Portland General Electric Co · NYSE:POR
Portland General Electric — Corporate Update (December 2008)
49 slides from Portland General Electric's corporate update, Dec 10, 2008
Slide 1: Integrated Resource Plan 2009 Third Stakeholder Presentation & Discussion
Integrated Resource Plan 2009 Third Stakeholder Presentation & Discussion December 10, 2008 1
Slide 2: IRP Timeline
IRP Timeline Initial Public Meeting (Process Overview, Resource Mix and Need, Supply Assumptions & Issues, Vet wind Public Meeting Final Study Content and integration (Portfolio results, IRP Stakeholder Review study Action Plan recommendations) 2008 June 12 August 21 September 19 December 10 2009 Ma
Slide 3: Today's Topics
Today’s Topics • Demand Side Topics – Energy Efficiency Resource Assessment – Energy Trust of Oregon – Demand Response Technical Assessment – Brattle Group – Demand Response RFP – Load Forecast Update • Supply Updates – Boardman DEQ Emission Control Proposal – Renewable Supply RFP – Wind Self-Integr
Slide 4: Demand Response Peaking Capacity RFP
Demand Response Peaking Capacity RFP • RFP issued August 18, 2008 • Posted at www.portlandgeneralrfp.com • 50 MW (or greater) of peaking capacity • Contract for dispatchable Peaking capacity – 10-minute notice – 1-hour increments – 2 seasons per year • 1 winter morning option • 1 winter afternoon op
Slide 5: Demand Response Peaking Capacity RFP
Demand Response Peaking Capacity RFP • Multiple proposals received from six bidders October 29, 2008 • Proposals under evaluation for short list by mid-December 2008 • Measures proposed direct load control in all markets 5
Slide 6: Load Forecast Update
Load Forecast Update • Load forecast updated in September ‘08 • Near-term (5-year) annual load growth reduced from 1.9% to 1.7% due to weaker economic conditions (~45 MWa lower in 2009 and ~60 MWa lower by 2014) • Long-term (30-year) annual load growth remains unchanged ~ 1.9% (~70 MWa lower in 2029
Slide 7: Load Forecast Update: Forecast Change October vs. July
Load Forecast Update Forecast Change October vs. July (Annual MWa) - (10) (20) (30) MWa (40) (50) (60) (70) (80) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 (44) (47) (52) (59) (63) (62) (62) (62) (63) (63) (64) (65) (65) (66) (67) (6
Slide 8: Boardman DEQ Emission Control Proposal
Boardman DEQ Emission Control Proposal • PGE still evaluating • Concerns with Proposal – Selective Catalytic Reduction (SCR) would have minimal impact on visibility and could cost over $250 million (2017 dollars) in addition to the cost for BART controls. – Requires immediate decision to address all
Slide 9: Renewables RFP Update
Renewables RFP Update •Final Short List –Bidders notified of status on November 13th by Independent Evaluator –12 bids remaining (9 separate bidders and projects), totaling about 255 MWa (97% wind). –Real levelized delivered prices in 2008$ range from approximately $85 to $110/MWh, including PGE’s c
Slide 10: Renewables RFP Update: Final Short List
Renewables RFP Update Final Short List Renew ables RFP Renew ables RFP Final Short List by MW Final Short List by MWa Wind 40 Wind 7 Solar Solar 248 747 10
Slide 11: Wind Self-Integration Cost Study Update
Wind Self-Integration Cost Study Update • Feb 2007 - PGE Contracts with Enernex to perform Wind Integration Study (WIS) • Aug 2007 - Enernex Provides In-hour Balancing Cost based on Mid-C Dispatch Model (Monet) • Nov 2007 - PGE determines additional granularity needed for effective WIS – Original Mo
Slide 12: Wind Self-Integration Cost Study Update
Wind Self-Integration Cost Study Update • 2005 Hydro and Wind conditions • 2014 base year forecasts for load, hydro contracts, PIRA gas price and market electric power price (Aurora) by hour • 1100 MW of nameplate wind capacity by 2014; “High Diversity” (5 Geographic Zones) • PGE’s existing thermal
Slide 13: Draft Fuel Forecasts: Delivered Powder River Basin Coal
Draft Fuel Forecasts Delivered Powder River Basin Coal • Commodity: – Forecast is based on PGE’s contract rates through 2011 and on an average of EIA Annual Energy Outlook 2008 and PIRA October 2008 forecasts beginning 2012. • Transportation – Based on PGE’s forecasted transportation, including poss
Slide 14: Draft Fuel Forecasts: Powder River Basin Coal
Draft Fuel Forecasts Power River Basin Coal Pacific NW Delivery $/mmbtu Nominal $ Base Case $2.16 High Case $2.27 Low Case $2.06 All figures are Real Levelized 2008$ 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 14
Slide 15: Draft Fuel Forecasts: Natural Gas Outlook
Draft Fuel Forecasts Natural Gas Outlook Natural Gas Supply Assessment, Navigant Consulting, July 2008 & PIRA • Domestic outlook for natural gas production over the next decade has improved sharply over last IRP: “Technology has allowed access to and economic production of a vastly greater resource
Slide 16: Draft Fuel Forecasts: Natural Gas Forecast Components
Draft Fuel Forecasts Natural Gas Forecast Components • Reference, high and low cases based on October 2008 PIRA forecast for Henry Hub with basis adders for Sumas and AECO through 2020. • Chart curve represents an average of Sumas and AECO nominal commodity prices. • November 8, 2008 trading curve t
Slide 17: Draft Fuel Forecasts: Natural Gas Price Forecast
Draft Fuel Forecasts Natural Gas Price Forecast Average of AECO and Sumas November 2008 Base Case High Low $/MMBTU Real levelized 2008$ Nov.'08 May'08 Base Case $7.47 $8.06 High $10.27 $12.63 Low $5.82 $6.31 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 17
Slide 18: CO2 Cost Outlook: Findings of McKinsey & Co.
CO2 Cost Outlook Findings of McKinsey & Co. • Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost, Dec. 2007. This study is significant because it takes a careful look at abatement options, the estimated amount available for each option, and their estimated cost. • Performed survey of ~ 50
Slide 19: CO2 Cost Outlook: EPRI WECC Analysis
CO2 Cost Outlook EPRI WECC Analysis • Collaborative EPRI Analysis of CO2 Policy Impacts on Western Power Markets, May 2008 • PGE was a sponsor, along with SCE, APS, Tuscon Electric Power, Salt River Project, PacifiCorp, Puget, a PUD and a municipality. • The study estimates that utility reduction of
Slide 20: CO2 Cost Outlook: Brattle Group
CO2 Cost Outlook Brattle Group • New Approaches to Electricity Supply Planning, The Brattle Group, Jan. 2006 • “Policies analyzed suggest $10-$50 per ton of CO2 would be necessary to stabilize CO2 emissions below current levels.” • “Extreme uncertainty (of CO2 timing and trajectory) makes analysis o
Slide 21: CO2 Cost Outlook: PGE Observations
CO2 Cost Outlook PGE Observations • Prior approach of assuming federal legislation with most inertia has become more complex: – Multiple federal proposals exist, perhaps with no clear frontrunner – Most versions employ a cap and trade without a price cap • More certainty with a democratic Congress a
Slide 22: CO2 Cost Outlook: PGE Observations (continued)
CO2 Cost Outlook PGE Observations (continued) • Aligning PGE’s baseline CO2 forecast to the costs embedded in PIRA would give forecast consistency among CO2, natural gas, and coal prices. • We have initiated a custom scenario with PIRA to examine the impacts of varying CO2 prices on natural gas and
Slide 23: Benchmark Resources
Benchmark Resources • Energy Resource – Combined Cycle Combustion Turbine(s) • Capacity Resources – Aero-derivative Combustion Turbines – Reciprocating Engine Gensets • PGE Synergies – Existing locations – Existing infrastructure 23
Slide 24: Benchmark Resources: Energy Resource F, G, H Comparison
Benchmark Resources Energy Resource F, G, H, Comparison •Efficiency – F - 58% – G - 59% – H - 60% •Track Record – F and G - well established – H - pilot currently in operation •Reliability – F and G well established, generally above 95% – H to be determined •Generic Costs – F and G installed costs a
Slide 25: Benchmark Resources: Capacity Resource
Benchmark Resources Capacity Resource (100-200 MW) GE LMS100 Combustion Turbine Reciprocating Engine Attribute Generators (CTGs) Gensets (Recips) Unit Size (MW) 100 MW each 4 - 16 MW each Fuels Natural Gas Natural Gas/Distillate Construction Period* 12-18 months 12-18 months Installed Capital Cost (
Slide 26: Efficiency Curves for Recip. Engine Gensets vs Combustion Turbines
Efficiency Curves for Recip. Engine Gensets vs Combustion Turbines Efficiency Versus Power Output Reciprocating Engine Genset Efficiency Efficiency Typical Range of Simple Cycle Gas Turbine Efficiencies Plant Output 26
Slide 27: LMS100 Power Plant
LMS100 Power Plant Standard scope of supply (dry) 27
Slide 28: Reciprocating Genset Power Plant
Reciprocating Genset Power Plant Standard scope of supply Excel Energy Plains End Generating Station (Colorado) 28
Slide 29: Draft Generic Revenue Requirements: Capital Cost by Technology
Draft Generic Revenue Requirements Capital Cost by Technology Cost Estimates from Industry Sources Earliest Preliminary Typical Availability Book date 2009 IRP Best Size Factor Life Avail. Estimate Comments MW 2008$/kW A conventional pulverized coal plant operating at higher pressures Super critical
Slide 30: Draft Generic Revenue Requirements: Cost of New Resources
Draft Generic Revenue Requirements Base Case - Cost of New Resources $190 $180 Capacity backup $170 CO2 tax/ SO2 Emissions $160 Fuel $150 $140 O&M Oregon CO2 Offset $2008/ MWh Real Levelized $130 $120 Capital Cost $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Super critical IGCC CO2 Wind Farm Geo
Slide 31: Planning Metrics: Energy Planning Standard in the PNW
Planning Metrics Energy Planning Standard in the PNW Utility Load Hydro Conditions Avista 90% confidence interval load Average BPA Annual average firm load critical water: year 1937 Idaho Power 70th percentile average load 70th percentile NWPCC Annual average firm load critical water: year 1937 Paci
Slide 32: Planning Metrics: 2014 Load - All Hours
Planning Metrics 2014 Load - All Hours 300 Average annual Average annual On- 8,500 Energy 2,673 MWa Peak Energy 2,971 MWa 8,000 7,500 250 7,000 6,500 6,000 200 5,500 Cumulative Hours 5,000 Frequency 150 4,500 4,000 3,500 100 3,000 2,500 Last 100 hours - approximately 550 MW 2,000 50 1,500 1,000 500
Slide 33: Planning Metrics
Planning Metrics • Currently plan to annual average energy need – Covers 45% of 2014 hours • Potential proposal is to plan to annual on- peak energy need • For 2014 increase is around 300 MWa • Covers additional 27% annually - 2,400 hours • Similar result to Puget’s “December average” planning metri
Slide 34: Planning Metrics: Peak Winter Month
Planning Metrics Peak Winter Month January - 2014 30 100% Average annual Average annual On-Peak Energy 2,673 Energy 2,971 90% 25 80% 70% 20 Cumulative Frequency Frequency of Hours 60% 15 50% 40% 10 30% 20% 5 10% 0 0% More 1,695 1,775 1,855 1,936 2,016 2,096 2,176 2,256 2,336 2,417 2,497 2,577 2,657
Slide 35: Planning Metrics: Peak Summer Month
Planning Metrics Peak Summer Month July - 2014 30 100% Average annual On- Average annual Peak Energy 2,971 Energy 2,673 90% 25 80% 70% 20 Cumulative Frequency Frequency of Hours 60% 15 50% 40% 10 30% 20% 5 10% 0 0% More 1,695 1,775 1,855 1,936 2,016 2,096 2,176 2,256 2,336 2,417 2,497 2,577 2,657 2,
Slide 36: Planning Metrics: Shoulder Month
Planning Metrics Shoulder Month May - 2014 80 100% Average annual Average annual On-Peak Energy 2,673 Energy 2,971 90% 70 80% 60 70% Cumulative Frequency Frequency of Hours 50 60% 40 50% 40% 30 30% 20 20% 10 10% 0 0% More 1,695 1,775 1,855 1,936 2,016 2,096 2,176 2,256 2,336 2,417 2,497 2,577 2,657
Slide 37: Planning Metrics: On- vs. Off-Peak
Planning Metrics On- vs. Off-Peak 2014 Average 2014 Average Annual MWa On-Peak MWa Total (2,673) (2,971) Hours Total Hours Covered 3911 6300 8760 Percent 45% 72% On-peak hours Covered 637 2603 4912 Percent 13% 53% 37
Slide 38: Portfolios
Portfolios All proposed portfolios meet expected PGE load from 2010 to 2030 – Long-term resources (plants and contracts) are economically dispatched first. – Spot wholesale electricity purchases fill the difference between load and generation/LT purchases. Long-term resources are added thru 2030 – F
Slide 39: Portfolios Analysis
Portfolios Analysis Draft Handouts Show our Trial Portfolios – Bookends to test the impact of fuel/technologies choices to cost and risk – Candidates for action plan: – Meet RPS requirements, then all Thermal; – Implement Governor’s CO2 reduction goals; – Diversified Green portfolio with Gas backup;
Slide 40: Futures
Futures PGE expects to evaluate against each trial portfolio: • Potential carbon regulation in accordance with Guideline 8 – Certain break-evens, such as the carbon tax price at which a coal plant is on par with a natural gas alternative on a per kWh basis. • High and low gas price future • High CO2
Slide 41: Parking Lot Issues
Parking Lot Issues • Solar Availability • Load Resource Balance – Economic vs Physical • Federal Funds for Local Hydrokinetic Research 41
Slide 42: Solar Availability - Summer
Solar Availability - Summer PG E Load vs. Solar Capability (Portland) Peak solar 3,500 availability hour 800 Peak use hour 700 3,000 600 2,500 Watt-Hours/Square-Meter Load -Average MWH 500 2,000 400 1,500 300 1,000 200 500 100 - - 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 J
Slide 43: Solar Availability - Winter
Solar Availability - Winter PGE Load vs. Solar Capability (Portland) Peak use hour 3,500 800 700 3,000 600 2,500 Watt-Hours/Square-Meter Load -Average MWH 500 2,000 400 1,500 Peak solar availability hour 300 1,000 200 500 100 - - 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 Ja
Slide 44: Solar Availability
Solar Availability 1000 900 Portland average annual insolation is 19% of the July Peak 800 700 Watt-hours/square meter 600 500 400 300 200 100 0 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 Christmas Valley - Dec Christmas Valley - Jul Hermiston - Dec Hermiston - Jul Portland
Slide 45: Load Resource Balance: Economic View
Load Resource Balance revised October ’08 Economic View Future Energy Needs 2010 to 2020 @ Normal Hydro based on average annual energy 3,500 3,000 2019 Shortfall 1,080 MWa 2,500 2012 Shortfall 2017 Shortfall 492 MWa 867 MWa 2,000 Long-Term Contracts MWa Renewable RFP 1,500 1,000 Power from PGE Plant
Slide 46: Load Resource Balance: Physical View
Load Resource Balance revised October ’08 Physical View Future Energy Needs 2010 to 2020 @ Normal Hydro based on average annual energy 3,500 Energy - Beaver as Baseload 3,000 2012 Shortfall 117 MWa 2017 Shortfall 2019 Shortfall 492 MWa 706 MWa 2,500 Long-Term Contracts 2,000 Renewable RFP MWa 1,500
Slide 47: Load Resource Balance: Future Peaking Capacity Needs
Load Resource Balance revised October ’08 Future Peaking Capacity Needs 2010 to 2020 January Capacity Needs 6000 and Amounts from PGE Resources 5000 Retail Load w/ Reserves 2019 Shortfall Retail 1,856 MW 4000 2017 Shortfall 2012 Shortfall 2,351 MW MW Capacity Available 840 MW 1,514 MW 1,299 MW 1,999
Slide 48: Local Hydrokinetic Research
Local Hydrokinetic Research •Oregon State University’s National Wave Energy Research Center – U.S. DOE funding – $6.25 million – five years •Makah Bay Project – Washington – Multiple public and private parties involved – 4 buoys – 1 MW •Reedsport Oregon Project – Developed by Ocean Park Technologies
Slide 49: Please call with questions, concerns, or any follow up. Thank You!
Please call with questions, concerns, or any follow up. Thank You! 49
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