”, Jan. 2014.
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Fraunhofer CO2 Projections
Source: C. Kost, J. N. Mayer, J. Thomsen, N. Hartmann, C. Senkpiel, S. Philipps, S. Nold, S. Lude, N. Saad, T. Schlegl, “Levelized Cost of Electricity Renewable Energy Technologies”, Nov.
2013, Fraunhofer Institute for Solar Energy Systems ISE
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Source: EPA, Office of Air and Radiation, “Estimating Future Air Emissions Allowance Values”, Nov. 2006
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Black & Veatch March 2013
Source: Black & Veatch, “City of Ames Energy Resource Options Study”, Mar. 2013
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Ventyx Fall 2013 - NOX
Source: Ventyx, “National Database Release Notes”, Fall 2013.
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Ventyx Fall 2013 – SOX
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Synapse CO2 Prices
Source: P. Luckow, E.A. Stanton, B. Biewald, J. Fisher, F. Ackerman, E. Hausman, “2013 Carbon Dioxide Price Forecast”, Synaps Energy Economics, Nov. 2013.
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Ventyx Fall 2013 – CO2
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Technology Price Projections - 2012$
•
Capital cost estimates from 2013 EIA Capital Cost Projections Update, April 2013
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Technology Price Projections - 2012$
•
Capital cost estimates from August 2013 Lazard’s Levelized Cost of Energy
Analysis
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Capital Cost Assumptions
• Average conventional capital cost assumptions
• GDP growth rate from EIA AEO 2014 Early Release - 2.4%
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
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987
1,011
1,035
1,060
1,085
1,111
1,138
1,165
1,193
1,222
1,251
1,281
1,312
1,344
1,376
1,409
1,443
1,477
CT
803
822
842
862
883
904
926
948
970
994
1,018
1,042
1,067
1,093
1,119
1,146
1,173
1,201
Coal
Coal W/CCS Nuclear
3,416
5,168
6,110
3,493
5,292
6,257
3,571
5,419
6,407
3,641
5,550
6,561
3,722
5,683
6,718
3,806
5,819
6,879
3,891
5,959
7,044
3,978
6,102
7,213
4,067
6,248
7,387
4,159
6,398
7,564
4,241
6,552
7,745
4,336
6,709
7,931
4,433
6,870
8,122
4,533
7,035
8,317
4,634
7,204
8,516
4,739
7,377
8,720
4,845
7,554
8,930
4,954
7,735
9,144
IGCC
3,937
4,032
4,128
4,227
4,329
4,433
4,539
4,648
4,760
4,874
4,991
5,111
5,233
5,359
5,487
5,619
5,754
5,892
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Capital Cost Assumptions – Cont.
• Average renewable capital cost assumptions
• GDP growth rate from EIA AEO 2014 Early Release - 2.4%
Year
Wind OnShore
2013
1,850
2014
1,884
2015
1,919
2016
1,925
2017
1,961
2018
1,997
2019
2,033
2020
2,071
2021
2,109
2022
2,148
2023
2,157
2024
2,196
2025
2,237
2026
2,278
2027
2,320
2028
2,362
2029
2,406
2030
2,450
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Solar PV
2,500
2,250
2,000
1,935
1,870
1,805
1,740
1,675
1,650
1,625
1,600
1,575
1,550
1,540
1,530
1,520
1,510
1,500
Biomass
3,724
3,813
3,905
3,998
4,094
4,193
4,293
4,396
4,502
4,610
4,720
4,834
4,950
5,068
5,190
5,315
5,442
5,573
Geothermal
4,719
4,824
4,932
5,052
5,165
5,280
5,398
5,519
5,642
5,768
5,909
6,041
6,176
6,314
6,456
6,600
6,748
6,899
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Wind Cost Trends
•
•
2013 Brattle ERCOT Study for Clean Energy Council assumed in the
Reference Case that wind costs fall to 1,800 2012$/kW in 2015 and then
remain constant in real terms through 2030. In the Low Cost Renewable
case, they decline to 1,500 2012$/kW by 2030.
The NREL 2012 Wind Technologies Market Report shows a range of $1,500
– 2,400/kW for recent capital costs for the Interior region (including Texas)
Source: NREL. 2012 Wind Technologies Market Report. August 2013.
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Wind Capacity Factor Trends
• Recent performance improvements in wind turbines could increase
capacity factors by 10% in the near term
• Projections for levelized cost of energy (LCOE) provide insight into
both capital cost and performance trends
Source: NREL. IEA Wind Task 26: The Past
And Future Cost Of Wind Energy,
Work Package 2. May 2012.
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