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POWER SECTOR TRANSFORMATION

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THE U.S. OPPORTUNITY CLEAN ENERGY NO LONGER ‘BOUTIQUE’

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WIND COST & DEPLOYMENT

*Capacity - American Wind Energy Association 2015 Annual Market Report **LCOE - Lazard's Levelized Cost of Energy Analysis 2008-2015, avg. of high/low figures

Prices down

60% since 2009

Capacity more

than doubled

since 2009

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THE U.S. OPPORTUNITY CLEAN ENERGY NO LONGER ‘BOUTIQUE’

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2009 2010 2011 2012 2013 2014 2015

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SOLAR COST & DEPLOYMENT

*Capacity - GTM/SEIA Solar Market Insight Annual Report 2015 **LCOE - Lazard's Levelized Cost of Energy Analysis 2008-2014, technology-weighted avg. of high/low ranges

Prices down

more than 80% since 2009

Capacity

increased 20X

since 2009

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THE U.S. OPPORTUNITY STATE COMMITMENTS

CA: 50% by 2030

HI: 100% by 2045

VT: 75% by 2032

NY: 50% by 2030

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THE U.S. OPPORTUNITY RENEWABLES REPLACING FOSSIL FUELS

12,500 MW of renewables ADDED

13,700 MW of fossil fuels RETIRED

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THE U.S. OPPORTUNITY CO2 DECOUPLING

Source: Center for American Progress

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THE GLOBAL OPPORTUNITY

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THE GLOBAL OPPORTUNITY

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THE GLOBAL OPPORTUNITY COUNTRY/REGIONAL COMMITMENTS

EU

20% renewables by 2020

Denmark

100% renewables by 2050

Sweden

49% renewables by 2020 (already met)

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OPPORTUNITY NEW TECHNOLOGIES UNDERWAY

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BUT… A CLEAN ENERGY FUTURE REQUIRES A FLEXIBLE GRID

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How can the electric grid

optimize for this?

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A SUITE OF FLEXIBILITY OPTIONS

Increasing Need for Grid Flexibility

High Cost

Low Cost

Flexibility Resource Supply Curve

Graphic adapted from: Paul Denholm et al., “The Role of Energy Storage with Renewable Electricity Generation” (NREL, January 2010).

High Cost

Low Cost

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IMPROVED OPERATIONS

Optimize how

resources are

dispatched and

shared across

regions

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IMPROVED OPERATIONS

Expand the EIM

Eight states

35 million customers

Savings of $70-200 million

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DEMAND RESPONSE

TWO KINDS OF DEMAND RESPONSE

Dispatchable

Price-responsive

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DEMAND RESPONSE

Shift demand based

on supply and prices $$$ $$$

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DEMAND RESPONSE

Let supply and

demand compete

Shift demand based

on supply and prices

$$$ $$$

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DEMAND RESPONSE

GWs of latent DR

opportunities across

the economy

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GRID INFRASTRUCTURE

TRANSMISSION

Regional optimization

Geographic diversity

Technological diversity

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GRID INFRASTRUCTURE REGIONAL OPTIMIZATION

Managing unpredictable variations

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GRID INFRASTRUCTURE GEOGRAPHIC AND TECHNOLOGICAL DIVERSITY

M. Jacobson, M. Delucchi. “A Path to Sustainable Energy by 2030.” Scientific American. 2009

Managing predictable variations

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FAST RAMPING SUPPLY IMPROVE FOSSIL FLEXIBILITY

Use only existing gas

capacity

Use only for power, not

energy

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FAST RAMPING SUPPLY

New natural gas WILL NOT get us to

our emissions reduction goals

Duke Energy (Flickr)

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ENERGY STORAGE

1.3 GW storage

mandate drives

deployment up,

costs down

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ENERGY STORAGE

Pumped hydro Battery storage

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CURTAILMENT THE MOST EXPENSIVE OPTION

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BaselineTarget HighSolar

Baseline Target HighSolar

Cu

rtai

lme

nt

(%)

Enhanced flexibility

Conventional flexibility

Source: G. Brinkman, California Low-Carbon Grid Study, Presentation to RETI 2.0 Stakeholder Meeting, April 18, 2016.

Flexibility is key to reducing curtailment

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CURTAILMENT …OR LONG -TERM ELASTICITY?

Data Processing

Battery Electric Vehicles

Air Gases

Desalinization

Time of use rates

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HOW TO WIN

1. Reward utilities for providing energy services

2. Keep RPS going

3. (not) Net Metering

4. Demand and supply compete as equals

Lawrence Berkeley National Lab

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HOW TO WIN

5. Value fast on/off capabilities

6. Optimize the existing grid

7. Employ investment-grade policies

8. Reduce siting conflicts

MSTI Review Project

31 WWW.AMERICASPOWERPLAN.COM

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THANK YOU

@HAL_HARVEY

@ENERGYINNOVLLC

WWW.ENERGYINNOVATION.ORG