Avista Corporation · NYSE:AVA
Avista — Technical Presentation (March 2022)
107 slides from Avista's technical presentation, Mar 9, 2022
Slide 1: 2023 Electric Integrated Resource Plan TAC Meeting No. 3 Agenda
2023 Electric Integrated Resource Plan Technical Advisory Committee Meeting No. 3 Agenda Wednesday, March 9, 2022 Virtual Meeting Topic Time Staff Introductions 8:30 John Lyons Existing Resource Overview 8:35 Mike Hermanson Resource Requirements 9:15 James Gall Break Non-Energy Impact Study 10:00 DN
Slide 2: 2023 IRP Introduction
2023 IRP Introduction 2023 Avista Electric IRP TAC 3 – March 9, 2022 John Lyons, Ph.D. Senior Resource Policy Analyst
Slide 3: Meeting Guidelines
Meeting Guidelines • IRP team is working remotely and is available for questions and comments • Stakeholder feedback form • Responses shared with TAC at meetings, by email and in Appendix • Would a form and/or section on the web site be helpful? • IRP data posted to web site – updated descriptions a
Slide 4: Virtual TAC Meeting Reminders
Virtual TAC Meeting Reminders • Please mute mics unless commenting or asking a question • Raise hand or use the chat box for questions or comments • Respect the pause • Please try not to speak over the presenter or a speaker • Please state your name before commenting • Public advisory meeting – comm
Slide 5: Integrated Resource Planning
Integrated Resource Planning The Integrated Resource Plan (IRP): • Required by Idaho and Washington* every other year • Washington requires IRP every four years and update at two years • Guides resource strategy over the next twenty + years • Current and projected load & resource position • Resource
Slide 6: Technical Advisory Committee
Technical Advisory Committee • Public process of the IRP – input on what to study, how to study, and review of assumptions and results • Wide range of participants involved in all or parts of the process • Please ask questions • Always soliciting new TAC members • Open forum while balancing need to
Slide 7: 2023 IRP TAC Meeting Schedule
2023 IRP TAC Meeting Schedule • TAC 4: August 2022 • TAC 5: Early September 2022 • TAC 6: End of September 2022 • TAC 7: October 2022 • Technical Modeling Workshop: October 2022 • TAC 8: February 2023 • Public Meeting Gas & Electric IRPs: February/March 2023 • TAC 9: March 2023 6
Slide 8: Today's Agenda
Today’s Agenda 8:30 Introductions, John Lyons 8:35 Existing Resource Overview, Mike Hermanson 9:15 Resource Requirements, James Gall Break 10:00 Non-Energy Impact Study, DNV 11:30 Lunch 12:30 Natural Gas Market Overview & Price Forecast, Tom Pardee 1:15 Wholesale Electric Price Forecast, Lori Herman
Slide 9: Existing Resource Overview
Existing Resource Overview 2023 Avista Electric IRP TAC 3 – March 9, 2022 Mike Hermanson - Power Supply/CETA Analyst
Slide 10: Existing Resource Types
Existing Resource Types Avista-owned Hydro Avista-owned Thermal • Natural Gas • Coal • Biomass Contracted Resources • Mid Columbia Hydro • Natural Gas • Wind • Solar • PURPA Customer-Owned Resources 2
Slide 11: Avista Owned Hydro
Avista Owned Hydro • Spokane River • Post Falls (14.8 MW) • Upper Falls (10 MW) • Monroe St. (14.8 MW) • Nine Mile (36 MW) Clark Fork • Long Lake (81.6 MW) River • Little Falls (32 MW) Spokane River • Clark Fork River • Noxon Rapids (518 MW) • Cabinet Gorge (265.2 MW) 3
Slide 12: Spokane River
Spokane River Project Nameplate Maximum Expected Capacity Capability Energy (MW) (MW) (aMW)* Post Falls 14.8 18 11.2 Upper Falls 10 10.2 7.3 Monroe Street 14.8 15 11.2 Nine Mile 36 32 22.6 Long Lake 81.6 89 56 Little Falls 32 35.2 11.2 TOTAL 189.2 199.4 119.5 Long Lake * based on 80-year hydrologic
Slide 13: Clark Fork River
Clark Fork River Project Nameplate Maximum Expected Capacity Capability Energy (MW) (MW) (aMW)* Cabinet Gorge 265.2 270.5 123.6 Noxon Rapids 518 610 196.5 TOTAL 783.2 880.5 320.1 * based on 80-year hydrologic record Cabinet Gorge 5
Slide 14: Avista Owned Thermal Resources
Avista Owned Thermal Resources Winter Summer Nameplate Fuel Maximum Maximum Project Name Capacity Type Capacity Capacity (MW) (MW) (MW) Colstrip Coal 222 222 247 Coyote Springs 2 Gas 317.5 286 306.5 Rathdrum Gas 176 130 166.2 Northeast Gas 66 42 61.8 Boulder Park Gas 24.6 24.6 24.6 Kettle Falls Wood
Slide 15: Colstrip Units 3 & 4
Colstrip Units 3 & 4 • Located in eastern Montana • Avista owns 15% of units 3 & 4 • After 2025 will not be used to serve Washington customers • Max net capacity of 222 MW Colstrip 7
Slide 16: Coyote Springs 2
Coyote Springs 2 • Natural gas-fired combined cycle combustion turbine (CCCT) • A combined-cycle power plant uses both a gas and a steam turbine together to produce up to 50% more electricity from the same fuel than a traditional simple- cycle plant. The waste heat from the gas turbine is routed to
Slide 17: Rathdrum, Northeast, & Boulder Park
Rathdrum, Northeast, & Boulder Park • Rathdrum • Simple cycle combustion turbine (CT) units • Winter max – 176 MW, Summer Max 126 MW • Boulder Park • Six natural gas internal combustion reciprocating engines • Max – 24.6 MW • Northeast • Two aero-derivative simple cycle CT units • Winter max 68 MW,
Slide 18: Kettle Falls Generating Station
Kettle Falls Generating Station • Among the largest biomass generation plants in North America • Open loop steam plant uses waste wood products (hog fuel) from area mills and forest slash. • Max capacity of 50 MW • Also has 7.5 MW gas combustion turbine increasing max capacity to 55-58 MW Kettle Fal
Slide 19: Power Purchase and Sale Contracts
Power Purchase and Sale Contracts 2021 Annual Contract Type Fuel Source End Date Energy (aMW) Mid Columbia Hydro Purchase Hydro varies 132.9 Lancaster Purchase Natural Gas Oct-26 207.8 Palouse Wind Purchase Wind 2042 41.2 Rattlesnake Flats Purchase Wind 2040 48.3 Adams-Nielson Purchase Solar 2038 4.
Slide 20: Mid-Columbia Hydroelectric Contracts
Mid-Columbia Hydroelectric Contracts • Douglas PUD • Wells – Total Capacity 840 MW Douglas PUD • Chelan PUD • Rocky Reach – Total Capacity 1254 MW Chelan PUD • Rock Island – Total Capacity 503 MW • Grant PUD Grant • Priest Rapids – Total Capacity 953 MW PUD • Wanapum – Total Capacity 1,220 MW Note:
Slide 21: Mid-Columbia Hydroelectric Contracts
Mid-Columbia Hydroelectric Contracts 2020 2020 Estimated Percent Annual Counter Party Project(s) Start Date End Date On-Peak Share (%) Energy Capability (aMW) (MW) Grant PUD Priest Rapids 3.79 Dec-2001 Dec-2052 30 19.5 Grant PUD Wanapum 3.79 Dec-2001 Dec-2052 32 18.7 Chelan PUD Rocky Reach 5 Jan-201
Slide 22: Mid Columbia Hydroelectric Contracts
Mid Columbia Hydroelectric Contracts 1
Slide 23: Wind & Solar Resources
Wind & Solar Resources • Palouse PPA • Capability – 105 MW • 30-year power purchase agreement (PPA) • 2021 output – 41.2 aMW • Rattlesnake Flat PPA • Capability - 160.6 MW • 20-year PPA • 2021 output of 48.3 aMW • Adams-Nielson Solar PPA • Capability – 19.2 MW • 80,000 panel facility Palouse Wind •
Slide 24: Public Utility Regulatory Policies Act (PURPA) Contracts
Public Utility Regulatory Policies Act (PURPA) Contracts Estimated Owner Fuel Source Location Contract End Date Capability (MW) Energy (aMW) Sheep Creek Hydro Inc Hydro Northport, WA 12/31/2025 1.40 0.79 Hydro Technology Systems Inc. Hydro Kettle Falls, WA 12/31/2025 1.30 1.05 Deep Creek Energy Hydr
Slide 25: Customer Owned Generation
Customer Owned Generation • 1,798 customer installed Avista's Net Metering Customers systems 600 14,000 ID Annual New Customers 12,000 • Technology 500 WA Installed Capacity (kW) Cumulative Capacity 10,000 • Primarily Solar 400 8,000 • Some wind, combined solar & 300 wind, and biogas 6,000 200 • Ave
Slide 26: 2021 System Generation by Resource Type (aMW)
2021 System Generation by Resource Type (aMW) Data is not adjusted for renewable energy credit sales or specified energy sales 18
Slide 27: 2021 System Obligations & Energy Sources
2021 System Obligations & Energy Sources 19
Slide 28: Load & Resource Balance Update
Load & Resource Balance Update Avista, Electric Technical Advisory Committee March 9th, 2022 – TAC 3 James Gall, Electric IRP Manager
Slide 29: Major L&R Changes Since 2021 IRP
Major L&R Changes Since 2021 IRP • Load forecast • 30 MW industrial demand response (Washington Rate Case Settlement) • Chelan County PUD purchase • ~88 MW or ~54 aMW equal to 5% of Rocky Reach and Rock Island projects 2022 2023 2024 2025 2026- 2031- 2034- 2030 2033 2045 Existing Slice 5% 5% 5% 5% 5
Slide 30: System Capacity Position
System Capacity Position Western Resource Adequacy Program not included at this time 1 Hour Peak Load & Resource Position 400 Peak Planning January Criteria 300 August 16% winter PRM 200 7% summer PRM 100 Operating reserves Megawatts (~6%) 0 Regulation (16 MW) (100) (200) 2027 2030 J: 162 J: 196 (30
Slide 31: System Planning Energy Position
System Planning Energy Position Energy Load & Resource Position Energy Contingency 400 Metrics January 10th percentile hydro 300 90th percentile load August Average Megawatts 200 Annual 2023 IRP will update 100 contingency metrics for wind/solar 0 variability (TBD in future TAC meeting) (100) (200)
Slide 32: Monthly Planning Energy Position
Monthly Planning Energy Position 800 2025 2030 2040 600 Average Megawatts 400 200 0 (200) (400) Feb Apr Aug Sep Oct Nov Dec Mar May Jan Jun 5 Jul
Slide 33: 2030 Washington CETA Planning
2030 Washington CETA Planning • Draft rules were released January 19th, 2022 • Creates a planning requirement and operation requirements • Planning requirement designs system for renewable energy to deliver to load • Operating requirement is creation of renewable energy and retaining nonpower attrib
Slide 34: Avista Clean Energy Position for Planning Standard
Avista Clean Energy Position for Planning Standard (strawman- for illustrative purposes) • Monthly retail load vs generation comparison • Renewable generation exceeding monthly retail load qualifies as alternative compliance • On/off peak estimates could be used • Expected Case Methodology • Median
Slide 35: 2030 Monthly Accounting Illustration (WA Only)
2030 Monthly Accounting Illustration (WA Only) Average Megawatts Illustration Purposes Only Washington Share Month Sales WA Net Hydro Wind Solar Biomass Energy Total Primary Alternative Forecast PURPA Retail Exchange Renewable Compliance Compliance Load from Idaho Generation Jan 801 21 780 362 62 2
Slide 36: Current Annual CETA Energy Position
Current Annual CETA Energy Position 100% 90% Percent of Retail Load 80% 70% 60% 50% 40% 30% Primary Compliance 20% Alternative Compliance 10% Primary Compliance Goal 0% 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 9 Does not
Slide 37: Compliance Window CETA Energy Position
Compliance Window CETA Energy Position 100% 11.0% 90% 16.5% 21.6% 9.4% 28.1% 80% 36.1% 7.1% Percent of Retail Load 5.7% 70% 4.4% 0.0% 60% 50% 40% 79.6% 76.4% 72.7% 67.5% 63.9% 30% Primary Compliance 20% Alternative Compliance Total Shortfall 10% Primary Compliance Goal 0% 2030-33 2034-37 2038-41 204
Slide 38: Supply Side Non-Energy Impacts
Supply Side Non- Energy Impacts 09 March 2022
Slide 39: Agenda
Agenda 01 Project Overview 02 Approach 03 Results 04 Gap Analysis 05 Discussion 2 DNV © 09 MARCH 2022
Slide 40: Project Overview
Project Overview 3 DNV © 09 MARCH 2022
Slide 41: What is a Supply Side Non-Energy Impact (NEI)?
What is a Supply Side Non-Energy Impact (NEI)? Cost of Energy NEI (Externality) Impacts included in the cost of Impacts not accounted for in the energy cost of energy Examples: Examples: • Jobs and direct economic • Health impacts due to impacts emissions • Fuel costs • Fatalities • Water use • Wate
Slide 42: Project Overview
Project Overview Jurisdictional Scan NEI Database Development Database Application Gap Analysis 5 DNV © 09 MARCH 2022
Slide 43: Approach
Approach 6 DNV © 09 MARCH 2022
Slide 44: Potential NEI Approaches
Potential NEI Approaches Primary Secondary Research Research 7 DNV © 09 MARCH 2022
Slide 45: Database Compilation: Generalized Approach
Database Compilation: Generalized Approach Identify NEI Values Monetize NEI Values Yes Metric from Avista No Yes Identify Yes Enter Enter Metric in Source Monetization Value Value Value No Yes Identify Additional No Source No Gap Gap Analysis Gap DNV © 09 MARCH 2022 8
Slide 46: Approach Limitations
Approach Limitations • NEI values are not always comparable across regions • Potential limitations: • Outdated studies • Issues with methodology • Lack of documentation for some values • Gaps in secondary research, particularly for monetization 9 DNV © 09 MARCH 2022
Slide 47: NEI Metrics
NEI Metrics Energy Public Safety Security Environment Economic Health (Customer) PM2.5 health Direct Land Use impacts fatalities from Induced Jobs construction & operations Water Use SO2 health Energy impacts Burden Wildlife Indirect Induced NOx health fatalities from value add impacts supply chain
Slide 48: Summary of Compiled Data
Summary of Compiled Data Public Health Public Health Environment Economic Economic Environment Water Use Land Use Safety Safety Wildlife Generator Generator Wildlife Group Group Water Land Types Types Use Use Biomass Biomass ✓ ✓ ✓ ✓ ✓ Non-natural gas NNG-Bio ✓ Coal Coal ✓ ✓ ✓ ✓ ✓ ✓ NNG-CF ≈ Coal CCS
Slide 49: Results
12. DNV® —_—os MARCH 2022 S DNV
Slide 50: Public Health: Approach
Public Health: Approach • Values: PM2.5, SO2, and NOx tons/MWh • Sources: Avista, eGRID Emissions Values • Values: $/ton of PM2.5, SO2, or NOx • Source: COBRA model by county Public Health Costs $ 𝑀𝑜𝑛𝑒𝑡𝑖𝑧𝑒𝑑 𝐻𝑒𝑎𝑙𝑡ℎ 𝑖𝑚𝑝𝑎𝑐𝑡𝑠 𝑀𝑊ℎ Monetized 𝑡𝑜𝑛𝑠 $ = 𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 ×…
Slide 51: Public Health: PM2.5
Public Health: PM2.5 14 DNV © 09 MARCH 2022
Slide 52: Public Health: SO2
Public Health: SO2 15 DNV © 09 MARCH 2022
Slide 53: Public Health: NOx
Public Health: NOx 16 DNV © 09 MARCH 2022
Slide 54: Safety: Approach
Safety: Approach • Values: direct fatalities, indirect fatalities • Sources: BLS, BTS, MSHA, CDC, DOT Fatality Values • Values: value of statistical life, $/MWh • Source: EPA Safety Costs $ 𝐹𝑎𝑡𝑎𝑙𝑖𝑡𝑖𝑒𝑠 $10,742,916.67 𝑀𝑜𝑛𝑒𝑡𝑖𝑧𝑒𝑑 safety = 𝑆𝑎𝑓𝑒𝑡𝑦 × 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎…
Slide 55: Safety: Fatalities
Safety: Fatalities 18 DNV © 09 MARCH 2022
Slide 56: Economic: Approach
Economic: Approach • NREL JEDI models • 6 different models • Specified location, year of construction, & MW • Types of impacts: • Direct: Labor directly related to onsite development, construction, and operations • Indirect: Supporting industry impacts • Induced: Impacts due to reinvestment and spen
Slide 57: Economic: Construction Impacts (proposed)
Economic: Construction Impacts (proposed) 20 DNV © 09 MARCH 2022
Slide 58: Economic: Operations Impacts
Economic: Operations Impacts Existing Proposed 21 DNV © 09 MARCH 2022
Slide 59: Database Application Example: Proposed Eastern Washington Large Wind Farm
Database Application Example: Proposed Eastern Washington Large Wind Farm Impacts per MWh Impacts per MW Impact NEI ($/MW) Economic - Construction $89,600 22 DNV © 09 MARCH 2022
Slide 60: Gap Analysis
Gap Analysis 23 DNV © 09 MARCH 2022
Slide 61: Gap analysis
Gap analysis • Economic (solar PV) • Wildfires (all) • Economic (battery) • Public health (battery) • Public health (all; Value construction, mining phases) • Reliability & resiliency (all) • Economics (H2 electrolyzer) • Economic (non-natural gas) • Public health (non-natural gas) • Decommissioning
Slide 62: Discussion
Discussion 25 DNV © 09 MARCH 2022
Slide 63: www.dnv.com
www.dnv.com 26 DNV © 09 MARCH 2022
Slide 64: Database Compilation: Resource Types
Database Compilation: Resource Types Technology Group Abbreviation Generator Types Biomass Biomass Biomass Coal Coal Coal Coal CCS Coal with Carbon Capture Hydro Hydro-PB Pumped hydro - brownfield Hydro-GF Pumped hydro - greenfield Hydro-Res Reservoir hydro Hydro-RR Run-of-river hydro Hydro-RRS Run-
Slide 65: Natural Gas Price Forecast
Natural Gas Price Forecast Avista, Electric Technical Advisory Committee March 9th, 2022 – TAC 3 Tom Pardee, Natural Gas IRP Manager
Slide 66: U.S. dry natural gas production and consumption
U.S. dry natural gas production and consumption U.S. dry natural gas production U.S. natural gas consumption AEO2021 side cases AEO2021 side cases trillion cubic feet trillion cubic feet 2020 2020 60 60 history projections history projections High Oil and Gas Supply 50 50 High Oil Price Reference 40
Slide 67: Natural gas production and prices
Natural gas production and prices U.S. dry natural gas production Natural gas spot price at Henry Hub AEO2021 oil and gas supply cases AEO2021 oil and gas supply cases trillion cubic feet 2020 dollars per million British thermal units 2020 2020 60 $12 history projections history projections Low Oil
Slide 68: U.S. production of natural gas from shale resources
U.S. production of natural gas from shale resources U.S. dry natural gas production from shale resources by region, AEO2021 oil and gas supply cases Reference case Low Oil and Gas Supply case High Oil and Gas Supply case trillion cubic feet trillion cubic feet trillion cubic feet 2020 2020 2020 45 4
Slide 69: U.S. production of natural gas from oil formations
U.S. production of natural gas from oil formations U.S. dry natural gas production from oil formations by region, AEO2021 oil and gas supply cases Reference case Low Oil and Gas Supply case High Oil and Gas Supply case trillion cubic feet trillion cubic feet trillion cubic feet 14 2020 14 2020 14 20
Slide 70: U.S. natural gas consumption by sector
U.S. natural gas consumption by sector Natural gas consumption by sector, AEO2021 Reference case trillion cubic feet billion cubic feet per day 2020 40 history projections 35 30 electric power 25 commercial 20 residential 15 transportation industrial 10 liquefaction lease and plant other 5 0 2000 20
Slide 71: Change in natural gas disposition by sector and net exports
Change in natural gas disposition by sector and net exports Natural gas disposition by sector and net exports Change in natural gas disposition and net exports AEO2021 Reference case AEO2021 Reference case trillion cubic feet relative to 2020 in trillion cubic feet 45 12 40 10 35 electric power 8 el
Slide 72: U.S. natural gas and liquefied natural gas (LNG) trade
U.S. natural gas and liquefied natural gas (LNG) trade U.S. natural gas and LNG trade, AEO2021 oil and gas supply cases Reference case Low Oil and Gas Supply case High Oil and Gas Supply case trillion cubic feet billion cubic feet per day (Tcf) Tcf Tcf (Bcf/d) 15 2020 41.1 15 2020 41.1 15 2020 histo
Slide 73: U.S. LNG exports and oil and natural gas prices
U.S. liquefied natural gas (LNG) exports and oil and natural gas prices U.S. liquefied natural gas exports Ratio of Brent crude oil price to natural gas price AEO2021 supply and price cases at Henry Hub, AEO2021 supply and price cases trillion cubic feet energy-equivalent terms 15 2020 10 2020 histo
Slide 74: # of Rigs
10 # of Rigs 0 1,000 1,200 1,400 1,600 1,800 200 400 600 800 1987 1988 1989 1990 Rig Count 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Oil 2002 2003 2004 Gas 2005 2006 2007 2008 2009 Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 (AEO2021) 2010 2011 2012 2013 2
Slide 75: Production
Production 11 Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 (AEO2021)
Slide 76: Expected Prices
Expected Prices $6.50 $6.00 $5.50 $5.00 $ per Dth $4.50 $4.00 $3.50 $3.00 $2.50 Expected AEO '21 Consultant 1 Consultant 2 NYMEX 2/16/22 12 Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 (AEO2021)
Slide 77: Expected Prices - Levelized
Expected Prices - Levelized $7.00 $6.00 $5.00 $ per Dekatherm $4.00 $3.00 $2.00 $1.00 $0.00 Henry Hub Blend - Expected Price AECO Rockies Sumas Malin Stanfield 13 Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 (AEO2021)
Slide 78: Levelized Costs (2023 – 2045)
Levelized Costs (2023 – 2045) $4.50 $4.00 $3.50 $3.00 $2.50 $ per Dekatherm $2.00 $4.10 $3.65 $3.57 $3.56 $3.38 $1.50 $3.03 $1.00 $0.50 $0.00 AECO Rockies Sumas Malin Stanfield Henry Hub Blend - Expected Price 14 Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 (AEO2021)
Slide 79: Basis to Henry Hub - Levelized
Basis to Henry Hub - Levelized $0.00 Rockies -$0.20 -0.35 Sumas Malin -0.45 -0.44 Stanfield -0.64 -$0.40 $ Basis per Dekatherm to Henry Hub AECO -0.98 -$0.60 -$0.80 -$1.00 15 -$1.20 Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 (AEO2021)
Slide 80: Henry Hub Stochastic Results (500 Draws)
Henry Hub Stochastic Results (500 Draws) $10.00 $9.00 Nominal $ per Dekatherm $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Average 25th Percentile 50th Percentile 95th Percentile
Slide 81: Henry Hub Stochastic Results (500 Draws)
Henry Hub Stochastic Results (500 Draws) 14% 12% 10% Frequency 8% 6% 4% 2% 0% $2.50 $2.70 $2.90 $3.10 $3.30 $3.50 $3.70 $3.90 $4.10 $4.30 $4.50 $4.70 $4.90 $5.10 $5.30 $5.50 $5.70 $5.90 $6.10 $6.30 Levelized Prices (2023 - 2045) 17 Source: U.S. Energy Information Administration, Annual Energy Outloo
Slide 82: Electric Wholesale Market Price Forecast
Electric Wholesale Market Price Forecast Lori Hermanson, Senior Resource Analyst Electric IRP, Third Technical Advisory Committee Meeting March 9, 2022
Slide 83: Overview
Overview • Draft market price forecast based on preliminary analysis – To be used for RFP response comparison • IRP will use this market price forecast with updated natural gas price and other assumptions (late summer) • Stochastics pricing results will be discussed at a future TAC meeting 2
Slide 84: Market Price Forecast – Purpose
Market Price Forecast – Purpose • Estimate “market value” of resources options for the IRP • Estimate dispatch of “dispatchable” resources • Informs avoided costs • May change resource selection if resource production is counter to needs of the wholesale market Source: NERC 3
Slide 85: Methodology
Methodology • 3rd party software - Aurora by Energy Exemplar • Electric market fundamentals - production cost model • Simulates generation dispatch to meet regional load • Outputs: – Market prices (electric & emission) – Regional energy mix – Transmission usage – Greenhouse gas emissions – Power pla
Slide 86: Wholesale Mid-C Electric Market Price History
Wholesale Mid-C Electric Market Price History Energy Crisis Forwards Natural Gas Market Tightens as of 2/21/2022 Cheap natural Shale Development gas, good hydro 5
Slide 87: U.S. Western Interconnect Historical Generation Mix
U.S. Western Interconnect Historical Generation Mix Significant changes (aGW) Solar: + 5.6 Wind: + 7.0 Nat Gas: + 7.9 Coal: - 12.8 Total: + 9.5 Hydro: -4.1 / +5.3 Source: EIA 6
Slide 88: Northwest Generation Mix (ID, MT, OR and WA)
Northwest Generation Mix (ID, MT, OR and WA) Significant changes (aGW) Solar: + 0.2 Wind: + 2.7 Nat Gas: + 1.8 Coal: - 1.8 Total: + 6.6 Hydro: -3.5 / +3.7 Source: EIA 7
Slide 89: 2020 Fuel Mix
2020 Fuel Mix Northwest U.S. Western Interconnect 75% GHG Emission Free 49% GHG Emission Free Source: EIA 8
Slide 90: Market Indicators- Market is Tightening
Market Indicators- Market is Tightening 9
Slide 91: Monthly Implied Market Heat Rate (2017-2021)
Monthly Implied Market Heat Rate (2017-2021) 10
Slide 92: Electric Greenhouse Gas Emissions U.S. Western Interconnect
Electric Greenhouse Gas Emissions U.S. Western Interconnect Change -3.8 +3.5 -2.9 7.3 -11.3 -3.2 -5.7 +1.7 -2.4 -9.2 2.6 Source: EIA Emissions are adjusted for generation within the Western Interconnect 2020 estimates are subject to adjustment 11
Slide 93: Northwest Greenhouse Gas Emissions
Northwest Greenhouse Gas Emissions 12 Source: EIA
Slide 94: Modeling Process
Modeling Process Capacity Expansion Input Changes Add new resource 80 yr hydro forecast Re-Run Capacity Test Year Stochastic Run Full Forecast Run Scenarios NG prices (Capacity/RPS) Expansion Vendor Database Study Stochastic & Deterministic Regional Loads Include known Increase/Decrease Deterministi
Slide 95: Load Forecast
Draft Forecast Load Forecast • Regional load forecast from IHS – Forecast includes energy efficiency • Add net meter resource forecast – Input annually with hourly shape • Add electric vehicle forecast – Input annual with hourly shape • Future load shape differs from today’s load shape 14
Slide 96: Electric Vehicle and Solar Adjustments
Draft Forecast Electric Vehicle and Solar Adjustments Roof Top Solar Electric Vehicles • EIA existing estimates for history • Penetration rates increase each year • IHS regional growth rates • 15-65% light duty (2040) • 12-15% medium duty (2040) • 5% heavy duty (2040) 15
Slide 97: Northwest GHG Emission Prices
Draft Forecast Northwest GHG Emission Prices • $41.47 levelized • Assumes California Emission Prices for the Northwest from the Revised 2019 IEPR Carbon Price Projections as placeholder for WA Climate Commitment Act and OR Climate Protection Program • To address imports, exporting region includes a
Slide 98: New Resource Forecast (Western Interconnect)
Draft Forecast New Resource Forecast (Western Interconnect) 17
Slide 99: U.S. West Resource Type Forecast
Draft Forecast U.S. West Resource Type Forecast Significant changes 2045 to 2023 (aGW) Solar: + 22.5 Wind: + 20.2 Nat Gas: - 15.6 Coal: - 13.4 Nuclear: - 4.0 Other: + 3.3 Total: + 13.4 18
Slide 100: Northwest Resource Type Forecast
Draft Forecast Northwest Resource Type Forecast Significant changes (aGW) 2045 to 2023 Solar: + 2.9 Wind: + 4.0 Nat Gas: - 3.1 Coal: - 1.1 Other: + 0.8 Nuclear: - 0.8 Total: + 2.9 19
Slide 101: Greenhouse Gas Forecast U.S. Western Interconnect
Draft Forecast Greenhouse Gas Forecast U.S. Western Interconnect 20
Slide 102: Greenhouse Gas Forecast Northwest States
Greenhouse Gas Forecast Draft Forecast Northwest States 21
Slide 103: Mid-C Electric Price Forecast
draft Mid-C Electric Price Forecast • Levelized Prices: – 2023-45: $41.76/MWh • Off-peak prices overtake on-peak in 2023 on an annual basis • Evening peak (4pm- 10pm) and off-peak prices remain high 22
Slide 104: Hourly Wholesale Mid-C Electric Price Shapes
Draft Forecast Hourly Wholesale Mid-C Electric Price Shapes 23
Slide 105: Mid-C Electric Price Comparison vs. Previous IRPs
Draft Forecast Mid-C Electric Price Comparison vs. Previous IRPs * These forecasts use price scenarios without GHG “taxes” to make all forecasts consistent 24
Slide 106: Next Steps
Next Steps • Conduct stochastic studies and verify resource adequacy • Update price forecast this summer for final IRP analysis – Update gas prices (including stochastics), – Western Resource Adequacy Program (WRAP) – New IHS Markit forecast (load forecast and new regional resource forecast), if ava
Slide 107: Data Availability
Data Availability Outputs • Expected Case: annual Mid-C prices by iteration • Expected Case: hourly Mid-C prices • Regional resource dispatch • Regional GHG emissions 26