Renewable Energy Supply Curves for E3 GHG Calculator

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Renewable Energy Supply Curves for E3 GHG
Calculator
Energy Environmental Economics, Inc. Greenhouse
Gas Modeling UpdateOctober 2, 2007
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Overview Key Tasks
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Supply Curve Overview

• Key input to E3 Calculator
• Cost of new renewable generation is represented
  in supply curves
• Based on all-in levelized costs including
  capital, operating, interconnection / collection
• Separate supply curves for CA and 10 other WECC
  zones

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WECC Zones in GHG Model
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Supply Curve Key Tasks

• Collect and assess existing public data
• Develop resource availability within each WECC
  zone
• Develop levelized costs within each WECC zone
• Input data into spreadsheet model
• Create supply curves

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Data Sources and Assessment
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Supply Curve Data Overview

• Five renewable technologies evaluated
• Wind
• Geothermal
• Hydro
• Biomass
• Solar Thermal
• General approach Use uniform cost assumptions
  and let resource class/availability drive zonal
  supply curves
• Mainstream estimates for 2007 technology
• Use publicly-available data

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Data Sources

• WGA, Clean and Diversified Energy Advisory
  Committee (CDEAC) reports (2006)
• NREL WinDS Model
• CEC 2007 IEPR Scenario Analyses Project
• California Biomass Collaborative CA Assessment
  2006
• ORNL, Biomass as a Feedstock, Billion Ton Vision
  Report (2005)
• NREL, A Geographic Perspective on the Current
  Biomass Resource Availability in the United
  States (2005)
• EIA, Annual Energy Outlook 2007
• CEC, Central Station Generation Costs (2007)
• AWEA Wind Vision
• BC Hydro, 2006 IEP
• Utility IRPs
• AESO 2005 10-Year Transmission Plan and 2003
  20-Year Outlook
• NTAC, Canada-Northwest-California Transmission
  System Options (2006)
• CEC Intermittency Analysis Project (2007)

• NW Power Council, 5th Power Plan (2005)
• NW Power Council, 4th Power Plan (1998)
• Geothermex/CEC, New Geothermal Site
  Identification and Qualification (2004)
• INL, Virtual Hydro Prospector Estimation of
  Economic Parameters of U.S. Hydropower Resources
  (2003)
• Sargent Lundy/NREL, Assessment of Parabolic
  Trough and Power Tower Solar Technology Cost
  (2003)
• Black Veatch, Economic, Energy, and
  Environmental Benefits of Concentrating Solar
  Power in California (2006)
• MIT, The Future of Geothermal Energy (2007)
• Petty Porro, Updated U.S. Geothermal Supply
  Characterizations (2007)
• Wiser Bollinger, LBNL, Annual Report on U.S.
  Wind Power (2006)
• Conversations with Utilities, EIA, State
  agencies, Research labs, Resource developers,
  Industry groups
• CEC Strategic Value Analyses (2003)

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Resource Assessment Methods

• Wind Solar Thermal
• Top-down resource potential assessments with
  filters
• Geothermal, Hydro Biomass
• Bottom-up project-level evaluation based on costs
  conditions, expert opinion

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Cost Estimation Methods

• Used EIAs Assumptions to Annual Energy Outlook
  2007 as baseline for conventional and renewable
  technology costs
• Substituted other technology cost estimates for
  EIA values as appropriate
• Used adjustment factors to account for inflation
  of materials costs since time studies were
  completed
• Adjusted using regional capital cost multipliers
  from U.S. Army Corps of Engineers (range CA
  1.20 to WY 0.92)
• Cost estimates shown here exclude federal PTC/ITC
  and state-level tax incentives (but will include
  in base case)
• Rule of thumb estimates of gen-tie and
  interconnection costs, usually based on distance
  to transmission

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Supply Curves
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Total Renewable Resource Availability by Region
(MW)

• Biomass small hydro resources limited
• Some geothermal potential in most areas
• The main story is wind and solar thermal

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DOES NOT INCLUDE LONG-DISTANCE TRANSMISSION COSTS
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DOES NOT INCLUDE LONG-DISTANCE TRANSMISSION COSTS
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DOES NOT INCLUDE LONG-DISTANCE TRANSMISSION COSTS
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DOES NOT INCLUDE LONG-DISTANCE TRANSMISSION COSTS
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Base Case RPS Targets by Region

• RPS currently in effect in 8 of 11 regions
  (shaded green)
• Assume 5 for other regions to reflect known
  renewables plans
• WECC-wide gap
• 120,000-150,000 GWh, or
• 13,000-18,000 aMW, or
• 40,000-55,000 MW of wind

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DOES NOT INCLUDE LONG-DISTANCE TRANSMISSION COSTS
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DOES NOT INCLUDE LONG-DISTANCE TRANSMISSION COSTS
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Resource Assessment Cost Estimation
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Wind Resource Cost Data

• Resource Potential from NREL
• GIS input for WinDS model
• 98 resource regions in WECC
• Exclude cities, lakes, Federal lands, gt20 slopes
• Use wind power Class to calculate capacity factor
• Include all resources Class 5
• Include resources lt Class 5 only if local
  transmission capacity available
• Generation costs (in 2007)
• EIA 2007 Annual Energy Outlook 1595/kW
  installed
• AWEA Wind Vision 1600/kW installed
• Levelized cost range for all sites in supply
  curve 78/MWh - 159/MWh
• Interconnection Cost
• Use distance proxy based on NREL GIS data
  linear /MW-mile cost
• Firming Cost 294/kW installed

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Wind Resources

• 2,400,000 MW of raw potential in WECC
• 277,000 MW included after filtering for power
  class and local transmission availability

Total MT Wind54,000 MW
Total WY Wind139,000 MW
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Solar Thermal Resource Data

• Resource Potential from NREL
• GIS data used for WGA CDEAC analysis
• 31 resource regions in WECC
• Exclude cities, lakes, Federal lands, gt1 slopes,
  noncontiguous resource areas
• Use Direct Normal Irradiation (DNI) class and
  Latitude to calculate capacity factor
• Include only resources with DNI gt 6.75 kWh/m2/day
• Interconnection Cost
• Used measured distance from center of solar
  potential in GIS region to nearest 230 kV line
  linear /MW-mile cost

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Solar Thermal Resources

• 128,000 MW of WECC-wide potential included after
  applying filters

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Solar Thermal Costs

• Wide range of estimates in literature
• Capital costs range from 2200 to 4400/kW
• Capacity factors from 28 to 56
• Levelized energy cost from 71 to 219/MWh
• Key cost determinants
• Technical progress assumptions
• Tax policy assumptions
• Amount of storage
• Black Veatch (2006) costs used in model
  3073/kW
• Trough technology with 6 hour storage and 40
  capacity factor
• EIA 2007 Annual Energy Outlook 3191/kW, 40
  c.f.
• Levelized cost range for all sites in model
  146/MWh - 218/MWh

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Geothermal Resource Cost Data

• Resource Potential
• Project-specific MW and cost estimates
• Use CEC/Geothermex (2004) for CA NV sites
• Use WGA CDEAC (2006) for rest of WECC
• Results after applying EIA filters
• CA 3000 MW at 21 sites
• NV 1300 MW at 43 sites
• BC 185 MW at 2 sites
• Rest of WECC 1500 MW at 24 sites
• Generation Costs
• Site-specific varies with depth, temperature,
  proven resource
• Cost range for most sites 2400/kW to 3700/kW
• Levelized cost range for all sites 65/MWh to
  324/MWh
• Interconnection Cost
• Used measured distance from center of site
  location to nearest 115 kV line linear
  /MW-mile cost

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Hydro Resource Cost Data

• Resource Potential
• Site-specific MW cost estimates
• INL data based on FERC applications
• EIA filtered site list based on costs and other
  parameters
• E3 selected only sites with existing dam and no
  documented barriers
• Sites smaller than 30 MW are RPS-eligible
• Total hydro results after applying filters
• CA 660 MW at 41 sites
• NW 2090 MW at 40 sites
• BC 5582 MW
• AB 200 MW
• Rest of WECC 400 MW at 71 sites
• Generation Costs
• Vary by location and conditions
• Range for most sites 1200-1900/kW
• Capacity factors range 15 to 65
• Cost range for all sites 73/MWh to 254/MWh
• Interconnection Costs
• Used INL GIS estimate of distance from site to
  existing transmission linear /MW-mile cost

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Biomass Resources

• Biomass includes many different technologies
  and resource types
• Solid Biomass
• Sub-Categories Wood, Mill Waste, Municipal Solid
  Waste, Ag Residues
• Constraints Fuel supply is uncertain and has
  competing uses
• Biogas
• Sub-Categories Landfill Gas (LFG), Wastewater
  Treatment, Dairy/Manure
• Constraints Most potential is for projects lt1
  MW, uneconomic to develop
• High gross potential, but difficult to determine
  how much is economically developable

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Biomass Resource Cost Data

• Resource Potential
• NREL state-level biomass availability by type
  used as reference point
• Scaled NREL data using estimate of likely
  development in California by 2020 (CEC/California
  Biomass Collective 2006)
• Results
• CA 600 MW of solid biomass 300 MW of biogas
• Rest of WECC 1700 MW of solid biomass 300 MW
  of biogas
• Generation Costs (in 2007)
• Biogas (EIA 2007 Annual Energy Outlook) 2492/kW
• Biomass (CEC/CBC 2006) 3646/kW
• Capacity factor 80 for both technologies
• Fuel costs 1.81/MMBtu (biogas) 3.64/MMBtu
  (biomass)
• Levelized cost range 112 - 135/MWh (biomass)
  91 - 111/MWh (biogas)
• Interconnection Costs
• Assumed generators locate near transmission, so
  interconnection costs minimal

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Treatment of Intermittent Resources

• Wind
• Firmed wind to 90 capacity factor on peak by
  adding capital cost of 0.7 MW of CTs for each MW
  of wind (net of CT energy benefit)
• Added hourly integration costs that increase with
  winds share of area generation (5/MWh- 12/MWh)

• Solar Thermal
• Assumed 6 hours of thermal storage allowing 90
  capacity factor on peak with no firming
• Added 6.25/MWh energy benefit because production
  occurs during peak hours
• Assumed no hourly integration costs

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Summary of Renewable Energy Costs

• Notes
• Levelized costs include
• Interconnection financing costs
• Fuel costs (for biomass biogas)
• Firming and shaping costs (for wind hydro)
• Regional capital cost adjustments from U.S. Army
  Corps of Engineers (e.g., CA 1.20 WY 0.92)
• Solar thermal variable costs include peak period
  energy benefit
• Small hydro and geothermal capital costs are for
  generic plant only
• Each site in data has its own capital cost
• Costs across sites range widely

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Our Renewables Costs Look High Because

• Tried to account for recent cost inflation (at
  least 50 in most cases)
• Includes full tax workup based on IOU financing
• Includes estimates of funds used during
  construction
• Includes estimates of transmission integration
  costs
• Excludes federal tax credits
• Wind resource is firmed with CTs

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Conventional Resources

• Five technologies considered
• Gas combined-cycle combustion turbine (CCCT)
• Pulverized coal steam
• Coal integrated gasification combined cycle
  (IGCC)
• Coal IGCC with carbon capture and sequestration
  (CCS)
• Nuclear
• Assume no limit on quantity of conventional
  resources that can be developed in each region

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Comparison of Conventional Resource Costs

• Todays technology
• Same financial, tax credit, and recent cost
  inflation assumptions as renewables
• Regional differences driven by fuel prices and
  capital cost differences

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Key Data Uncertainties

• Solar Thermal generation cost
• Wide range of current costs estimates
• Large uncertainty about future costs
• Interconnection costs
• Variability can be large
• Estimation techniques important, especially for
  wind
• Data limitations result in different estimation
  methodology for different technologies

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Key Modeling Uncertainties

• Include federal and state tax incentives?
• Will PTC ITC expire?
• Modeling CA resources
• Statewide potential vs resource zone approach
• Affects what user can specify in dashboard
• Treatment of intermittent renewables
• Firming integration costs, esp. for wind
• New long-line transmission (e.g. CA-WY)
• What to assume for base case?