Platts 2014 Transmission Planning and Development Conference

June 18-19 Arlington, VA

Resource AdequacyMethods Moving Forward to Assure Peak Deliverability

Bob SmithDirector, Energy Delivery Asset Management & Planning

Outline

• APS System and Generation Resources

• Capacity Planning

• Energy Efficiency, Renewable Energy and Demand

Response

• Managing Intermittency

• Grid Modernization

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Transmission System & Generation

• Electric generating resources help balance the flow of power around the state

• Grid built to balance sources of energy– Palo Verde and natural gas

generators are located West of Valley while coal generators are located North and East

• Generation additions or retirements change this balance

• Generation close to customer demand center (metro-Phx) improves transmission import capabilities and maintains a balanced system

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Supply-Demand Gap

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Year

MW

Existing Resources

Existing Contracts

New Utility-Scale Resources

New Customer Resources

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• Growth in demand requirements expected to resume

• Customer resources expected to triple over planning horizon• Renewable Energy Standard

15% by 2025• Energy Efficiency Standard

22% by 2020

• Additional resource needs anticipated to be met by increasingly diverse and efficient technologies

Demand Requirements

2014-2029 (Forecast)

Future Additional Resources6,613 MW Expected at Peak

a. New Utility-Scale Resources Natural Gas

4,205 MW

Renewable Energy 425 MW (818 MW nameplate capacity)

b. New Customer Resources Energy Efficiency 1,447 MW

Distributed Energy 261 MW (722 MW nameplate capacity)

Demand Response 275 MW

Expected Future Resources

20148,124 MW

peak requirement

100% met with existing resources

202912,982 MW

peak requirement

50% met with existing resources

b

a

Existing Utility-Scale Resources

Existing Contracts

Existing Customer Resources

a New Utility-Scale Resources

New Customer Resourcesb

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Different Types of Renewables vs. Time of Day

Illustration of future peak demand

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 240

20

40

60

80

100

120

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000Load Profile

Fixed Position PV

Single Axis Tracking PV

Wind

CSP w/6 Hr Storage

MW Level of Renewable Output

Hour of Day

MW of System Load

CTs

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Evolving Customer Demand and Markets

• Growth of solar PV is

changing customer energy

consumption patterns

• Generators must be able to

start and stop multiple times

per day

• Fast starting and ramping

capability is required in

responding to variable output

of renewable resources

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1 3 5 7 9 11 13 15 17 19 21 231,000

2,000

3,000

4,000

5,000

Non-Summer Customer Power Consumption

2014 2021 20252029

HOUR

MW

Potential over-generation followed by 8-hr 3,000

MW continuous up-ramp

Capacity Contribution of Solar PV Declines as Deployment Levels Increase

APS Forecast Peak LoadWith Photovoltaic (Fixed South Facing)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

MW

1st Addition MW PV 2nd Additon PV 3rd Addition PV

0 500 1000 1500 2000 2500 30000%

10%

20%

30%

40%

50%

60%

Average Capacity Contribution

Incremental Capacity Contribution Range of Possible Penetration by 2025

0

Peak Shifts to Sunset

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Capa

city

Con

trib

ution

Per

cent

of N

amep

late

MW of Nameplate Capacity

Ocotillo Modernization Project

• Retire existing steam units (220 MW) constructed in 1960

• Replace aging steam units with modern combustion turbines– Install five General Electric LMS 100 combustion turbines – 102 MW each

– Transmission and natural gas pipeline infrastructure optimized

– Net site capacity increased by 290 MW to 620 MW total

• Maintain Valley reliability– Generation close to load center

– Contingency and voltage support

• Responsive unit operations– Quick starting and ramping

– Renewable integration

• Environmental attributes– Emissions and water consumption

• In-service planned for summer 2018

9

Modernized Grid

AMI

AMI Solar Production

Meters

Automated Switches

TOAN

TOAN

Fault Indicators

Substation Health

Monitoring

Integrated Volt/VAR Control

Demand Response

Fiber Backhaul

ADMS EMSTransformer

Load Managemen

t

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Conclusions

• Transmission system must accommodate entirety of peak capacity needs– Reserves– Back-up capacity

• Diverse resource fleet includes renewables and energy efficiency– Significant growth expected

• Flexible generation aligns with capacity needs and complements growing renewable energy fleet

• Investments in modernizing grid continuing

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www.aps.com/resources

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