Avoided cost and e3 calculator workshops
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Avoided Cost and E3 Calculator Workshops. Energy and Environmental Economics, Inc. October 4, 2005. Total Electric Avoided Costs. Shape is Based on PG&E’s San Jose Planning Division. Refinements in Avoided Cost. Background Overview of Title 24 DR Progress Focus on demand response measures

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Avoided Cost and E3 Calculator Workshops

Energy and Environmental Economics, Inc.

October 4, 2005


Total Electric Avoided Costs

Shape is Based on PG&E’s San Jose Planning Division


Refinements in Avoided Cost

  • Background

  • Overview of Title 24 DR Progress

  • Focus on demand response measures

    • Programmable Communicating Thermostat example

  • Capacity and Energy Value Refinement

    • Existing CPUC and CEC TDV Values are based on 1998 and 1999 PX market data

    • Proposed new method modifies the PX market shape based on a ‘CT Backstop’ approach

    • Creates a ‘peakier’ value curve


Background

  • 2005 Title 24 Building Standards adopted ‘Time-dependent Valuation’ methodology

  • Analysis was completed in 2003, and much information was used in the CPUC Avoided Cost proceeding started in 2004

  • 2008 Title 24 Building Standards are evaluating a new TDV curve for demand response

    • Refinement in energy and capacity valuation


Overview of Title 24 DR Progress

  • 3 Public Meetings Completed

  • Methodology Components

    • Energy, reliability, and capacity most difficult

    • T&D, environment, other pieces adopted from prior CEC Title 24 TDV and CPUC Avoided Costs

  • Attempt at party consensus of approach

    • CEC, SCE, PG&E, SDG&E

    • Public comment also requested

  • Proposal for complete methodology has been developed – remainder of presentation


Title 24 2008 Energy and Capacity Value

Method and results in this slide are preliminary.


Resource Planning

Operations

  • Class Average VOS $25/kWh

  • -Productivity -$5/kW

  • Net Reliability $20/kWh

Value of Energy, Capacity, Reliability

+

+

DkW of Equivalent Capacity

in Each Hour

Additional DkW of Equivalent Capacity

Achieved During Stage 3


CT Backstop Method

  • Modifies the historical market price shape to reflect avoiding the need to add capacity

  • Assumes that the backstop technology to add capacity in the State is a CT

  • Observed market prices will pay for part, but not the total costs of a new CT

    • Differe


CEC Price Shape – 2004 IEPR

Note these shapes are from 2004 IEPR.


Price Duration Curve

CEC Shape

Scaled to All-in Combined Cycle Cost

Forecast Market Price - 2008


Uses $72/kW-year Fixed Cost of a CT Assumption (levelized real)

$85/kW-year (levelized nominal) approx. the same value.

Result is approximately $20/kW-yr

High number of operating hours

Similar analyses for other cases / utilities show approximately 700-900 hours operation

Few hours results in a larger residual capacity value

Calculation of Residual Capacity Value


Allocation of Residual Capacity

Control Area Load

1999 Example

Resulting Allocators


Energy and Capacity Curve(Example from 2008)

Residual Capacity – 100 Hours

Residual Capacity – 250 Hours


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