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Future Energy Overview. 2009 GCAA Management Workshop February 17, 2009 Jeff Burleson Director, Resource Policy and Planning Georgia Power Company. Current Situation. Fuel prices have declined Retail gasoline $4.00 vs 1.50 per gallon

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future energy overview

Future Energy Overview

2009 GCAA Management Workshop

February 17, 2009

Jeff Burleson

Director, Resource Policy and Planning

Georgia Power Company

current situation
Current Situation
  • Fuel prices have declined
    • Retail gasoline $4.00 vs 1.50 per gallon
    • Wholesale natural gas $13 vs 6 per million btu
    • Central Appalachian coal $120 vs 60 per ton
  • But for the wrong reason
    • Economic downturn lowering current and near term outlook for demand
  • Fuel prices will climb again in the future
    • Only a matter of time
    • Over half of U.S. oil consumption is from imports
    • Natural gas imports projected to rise significantly over long term
    • No single fix, nor quick fix
      • Requires holistic, sustained efforts
  • Environmental requirements will increase
slide3

US Electricity Generation by RegionHistory and projection, 1990-2030

Projected growth

2008-2030

34%

25%

34%

22%

11%

History

Projection

Data Source: Energy Information Administration, US Department of Energy

slide5

Environmental Uncertainty

AMFA

ARPAA-88

AIA

ASBCAA-88

ESAA-88

FIRAA-88

TOSCAA-88

NWPAA-88

CPDRAA-88

NMSPAA-888

FCRPA

MMPAA-88

ODBA

SFA

FWLA-88

ICPBD

EDP

OPA

RECA

CAA-90

CCRA

CLFWRA

HMTUSA

NEEA

PPA

PPVA

IEREA

ANTPA

GLCPA

ASA

CZMAA-90

WRDA

FFCA

CERFA

CRAA-92

150

SDWAA-86

SARA-86

AOA

BLRA

ERDDAA

EAWA

NOPPA

PTSA

UMTRCA

ESAA-78

QCA

NCPA

RCRAA-84

WLDI

MPRSAA-82

NAWCA

NWPA

ESAA-82

WQA

No. of Laws

100

NEPA

EQIA

CAA

EPA

OSHA

FAWRAA-70

APA

SWDA

CERCLA

CZMIA

COWLDA

FWLCA

MPRSAA-80

ANISCA

CAAA-77

CWA

SMCRA

SWRCA

SDWAA-77

LLA-81

ARPA

TOSCA

FLPMA

RCRA

NFMA

CZMAA-76

HMTA

WSRA

EA

RCHSA

ESA

TAPA

BLBA

FWPCA

MPRSA

CZMA

NCA

FEPCA

FWSA

MMPA

NHPA

PFW

FOIA

50

FCMHSA

ESCA

FHSA

NFMUA

FWCAA-58

AQA

AEA

TA

FWCA

BPA

FWA

FIFRA

WRPA

AFCA

AEPA

WLDA

MBTA

MBCA

PAA

NPS

OPA

FAWRA

CAA-55

WA

NBRA

AA

VA

RHA

NLR A

WPA

SCS

WPCA

YOS

RTC

FEATH

IA

0

LA

1862 1872 1882 1892 1902 1912 1922 1932 1942 1952 1962 1972 1982 1992 2001

some elements of a sound energy strategy
Some Elements of a Sound Energy Strategy
  • More fuel efficient automobiles to reduce oil imports
    • Plug-in hybrid electric vehicles
  • Energy efficiency and demand reduction
  • Increase fuel diversity of electric generation
    • Fully develop all cost effective applications of renewable generation
    • Nuclear
planning to ensure a reliable and economic electric supply
Planning to Ensure a Reliable and Economic Electric Supply
  • Uncertainties include
    • Long term fuel costs and availability
    • Long term environmental requirements
    • Customer response to Demand Side Management (DSM) programs
  • Long lead times for new resources
    • Typically 3 to 10 years
    • Resources typically last 30 to 60 years
  • Robust, comprehensive planning process
    • Integrated Resource Planning (IRP)
    • Frequent validation and updates, as needed
slide12

Strategic Options for Meeting Generation Needs

  • Supply Decisions
    • Pulverized coal
    • Natural gas combined cycle
    • Integrated gasification combined cycle
    • Nuclear
    • Renewable energy
  • Demand Side Management
georgia power anticipated plan for the next decade
Georgia Power Anticipated Plan for the Next Decade
  • 12-20% renewable and DSM
    • Plant Mitchell conversion to biomass
      • One of largest wood biomass plants in US
    • Solar research project
      • 2011 possible expansion
    • Limited potential
  • 69-76% natural gas capacity (50% add’l gas energy generation)
    • Price and volatility
  • 12% nuclear
    • First U.S. nuclear planned in 30 years
contracts with renewable generators
Contracts with Renewable Generators
  • May invest more than $1 billion on capacity and energy from renewable generation developers over next 10 years if all projects proceed
nuclear power cost effective when compared to alternatives
Nuclear Power Cost-Effective when Compared to Alternatives:
  • Significant lifetime savings
    • $2 - $6.5 billion when compared to pulverized coal
    • $1 - $6.5 billion when compared to natural gas combined cycle
  • Reduces exposure to high natural gas prices and future costs of potential carbon legislation
    • Natural gas prices rose 400 percent between Jan 31, 2002 and Jun 30, 2008
    • Future costs of potential carbon legislation could be significant for coal
  • Natural gas generation more sensitive to fuel price fluctuations
    • 60 to 80 percent of cost per kWh from natural gas plant is fuel
    • About 10 percent of nuclear generation cost is fuel
base load generating capacity needed
Base Load Generating Capacity Needed:
  • Georgia Power’s last base load plant was added in 1989
  • Natural gas capacity increased from 7 percent to 37 percent since 1989
  • New coal power plants less attractive
    • Increased environmental requirements
    • Coal fuel has more than doubled in a year
    • Cost of potential carbon legislation could be significant.
demand side management dsm will play a key role but cannot displace all generation need
Demand Side Management (DSM) will Play a Key Role but Cannot Displace all Generation Need
  • Within 10 years, Georgia Power will have 1,900–2,200 MWs DSM
  • DSM will play a key role, but not cost effective to achieve DSM maximum potential of 3,000 megawatts
  • DSM is less reliable
    • Energy efficiency programs do not provide constant load reductions in all hours of year
    • Base load generation typically operates 24 hours per day, 7 days per week, throughout entire year
summary
Summary
  • Planning to ensure an economic and reliable supply of electricity
  • Georgia Power pursuing diverse and economic portfolio of new generation resources
    • nuclear
    • renewables and usage reduction
    • natural gas