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Thomas Key EPRI Renewable and Hydropower tkey@epri.com

Role of Renewable Energy and Implication of RPS in a Sustainable Electric Generation Portfolio NARUC Electricity Committee 2007 Annual Conference New York, New York July 16, 2007. Thomas Key EPRI Renewable and Hydropower tkey@epri.com.

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Thomas Key EPRI Renewable and Hydropower tkey@epri.com

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  1. Role of Renewable Energy and Implication of RPS in a Sustainable Electric Generation PortfolioNARUC Electricity Committee2007 Annual ConferenceNew York, New YorkJuly 16, 2007 Thomas Key EPRI Renewable and Hydropower tkey@epri.com

  2. Non-Emitting – Renewable, Hydropower and Nuclear Generation • Low-Emitting – Fossil-Fueled Distributed and Central Plant with CO2 Capture Changing Mix of World’s Electricity to Stabilize CO2 Concentrations at 550 ppm From T. Wilson, EPRI, etal, “Electrification of the Economy and CO2 Emissions Mitigation,” Journal of Environmental Economics and Policy Studies, Vol. 7/No. 5, 2005

  3. Technologies for Utility Industry CO2 Reductions: Technically Feasible Targets EIA Base Case 2007

  4. Different viewpoints on how much renewable energy, by when?

  5. Renewable technologies at various stages of development and deployment

  6. EPRI Analysis Approach • National Energy Modeling System (NEMS) feeds EPRI’s capacity expansion model • Scenarios developed based on technologies, fuels, emissions cost expectations and related incentives. • Simulation yields generation mix, capacity, energy, fuels, emissions, LCOE, etc. • Details provided for 13 NERC regions, supply-side only… includes reserves but not other costs of integration.

  7. 2020 Regional Distribution of Electric Generation(Total Estimate is 4,828 TWhr, 15% is 674 TWhr)

  8. Base Case Assumptions – 15%, 2020 • Federal RPS along lines of “Bingaman ARP07513” • 3.75% (2010), 7.5% (2015), 15% (2020) • Incentives (production tax credits) are applied to drive renewable deployment to levels required. • Alternative compliance payment is $20/MWh • No CO2 emission allowance….other allowances are: • SOX @ $470/ton increasing at ~4%/year • Nox @ $1931/ton increasing at ~4%/year • HG @ $18,000/lb increasing at ~9%/year • Natural gas varies from $4.50 to $5.75/MMBtu by season/region • Demand growth is ~1.4%/year

  9. Different quantities and mix of renewable energy across the country – 15%, 2020 Shown here as a % of regional electric generation

  10. Differences between required and available renewable energy by region – 15%, 2020 Results show importance of regional flexibility

  11. What is the cost of a Federal RPS? Several key questions in analyzing RPS cost impact: • How are federal PTC incentives handled …continuing, tax payers sharing of RPS cost? • Should CO2 credits be considered…..as adder to relative cost of fossil generation options? • What is relative cost to build other, non-renewable, plants? • Uncertainty in the demand for, and price elasticity of, natural gas. • Limit to wholesale supply-side cost or include demand-side and retail. • How will existing State RPS be counted?

  12. Potential effect of State RPS on Federal • States with aggressive RPS….. • California ~86 TWHr by 2020 • Texas ~18 TWHr by 2015 • Northeast ~30 TWHr, 2010-2020 • PA, NJ, MD ~55 TWHr by 2020 • Estimated total of state RPS by 2020 is >300 TWHr • A 15% federal RPS in 2020 is ~ 675 TWHr • Regions w/o RPS….SERC, FL, ECAR, MAPP, SPP • State RPS will play a major role in cost and achievement of Federal RPS goals

  13. Impact of federal RPS on wholesale electricity cost – 15%, 2020 ….depends on assumptions and region

  14. Some points the electric industry can bank on • Demand for electricity will continue to grow  • Pressure to reduce green house gasses will continue • Most of low and non-emitting generation technologies will be less controllable and change how the power system is operated • Advances in electric generation technology will occur, and affect the relative cost/performance • All electric generation technologies will be needed in the future

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