MSU Issues & Opportunities

Supply Management

Demand ManagementIntegrated Approach to

Energy Planning

Integrated Energy Planning Model

Integrated Energy Planning Moving

Forward

Kathy Lindahl, MSU | Nick Travis and Rob McKenna, Energy Strategies, LLC

MSU Issues• Powerplant capacity issue• CCX – CO2 emission constraints

– Nationally – something will happen• Technologies

– What do we buy next– Is it ripe enough

• Growth - Continue to add 1MM GSF per decade– 2MM in most recent decade

• Deferred maintenance• Driving for flexibility• How to integrate the ability to make good financial decision while

managing other complexities.

2

4

6

8

10

12

14

16

18

5

25

45

65

85

105

125

1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2010-11 2020-21 2030-31

Electric (1,000 Kilowatts) Steam (100,000 Pounds/Hour)

Fiscal Year

FIRM ELECTRIC CAPACITY 90,000 KW

FIRM STEAM CAPACITY 950,000 Pounds/Hour

Physical Plant DivisionPeak Annual Demands

Total Electric Capacity 114,000 KW Total Steam Capacity 1,300,000 #/Hour

2023 “Tipping Point”

Bend the Line toward Environmental Stewardship

"Dr. King once said that the arc of the moral universe is long but it bends towards justice. It bends towards justice, but here is the thing: it does not bend on its own. It bends because each of us in our own ways put our hand on that arc and we bend it in the direction of justice....“

Senator Barack Obama

Regulatory & Policy Support

Market Monitoring & Intelligence

Dynamic Baseline & Performance Measurement

Development & Implementation

Investment Analysis

Contract Negotiations

Funding

Operation

Procurement

Regulatory Intervention

Rate Design

Supp

lem

enta

l Ext

erna

l Sub

ject

Matt

er

Expe

rtise

(e.g

. tec

hnic

al, l

egal

)

Inte

rnal

Sub

ject

Matt

er E

xper

tise

Internal Leadership

Strategic Planning

Integrated Strategic Resource Planning

Examples:•Energy/Utility Master Plans•Climate Action Plans

Integrated Decision Support FrameworkEconomic, Financial and Decision Analysis

Define Decision Metrics

Analyze Historical Data

Define Starting “Test Year”

Definition & Scope Measure Performance

MSU General Analytical Direction

Add Givens

Create Baseline

Reference Case

Add, Renovate

& Demolish

Impact Demand

Vary Utility Plant

Operations

Impact Supply

Invest in Energy

Conserva-tion

Modify Behavior, Space Use & Building Standards

Apply Alternative Utility Plant Technology

Vary External Planning Environment

Feedback & Adjustment

Vary Procure-

ment Practices

You Can’t Manage What You Don’t Measure

0

1

2

3

4

5

6Cost of Service (FS)

Capital Intensity (FS)

Bonding Capacity (FS)

Capital Efficiency (FS)

Financial Risk (FS)

Reliability (OE)

Efficiency (OE)

Capacity Constraints (OE)Criteria Pollutants (ES)

GHG Emissions (ES)

Water (ES)

Solid Waste (ES)

Research (OML)

Local Economy (OML)

Outreach (OML)

Expand Metrics for Insight & Trade OffsIdeal Sample Trade off

0

1

2

3

4

5

6Fiscal Stewardship (FS)

Operational Excellence (OE)

Environmental Stewardship (ES)

Other Mission Linked (OML)

"Buckets" for Decision MetricsIdeal Sample Trade off

Insight/Decision Modules:

Integrated Energy Planning ModelModel Description/Charter: The demands for energy at Michigan State University (MSU) and the manner in which those demands are served represent a complex portfolio of accumulated decisions. The purpose of this model is to provide a dynamic, integrated planning resource that is designed to allow the user to effi ciently gain insights with respect to current and alternative courses of energy planning related actions. Use the navigation provided below to navigate to the desired location. On each page you will see the following "Home" button. Click this button to return to this page. Home

Confirm Baseline Reference Case

Energy Management PlanningDemand Related

Energy Mangement PlanningSupply Related

Integrated Energy Management Portfolio Planning

Establish External Planning Environment

Documentation & Other Resources

CAPITAL STEWARDSHIP VALUE UNITCost of Utility Service Current Year $30.3 2010 $ MM Forecast Horizon $968 2010 $ MM PVRequired Capital 1-5 Years $0 2010 $ MM 6-10 Years $0 2010 $ MM Forecast Horizon $74 2010 $ MM PV

2010 2020 2030 2040 2050 AssumptionNet GSF (MM) 22.9 23.9 25.0 26.0 27.0 Trend"Givens" ModifyFuture Trend Renovation 30%Future Trend Demolition 10%Existing No Change 22.9 20.3 18.1 15.9 13.7

% of NewCentral Connect - Electric 20.0 21.5 22.9 24.4 25.9 100%Central Connect - Steam 17.7 19.1 20.6 22.1 23.6 100%

Peak Annual Peak AnnualExisting Campus Averaage 2.4 46 35.9 151Renovations 2.5 46 35.9 151Additions 2.8 46 35.9 151Units W/GSF KBTU/GSF BTU/GSF KBTU/GSF

Unit Nameplate N-1 Nameplate N-1Generator 1 12.5 250Generator 2 12.5 250Generator 3 15.0 350 X ENVIRONMENTAL STEWARDSHIP VALUE UNITGenerator 4 21.0 350 GHG EmissionsGenerator 5 24.0 X 115 Current Year 545,638 MTCO2eGenerator 6 13.5 2050 701,852 MTCO2eCPC Tie-Line 21.0 Financial Exposure to Carbon - Forecast Period $642 2010 $ MM PV

OUTPUTS

OPERATIONAL EXCELLENCE

Boiler 4HRSG6

Unit

AVAILABLE CAPACITYElectric (MW) Steam (klb)

Boiler 1Boiler 2Boiler 3

ENERGY USE INTENSITY (CAMPUS SENDOUT)Electric Steam

SPACE PLANNING

Renovations, Demolitions, Additions% of Existing Renovated by 2050

% of Existing Demolished by 2050

INPUTS

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Net

Cam

pus

Spac

e (1

,000

GSF

) Click to See Larger Chart

BAU Tipping Point: 2023

0

200

400

600

800

1,000

1,200

1,400

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

klb

Peak Non-Discretionary Steam

BAU Tipping Point: 2045

0

20

40

60

80

100

120

140

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

MW

Nameplate Capacity N-1 Capacity Peak Sendout Post EUI Sendout Peak

Insight/Decision Modules:

Integrated Energy Planning ModelModel Description/Charter: The demands for energy at Michigan State University (MSU) and the manner in which those demands are served represent a complex portfolio of accumulated decisions. The purpose of this model is to provide a dynamic, integrated planning resource that is designed to allow the user to effi ciently gain insights with respect to current and alternative courses of energy planning related actions. Use the navigation provided below to navigate to the desired location. On each page you will see the following "Home" button. Click this button to return to this page. Home

Confirm Baseline Reference Case

Energy Management PlanningDemand Related

Energy Mangement PlanningSupply Related

Integrated Energy Management Portfolio Planning

Establish External Planning Environment

Documentation & Other Resources

IllustrationExpand Grid Purchases Option

Alternatives

Baseline Reference Case

Sub-Category

Energy Management Category

Supply -Plant Operation Practices

Make vs. Buy Electricity

Minimize Grid Purchases

Minimize CTG

Minimize Grid Purchases

Expand CTG Use

Expand Grid Purchases

Fuel Switching

Maximize Coal Use

Expand NG Use Expand Biomass Use

Link to GlossaryCHANGE IN GRID PURCHASES BY RATE PERIOD VALUE UNIT CAPITAL STEWARDSHIP VALUE UNIT COS Horizon VSGTargeted Reduction in Peak Steam Production 12.5 MW equivalent Cost of Utility Service Increase (Decrease)Winter (Oct-May), Off-Peak Hours (7PM-11AM) 10.0 Avg MW per hour Current Year ($4.7) 2010 $ MMWinter (Oct-May), On-Peak Hours (11AM-7PM) 10.0 Avg MW per hour Forecast Horizon ($122) 2010 $ MM PVSummer (Jun-Sep), Off-Peak Hours (7PM-11AM) 10.0 Avg MW per hour Incremental Capital Increase (Decrease)Summer (Jun-Sep), On-Peak Hours (11AM-7PM) 10.0 Avg MW per hour 1-5 Years -$ 2010 $ MMLoad Factor 80% Percent 6-10 Years -$ 2010 $ MM

Forecast Horizon -$ 2010 $ MM PVCHANGE IN STEAM PRODUCTION BY SOURCE VALUE UNITBLR1,2 (Pulverized Coal) 55% % of Total DisplacedBLR3 (Pulverized Compliance Coal) 25% % of Total Displaced OPERATIONAL EXCELLENCE VALUE UNIT Efficiency Elemental VSGBLR4 (Fluidized Bed Coal) 20% % of Total Displaced Available Capacity Increase (Decrease)

Steam Generation 171 MlbUTILITY PLANT/BUILDING CHARACTERISTICS VALUE UNIT Equivalent New Building Space Served 3.4 millions of GSFHeat Rate for Condensing Steam 12.50 Steam lbs per kWh Increase (Decrease) in Current Year:

50 Steam lbs per kGSF Discretionary Condensing Steam ("DCS") -44% % of Total DCS Electricity Purchases 29% % of Total Net Campus

PURCHASED ENERGY PRICE SCENARIO VALUE UNIT Primary Energy (Source) -10% % of Total MMBtu Coal 0% % Real Annual GrowthNatural Gas % Real Annual GrowthPurchased Electricity - General Service 0% % Real Annual Growth ENVIRONMENTAL STEWARDSHIP VALUE UNIT GHG Elemental VSGPurchased Electricity - Green Power 25.00$ $/MWh Cost Premium GHG EmissionsPurchased Electricity - Green Power 50% % of Total Purchased Current Year -16% % of Total

Forecast Period -16% % of TotalREGULATORY SCENARIO VALUE UNIT Financial Exposure to Carbon - Forecast Period ($82) 2010 $ MM PVClimate Change Policy Moderate ScenarioClimate Change Carbon Costs EV ScenarioClean Air Act Criteria Pollutants ScenarioCoal Ash EPA Scenario

SUPPLY OF ENERGYPLANT OPERATION PRACTICES

EXPAND GRID PURCHASES - DISPLACE CONDENSING GENERATION

SUPPLY OF ENERGYPLANT OPERATION PRACTICES

ENVIRONMENTAL STEWARDSHIP

FISCAL STEWARDSHIP

SUPPLY OF ENERGYPLANT OPERATION PRACTICES

EXPAND GRID PURCHASES - DISPLACE CONDENSING GENERATION

OUTPUTS -VISUAL

OPERATIONAL EXCELLENCE

EXPAND GRID PURCHASES - DISPLACE CONDENSING GENERATION

OUTPUTS - NUMERICINPUTS

1.6 -0.9

-0.1 0.7

0

1

1

2

2

Fuel - Coal Electricity purchased

Grid transmission losses

Net increase (decrease)

mtC

O2e

3

15

19 -3

-6

10

0

5

10

15

20

25

Electric energy made

Condensing steam

Fuel & power to make steam

Electric energy purchased

Grid losses Net increase (decrease)

MM

Btu

178

92 -70

-52-26

0 122

82 203

050

100150200250300

Fuel Non-fuel opex

Electric purchases - energy

Electric purchases - demand

Green power

premium

Capital Net increase

(decrease) w/o

carbon

Carbon Net increase

(decrease) w/carbon

PV 2

010$

MM

HomeReturn

Dashboard – Expand Grid Purchases

An Elemental Understanding of Value Drivers per MWhExpand Grid Purchases

Operational ExcellenceEnergy Intensity

Environmental Stewardship GHG Intensity

Electric

energy made

Condensing st

eam

Fuel & power t

o make

steam

Electric

energy purch

ased

Grid lo

sses

Net (incre

ase) d

ecrease

0

5

10

15

20

25

3

15

19 1916

10

MM

Btu

1.6 -0.9

-0.1 0.7

0001111122

Fuel - Coal Electricity purchased

Grid transmission

losses

Net (increase) decrease

mtC

O2e

$1.7 $0.9 ($0.8)

($3.0)

$0.0 $0.0 ($1.2) $0.0 ($1.2)

($2.0)($1.0)$0.0 $1.0 $2.0 $3.0

Fuel Non-fuel opex

Electric purchases - energy

Electric purchases - demand

Green power

premium

Capital Net (increase) decrease

w/o carbon

Carbon Net (increase) decrease

w/ carbon

2010

$MM

Link to Glossary Scenario: Peak FollowCHANGE IN GRID PURCHASES BY RATE PERIOD VALUE UNITTargeted Reduction in Peak Steam Production 18.4 MW equivalentWinter (Oct-May), Off-Peak Hours (7PM-11AM) 1.5 Avg MW per hourWinter (Oct-May), On-Peak Hours (11AM-7PM) 5.3 Avg MW per hourSummer (Jun-Sep), Off-Peak Hours (7PM-11AM) 1.0 Avg MW per hourSummer (Jun-Sep), On-Peak Hours (11AM-7PM) 7.1 Avg MW per hourLoad Factor 30% Percent

INPUTS

What if: Vary Grid Purchases So Peak is Set by Non-Discretionary Steam Demands

$7.0

$3.6 ($2.7)

($2.0)$0.0 $0.0

$5.8 $0.0

$5.8

$0.0 $2.0 $4.0 $6.0 $8.0

$10.0 $12.0

Fuel Non-fuel opex

Electric purchases - energy

Electric purchases - demand

Green power

premium

Capital Net (increase) decrease

w/o carbon

Carbon Net (increase) decrease

w/ carbon

2010

$MM

What if: Purchase Blocks of Grid Power to Spread Fixed Capacity Charges over More MWh

Link to Glossary Scenario: BlockCHANGE IN GRID PURCHASES BY RATE PERIOD VALUE UNITTargeted Reduction in Peak Steam Production 12.5 MW equivalentWinter (Oct-May), Off-Peak Hours (7PM-11AM) 10.0 Avg MW per hourWinter (Oct-May), On-Peak Hours (11AM-7PM) 10.0 Avg MW per hourSummer (Jun-Sep), Off-Peak Hours (7PM-11AM) 10.0 Avg MW per hourSummer (Jun-Sep), On-Peak Hours (11AM-7PM) 10.0 Avg MW per hourLoad Factor 80% Percent

INPUTS

What if: Purchase Green Power to Avoid Grid GHG Emissions

$7.0

$3.6 ($2.7)

($2.0)($2.0)

$0.0 $3.8

$0.0

$3.8

$0.0 $2.0 $4.0 $6.0 $8.0

$10.0 $12.0

Fuel Non-fuel opex

Electric purchases - energy

Electric purchases - demand

Green power

premium

Capital Net (increase) decrease

w/o carbon

Carbon Net (increase) decrease

w/ carbon

2010

$MM

143.1 -78.7

-5.9 58.5

020406080

100120140160

Fuel - Coal Electricity purchased

Grid transmission losses

Net (increase) decrease

mtC

O2e

(000

's)

143.1 0.0 -5.9 137.2

020406080

100120140160

Fuel - Coal Electricity purchased

Grid transmission losses

Net (increase) decrease

mtC

O2e

(000

's)

Without Green Power With 100% Green Power

Vision of Integrated Planning Tools in the Future