1. business and industrial
2. energy
3. natural gas

2014 LTSA Scenario Results
July, 2014
ERCOT PUBLIC
7/22/2014
1
Agenda
• Summary of Scenario Results
• Scenario Load Forecasts
• Scenario Comparisons
• Scenarios Selected for Full Study
• Modified Siting Process
ERCOT PUBLIC
7/22/2014
2
Scenario Summary
• Generation expansion for nine scenarios are complete - Low Global
Oil Prices remaining
• Scenarios indicate natural gas will remain the primary fuel in ERCOT
• Expansion of wind continues but solar becomes a major player in most
scenarios
• Generation by coal resources declines in most scenarios to about
25% of generated energy
• Roughly 50% of the coal fleet retires in the Stringent Environmental
Scenario
• Reserve Margins for all scenarios in 2029 are in the 9% to 14% range
ERCOT PUBLIC
7/22/2014
3
Comparison of Load Forecasts
• LNG
i.
All forecasts included 235 MW of LNG in the COAST weather zone
for 2018 and 706 MW for 2019 – 2029
ii.
The High Economic Growth forecast included an additional 784 MW
of LNG in the SOUTH weather zone for 2018 and an additional
1,568 MW for 2019 – 2029
iii. The High LNG included 1607 MW in 2018 and an additional 2,233
MWs in the COAST and SOUTH weather zones for 2019 - 2029
•
Energy Efficiency and Load Management
•
The Current Trends, High Economic Growth, and High Natural Gas
forecasts used 686 MW (same as included in Feb CDR)
•
The Stringent Environmental and Global Recession forecast
increased the 686 MW by 3.3% per year (1,117 MW in 2029)
•
The High EE/DG forecast increased EE by 20% per year (7,063 MW
in 2029)
ERCOT PUBLIC
7/22/2014
4
Comparison of Load Forecasts
• PV DG
•
i.
The High EE/DG, Stringent Environmental, and the Global
Recession forecasts included 220 MW of peak load reduction
due to PV for 2018, increasing to 1,057 MW in 2029
ii.
The rest of the forecasts included no PV load reductions.
Load Adjustments
i.
The High Economic Growth forecast increased the growth rates
in the COAST, NCENT, and SCENT weather zones to 1.5% per
year for 2015 – 2029.
ii.
The High Natural Gas forecast increased the growth rates in the
COAST, NCENT, and SCENT weather zones by 0.2% per year
for 2015- 2029.
iii. The Global Recession forecast decreased the peak in ERCOT
by 5.0% in 2021 and used a slower forecasted growth rate for
2022 – 2029.
ERCOT PUBLIC
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Comparison of Load Forecasts
Peak Load Forecasts
ERCOT PUBLIC
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Scenario Comparisons
• Total Capacity by Fuel Type in 2029
‒
‒
Wind total times 8.7%
Solar total times 70%
ERCOT PUBLIC
7/22/2014
Potential Scenarios
selected for full study
7
Scenario Comparisons
• Total Capacity by Technology Type in 2029
‒
‒
Wind total times 8.7%
Solar total times 70%
ERCOT PUBLIC
7/22/2014
8
Scenario Comparisons
• Percentage of Energy Generated by Fuel Type for 2029
ERCOT PUBLIC
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9
Selection of Scenarios for Full Study
• Scenarios selected for complete study were based on some of the
following factors:
–
–
–
–
–
Stakeholder feedback
location of new load
Total amount of renewable generation
Total new capacity added to the system
Meets a required reserve margin
• Selected Scenarios include:
–
–
–
–
–
Current Trends
Stringent Environmental
High Economic Growth
Global Recession
To be named later
ERCOT PUBLIC
7/22/2014
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Generation siting methodology for LTSA
 The generation expansion planning process yields the
total capacity additions by generation type with its
expected in-service dates
 The resource siting methodology identifies the individual
buses where such generation can be modeled
 Generator siting methodology to be used in the LTSA
was first presented as part of the DOE report in 2013
 This process has since been updated based on
stakeholder feedback
ERCOT PUBLIC
7/22/2014
11
Generation siting methodology for LTSA
 Siting of Wind/Solar generation considered in this LTSA will
be dictated by the wind and solar curves used in the
expansion process
 For conventional generation type, the planned/expansion
generation capacity is divided between the weather zones
in the same proportion as their contribution towards total
load growth
 Buses at competing sites based will be sorted based on the
annual average LMP
ERCOT PUBLIC
7/22/2014
12
Priority for Siting of allotted capacity
 Generators which meet Planning Guide (PG) 6.9 requirements but
not considered in gen expansion plan
 Generators with a signed interconnection agreement (IA) but do
not meet PG 6.9 requirements
 Buses with highest LMP will then be evaluated based on following
priority
 Resource availability for the generation type
 Sites with mothball generation
 Brownfield sites
 New (greenfield) sites
ERCOT PUBLIC
7/22/2014
13
Questions?
Doug Murray
dmurray@ercot.com
512-248-6908
Julie Jin
Julie.jin@ercot.com
512-248-3982
ERCOT PUBLIC
7/22/2014
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Appendix
ERCOT PUBLIC
7/22/2014
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1. 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
• Oil production rates follow trend in recent EIA
projections for Texas
Environmental Regulation
•
•
•
•
MATS and 316B are implemented by 2016
CSAPR Hybrid
Greenhouse gas regulation set with flexibility
No other major changes in environmental
regulations
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.
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 credit
policy
Gas/Oil Prices
ERCOT PUBLIC
• EIA reference case
or best available gas and oil
7/22/2014
price forecasts
Transmission Regulation
/Policy
• Policy set to reduce constraints
• Increased DC-tie capacity with neighboring
region
• 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
• Increasing distributed generation
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.
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.
16
Current Trends Scenario Highlights
• Conditions existing today will generally continue into the future
• ERCOT’s basecase load forecast with the addition of small amounts
LNG
• Natural gas prices increase slowly but are generally considered low
• No major changes to environmental regulations
• Trends in capital cost for new resources are increasing at GDP with
the exception of Solar PV which is declining thru the planning period
• Modest increase in penetration of demand response
• No specified reserve margin, generator additions for conventional and
renewable resources are by economics only
• No PTC
ERCOT PUBLIC
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Current Trends Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Solar Adds
Wind Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
650
700
1,350
1,350
955
300
1,200
9.95
76,571
52.50
5.02
10.46
46.0
31.0
12.0
8.0
4.5
312,930
240,205
112,419
2021
3,600
2,090
100
5,790
7,140
2,086
18
73
10.10
79,935
55.40
5.07
10.93
51.0
27.0
11.0
10.0
10.8
272,616
247,719
114,359
2024
2027
2029
1,200
380
3,200
4,780
11,920
2,379
19
78
10.30
82,686
65.41
5.93
11.03
49.0
28.0
11.0
2.0
10.3
11.9
304,280
256,896
118,814
1,740
4,200
5,940
17,860
2,453
21
83
11.90
85,443
68.01
6.03
11.28
51.0
26.0
10.0
4.0
10.0
10.9
272,207
256,860
118,987
900
2,600
3,500
21,360
950
14
58
12.77
87,300
71.21
6.35
11.21
51.0
25.0
9.0
6.0
8.0
8.3
266,469
259,524
120,677
18
2. Scenario: Global Recession
Economic Conditions
• Net population growth in Texas ~1%
• Urbanization with growth concentrated in the
major cities
• No industrial growth
• Capital for new generation difficult to obtain
• Little to no GDP growth or net load growth
Environ. Regs. / Energy Policy
Story:
Low energy prices threaten the Texas economy.
Load growth is limited, resource expansion is
limited to gas-fired plants and continued subsidized
renewables. Stimulus programs help create
incentives for consumers to replace old appliances
and increase conservation. Coal plants that rely on
coal by rail retire due to lower energy margins.
• Continuing modest environmental regulations,
no significant changes from assumptions under
Current Trends
• Government incentives continue for high
efficiency appliances
• Continued subsidies for renewables (PTC/ITC)
Alt Gen Resources
• Lower oil/gas prices
• Limited development of wind and solar due to
low energy prices
• Nuclear re-licensing
• Slower solar cost decline due to reduced global
demand
Gas/Oil Prices
• Lower prices (~$1/mmbtu lower than
assumptions under Current Trends)
• Less oil exploration and production
• No LNG development
ERCOT PUBLIC
7/22/2014
Transmission Regs/Policies
• Same as assumed under Current Trends
• Transmission faces lower construction cost
per mile
Gen Resource Adequacy
Standards
• Retiring of coal plants due to low energy
margins
• System inertia issues increase
Implications for ERCOT:
• Slow load growth
• Growth in urban areas greater than in rural areas
• Limited generation development, predominantly
gas-fired, subsidized renewables
• Import/export issues between urban areas will
need to be addressed
• Stability issues continue to increase due to low
system load
End - Use
• Customers are more cost conscious, thus
more conservation
• Limited growth of new technologies that are still
high costs, such as storage
• Low load growth due to increased efficiency
and changed customer behavior
Weather / Water
• Same as under Current Trends – no drought
conditions, but limited water supply for new
generation
19
Global Recession Highlights
• Natural gas price is low
• Scenario includes PTC and ITC
• No Reserve Margin
• Solar capital costs decline slower
• Lowest reserve margin of all scenarios – 9% in 2029
ERCOT PUBLIC
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Global Recession Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Solar Adds
Wind Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
380
380
380
975
300
1,200
7.95
76,307
55.58
4.27
13.02
51.7
25.6
12.1
11.0
13.2
230,606
209,007
109,579
2021
950
853
1,803
2,183
2,086
337
1,349
8.67
75,760
60.12
4.37
13.76
51.9
24.9
12.8
17.0
18.2
230,491
209,887
108,933
2024
3,990
3,990
6,173
2,379
379
1,518
8.17
77,897
63.23
5.20
12.16
50.3
27.1
12.4
12.0
20.2
265,478
223,368
117,475
2027
2029
760
3,000
990
4,750
10,923
2,453
427
1,708
8.23
80,099
67.19
6.00
11.20
47.6
27.9
9.6
1.9
12.0
24.5
279,012
227,725
120,448
380
2,400
422
3,202
14,125
950
480
1,921
9.07
81,604
70.33
6.63
10.61
46.4
28.2
12.7
3.3
12.0
19.8
285,814
230,919
121,949
21
3. Scenario: High Economic Growth
Economic Conditions
•
•
•
•
High Texas GDP growth
High population growth (2.5%/yr)
Pro-business environment
Industrial growth concentrated in Houston, I-35
corridor, Midlands/Odessa, Lower Rio Grand
Valley
• Higher LNG exports than under Current Trends
• Capital is available to support new generation
and transmission
Story:
Higher economic growth than under
Current Trends. Growth occur throughout
Texas driven in large part by oil and gas
sector and related upstream and
downstream industries.
• Likely to impose a resource adequacy
requirement
• Continued modest environmental regulations,
no significant changes from assumptions under
Current Trends
• U.S. more focused on developing domestic
energy sources
• Renewables are economic and growth occur
due to higher gas prices
• More technological improvement than under
Current Trends for renewables and storage
• Cap on annual wind capacity growth
Implications for ERCOT:
•
•
•
•
Oil/Gas Prices
• Higher (but still relatively low) gas prices than
under Current Trends (~$1.5/mmbtu higher
than in Current Trends)
ERCOT
PUBLIC
• Same oil prices as
under Current
Trends
7/22/2014
• Same as under Current Trends
• Higher cost for Transmission (for both materials
and labor)
Gen Resource Adequacy
Standards
Environ. Regs/Energy Policy
Alt. Gen. Resources
Transmission Regs/Policies
•
High load growth
High urban growth
High industrial growth, concentrated
through I-35 corridor,
Midlands/Odessa, and Lower Rio
Grand Valley
Higher costs for new generation and
transmission due to high commodity
prices
Potential challenges with generation
portfolios keeping pace with load
profile changes
End-Use
• Growth of household income
• However, more energy-efficient new homes
• Overall efficiency gains are similar as under
Current Trends
• Fast adoption of new demand-side
technologies
Weather / Water
• Higher water costs, but does not limit growth
(e.g., potentially more dry cooling for new
generation)
22
High Economic Growth Scenario Highlights
• High load forecast
• Capital cost change
• Increase CT and CC capital cost by 25%
• Solar starts from 3000 $/kW in 2013 and decreases 5% every year;
• All the other technologies the same as in Current Trends
• LNG Medium assumption
• Gas price is 1.5 $/MMBtu higher than in Current Trends
• 13.75% reserve margin target
ERCOT PUBLIC
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High Economic Growth Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Solar Adds
Wind Adds
Reliability Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
1,300
190
600
4,147
6,237
6,237
1,120
300
1,200
13.75
78,133
50.11
6.52
7.69
43.5
33.8
11.9
0.4
388,082
236,104
126,985
2021
800
4,200
4,222
9,222
15,459
2,336
18
73
13.98
83,071
53.37
6.57
8.12
45.6
31.2
10.8
2.8
392,774
249,096
133,607
2024
2027
2029
400
190
4,500
100
3,230
8,420
23,879
2,379
19
78
13.94
86,747
63.70
7.43
8.57
45.8
29.7
10.3
5.1
2
0.3
392,711
255,942
137,619
3,900
1,175
3,040
8,115
31,994
2,453
21
83
13.88
90,551
67.80
7.53
9.00
46.8
27.4
10.2
6.9
3
2.3
356,953
258,156
138,437
2,600
121
1,900
4,621
36,615
950
14
58
13.92
93,176
73.05
7.85
9.31
48.1
26.0
9.8
8.0
3
4.6
326,398
262,170
140,451
24
4. Scenario: High Efficiency/Distributed Generation
Economic
• Same as under Current Trends
• Additional growth in clean technologies
Story:
Economic growth good enough to allow
new investments in efficiency and
distributed generation. Customers
increase acceptance of EE/DG
technologies which leads to widespread
market adoption
Environ. Regs/Energy Policy
• Capital cost for wind and solar
technologies and CHP decrease faster
than under Current Trends
• Improved storage technology and lower
cost
• Same as under Current Trends
Gen Resource Adequacy
Standards
• Same as under Current Trends
• Increase stringency in building codes, with
more net zero buildings
• Government provides more incentives for
building retrofits to increase efficiency
• Increase in appliance standards increase
• More attractive DR programs/pricing
Alt. Gen. Resources
Transmission Reg.
End – Use Customer
Acceptance
Implications for ERCOT:
• Lower net load growth compared to under
Current Trends
• More market-based programs for demand
response
• Widespread of distributed generation creates
some operational challenges
• More high efficiency homes and buildings
built
• Efficiency gains are above those under
Current Trends, thus lower net load
growth
• Higher installation DG
• Higher DR participation
• More options for microgrids, smart
appliances, etc.
Gas Price / Oil Price
Weather / Water
• Higher gas prices than under Current
Trends: also higher resulting wholesale
electricity prices
• Above average summer temperatures
• Greater water stresses and higher water
costs than under Current Trends.
ERCOT PUBLIC
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25
High EE and DG Highlights
• High natural gas price
• High amounts of EE, DR and DG
ERCOT PUBLIC
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26
High EE and DR Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Biomass Adds
Solar Adds
Wind Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
620
190
810
810
995
300
1,200
9.51
76,417
64.67
6.52
9.92
42.9
34.3
10.2
8.0
6.4
391,705
233,394
126,772
2021
1,200
3,650
1,500
6,350
7,160
2,086
337
1,349
9.49
79,686
67.71
6.57
10.31
46.3
31.2
11.4
1.0
10.0
11.0
376,518
238,214
128,983
2024
2027
2029
1,950
4,200
6,150
13,310
2,379
379
1,518
10.98
82,298
73.86
7.43
9.94
45.5
30.5
10.9
3.4
10
8.4
383,036
242,866
132,018
800
950
4,000
351
6,101
19,411
2,453
426
1,707
12.68
84,895
75.19
7.53
9.99
46.8
28.2
10.2
5.5
6
10.4
341,385
242,897
131,863
1,950
1,900
100
3,950
23,361
950
480
1,921
13.97
86,646
76.68
7.85
9.77
47.1
27.5
10.0
6.5
6
7.6
308,433
240,659
129,938
27
5. Scenario: High Natural Gas Prices
Economic Conditions
• GDP growth slightly higher than under Current
Trends
• Population growth ~2.3%/yr
• Pro-business environment
• Higher LNG exports than under Current
Trends
• Reduced Industrial growth (downstream
facilities)
• Increased gas exploration in Texas
Environm. Regs / Energy Policy
• Modest environmental regulation, same as in
under Current Trends
• No regulatory impediments to LNG exports
• Lower coal plant retirements due to higher
energy margin
Story:
• Natural gas prices are high, but are below global
natural gas prices – thus still continued LNG
export as under Current Trends.
• No impediments to LNG exports
• High gas prices also reduce the downstream
industrial growth compared to under Current
Trends
• Increase in renewable development compared to
under Current Trends, due to higher gas and
wholesale energy prices
Implications for ERCOT:
Alt. Gen Resources
• Renewables are more economic and thereby
more growth than under Current Trends
• Annual limit on wind development
• More technological improvements for
renewables
Gas Prices / Oil Prices
• Natural gas prices $3.50/mmbtu above Current
Trends by 2020
• Oil prices same as
under Current
Trends
ERCOT
PUBLIC
7/22/2014
-
High load growth
High urban growth
Reduced downstream industrial growth (in the
Houston, Corpus, and coastal areas)
Transmission Regs / Policies
•
Same as under Current Trends
Gen Res Adequacy Standards
• Same as under Current Trends
End - Use
• Motivate high energy efficiency at a higher rate
than current trends.
Weather / Water
• Same as under Current Trends
• Increased water costs which contribute to the
higher cost of producing natural gas
28
High Natural Gas Prices Highlights
• Lower solar and storage costs than under Current Trends
• Gas price is 3.5 $/MBtu higher than under Current Trends
• High EE and DG as under Stringent Environmental scenario, DR growth
additional 3% every year than under Current Trends
ERCOT PUBLIC
7/22/2014
29
High Natural Gas Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Solar Adds
Wind Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
650
700
250
200
100
1,900
1,900
1,145
300
1,200
10.51
76,603
71.54
8.52
8.40
42.3
34.7
12.1
0.2
4.0
2.3
395,927
235,875
127,634
2021
1,140
250
4,500
2,065
7,955
9,855
2,171
47
189
11.04
79,866
75.78
8.57
8.84
40.5
32.8
13.4
2.9
8.0
6.9
394,626
236,522
128,360
2024
2027
2029
2,600
100
250
4,500
232
7,682
17,537
2,911
55
219
13.21
83,092
83.06
9.43
8.81
40.3
31.4
12.9
5.3
10
8.1
398,444
241,295
132,255
400
1,430
250
4,500
571
7,151
24,688
2,453
63
253
14.32
86,413
87.08
9.53
9.14
41.7
29.0
12.0
7.5
7
9.2
359,957
242,950
132,284
1,300
190
2,800
926
5,216
29,904
950
48
191
15.71
88,697
90.89
9.85
9.23
42.7
27.2
12.1
8.7
7
11.7
325,148
243,038
132,331
30
6. Scenario: Stringent Environmental Regulations
Economic Conditions
• Moderate economic growth – (some limits on oil &
gas development)
• Less oil and gas production than under Current
Trends
• Less LNG exports than under Current Trends
• Population growth same as under Current Trends at
~1.5%/yr, in the I-35 corridor and Houston areas but
decrease in the Valley (Midland) area
• Increase in industrial production of alternative
energy and efficiency-related technologies
Enviro Regs / Energy Policies
• Federal greenhouse gas emission standard
implemented
• Federal standard of 25% renewable / energy
efficiency
• More stringent ozone standard implemented
• Toxic emissions standards implemented
• Some limits on drilling and associated disposal
wells
• Government imposes some water usage limits,
raising cost of water
• More dry cooling for natural gas generators
• Moderate carbon tax / price materializes
• Increase nuclear safety concerns than under
Current Trends
Alt. Generation Resources
• Continued PTC/ITC through 2020, reducing
over time
• Continued decrease capital costs for solar: 35% /yr
• Wind capacity factors increase due to
technological improvements
• Cap on annual wind generation
• Increased development of storage due to cost
reductions for batteries & compressed air
• More financing mechanism are available (e.g.:
real estate investment trusts, propertyPUBLIC
assessed clean ERCOT
energy financing,
and others]
7/22/2014
Natural Gas Prices
• Moderate increase than under Current Trends
• Same amount of LNG exports as under Current Trends
Story:
• Aggressive action on mitigating environmental
impacts of energy sector, including electric
generation and oil & gas sectors
• Higher gas, oil, electricity prices, and lower
solar, wind, storage costs.
• Assumes more DC ties with neighboring regions
and the development of concentrated solar
regions that will require solar-CREZ lines to and
from west Texas.
• Higher electricity prices drive more adoption of
energy efficiency and customer-sited solar PV.
• Uncertain development of new nuclear &
geothermal
Implications for ERCOT:
• Challenge in matching generator w/ load
• Reserve & integrate issues
• Potential need for new ancillary services to
provide faster & flexible resources
• More transmission for solar CREZ
• Need to develop rules for integrating storage &
distributed generation
• Need to address issues associated with adding
DC ties to neighboring regions (including NERC
and FERC-related issues)
Oil Prices
• Higher oil prices than under Current Trends
• But growth in oil exploration and development
limited by stringent environmental regulations
Transmission Regs
• More DC ties such as Tres Amigas / El Paso /
Cross Wind
• Solar CREZ to west Texas to take advantage
of Pecos / Brewster / El Paso
• Potential ties w/ Mexico
End – Use Customers / Policies
• Continued stringent building code – 10%
improvement every 3 years
• More onsite solar penetration –
• 1000 MW by 2022
• 3000 MW by 2032
• Existing buildings retrofits – 20% improvement
in existing buildings efficiency
Weather & Water
• More extremes helps convince public and
politicians to take action
• Higher water costs than under Current Trends,
increasing dry-cooling for new generators31
Stringent Environmental Scenario Highlights
•
ERCOT’s Current Trends load forecast was adjusted for increased EE and 2,400
MW of Solar DG by 2029
•
Current Trends NG forecast was increased by $1.50/mmBtu in each year
•
Costs for SO2, NOx, and CO2 were added
– CO2 costs ranged from $25/ton in 2018 to $61/ton in 2029
– At these CO2 costs ERCOT exceeds current GHG emission levels goals for
both 2020 and 2030
•
PTC and ITC were added to Wind and Solar expansion
•
Demand response was increased an additional 3% per year over Current Trends
amounts
•
DC Ties were increased by 3,000 MW to represent new connections to external
ERCOT markets
•
This scenario will be analyzed with Kermit
ERCOT PUBLIC
7/22/2014
32
Stringent Environmental Results
Capacity by Fuel Type
Wind total times 8.7%
Solar total times 70%
Generation by Fuel Type
ERCOT PUBLIC
7/22/2014
33
Stringent Environmental Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Biomass adds
Solar Adds
Wind Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
2,627
2,627
2,627
3,854
300
1,200
11.96
76,557
69.39
6.52
10.64
51.6
24.5
13.8
253,868
206,849
106,910
2021
2,000
120
4,500
4,337
10,957
13,584
2,086
318
1,273
9.84
79,931
84.78
6.57
12.90
54.9
16.5
16.5
2.6
2.0
1.5
169,839
184,529
92,600
2024
2027
2029
650
190
120
80
4,500
5,614
11,154
24,738
2,379
337
1,351
10.90
82,692
106.59
7.43
14.35
54.1
12.0
19.9
4.9
8.0
6.1
123,993
166,290
80,318
2,000
1,100
120
80
4,500
413
8,213
32,951
11,223
358
1,434
14.49
85,457
100.97
7.53
13.41
54.5
8.3
18.7
7.1
1.0
0.8
86,700
153,662
74,607
6,400
1,100
120
80
3,000
300
11,000
43,951
977
373
1,492
13.52
87,321
109.67
7.85
13.97
56.7
3.7
18.2
8.4
2.0
2.1
41,523
132,129
69,006
34
8. Scenario: High LNG Export
Economic Conditions
• High economic growth in Texas, especially
industrial growth at gulf coast,
• High growth in oil & gas exploration
• High growth in manufacturing near border
& ports
• Growth in immigration to Texas
Environmental Regulations
Story:
Very healthy global economy drives
high demand for natural gas. Oil &
gas exploration in Texas remain
high. Abundant natural gas supply
spurs large export and industrial
growth in Texas.
• Same as Current Trends
Natural Gas & Oil Prices
• $10/MMBtu price difference with the
rest of world
• High oil prices $100+/barrel
• [Domestic natural
gas
price could
ERCOT
PUBLIC
be equal/higher/lower
7/22/2014 than in
Current Trends]
• Same as Current Trends
Resource Adequacy Standards
• Could deviate from Current Trends
if additional growth from the LNG
exports drive faster demand growth
than naturally supported by market
entry.
• Environmental regulations
conducive to continued growth in
oil & gas production
• [Other environmental regulations
are same as in Current Trends]
• Other policies are conducive to
LNG export
Alternative Generation
Transmission Regulations
Implications for ERCOT:
• High electricity load growth on the
coast & dry gas basins
• Transmission improvements needed
to serve new industrial load and oil &
gas load
• Pressure on resource adequacy [due
to uncertainties around how to meet
the fast growing electric demand]
End - Use
• More potential for industrial
demand response
• Same as Current Trends for nonindustrial demand response
• More CHP [due to high NG supply]
Weather / Water
• Technology improvement in oil &
gas production
• Technological improvements
alleviate additional pressure on
35
water supply
High LNG Export Highlights
• Load forecast between High Economic Growth and Current Trends
scenarios
• Added 4.1 bcf/d LNG from 2018 and additional 5.7 bcf/d from 2019, the
total is around 3840 MW flat load
ERCOT PUBLIC
7/22/2014
36
High LNG Export Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Solar Adds
Wind Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
2,600
760
3,360
3,360
955
300
1,200
9.51
78,721
53.50
5.02
10.66
47.2
30.6
11.8
0.0
8
7.1
316,107
230,087
124,100
2021
7,200
1,700
8,900
12,260
2,086
18
73
9.85
84,639
57.10
5.07
11.26
48.3
29.1
12.0
0.0
11
12.9
273,429
220,369
119,118
2024
2027
2029
3,200
190
3,700
7,090
19,350
2,379
19
78
11.01
88,315
63.59
5.93
10.72
52.9
26.3
10.0
2.0
8
8.7
314,332
256,336
142,814
1,450
1,060
4,200
6,710
26,060
2,453
21
83
11.98
92,119
67.54
6.03
11.20
54.9
23.8
8.9
4.0
11
10.0
278,560
258,153
144,306
1,850
2,800
4,650
30,710
950
14
58
13.05
94,744
69.16
6.35
10.89
55.5
22.9
8.5
5.3
7
6.7
269,049
262,069
147,069
37
9. Scenario: High System Resiliency
Economic Conditions
• Same as in Current Trends
• Companies are more willing to
locate in Texas due to perceived
highly reliable electricity system
Story:
•
•
Environmental Regs / Energy
Policy
• [Environmental regs and renewables]
are the same as in Current Trends
• [Limitations on] generation
development near load centers
Alt. Gen
• Same as in Current Trends
• [Perceived reliability issues could
result in increased distributed
generation and higher backup gen /
cogen at the customers]
Gas / Oil Prices
• Same as Current Trends
ERCOT PUBLIC
7/22/2014
•
•
•
•
[“Black swan” events on the grid occur more
regularly across the US, impacting system
reliability]
Northeast-type events (e.g. blackouts, storms)
occur in ERCOT, Rio Grande Valley blackout,
West Texas load growth continues
Houston import constraints + challenging
reliability events occur
Regulators have major concerns, generation
and load see high risk
[Value of resilience and system flexibility is
broadly recognized and stakeholders are more
willing to invest in infrastructure to ensure
greater resiliency]
Implications for ERCOT:
• Highly reliable system would drive more
load growth
• Reduced congestion risk would lead to
greater generation buildout
• System will be able to support major
power transfers within ERCOT during
highly variable conditions (weather,
wind, growth…)
• Highly reliable & flexible system as a
result
• [Be able to serve spikes in load growth]
Trans Regs
• CREZ concept applied to load centers
• [Legislative direction or PUCT mandate to
increase system resiliency and flexibility
beyond traditional planning criteria]
• [Increased reliability standards applied to
transmission planning]
Res Adequacy
• Regulators’ desire for a more
robust fleet leads to required
reserve margin and/or centralized
capacity market
End Use
• Same as Current Trends
Weather / Water
• Same as Current Trends
38
High System Resiliency Highlights
• DC Ties were increased by 3,000 MW to represent new connections to
external ERCOT markets as under Stringent Environmental Scenario
• Included a 13.75% reserve margin target
• DR growth is 5% every year as under String Environmental Scenario
ERCOT PUBLIC
7/22/2014
39
High System Resilience Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Solar Adds
Wind Adds
Reliability Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
1,710
1,710
1,710
1,952
300
1,200
13.80
79,571
38.43
5.02
7.66
46.1
31.1
12.1
0.0
315,785
225,041
119,110
2021
1,600
2,660
3,990
8,250
9,960
2,086
47
189
13.80
82,936
42.31
5.07
8.35
49.8
28.7
11.4
0.0
301,067
233,102
124,851
2024
2027
2029
2,500
3,420
5,920
15,880
2,569
55
219
13.82
85,686
47.72
5.93
8.05
48.3
29.6
10.9
1.5
340,338
244,327
130,037
1,800
3,420
5,220
21,100
2,453
63
253
13.79
88,443
51.23
6.03
8.50
50.6
27.8
9.8
2.5
312,889
248,058
131,855
400
2,470
2,870
23,970
950
48
191
13.91
90,300
55.20
6.35
8.69
51.9
27.3
9.4
2.7
304,938
254,251
134,802
40
10. Scenario: Water Stress
Economic Conditions
• [Moderate decline in population and economic
growth with higher impacts on localities with
water intensive industry]
• Increased water and electricity prices
• Productivity and job losses in agriculture
• Potential negative impact on oil & gas
extraction
• Impact on local economy
Enviro Regs / Energy Policies
• Required drought management plans and water
conservations
• Stringent requirements on power generation
water use leads to dry cooling
• Tax breaks for drought resistant generation
• [Other environmental regs are same as Current
Trends]
Alt. Generation Resources
• Continued investments in renewables, storage,
and dry-cooling [with continued federal
PTC/ITC continues]
• Policy incentives for dry-cooling retrofits?]
• Development of co-location desalination and
power plants
• [Renewable costs same as Current Trends]
Natural Gas and Oil Prices
• Moderate increase in natural gas prices
relative to in Current Trends [$1 –
2/MMBtu]
• Moderate impact on local oil production, but
prices are set internationally
[at the same
ERCOT PUBLIC
price as Current
Trends]
7/22/2014
Story:
• The rate of population and economic
growth moderately declines, due to
sustained [multi-year] drought
conditions.
• Sustained drought conditions impact
water-intensive generation resources
(nuclear/coal/steam units), and lead to
significant increase [over those in
Current Trends] in renewables and
storage, dry cooling [on thermal
generation], and transmission
expansion.
Implications for ERCOT:
• Derating units due to water resource
limitations and generation retirements
lead to challenges in meeting demand
• Potential need for new ancillary services
to meet the needs of integrating new
renewable energy generation
• More transmission [will be needed for
expansion of renewables [over those in
Current Trends]
• [Seriously consider] more
interconnections outside ERCOT.
Transmission Regs
• More DC ties to neighboring
regions
• Potentially increase in transmission
into high solar regions [possibly
solar CREZ]
• Increase in transmission due to
policy/ regulatory changes
resulting from drought
Gen Res Adequacy Standards
• Mandated reserve margin and
increased operating reserves
• Demand response [plays a larger
role than in Current Trends]
End – Use Customer / Policies
• Increase the development of
demand-side management tools
[increases EE penetration beyond
those in the Current Trends]
• Greater market penetration of timeof-use rates and water smart
devices
Weather & Water
• More drought than in the Current
Trends
• Hot summers
41
• Limited water supply
Water Stress Highlights
• High natural gas price
• New thermal additions are dry cooled only
• Includes PTC / ITC
• Increased DC ties
• Reserve margin set to 13.75%
ERCOT PUBLIC
7/22/2014
42
Water Stress Scenario Results
Description
CC Adds
CT Adds
Coal Adds
Nuclear Adds
CAES Adds
Geothermal Adds
Solar Adds
Wind Adds
Reliability Adds
Annual Capacity Additions
Cumulative Capacity Additions
Retirements
Residential Demand Response
Industrial Demand Response
Reserve Margin
Coincident Peak
Average LMP
Natural Gas Price
Average Market Heat Rate
Natural Gas Generation
Coal Generation
Wind Generation
Solar Generation
Scarcity Hours
Unserved Energy
SO2
CO2
NOx
ERCOT PUBLIC
7/22/2014
Units
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
MW
%
MW
$/MWh
$/mmbtu
MMbtu/MWh
%
%
%
%
HRS
GWhs
Tons
(k) Tons
Tons
2018
1,550
1,550
1,550
922
300
1,200
13.62
76,557
47.58
6.52
7.30
46.3
32.3
11.3
392,932
233,829
125,808
2021
760
3,200
3,500
7,460
9,010
3,966
318
1,273
13.36
79,931
52.14
6.57
7.94
48.3
29.6
10.7
1.9
2.0
0.04
379,956
238,339
127,781
2024
2027
2029
300
4,400
399
850
5,949
14,959
2,379
337
1,351
13.81
82,693
57.27
7.43
7.71
47.2
28.8
10.6
4.2
384,213
243,316
130,469
3,500
1,140
4,640
19,599
2,453
358
1,434
13.70
85,457
72.73
7.53
9.66
48.9
26.8
9.6
5.9
4.0
3.8
345,663
245,872
131,884
2,600
272
190
3,062
22,661
950
373
1,492
13.69
87,322
77.82
7.85
9.91
49.6
25.6
9.4
7.1
7
9.0
311,049
247,597
132,695
43