Pacific Northwest Resource Adequacy Standard

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Pacific Northwest Resource Adequacy Standard

• GRAC Meeting
• October 23, 2008

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Outline

• What makes up the Northwest power supply?
• What is a resource adequacy standard?
• Didnt we already have one?
• Why do we need (a new) one?
• What exactly is it?
• How is it enforced?
• What is the status of the power supply?
• How does it compare to last years assessment?
• How does this compare to other reports?

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What makes up the Northwest Power Supply?
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Firm Generating Resources
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5
Monthly Shape of River Flowsand NW Electricity
Demand
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Comparison of Storage and Runoff Volumes
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Variability in NWHydroelectric Generation
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What is a resource adequacy standard?
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Three Components toKeeping the Lights On

• Resource and fuel availability
• Bulk delivery high voltage transmission
• Distribution low voltage transmission
• Most outages are due to distribution

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What is resource adequacy?

• Physical adequacy
• The region is assured that, in aggregate,
  load-serving entities have sufficient power
  resources to satisfy forecast future loads with
  an acceptable risk of curtailment
• Economic adequacy
• The region is assured that, load-serving
  entities have sufficient power resources to
  satisfy forecast future loads with an acceptable
  risk of high cost years

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Build vs. Buy

• Building more resources increases average cost
  but reduces risk of high cost years
• Relying more on the market reduces average cost
  but increases the risk of high cost years

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Objectives for anAdequacy Standard

• Transparent and easy to calculate
• Linked to a more sophisticated analysis (like a
  Loss-of-load-probability assessment)
• Provide adequate protection against
• Unwanted curtailments and
• High and/or volatile prices

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Didnt we already have one?
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Historic NW Planning Criteria

• Average annual load/resource balance of zero
• Critical water hydroelectric generation
• No spot-market supply
• No non-firm resource generation
• But . . .

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Historic NW Planning Criteria

• But, we could borrow energy stored in
  reservoirs by backing it up with agreements to
  curtail future loads, if necessary.
• This moves away from a strict critical-water
  standard, without adding additional risk.

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Historic NW Planning Criteria

• However, the region didnt really plan to these
  criteria
• The regions load/resource balance steadily grew
  more and more deficit throughout the 1990s.
• Why were utilities not more concerned?

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Historic NW Energy L/R Balance
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What, Me Worry?

• Nearly 4,000 MWa more energy under average water
  conditions (vs. critical).
• Over 7,000 MW of transmission capacity connecting
  the NW and the SW.
• A large SW winter surplus capacity is forecast
  for some time (recall that the SW peaks in summer
  and the NW peaks in winter).

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Why do we need one?
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Why Now?

• West Coast electricity crisis of 2000-01
• 2005 Energy Bill
• Increasing complexity of the power supply
• IPP and spot market generation
• Integrating wind
• Added constraints on hydro
• Increasing summer loads
• Councils Fifth Power Plan

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What Happened Leading Up to 2001?

• Very little resource development in the 1990s
• Dysfunctional California market
• Second driest year in 2001
• Led to a situation where the NW was short and
  could not make it up with better-than-critical
  hydroelectric generation or imports

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What Happened in 2001?

• DSI loads were purchased
• BPA curtailed fish bypass spill
• Utilities forced to acquire very expensive
  resources (i.e. diesel generation)
• Some load lost due to economic considerations
• Region got through but not the way it would
  have liked to!

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Whats Happened Since?

• NW demand is still about 1,500 MWa lower (mostly
  DSIs)
• Over 9,000 MW of new generating capacity
• Turned the annual L/R deficit of 4,000 MWa into a
  large surplus

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Resource Development Since 2000
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What exactly is it?
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Institutional Framework
SMD
FERC Reliability Title (Enforceable)
States
NERC (Voluntary)
Energy Offices
Council
PUCS
Regional Councils (WECC)
Adequacy Forum
State Standards(i.e. Cal)
Planning Committee
Power Pools
CREPC
5th Plan
Reliability Subcommittee
Control Areas
WRAT
BPA
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Components of a Standard

• Metric something measurableAn assessment of
  available resources compared to expected loads
• Threshold acceptable value for the metricSet
  to yield a 5 loss of load probability

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Two Challenges

• Energy Planning Fuel (water) management to get
  us through the year
• Capacity Planning Machine capability to get us
  past peak hours of the day

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Metrics

• Annual Needs Annual average generating
  capability minus annual average load, referred to
  as the annual load/resource balance (in MWa)
• Hourly Needs Surplus hourly generating
  capability over expected sustained peak hourly
  load, referred to as the reserve margin (in
  percent)

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Thresholds

• Energy zero, i.e. loads and resources should be
  in balance, on average, over the year
• Capacity surplus percent required to cover
• Operating reserves
• Extreme weather event
• Other contingencies

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Thresholds

• Energy Load/resource balance
• Physical 0 MWa
• Economic approx. 3,000 MWa
• Capacity Reserve margin
• Physical Winter 23
• Physical Summer 24
• Economic ?

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Current Energy Assumptions

• Out-of-region market
• About 200 MWa per year
• Non-firm hydro
• About 1,100 MWa per year
• Uncommitted IPPs
• Dispatched as regional resources limited by
  capacity assumptions
• Wind
• 30 percent of nameplate annually

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Energy Planning Adjustment
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Current Capacity Assumptions

• Out-of-region market
• 3,000 MW maximum in winter
• None available in summer
• Non-firm hydro
• 2,000 MW in winter
• 1,000 MW in summer
• Uncommitted IPPs
• Full availability in winter
• 1,000 MW maximum in summer
• Wind
• 5 percent over the sustained peak period

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How is it enforced?
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AdequacyImplementation Plan

• Power supply adequacy will be accessed on a
  regional basis
• Three years out
• Five years out
• Voluntary participation non-binding standard

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Implementation Plan
gt Econ
lt Econgt Phys
3 Years Out
lt Phys
gt Econ
lt EcongtPhys
5 Years Out
lt Phys
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AdequacyImplementation Plan

• Green light Regional power supply is adequate
• Yellow light warning economic standard is not
  met in either the 3rd or 5th year or if the
  physical standard is not met in the 5th year.
• Red light warning the physical standard is
  not met in the 3rd year.

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Red-light Warning Actions

• Heavily publicized adequacy report
• Initiate a process to validate the data
• Instigate public meetings to consider possible
  actions

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What is the status of the Northwest power supply?
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Adequacy Assessment
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How does it compare to last years assessment?
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Adequacy Assessment - Energy
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Adequacy Assessment- Capacity
Sustained Period changed from 50-hours in 2007 to
18-hours in 2008.
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Resource and Load Assumptions for 2013
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Load Differences for 2011
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How does it compare to other regional reports?
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Load/Resource Balance (2011)
Load includes firm exports minus firm imports.