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Transcript of Future Energy Overview 2009 GCAA Management Workshop February 17, 2009 Jeff Burleson Director,...
Future Energy Overview
2009 GCAA Management Workshop
February 17, 2009
Jeff BurlesonDirector, Resource Policy and Planning
Georgia Power Company
Current Situation• Fuel prices have declined
– Retail gasoline $4.00 vs 1.50 per gallon– Wholesale natural gas $13 vs 6 per million btu– Central Appalachian coal $120 vs 60 per ton
• But for the wrong reason– Economic downturn lowering current and near term outlook for demand
• Fuel prices will climb again in the future– Only a matter of time– Over half of U.S. oil consumption is from imports– Natural gas imports projected to rise significantly over long term– No single fix, nor quick fix
• Requires holistic, sustained efforts
• Environmental requirements will increase
US Electricity Generation by RegionHistory and projection, 1990-2030
0%
20%
40%
60%
80%
100%
120%
1990 1995 2000 2005 2010 2015 2020 2025 2030
Chan
ge fr
om 1
990
.
Southeast (SERC, FRCC: AL, AR, FL, GA, LA, W MO, MS, NC, SC, VA)
US
West (WECC: AZ, CA, CO, ID, MT, NV, NM, OR, UT, WA, WY)
Northeast (CT, DE, ME, MD, MA, NH, NJ, NY, PA, RI, VT)
Midwest (ECAR: IN, KY, MI, OH, WV)
Data Source: Energy Information Administration, US Department of Energy
ProjectionHistory
Projected growth
2008-2030
34%
25%34%
22%
11%
Coal vs. Gas Prices
Fuel Price Risk
Environmental Uncertainty
1862 1872 1882 1892 1902 1912 1922 1932 1942 1952 1962 1972 1982 1992 2001
YOSVA
RTCRHA
LA
NBRAAA
WA
IA FEATH
NPS
MBTA
OPA
MBCA
TAFWCABPA
AEPA
NLR AWPASCS
FAWRA
FIFRA
WPCA
AEA FWA
CAA-55PAA
FWCAA-58
WLDA
FHSANFMUA
NHPAPFWFOIA
WSRAEARCHSA
NEPAEQIACAAEPA
OSHAFAWRAA-70
CAAA-77CWA
SMCRASWRCA
SDWAA-77
ESATAPA
HMTA
ARPA
NWPAESAA-82
RCRAA-84WLDIMPRSAA-82
SDWAA-86SARA-86
NAWCA
AOA
AMFAARPAA-88
AIAASBCAA-88
ESAA-88FIRAA-88
TOSCAA-88NWPAA-88CPDRAA-88
NMSPAA-888FCRPA
MMPAA-88ODBASFA
FWLA-88ICPBD
WRPAAFCA
AQA
FCMHSAESCA
BLBAFWPCAMPRSACZMANCA
FEPCAFWSAMMPA
TOSCAFLPMARCRANFMA
CZMAA-76
APASWDA
CERCLACZMIA
COWLDAFWLCA
MPRSAA-80ANISCA
LLA-81
WQA
EDPOPARECA
CAA-90CCRA
CLFWRAHMTUSA
NEEAPPA
PPVAIEREAANTPAGLCPA
ASACZMAA-90
WRDA
FFCACERFA
CRAA-92
BLRAERDDAAEAWANOPPAPTSA
UMTRCAESAA-78
QCANCPA
0
No.
of
Law
s
150
100
50
US Utility Industry Capacity Additions – 1970s
Oil14%
Nuclear17%
Coal / Pet Coke37%
Gas20%
Hydro12%
Biomass0%
Green Power0%
Other0%
Green Power2%
Biomass3%
Other0%
Coal / Pet Coke45%
Nuclear31%
Oil2%
Gas11%
Hydro6%
US Utility Industry Capacity Additions – 1980s
Gas63%
Oil5%
Nuclear7%
Coal / Pet Coke14%
Other0%
Biomass4%
Green Power2%Hydro
5%
US Utility Industry Capacity Additions – 1990s
Gas98%
Coal / Pet Coke1%Nuclear
0%Oil0%
Other0%
Biomass0%
Green Power1%Hydro
0%
US Utility Industry Capacity Additions – 2000s
Some Elements of a Sound Energy Strategy
• More fuel efficient automobiles to reduce oil imports
– Plug-in hybrid electric vehicles
• Energy efficiency and demand reduction
• Increase fuel diversity of electric generation
– Fully develop all cost effective applications of renewable generation
– Nuclear
Planning to Ensure a Reliable and Economic Electric Supply
• Uncertainties include– Long term fuel costs and availability– Long term environmental requirements– Customer response to Demand Side Management (DSM)
programs
• Long lead times for new resources– Typically 3 to 10 years– Resources typically last 30 to 60 years
• Robust, comprehensive planning process– Integrated Resource Planning (IRP) – Frequent validation and updates, as needed
Strategic Options for Meeting Generation Needs
• Supply Decisions– Pulverized coal – Natural gas combined cycle – Integrated gasification combined cycle– Nuclear – Renewable energy
• Demand Side Management
Georgia Power Anticipated Plan for the Next Decade
• 12-20% renewable and DSM– Plant Mitchell conversion to
biomass • One of largest wood
biomass plants in US– Solar research project
• 2011 possible expansion– Limited potential
• 69-76% natural gas capacity (50% add’l gas energy generation)– Price and volatility
• 12% nuclear– First U.S. nuclear planned
in 30 years
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20Year of Plan
Cap
acity
(MW
s)
Demand Side Management & Renewables New Generation Existing Resources
Georgia Power Supply Capability by Fuel Type
2008 Net Capacity by Fuel Type
Nuclear10.2%
Hydro5.3%
Coal44.5%
Gas & Oil36.6%
Active DSO3.4%
2018 Net Capacity by Fuel Type
Nuclear12.6%
Hydro4.3%
Coal33.4%
Gas & Oil46.3%
Active DSO3.5%
† Includes generics & PPAs
Contracts with Renewable Generators
0
100
200
300
400
500
600
700
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
MW
s o
f C
apac
ity Notice of Intent
Capacity Additions UnderContract
Operational Capacity
May invest more than $1 billion on capacity and energy from renewable generation developers over next 10 years if all projects proceed
Nuclear Power Cost-Effective when Compared to Alternatives:
• Significant lifetime savings– $2 - $6.5 billion when compared to pulverized coal– $1 - $6.5 billion when compared to natural gas combined cycle
• Reduces exposure to high natural gas prices and future costs of potential carbon legislation– Natural gas prices rose 400 percent between Jan 31, 2002 and Jun
30, 2008– Future costs of potential carbon legislation could be significant for coal
• Natural gas generation more sensitive to fuel price fluctuations– 60 to 80 percent of cost per kWh from natural gas plant is fuel– About 10 percent of nuclear generation cost is fuel
Base Load Generating Capacity Needed:
• Georgia Power’s last base load plant was added in 1989
• Natural gas capacity increased from 7 percent to 37 percent since 1989
• New coal power plants less attractive– Increased environmental requirements– Coal fuel has more than doubled in a year– Cost of potential carbon legislation could be significant.
Demand Side Management (DSM) will Play a Key Role but Cannot Displace all
Generation Need• Within 10 years, Georgia Power will have 1,900–2,200 MWs DSM
• DSM will play a key role, but not cost effective to achieve DSM maximum potential of 3,000 megawatts
• DSM is less reliable
– Energy efficiency programs do not provide constant load reductions in all hours of year
– Base load generation typically operates 24 hours per day, 7 days per week, throughout entire year
Summary
• Planning to ensure an economic and reliable supply of electricity
• Georgia Power pursuing diverse and economic portfolio of new generation resources
– nuclear
– renewables and usage reduction
– natural gas