Document omr4MKqQKzo93KBkK3p6rGB4g
17cv01906 Sierra Club v. EPA
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The history of predictions has been hazy
Load growth has consistently underperformed expectations
New technologies have advanced If you wait long enough, chances
faster or slower than anticipated
are you'll eventually be right
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PJM
"Beginning with the Great Recession of 2007 2009, the accuracy of the PJM model decayed noticeably, with a
trend towards over forecasting."
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Vltflllli
PJM RIO* Summer Peak Forecasts (MW)
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9 9 9 99;
99 99 I
Source: PJM Resource Adequacy Planning Department "Load Forecasting Model Whitepaper," April 27, 2016
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Southeast
"...one does have to ask, how did they get it so wrong?"
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Projectec Load (MWj
SERTP Region - Cumulative Summer Peak Load Forecast Source. SIR IP
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i40.:vyi PS U'O I P.HM i n
IVlVl
nr nr nr .nr 1 n m vn vv nn
-
i" J . -
Source: C Three, "North American Electric Transmission Market Forecast," August 2017
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West
a
t
at
9^
"...there continued to be a : systematic over estimation i
of load qrowth rates..." .
w
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1A;w
^-rwh`,y>:<yy
r>v `r^,^.
rcr';ocj
f'MM.M!/,
h.ywn'MK',,
yi'ii
yyttai'ir I>
<" ' <
Source: Juan Pablo Carvallo, Peter H. Larsen, Alan H. Sanstad, Charles A. Goldman,"Load Forecasting in Electric Utility Integrated Resource Planning," October 2016, LBNL-1006395
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National
NERC Fan: Actual (1960-1982) and Projected (1974-1990)
"All forecasts are wrong. ...A
more realistic expectation,
especially for long term
forecasts, is the insights on the
various risks that may confront
a utility."
1960
1965
1970
1975
1980
1985
Source: Tao Hong, Mohammad Shahidehpour, "Load Forecasting Case Study," January 15, 2015
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Solar
"These [projections] largely missed the rapid-tetiild out of utility scale solar PV projects."
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. ,-.
,, >,!, Ij.t ...t.'>1! `'I'- - <H
Sources: EIA, "Wind and Solar Data and Projections from the U.S. Energy Information Administration: Past Performance and Ongoing Enhancements," March 2016
Colin Smith, "U.S. Utility PV Market: Quarterly Update," GTM Research, September 2017
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Storage
"Updated data that indicate lower battery costs have increased ElA's outlook for BEV and PHEV sales."
EIA AEO 2017
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Predicted 2020 Sales Price $/kwh
Li-Ion Battery 2020 Sales Price Predictions
300
217
210
Boston Consulting
(2010)
GTM Research
(2016)
P3 (2016) Tesla (2017)
: Berckmans et at., "Cost Projection of State of the Art L ithium-Ion Batteries for Electric Vehicles Up to 2030," Energies 2017,10, 1314; doi:10.3390/enl0091314
BNEF Li-ion Battery Price Survey
w
Surveyed Sales Price $/kwh
2012
2013
2014
2015
2016
Source: Clare Curry, "Lithium-ion Battery Costs and Market," Bloomberg New Energy Finance, July 5, 2017
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U.S. Shale Gas Production (billion cubic feet/yr)
Shale Gas Production
"...the convergence of a number of factors, invading key technology developments, government policy, and market forces, coalesced to bring
about the shale gas revolution."
40 35
hale Gas-Related R&D
($M/yr)
t
18000
U.S. Shale Gas Production!
(bcf/yr)
X! 16
/ ! 14000
/ ! 12000
/
! 10000
> ' : -L .
- ,
>
search. I, ns.t.i.tut.e as-Relat< -- I
($M/yr)
,
*I
/
! 8000
I 6000 ! ! 4000
1 2000
Fracture technology for tight gas .hImopri.rzoovne.tdal,,odil,eavn.iad.tqeda,s, adnridl.lienxgt.:end,ed, 3-Dseismic imaging Diamond drill bits
Influential Ab, sent/Mimmal,
Absent/Minnal Direct
Source: Robert Horner, "Federal Government Contributions to the Shale Gas Revolution," DOE/EPSA Internal Memo, June 14, 2017
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Natural Gas Prices
"...the absolute percent differences [between the AEO
projections and reali^e^l outcomes] for energy prices range between 10% and 40%."
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$/mmBtu
Source: EIA, "Annual Energy Outlook Retrospective Review, Table 7a," September 19, 2017 ED_001523_00006096-00013
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Improvements in lighting value over time
Price of Lighting for Different Lighting Technologies
350 ..................................................................................................................................................................................................................................................................
300
c 250
(/)
5 o
T c01
150
ED
100
Candle Lamp Town gas Kerosene lamp
o E
E
35 3
I
O S
0)
E
E
E
a
Source: William D. Nordhaus, "Do Real-Output and Real-Wage Meas ures Capture Reality? The History of Lighting
15
Suggests Not," in NBER, "The Economics of New Goods," January 1996.
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Natural Gas as Di&xjptee
"Virtually all manufactured gas sold during this period was used for lighting." -Troesken
"Even before Edison demonstrated a working lamp, gas stocks began to fall in price." - Smithsonian
Edison lighting demonstration at Menlo Park
Pearl Street Station opens
Sources: Werner Troesken, "The Institutional Antecedents of State Utility Regulation: The Chicago Gas Industry, 1860 to
1913," in NBER, "The Regulated Economy: A Historical Approach to Political Economy," January 1994
Smithsonian Institution, "Lighting A Revolution," May 2017, _
'__l_ _
1
` 1 1 r_____
Accessed 11/1/2017
Image from Richard Warren Lipack / Wikimedia Commons ' 1
c * soj _ ' F - " .1
rd 1 " '__
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Tallow (1800)
Sperm oil (1800)
Whale oil (1815)
Early lamp (1827)
Tallow (1830)
Sperm oil (1830)
Silliman experiment Sperm oil (1855)
Silliman experiment Other oils (1855)
Silliman experiment (1855)
Silliman experiment (1855)
Early lamp (1875)
19th century (1875)
Edison carbon lamp (1883)
Welsbach mantle (1885)
Filament lamp (1900)
Filament lamp (1910)
Welsbach mantlec (1916)
Filament lamp (1920)
CD 3
Filament lamp (1930)
J?
Filament lamp (1940)
Filament lamp (1950)
I?
Filament lamp (1960)
Filament lamp (1970)
Filament lamp (1980)
3
& 0)
$
Filament lamp (1990)
?
Compact fluorescent (1992)
CD
?
<3
Coleman lantern (1993) Light Emitting Diode* (2017)
iD
rr
r- r-to
Lumen-Hours Cent
Improvements in lighting value over time
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INTERACTIVE POLL
Compared to 10 years ago, is th )ace of change in your organizati
clniAf^r ahmit tho camp nr
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Generating Change
Change is Constant
Change can be Fast or Slow Change has Accelerated
The generation fuel mix has evolved considerably since the
1950s
New technologies have varied speeds of adoption or displacement
A proposed metric for quantifying fuel mix changes
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N uclea-ifepS^
Share and Rate of Change in Electricity Generation Fuels
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Renewables: Slow Growth, Fast Growth
Share and Rate of Change in Electricity Generation Fuels
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Natural Gas: Decrease, Growth, Faster Growth
Share and Rate of Change in Electricity Generation Fuels
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Share of Fuel for Electricity Generation
Coak St^y Decrease
100% 90% |||||||||M
60% ||^^^||||||||||||||^^ 50% illllllllll 40% 30% llll|lilllll^^ 20%
o%
Share and Rate of Change in Electricity Generation Fuels
------------g---------------------------
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Wind Solar Other Hydro Nuclear Natural Gas Petroleum Coal
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Fast or Slow New technologies have varied in adoption speed
Nuclear: 32 years to reach 20% energy share
Adoption Rates of Selected Electricity Generation Sources
18
Wind: 25 years between first appearance on El A data and 1% threshold
Solar: nearly a decade of accelerating adoption rates
Nuclear
Wind 01%W% l%-10% 10%-20%
Solar
25
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From the Staff Report on Electricity Markets and Reliability
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Natural gas: a major primary energy source since the 1950s
U.S. Primary Energy Sources
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Biomass Wind Solar Geothermal Hydroelectric Nuclear Petroleum Natural Gas Coal
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Potential^^
gas
1. Ramp-focused future 2. Energy-Centric Dispatch
3. Reliability
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Increased Ramp Dispatch with VERs
"...[Utilities have increasingly begun replacing expensive fuel
through self built renewable generation." Dumoulin Smith
Source: Julien Dumoulin-Smith, "Turning on the lights: an elect rie utilities, power, and renewables overview," Bank of America Merrill Lynch, October 23, 2017
17cv01906 Sierra Club v. EPA
i .
A,
I!,.. P .J Ai <! <> >> I .1
, . I I- i -,
A-('li,';. t<f-, e >. > fa A ,.< 1,.- , o if. ., f , <l
........ *'
' '* .*. a a - - I, ,, . - , < i;
y, ' ' I f> J , . All " ,>-,,
.! 1 ,V
f Cf-I ."'A `
Source: Ryan Wiser, Mark Bolinger, "2016 Wind Technologies Market Report: Summary," August 2017
W
Generation,weighted average PV PPA price owr time
A
Median PV PPA price (and ?0<h/80th percentile bars) aver time
masigissgo3sosgmimgo
32 Source: Mark Bolinger, Joachim Seel, Kristina Hamachi LaCommare, "Utility-Scale Solar 2016 ," September 2017
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Increased Ramp Dispatc with VERs
"The ISO has identified a growing need for downward flexible capacity to address
over generation." CAISO
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o 1.006
Source: Yih-huei Wan, ''Analysis of Wind Power Ramping Behavior in ERCOT," March 2011, NREL/TP-5500-49218
m
--
Source: CAISO, "Flexible Resource Adequacy Supplemental Issue Paper," Nov. 2015
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Increased Energy Dispatc witghI Sgtorage
"[P]lants recover their fixed costs...in somewhat more predictable fashion than on the system without storage." Brattle
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sfJIJ
h. `5 ~
W " ... :
$0
?w
... -W'
ao nit : **ir <i MISi
of Hours
os isii if*
Huws
ii a# Jill
Source: Brattle, "The Value of Distributed Electricity Storage in Texas," March 2015
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Increased Energy Dispatch with Electric Vehicles
"Customers took advantage of time based rates to save on
overnight residential charging." DOE
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Figure 11. Charging Patterns with (TOU) and without (RES) Whole House Time-of-Use Rate during Summer Weekdays at Progress Energy (Peak period is in gray)
Source: DOE, "Evaluating Electric Vehicle Charging Impacts and Customer Charging Behaviors," December 2014
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Decisions Scenarios for potentlalAiture roles of natural gas
Today
Scenario
Electricity Outcome
NG Adaptation
Market Priority
I 1- High 1 Rene, /ables ; Growth
Peakier Load
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M '2a High Stoiage
'
' aH J
Growth
-TJJr
o UIf
A ...............................,,........
Geneiation
___________
f
'
IB 2b High Electi ic
Hl Vehicle Adoption
1
^H i
Flatter Load Profile
Increased Off Peak Demand
Frequent Cycling (Favors CTs)
Constant Output (Favors CCs)
Constant Output (Favors CCs)
Capacity and Essential
Reliability Svcs.
Wholesale Prices
Retail Prices
i
BBBBBBBBBIII^I
3 Reliability
Minimal Change :*^|J
Increased Direct HHHHHH
Reliability Value
37
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Financial Flows
Scenarios that involve competition among generation fuels
Revenue Flows through the U.S. Power Sector (EPSA/ORNL Energy Finance Data Warehouse)
1 High Rene* > ables
Giov 'th
2a High Stoiage GI o1. 'th
sS
38
Zeng, Hendrickson, Lee, Chinthavali, Lin, Hsieh, Shankar. (2017). Energy finance data warehouse: Tracking revenues through the power sector. The Electricity Journal. 30. 4-9.10.1016/j.tej.2017.03.001.
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Financial Flows
Scenarios that involve growth of overall elect^e^^emand
Revenue Flows through the U.S. Energy Sector (Prototype for EPSA/ORNL Energy Finance Data Warehouse)
2b High Electi ic Vehicle Adoption
39
Zeng, Hendrickson, Lee, Chinthavali, Lin, Hsieh, Shankar. (2017). Energy finance data warehouse: Tracking revenues through the power sector. The Electricity Journal. 30. 4-9.10.1016/j.tej.2017.03.001.
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2000s-2010s Natural gas emerges
as a dominant electricity generation source
2020s+ NG potential paths Ramping, energy, or
reliability Electrification
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