NorthWestern Energy Group, Inc. · NASDAQ:NWE
NorthWestern Energy — ETAC May 11, 2017
17 slides from NorthWestern Energy's conference presentation, May 11, 2017
Slide 1: Changes in the WECC from Increased Renewable Generation
Thompson Falls Changes in the WECC from Increased Renewable Generation ETAC May 11, 2017
Slide 2: Electricity Markets in the West are Changing
Electricity Markets in the West are Changing • Electricity markets have changed significantly in the West due to increased penetration of renewable resources, namely solar and wind • The Production Tax Credit (“PTC”) of approximately $24 per MWh instituted by the U.S. government as well as Renewable
Slide 3: Changing Markets
Changing Markets • Western electricity markets have traditionally been broken into two distinct periods: on-peak (also referred to as heavy load or 6x16) and off-peak (light load or 6x8,1x24) • On-peak hours are 7:00 am to 10:00 pm (Pacific Time) Monday through Saturday. Off-peak periods are 10:00 p
Slide 4: Policies are Driving Change
Policies are Driving Change • Energy and policy initiatives, especially in California, are causing changes in traditional grid operations and markets • California – RPS currently 25%, 33% by 2020, 50% by 2030 – Goal of greenhouse gas emissions to 1990 levels – Existing power plants that use coastal
Slide 5: Renewables Have Altered the Supply/Demand Paradigm
Renewables Have Altered the Supply/Demand Paradigm • Traditional summer “super peak” hours are now becoming net “low load” hours due to increased penetration of solar PV • Short, steep ramps, both increasing and decreasing, are becoming much more pronounced and they require dispatchable resources to
Slide 6: The CAISO Duck Chart
The CAISO Duck Chart • To highlight this new development the California ISO (“CAISO”) developed a graphical representation commonly referred to as the “Duck Chart” • The Duck Chart shows, among other things, the potential for “over- generation” occurring at increased penetration of solar photovoltai
Slide 7: Managing Frequency through Reliability Based Control
Managing Frequency through Reliability Based Control
Slide 8: CAISO Duck Chart
CAISO Duck Chart CAISO Net Load January 11 8
Slide 9: CAISO Duck Chart
CAISO Duck Chart • During a typical day in January the first ramp in an upward direction (duck’s tail or secondary ramp) occurs in the morning starting around 4:00 a.m. as people get up and go about their daily routine. • The second ramp, in a downward direction, occurs after the sun comes up around
Slide 10: CAISO Duck Chart
CAISO Duck Chart Net load - March 31 Megawatts 2020 overgeneration ZO risk 12am Sam)—(tstétémM—(Cts~‘i«é«éSM Hour ” Delivering @ Bright Future
Slide 11: CAISO Market Prices Reflect Supply and Demand
CAISO Market Prices Reflect Supply and Demand
Slide 12: Changes in California are Being Felt in Montana
Changes in California are Being Felt in Montana Below are Powerdex hourly prices for Mid C which closely approximate hourly prices in Montana 12
Slide 13: Powerdex Hourly Prices
Powerdex Hourly Prices Feb. 2014 Feb. 2017 $50.00 $60.00 Am $40.00 $50.00 $40.00 a $30.00 = = 2 3000 5 ION a $20.00 coos / NY ™_, $10.00 $10.00 $0.00 $0.00 123 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 26 123 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 He He March 2014 March
Slide 14: Options Being Weighed by CAISO
Options Being Weighed by CAISO • Increase demand by expanding the ISO control area beyond California to other states so that low cost surplus energy can serve consumers over a large geographical area • Increase participation in the western Energy Imbalance Market in which real-time energy is made av
Slide 15: CAISO's Need for Flexible Resource Capabilities
CAISO’s Need for Flexible Resource Capabilities • CAISO states: “To reliably operate in these conditions, the ISO requires flexible resources defined by their operating capabilities. These characteristics include the ability to perform the following functions:” • sustain upward or downward ramp • re
Slide 16: CAISO: Policy Needed for Flexible Generation
CAISO: Policy Needed for Flexible Generation CAISO states: “To reliably manage the green grid, the ISO needs flexible resources with the right operational characteristics in the right location. The ISO is actively engaged in policy efforts to build awareness of the new grid needs. Working with the i
Slide 17: Discussion
Discussion NorthWegterrt 17 Delivering o Bright Future