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WSTF Weekly Meeting

This document discusses four scenarios for policy and market models in the energy industry, exploring different levels of customer choice, adoption rates, and advancements. It also explores the impact of regulations on reliability, cost, and customer options.

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WSTF Weekly Meeting

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  1. WSTF Weekly Meeting Friday, August 30, 2019 Scenario Policy & Market Models Michael Bailey

  2. Policy Models • Market Based Models Discussion Items

  3. 2038 Scenario Matrix

  4. Scenario 1: Open Markets with High Levels of Customer Choice yet Moderated Adoption: Reference Adoption, Moderate Advancement This scenario envisions a world in which new energy services and products are introduced into the marketplace, but due to their inability to consistently provide a good cost versus benefits tradeoff, the pace of adoption for those services and products by electric customers is moderate and diverse across the Western Interconnection. Rates of adoption are different in different states and provinces which have variations in supportive government policy. In this light, we see the technology advancing at a moderate pace as new products and services are introduced, but adoptions rates not beyond the status quo. Scenario 1

  5. Scenario 2: Open Markets with High Levels of Customer Choice: High Adoption, Moderate Advancement This scenario envisions a world in which new energy services and products are introduced into the market place, and because they deliver a positive benefit to cost ratio, there is a high adoption rate by electric customers in all customer classes across the Western Interconnection. In this scenario, most states in the Western Interconnection put similar and supportive policies in place to support the adoption of those services as well. In this light we see the technology advancing at a moderate pace (as new products and services are introduced, but adoptions rates could be high in some states based on policy support and consumer interests in the benefits. Scenario 2

  6. Scenario 3: Reliability and Cost Policy Driven with Restricted Customer Choice Reference Adoption, Slow Adoption This scenario envisions a world in which new energy services and products have their introduction into the market place curtailed due to a lack of benefits over their costs and a concern by regulators that they could contribute to a reduction in electric reliability and harm to consumers. Electricity policy oversight across the Western Interconnection may vary by State or Province but lean predominately toward control of electric system products and services markets to assure reliability. In this light, we see the technology advancing at the status quo pace as new products and services are introduced, and adoptions rates not beyond the status quo as well. Scenario 3

  7. Scenario 4: Reliability and Cost Policy Driven with High Levels of Customer Choice Medium Adoption, Moderate Advancement This scenario envisions a world in which new energy services and products have their introduction into the market place controlled and monitored by regulators to assure cost and benefits are balanced, and overall electric reliability is not compromised. Policies across the Western Interconnections lean toward supporting established providers to assure accountability and recourse to sustain reliability. In this light, we see the technology advancing at a moderate pace as new products and services are introduced, and rates of adoption being moderate as benefits from new services and products are proven. Scenario 4

  8. S3 S1 S4 S2 From NREL Electrification Futures Study December 2017, Report page 18, PDF file page 39. Risk Averse, Cost Sensitive Seeking Benefits, Desire More Options Customer Adoption of Energy Service Options Demand-side Model Representation Customer Adoption

  9. Policy Based, Low Degree of Market Freedom Market Based, High Degree of Market Freedom Direction of State & Provincial Energy Policy Resource Portfolio Model Representation Policy versus Market

  10. 2028 ADS Portfolio • All In (ADS and Candidates, let PCM decide) • Resource portfolio candidates limited to adequacy and RPS requirements (CapEx derived) • Flexible Electrification (with and without) • Reduced Emissions (50%, 80%, ?) • Increased Storage (10%, 20%, ?% of installed Solar PV and/or Wind) • Resource Portfolio Standard (RSP; expected?, ambitious?, relaxed?) • EWCC constraints (hydro, thermal cooling)? • ADS reliability requirements? • Variable Costs (fuel, CO2, water)? Resource Portfolio Options

  11. Regulations are open and flexible to allow a range of energy service options. • Demand Scenario: moderate tech advancement, reference customer adoption. • All in resource portfolio (let PCM decide). Scenario 1

  12. Customer adoption of new energy options is limited by new products not meeting customer needs. • Demand Scenario: moderate tech advancement, reference customer adoption. • No flexible Electrification. Scenario 1

  13. The bulk transmission system is maintained to back up reliability for the interconnection. • Demand Scenario: moderate tech advancement, reference customer adoption. • ADS reliability requirements. Scenario 1

  14. Regulations are open and flexible to allow a range of energy service options. • Demand Scenario: moderate tech advancement, high customer adoption. • All in resource portfolio (let PCM decide). Scenario 2

  15. Customers are willing to try new energy options with varied levels of success and benefits vs. costs. • Demand Scenario: moderate tech advancement, high customer adoption. • Flexible Electrification (moderate price points). Scenario 2

  16. The bulk transmission system is allowed to diminish as reliability can be met increasingly by distributed options. • Demand Scenario: moderate tech advancement, high customer adoption. • Relaxed reserve requirements. • Pooled reserves. Scenario 2

  17. Regulations are made to hold control over the system to assure environmental goals are met and community-wide reliability is sustained. • Demand Scenario: slow tech advancement, reference customer adoption. • Resource portfolio candidates limited to adequacy and RPS requirements (CapEx derived). Scenario 3

  18. Customer demand for new energy options are constrained to assure cost sharing and overall system integrity. • Demand Scenario: slow tech advancement, reference customer adoption. • No flexible Electrification. Scenario 3

  19. The bulk transmission system is protected and maintained to assure reliability for the interconnection. • Demand Scenario: slow tech advancement, reference customer adoption. • ADS reliability requirements. Scenario 3

  20. Regulations are put in place to assure standards are met for reliability and system integrity purposes. • Demand Scenario: moderate tech advancement, medium customer adoption. • ADS reliability requirements. Scenario 4

  21. Customers are directed towards new service options based on regulatory approval to assure reliability. • Demand Scenario: moderate tech advancement, medium customer adoption. • Flexible Electrification (competitive price points). Scenario 4

  22. The bulk transmission system is protected and maintained to assure reliability for the interconnection. • Demand Scenario: moderate tech advancement, medium customer adoption. • ADS reliability requirements. Scenario 4

  23. DSE: demand-side electrification Policy Based, Low Degree of Market Freedom Market Based, High Degree of Market Freedom Direction of State & Provincial Energy Policy Resource Portfolio Model Representation Policy versus Market

  24. Michael Bailey, P.E. Senior Staff Engineer mbailey@wecc.org

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