ERCOT PUBLIC 4/22/2014 Updates for 2014 LTSA Scenario and Data Assumptions 4/22/2014.

ERCOT PUBLIC4/22/2014

Updates for 2014 LTSA Scenario and Data Assumptions

4/22/2014

ERCOT PUBLIC4/22/2014 2

• Based on feedback from stakeholders and Brattle, we made corresponding changes for the data assumptions.– Solar cost– CC and CT cost– Natural gas price

• Assumption change for LNG expansion• Assumption change for High Gas Prices Scenario• Load forecast update

Outline


Solar Capital Cost

• Solar cost monotonically declines slower and reaches the similar cost target in 2029. Based on input from Brattle


CC and CT Cost

• Changes have been made to reflect EIA state specific adjustment


Natural Gas Prices• EIA natural gas forecast has been higher than actual prices in historical years.

• Wood Mackenzie has a lower forecast and was averaged with the EIA forecast.


LNG Exports Overview

• 9 Proposed LNG facilities in ERCOT• 3 general locations (Freeport, Corpus

Christi region, Brownsville)• Assume principally powered from

grid.• Assume 2018-2019 online dates• Assume each Bcf/d of LNG capacity

has a load of several hundred MWs, based on indicative proprietary data available to ERCOT, but we expect public load data will become available soon.

• Available data indicates each Bcf/d of LNG capacity could used 300 to 500 MW. These numbers show the large load impact LNG facilities could have.

All Other Scenarios

High Eco Growth

High LNG

Total LNG Capacity

1.8 Bcf/d 5.8 Bcf/d 9.8 Bcf/d

2018 0.6 Bcf/d Freeport

0.6 Bcf/d Freeport,1.0 Bcf/dCorpus,1.0 Bcf/d

Brownsville


Brownsville

2019 1.2 Bcf/dFreeport


Brownsville


Brownsville

Range of potential load additions

540 MW to 900 MW

1,740 MW to 2,900 MW

2,940 MW to 4,900 MW


Economic Conditions•GDP growth slightly higher than under Current Trends•Population growth ~2.3%/yr•Pro-business environment•LNG exports the same as under Current Trends•Reduced Industrial growth (downstream facilities)•Increased gas exploration in Texas

Weather / Water•Same as under Current Trends•Increased water costs which contribute to the higher cost of producing natural gas

Gas Prices / Oil Prices•Natural gas prices $3.50/mmbtu above Current Trends by 2020•Oil prices same as under Current Trends

Transmission Regs / Policies• Same as under Current Trends

End - Use•Motivate high energy efficiency at a higher rate than current trends.

Alt. Gen Resources•Renewables are more economic and thereby more growth than under Current Trends•Annual limit on wind development•More technological improvements for renewables

Gen Res Adequacy Standards •Same as under Current Trends

Environm. Regs / Energy Policy•Modest environmental regulation, same as in under Current Trends•No regulatory impediments to LNG exports•Lower coal plant retirements due to higher energy margin

Story:

•Natural gas prices are high, but are below global natural gas prices – thus still continued LNG export as under Current Trends.•No impediments to LNG exports•High gas prices also reduce the downstream industrial growth compared to under Current Trends•Increase in renewable development compared to under Current Trends, due to higher gas and wholesale energy prices

Implications for ERCOT:-High load growth-High urban growth-Reduced downstream industrial growth (in the Houston, Corpus, and coastal areas)

5. Scenario: High Natural Gas Prices


Load Forecast

• ERCOT official load forecast includes oil and gas drilling load already;

• The official load forecast will be adjusted to obtain the load forecast for LTSA Current Trends.– Incremental EE and DR will be considered– LNG load will be added

ERCOT PUBLIC 4/22/2014 Updates for 2014 LTSA Scenario and Data Assumptions 4/22/2014.

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