Integrated Resource Planning
GHG reduction in California
EPRI 2017 Annual Seminar on Fuels, Power Markets and Resource Hanning
Jenifer Hedrick P.E. November 9, 2017
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SOUTHERN CALIFORNIA
EDISON"
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SCE Highlights
One of the nation's largest electric utilities
15 million residents in service territory 5 million customer accounts 50,000 square-mile service area
Significant infrastructure investment
1.4 million power poles 729,000 transformers 119,000 miles of distribution and transmission lines 3,200 MW owned generation
Above average rate base growth driven by
Safety and reliability California's low-carbon objectives
Grid modernization > Electric vehicle charging > Energy storage > Transportation electrification (proposed)
Limited Generation Exposure
Own less than 20% of its power generation Future needs via competitive solicitations
October 31, 2017 https://vvww.edfeorLcom/content/dam/eb/documents/irwestors/evertspresentations/eix-october-2017-busi ness-update.pdf
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California Climate Policies - Future Timeline
IOU Transportation Ele-tinf-rmon oroposals CARB Updated Scoping Plan Integrated Resource Plan
Reduce GHG emissions to 2999 levels 33% of electricity sales from renewables
Once through cooling ret res significant conventional generation New residential construction with zero net energy
Pending GHG Legislation SB co accelerates GHG reduction)
targets
1. j million elecn c vehicles Energy | ' storages
Reduce GHG emiss.cns to
40U
1990 levels
SOU of elear city sales
from renewables
4 2 million ele-finc -.eh ties
CPUC target
Post 2020 cap-and-trade
program
2030
New commercial construction zero energy Double statewide energy efficiency savings
Target reduction of GHG errs sighs to
levels
Achieving California's expansive energy and environmental policy goals will require takin foundational steps to evolve the electric grid and further develop new technologies
Source: http://www.edison.com/content/dam/eix/documents/investors/events-presentations/20170412-edison-insights-series-presentation.pdf
CONFIDENTIAL
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Achieving CA's SB32 targets in 2030 requires a dramatic acceleration of GHG emission reductions
California GHG Emissions1
million metric ton
valent (MMT)
2015-20 2021-30
2031-50
Residential 81 Commercial
AB32:1990 levels by 2020
(431 MMT)
SB32:40% below 1990 levels by
2030 (260 MMT)
1990 2000
2005
2010
2014
Gov Order: 80% % below 1990 levels by
2050 (86 MMT)
2020 2025 2030 2035 2040 2045 2050
Source: www.arbxa.gov/cc/inventory/data/data.htm 1) Total emissions excludes 54 MMT CO2 equivalent per AB32 definition (including portions of transportation and industrial as well as military)
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California Air Resource Board Scoping Plan
Estim ated GHGs by Sector [MMTC02e]
1990
2030 Scoping
= a-=a:e-
Acrcuitu^e
26
24-25
Residential and
44
38--40
Commercial p-- Eect'cPc er
H^ghG\ =
8-1168
Industrial
08
83-90
= e: : -7 re ` .-re
7
8-9i;
Transportation
152
103-111
^Including TCUi
Natural Working Lands |||||||^^
TED
Net Sink*
Sub Total
43'
294-339
Cap-ana-Trade
n/a
34-79
- pgram
Total
431
260
-7 change from 1990
-8 to -4 -14 to -9
-T to -5 ' 257 -o 357 -15 to -8 14 to 29" -32 to -27
TED
32 to -21 n/a
4C
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California Public Utilities Commission lead IRP process for LSEs
Proposed Two-Year IRP Process
' Current Status ofz / /PPPtograrn
j 1. GHG Planning Targets I Range of GHG emissions levels I for electric sector
> 2. CPUC Creates Reference
i System Plan & LSE Filing
i Requirements
*""
Assumptions & data
l ! Reference System Portfolio
Ref. System Action Plan
LSE filing requirements
COMMISSION DECISION 'il
'> Hot li orient and Po cy liT-p .r'vnt.mnn Example mechanisms: Al scarce REO P-ogmrr jpcciii;. procm-ru-m flu ^rd incLfiti.es
4 PiJl K-v .-wsanG Mmife-s
iS: l'I.im, and Aggic _ .<,
u.'.-rcB ^y.t>"n PI >r
( PK va!
GHG rost,
and o ! .ibil ty
CPLj
poicu'om^nt
i 4 pc i.y v j <: ..
COMMISSION DECISION >2
J. uts Develop Hans
At least one portfolio reflects
'PUC requirements
Other portfolios permitted
One preferred portfolio and
acton plan
t', procmr-mcm autbon'y
Co's steri dm-j formats
,
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Impact, Scope and Schedule of IRP
IFPhas the potential to re-shape California's Electric^
IRP becomes the state's key resource decision-making forum IRP reconstructs resource planning in California Centralized, not piecemeal decision making Process for transparent and comparative special studies of state interest
'Need' is 'de-constructed' and can be any system attribute or characteristic - e.g. flexibility, VARs, replacement of usable resources with low GHG resources, solar PV and curtailment correlations, wire vs DERs, etc
All resources to be compared on a common cost effectiveness platform Procurement adders St characteristics Marginal cost from IRP used to compare all resources
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=
-l
CAISO Energy Balance
42 MMT Statewide Target
2. CFC Crt
Wan & W Film
RpquFrcrn^nts
A.ui-uiia I -
r I
In, , K- -, t' . V
< I ,'b ", W-." , :>
Additional near term renewable build displaces energy from gas and reduces GHG emissions below GHG target in 2018 & 2022
Energy from gas rebounds by 2026 with Diablo Canyon closure, but imports decrease to meet GHG target by 2030
RESOLVE results show imports decline relative to in-state gas use because the GHG emissions factor that CARB assigns to imported electricity is larger than California CCGT emission factors
300,000
250,000
S''''
60
Renewables
Hydro
MMB I
-
-- Has
I ' "'
hmm r 1
i Nuclear
'
I
.
Storage tosses
Al '
0 -50,000
2018
2022
2026
! 1 0
Exports
'
----
' 1' 1< ,
5fi
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RESOLVE Output: Resources Selected in
42 IVI MT Case
--
2 CPW Lrat-s System a swing
A'. %, -,
i" . it - , p,, , ,
*l , ,t. >11 i,-`l > < 1 1
7
Model selects ~9 GW of new utility-scale solar; 1,100 MW in-state wind; and 2,000 MW battery storage in addition to expected baseline of EE, DR, storage, renewables, hydro, gas, and nuclear
Few additional resources needed for balancing (no new gas or pumped storage; 200 MW geothermal)
"ota incie-Mntj' coit is 1219 mJ1 or >.ea', eque, aient to apprc.vmatel, a 1 nc-eare <r, satem a e'ae mW c, 20'0
25,000 20,000
j ,,I th- mart
Ftoto'E d M M"-1
1> > c ,
in i"',
New Shed 03
Selected Resources (MW)
15,000 10,000
Pumped Stuid^e
* Battew Storage
Solar Wind
5,000
Geothermal Biunidii
Gas
0
2018
2022
2026
2030
SwMuhiB ttnioitt ctiiii ta (wwfctai by
0*" ws:, which wr ttl MI pSeitiy bvt -ttutf taw
re fjetwti up w 3<J MW. W ftttittf n aettf for *rt Arati ewiet to fc**wt i
ef toi-
fsitowfcif maw tttftntntitt ie f RESOLVE. Tier* m*y te tewfts writer prrewm han siww here.
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RESOLVE Output: Incremental Total Resource Cost (TRC) to Meet GHG Targets
SyMem M<i & ISF Filing
V. + !< <1 %, -,
, f,, , ,
> t , ,t. >11 i,-`l > < 1 1
7
Incremental cost of the optimal portfolios ranges from $239 to $1,137 million per year for the 42 MMT and 30 MMT GHG targets, respectively
Primary driver of incremental costs is new investment in renewables, whose zero carbon generation displaces emissions from thermal generation and imports
I
Incremental Fixed Costs
i Renewables i Storage
i Thermal
I DR
Transmission
Incremental Variable Costs
Incremental OSM Program Costs
7 nr -nto u r >>> w > i t
Incremental Total Resource Cost
+$843 j +545
30MMT
j
+$2,203
+$400
--
-$650 j
--
i
i
+$233 i
-- +$41
-$1,507 -- --
+$1,137
tasreasei investment in aero-eart renewables fa primary driver at increment! costs
meet CHS goals
orees aAied to
Little to no new transmission eanstruetton Addition of renewable* displaces generation from tkernwal resources, reducinf operating costs
Because demand-side assumptions are constant between scenarios, incremental sorts are two
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GHG Planning Price
(' 2 CPUC . Mwm System Plan S ISt filing
A U1'*!* J < k ' i
R -h , S i< r< 4! 1
*
'
x.O\.K'j|i>SON ECtSION di
Recommended GHG Planning Price for IRP 2017-18: $150/MT in 2030
- Represents the CAISO system-wide marginal GHG abatement cost associated with
.
achieving the 42 MMT planning target for the electric sector
- The GHG Planning Price is an outcome of RESOLVE modeling, which constrains GHG emissions at the system level on an annual basis
- LSEs would use the GHG Planning Price to develop their own portfolios and benchmark
against resources in the Reference System Portfolio and an LSE-specific GHG Emissions
I
Benchmark
...
. VW w.
i
$160 g $140 $120
I 1 $100
.. VItSBlngfS
x E 560
J ~ $40
f $20
5
$0
2018
....... 2022 .................. 2S .............. 2030
j IRP-DRP Interface Point J
II
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IRP - DRP Interface
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IDER
[Integrated Distributed Energy Resources]
--
2 CPW creates IMw System a swing
A'. -,
I- . it - ,p,, , ,
*l , ,t. >11 i,-`l > < 1 1
7
Conclusions:
IRP has the ability to produce marginal abatement prices that reflect the system-wide marginal resource abatement cost associated with achieving certain targets, such as GHG or RPS targets
Implications:
Other proceedings can use marginal abatement prices provided by IRP in their planning, valuation, and procurement processes
Action Items:
B MM MM Maas -- wa MM i--
n
-- MS -- 1 MS MM t88
MS --m
8 MM MM Mm 9
IRP should determine how marginal abatement prices (i.e. the GHG
Planning Price) should flow into IDER cost-effectiveness methodologies
IRP should develop a Common Resource Valuation Methodology (CRVM) in close cooperation with IDER staff
Staff should identify specific data needs and timing of information flows between IDER and IRP
5. Path to Future AP-Re&ource Planning
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IRP - DRP Interface
P ' e. 0)7 JK72
DRP (1 of 2)
t &X Cwatts Beteeiwt
Sattem Plan IS4 filing
j>- I >j
>.`u . , ,> uh -t`<>
K- ' , t> ' ``Vi I Ui
Conclusions
|
L1 i t -- w.' jj p '
p f. .Cw
There are two major interaction areas between IRP and DRP:
Grid integration costs and benefits of DERs at system level need to be
calculated
.
.
- RESOLVE does not currently account for grid integration costsand benefits of DERs
- DRP future refinements to the locational net benefit analysis (LNBA) include calculation of net DER integration costs at the Distribution Planning Area level, but calculation of a system level costs/benefits is not currently in
scope of LNBA working group
Transparent and consistent DER growth forecasts are needed for
both IRP and DRP
.
. .
: - IRP needs a clear set of planning assumptions in order to run scenarios on the impact of policy levers on each DER . .
- DRP staff is coordinating CEC on development of DER growth scenarios, and ensuring the process will meet IRP needs
- Currently discussing what adjustments may be needed to the IEPR demand forecast process to meet IRP and DRP needs
5. Path Fq Future MPKes&um Planning
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IRP - DRP Interface
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DRP (2 of 2)
[Distribution Resources Plan]
2. CPUC Creates Referente Spi
, u `Ui' f * /
* I * r t * it I I i ' Of *
i< System Action Pto
a t- i, '.w ( i ,. -s
C0MP*siSSX-:fl DCCtsiON
Implications: DRP and IRP comprise a feedback loop: DER growth depends on the cost
effectiveness of DER relative to other GHG free resources, which depends on costs of grid integration of DERs, which in turn depends on DER growth This feedback loop makes the assessment of DER growth and cost effectiveness complex, and by necessity an iterative process
-- DRP will not inform the 2017-2018 IRP planning cycle or vice versa, but results will be for the following cycle
- IRP guidance from the optimized portfolio is expected to flow through to policy revisions in CPUC resource proceedings, and then the IEPR forecast, before becoming new DRP DER growth scenarios
New analysis that pulls together results of LNBA in order to understand impacts at a system level may be needed
Action Items: DRP to develop a plan for determining system level grid integration costs/benefits DRP to work with CEC to define planning assumptions for DER growth DRP staff to determine how optimization of DERs in future IRP cycles will impact DER
growth forecasts DRP to identify which DERs are driving specific grid needs, so that grid planning can
adjust to changing market adoption rates
5. Path to Future All-Resource Planning
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Questions?
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lilM
2050
jr. Pathway
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