California’s Energy Future: California’s Energy Future: Generation, Integration, Generation, Integration,
Storage and TransportationStorage and Transportation
Roy KugaIEP Annual Meeting
September 24, 2010
2
Looking Back at How We Saw the Future
Our 1990 Electric Supply Strategy
Maximize the deployment of all cost-effective customer energy efficiency programs
Implement efficiency and environmental quality improvements to existing transmission and generation assets
Capture regional electric generation efficiencies
Continue leadership role in advancing cost competitive commercial development of environmentally preferred renewables and highly efficient advanced technologies
Encourage and take advantage of the development of true market competition among potential generation supplies
3
Looking to the Future
Policy initiatives, market design, technology and operational considerations will shape the energy market and utility portfolio mix
GHGCap-and-
Trade
GHGCap-and-
Trade
FERC Initiatives
FERC Initiatives
FEDERAL ENERGY POLICIESFEDERAL ENERGY POLICIES
Wind Integration
Policies
Wind Integration
Policies
RenewableTransmission Development
RenewableTransmission Development
British ColumbiaEnergy Plan
British ColumbiaEnergy Plan
Energy Action Plan
Energy Action Plan
CA Solar InitiativeCA Solar Initiative
Renewable Portfolio Standard
Renewable Portfolio Standard
AB32 GHGReduction AB32 GHGReduction Once-
Through Cooling
Once-Through Cooling
CALIFORNIA ENERGY POLICIES
CALIFORNIA ENERGY POLICIES
REGIONAL ENERGY POLICIES
REGIONAL ENERGY POLICIES
EPAEmissions
Policy
EPAEmissions
Policy
Plug-In ElectricVehicles
Plug-In ElectricVehicles
Investment Incentives, Loan
Guarantees & Tax Credits
Investment Incentives, Loan
Guarantees & Tax Credits
Smart GridTechnology
Advancements/ Breakthroughs
Smart GridTechnology
Advancements/ Breakthroughs
Demand Bidding Peak Day Pricing
Demand Bidding Peak Day Pricing
QF SummitQF Summit
Retail Competition
Retail Competition
4
Considerations for the Electric Supply Portfolio
Demand-Side More than half of future load growth met through energy efficiency
Market-based pricing for demand response, and time of use pricing for retail customers
Supply-Side Increasing central station and distributed intermittent renewable
resources
Continuing dependency on large transmission upgrades
Increasing amounts of new baseload, combined heat and power (CHP)
Continuing permit challenges
Continuing to be on the verge on major technological breakthroughs
Increasing amounts of surplus during off-peak and ramp hours
5
Implications for Future Procurement
Greater need for operationally flexible, rapid response ramp-up and ramp-down resources
Higher operating and planning reserves to maintain reliability
Greater need/value for physical curtailment rights on supply resources
Greater need for load shifting/load creation
Opportunities for cost-effective energy storage
6
Operational Implications: Wind Generation
While the average is looks fine, the hourly/daily variability is great
0
100
200
300
400
500
600
700
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour
MW
Average
Each Day is a different color.
Day 29
Day 5 Day 26
Day 9
Source: CAISOSource: CAISO
April 2005 in Tehachapi WRA
7
Operational Implications: PV Generation
Source: AES
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Operational Implications: Ramping Up & Down
Case Study: 4000 MW Solar and 6000 MW Wind5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
-500
MW
Source: CAISOSource: CAISO
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Operational Implications: Ramp Rate Requirements (MW per Minute)
Source: Renewable Issues Forum 2010: Product and Market Review, CAISO, July 16, 2010
Rapid response, operationally flexible resources needed to provide regulation and load following
MW/min
-500-400-300-200-100
0100200300400
2006 2012 2020
ramp up ramp down
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Ramp Rates
Ramp Rate (MW/minute)Ramp Rate (MW/minute)Types of Ramp UnitsTypes of Ramp Units
Conventional Steam Generation 3 - 10
Conventional Peaker 10
Conventional Combined Cycle 12 - 15
Next Generation Fast Ramp Combined Cycle 30
Next Generation Fast Ramp Peaker 30
Pumped Storage 40
Compressed Air Energy Storage (CAES)1 90
Battery Technology Depends on size and technology
1. Estimates for the Department of Energy CAES Application.1. Estimates for the Department of Energy CAES Application.
A number of different technologies have fast ramp rates and therefore can provide ancillary services A number of different technologies have fast ramp rates and therefore can provide ancillary services
11
Rapid Response, Operationally Flexible Resource Spectrum
Higher Cost
Lower Cost
Conventional Newer Technologies
Existing Pumped StorageConventional Combined Cycle
Conventional Gas TurbinesLegacy SteamExisting Hydro
Gas Storage
Next Generation Gas TurbinesNext Generation Combined Cycles
Next Generation Pumped StorageCompressed Air Storage
Physical Curtailment RightsSurplus Sales
Demand Response
Batteries
Thermal Storage
New Load Applications (PHEV)
12Source: Electricity Storage AssociationSource: Electricity Storage Association
Tested
Demo Projects
Different Storage Technologies Have Different Capabilities
13Source: Same as prior graph by Electricity Storage Association (converted to normal scale by Rick Miller, HDR | DTA)
Why Compressed Air and Pumped Storage? Meeting Utility-Scale Needs
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Compressed Air Energy Storage
Tehachapi
•4,500 MW of new wind generation to be developed over the next 4 to 5 years
Proposed CAES Site
•Close to wind generation
•Close to transmission lines
•Good geologic characteristics
15
Sodium-Sulfur (NaS) Battery
Rationale for Deployment:
• Placement of NaS batteries on T&D lines can improve reliability and power quality
• Secondary benefits include load shaping and ancillary services
• Potential role in integrating solar photovoltaic
Opportunity:
• One of the most advanced battery technologies
• High energy density, high efficiency, and large capacity
• Capable of both fast discharge
16
Summary: Future Procurement
Greater need for operationally flexible, rapid response ramp-up and ramp-down resources
Higher operating and planning reserves to maintain reliability
Greater need/value for physical curtailment rights on supply resources
Greater need for load shifting/load creation
Opportunities for cost-effective energy storage
Critical that integrated energy policy and planning approach be employed vs. a piecemeal “set-aside” programmatic approach, in order to minimize costs