Electricity and Natural Gas Supply, Reserves, and Resource Adequacy
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Transcript of Electricity and Natural Gas Supply, Reserves, and Resource Adequacy
Electricity and Natural Gas Supply, Reserves, and Resource Adequacy
CMTA Energy Conference
Energy: Growing California’s Economy
William J. KeeseCalifornia Energy CommissionJuly 29, 2004
2
An Opening Thought…
• Promote energy efficiency
• Diversify portfolio with renewable energy
• Offer consumers energy choices
• Strengthen California’s energy infrastructure
Remember the Loading Order
3
Helping the California Economy:An Energy Report Card (Post Crisis)
• Energy Efficiency– 5000 MW during crisis– About one-third permanent savings– Demand Response programs being developed
• Renewable Energy– Lots of PV– RPS– WREGIS
• Consumer choice– No direct access and some exit fees– Core/noncore structure being addressed
• California’s Energy Infrastructure– New generation and natural gas infrastructure added.– LNG on the horizon?
4
California Electricity Outlook:Summer 2004
Interruptibles
Spot Market Imports
High Probability Additions- Only
Net Firm Imports
adjustments for retiring units and
1-in-10 Summer Temperature
Demand (Normal)
counts plants deemed 75% orbetter chance of being built.
Emergency Response Programs/
Existing Generation (reflects
Demand (Hot)
1-in-2 Summer Temperature
both forced & planned outages)
4
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
Jun Jul Aug Sept Oct
Meg
aWat
ts
4
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
Jun Jul Aug Sept Oct
Meg
aWat
ts
5
California Electricity Outlook:2004 - 2010
Emergency Response Programs/Interruptibles
Spot Market Imports
High Probability Additions- Onlycounts plants deemed 75% orbetter chance of being built.
Net Firm Imports
Existing Generation (reflectsadjustments for retiring units andboth forced & planned outages)
1-in-10 Summer TemperatureDemand (Hot)
1-in-2 Summer TemperatureDemand (Normal)
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
2004 2005 2006 2007 2008 2009 2010
Meg
aWat
ts
6
California’s Electricity Outlook: Projected Operating Reserves
0%
2%
4%
6%
8%
10%
12%
14%
16%
2004 2005 2006 2007 2008 2009 2010
Year
Op
erat
ing
Res
erve
Projected Operating Reserve (1-in-2)
Projected Operating Reserve (1-in-10)
7 % Target Operating Reserve
Stage 2 Emergency - When Reserves dropbelow 5.0%
Stage 3 Emergency - When Reserves dropbelow 1.5%
7
1,415
2,172
3,199
0
2,518 2,386
185
730
6,158
2,891
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2001 2002 2003 2004 2005 2006 2007 2008
Me
ga
wa
tts
Power Plant Status Report Over 20,000 MW approved, but many projects not moving forward…
Approved butNo Construction
UnderReview
Approved &Operating
Approved & UnderConstruction
8
Resource Adequacy
Definition: “A condition in which sufficient generation and transmission resources exist to cover
load and satisfy reserve requirements”
Outstanding issues:– Tradeable capacity credits– ISO dispatch control over nominated resources
9
California’s Electricity Future…
10
Natural Gas Price Situation (Dollars per MMBtu)
• High natural gas prices continue to be a national problem.
• California natural gas prices have exceeded $5.00 per MMBtu for most of this year.
• California is actually doing better than the rest of the nation. – Main reason: Infrastructure
enhancements and efficient use of storage.
4.00
4.50
5.00
5.50
6.00
6.50
7.00
05/0
3/04
05/0
6/04
05/1
1/04
05/1
4/04
05/1
9/04
05/2
4/04
05/2
7/04
06/0
2/04
06/0
7/04
06/1
0/04
06/1
6/04
06/2
1/04
06/2
4/04
06/2
9/04
07/0
2/04
07/0
8/04
07/1
3/04
07/1
6/04
$/M
MB
tu
PG&E-Malin
PG&E-Topock
SoCalGas Border Average
Henry Hub
11
Natural Gas Storage Capacity and Inventories(Billion Cubic Feet)
Beginning of the month levels, unless otherwise indicatedCalifornia Energy Commission estimate
-
25
50
75
100
125
150
175
200
225
250A
ug-2
001
Oct
-200
1
Dec
-200
1
Feb
-200
2
Apr
-200
2
Jun-
2002
Aug
-200
2
Oct
-200
2
Dec
-200
2
Feb
-200
3
Apr
-200
3
Jun-
2003
Aug
-200
3
Oct
-200
3
Dec
-200
3
Feb
-200
4
Apr
-200
4
Jun-
2004
July
15,
200
4
Bil
lio
n C
ub
ic F
eet
Capacity
Inventories
Average inventories over the previous 5 years
12
California’s Natural Gas OutlookGeneral Observations
• Current supply/infrastructure is adequate…FOR NOW.
• Prices are higher than desired, but we are positioned to do better than the rest of the nation.
• Demand for natural gas is growing in California despite aggressive energy efficiency programs.
• Additional import capacity is needed to meet future demand.
13
California’s Natural Gas Future…
14
So Is State Policy Moving in the Right Direction???
Core/Noncore
Market Redesign
AB 2006
Tradeable Capacity Market
Procurement
15
Closing Thought: It All Depends on Your Perspective