Renewables Portfolio Standards in the United States: A Status ...
RENEWABLES PORTFOLIO STANDARD UPDATE
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RENEWABLES PORTFOLIO STANDARD UPDATE ANAHEIM PUBLIC UTILITIES BOARD MEETING - 09/22/2021
Transcript of RENEWABLES PORTFOLIO STANDARD UPDATE
RENEWABLES PORTFOLIO STANDARD UPDATEANAHEIM PUBLIC UTILITIES BOARD MEETING - 09/22/2021
AGENDA
• Where we started• Renewable Regulations • Where we are now• Where we are going• How we get there
ANAHEIM PUBLIC UTILITIES 2
WHERE WE STARTED
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o Portfolio was primarily baseloaded(96%) & peaking (4%) conventional generation
o 79% Coal o 17% Nuclear o 2% Natural Gaso 1% Hydro
o Single renewable resourceo 0.5% wind
Intermountian Power Plant (Coal)58%
Deseret (Coal)10%
San Juan (Coal)11%
San Onofre (Nuclear)
17%
Kraemer CTG (Natural Gas)
2%
Hoover (Hydro)
1%High Winds
(Wind)<1%
2004 Resource Portfolio
Presenter
Presentation Notes
SONGS Divestiture - SONGS at a price tag of $25M Steam Generator replacement failure, additional cost along with prolonged outages APU pivoted towards Canyon and started our own voluntary RPS to start our sustainable journey Divestiture of SONGS by our predecessors has benefitted our customers by an estimated $188M Energy Exchange Agreements to shift power from off-peak months to on-peak months Short-term purchase agreements, various sources Coal 327 MW Nuclear 70 MW Gas 47 MW Hydro 40 MW Wind 6 MW Short-term Purchases 100 MW 590 MW
RENEWABLE RAMP-UP
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o 2003 - APU established a target of 15% by 2017 RPS
o 2011 - APU increases target to 20% by 2015
o SBX 1-2 (2011) escalated California’s RPS to 33% by 2020
o To date, APU has met all interim and compliance period targets
2010 2015 2020
11%22%
33%
APU’s Progress Toward Meeting RPS Targets
Renewable Resources
Presenter
Presentation Notes
In 2011, SBX1 2 increased the RPS from 20% by 2010 to 33% by 2020 – and pulled the POUs into the State mandated program, subjecting them to compliance and associated non-compliance penalties Bill authorized limited oversight of POU RPS activities by the California Energy Commission (CEC) Established interim RPS targets and multi-year compliance periods Senate Bill 350 (2015) expanded the RPS from 33% by 2020 to 50% by 2030 Requires POUs to develop and submit an Integrated Resource Plan no less than once every 5 years to the CEC Senate Bill 100 (2017) expanded the RPS to 60% by 2030, and established a policy goal of serving customers with 100% carbon free energy by 2045
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Policy Direction
Resource Milestones
2002RPS established
2003City Council
establishes 15% by 2017 goal
2000 2005 2010 2015 2020
2006SONGS Divestiture
2018San Juan
Divestiture
2019Kraemer Ceases
Operation
2011Canyon
Commissioned
2006RPS accelerated to
20% by 2010
2011RPS escalates to
33% by 2020POU Mandatory
2015 RPS escalates to
50% by 2030
2017 RPS escalates to
60% by 2030100% Carbon free
by 2045
2005Magnolia
Commissioned
Presenter
Presentation Notes
RPS goalpost keeps moving on the top of the chart (and we expect this to continue) Adapted our key resources in our portfolio on the bottom as part of our long term game plan In 2002, the passage of SB 1078 established the State’s RPS Program. (Increase 1% per year until 20% achieved) RPS was a mandatory requirement for IOUs (20% by 2017). POU participation in RPS at that time was voluntary In 2003, APU established a target of 15% by 2017 RPS (Council approved) In 2006, seeing a rapid uptake in renewable development and production, Legislature passed SB 1362 and escalated the target to 20% by 2010 In response, APU increased its target to 20% by 2015 In 2011, SBX1 2 increased the RPS from 20% by 2010 to 33% by 2020 – and pulled the POUs into the State mandated program, subjecting them to compliance and associated non-compliance penalties Senate Bill 350 (2015) expanded the RPS from 33% by 2020 to 50% by 2030 Requires POUs to develop and submit an Integrated Resource Plan no less than once every 5 years to the CEC Senate Bill 100 (2017) expanded the RPS to 60% by 2030, and established a policy goal of serving customers with 100% carbon free energy by 2045
WHERE WE ARE NOW
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o Shifting Generation Profileo 33% Reduction in coal o 32% increase in Renewableso Natural Gas maintain Reliabilityo Peaking Generation to mitigate load
spikes
Renewable Portfolio 185 MW
Contracted Renewables
(Various)33%
Intermountian Power Plant (Coal)
45%
Magnolia Power Plant (Natural Gas)
16%
Canyon Power Plant (Natural Gas)
3% Hoover (Hydro)2%
2020 Resource Portfolio
Small Hydro 5%
Biomethane 25%
Biomass <1%
Geothermal 13%
Solar 21%
Wind 36%
WHERE WE ARE GOING
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o Senate Bill 350 (2015)o Expanded the RPS from 33% by 2020
to 50% by 2030o Requires POUs to develop an
Integrated Resource Plan
o Senate Bill 100 (2017) o Expanded the RPS to 60% by 2030o Established a policy goal of serving
customers with 100% carbon free energy by 2045
0%
20%
40%
60%
80%
100%
2020 2030 2045
33%60% 60%
40%
California’s RPS Targets
Renewable Resources Other Resources Carbon Free
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Presenter
Presentation Notes
IRP – CC approval May 2018 CEC Submittal June 2018 CEC Adoption/Acceptance – CEC Business Meeting, February 2019 IRP identified several portfolios, of which the Variable Portfolio which increased solar & wind contracting was the most optimal fit to meet the requirement Due to grid conditions emerging from the 2020 summer load cuts & potential increased Resource Adequacy requirements, may need to seek alternative resource mixes Possible hybrid resources of more mix of baseload & variable 2018 IRP was to meet 50% RPS, SB100 will need to be incorporated into the next IRP due no later than May 2023. Expect to begin the process in Q4 this year
20%25%
33%
44%52%
60%
0%
10%
20%
30%
40%
50%
60%
70%
Compliance Period 1(2011 - 2013)
Compliance Period 2(2014 - 2016)
Compliance Period 3(2017 - 2020)
Compliance Period 4(2021 - 2024)
Compliance Period 5(2025 - 2027)
Compliance Period 6(2028 - 2030)
Solar Wind Geothermal Biofuel RPS Targets8
Progress Toward Meeting Targets
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Presenter
Presentation Notes
Snapshot of our compliance position with only the resources in our portfolio today Because we can “bank” energy over and above our compliance obligation in any given year, we are able to remain in compliance through 2024 Shortfall expected (without additional procurement) in year 2025/2026 as targets increase Possible long-term contract(s) to fill large open positions; Mix of short and long-term purchases to remain flexible 65% of contracts must be 10-years or longer Compliance Period RPS Targets Solar Wind Geothermal Biofuel Small Hydro Short Term Purchase�CP1 (2011 - 2013) 20% 0% 7% 6% 5% 0.5% 0.4%�CP2 (2014 - 2016) 25% 0% 6% 4% 14% 0.4% 0% �CP3 (2017 - 2020) 33% 1% 8% 6% 18% 0.4% 0%�CP4 (2021 - 2024) 44% 7% 8% 5% 24% 0.5% 0% �CP5 (2025 - 2027) 52% 8% 1% 4% 27% 0% 0% �CP6 (2028 - 2030) 60% 6% 0% 3% 19% 0% 0%
HOW WE GET THERE
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o Strategic Roadmapo Phase-out of coal by 2027o Battery Energy Storage Systemo Mix of Variable & Baseloaded
Renewable Resourceso Integrate Hybrid (Solar + Storage)o Leverage industry partnerships to
address regulatory barrierso Repurpose Natural gas generatorso Maintain financial flexibility
ANAHEIM PUBLIC UTILITIES
New and Emerging Technologies
Energy Storage
Solar Wind Biofuel
Hydro
Geothermal
Presenter
Presentation Notes
APU has worked toward achieving long-term goal of maintining a reseilent power supply fleet Ensure adaptability to mitigate regulatory changes and shifts Flexible resources to sustain the influx of Variable Renewable energy Financial flexibility to augment the fleet and capitalize on the statewide Renewable movement and benefit our customers Maintaining room in the financial portfolio to shift and integrate resources such as storage to add resiliency to the Anaheim grid Ability to borrow for storage and contract within Anaheim, a key central part of the LA Basin area Natural Gas Generation Repurpose (could be delayed further depending on new regulations or alternative fuel sources) Magnolia - Post 2038 Canyon – Post 2040 100% Carbon free by 2045 Potential for Biogas or Hydrogen Battery Storage Provide High Reliability Ancillary Services Available to shift generation to later hours New and emerging Hybrid resources Co-located Solar & Storage PPAs Produce power after sunset Get full Resource Adequacy attributes Hydrogen – Natural gas alternative Potential new storage alternative sites Want to be sure that the technology is feasible & reliable Forbes.com – (https://www.forbes.com/sites/feliciajackson/2021/01/27/top-technologies-transforming-energy-in-2021/?sh=49e2b7323775) “Over 2021 renewable energy will continue to add capacity by more than 200GW globally, with solar still adding the most but wind contributing the most aggressive growth with regard to both electricity delivered and investment. Cost will help drive the virtuous cycle necessary for the integrated scale-up of renewable energy. The price of renewable energy is expected to continue to fall. Diego Díaz Pilas, head of new ventures and technology prospects at Iberdrola, says: “Starting in 2021 we expect solar PV [photovoltaic] and onshore wind costs to fall an additional 30 per cent by 2030 and offshore wind an additional 50 per cent.”” “The areas attracting the most excitement involve cutting system costs, deepening understanding of combining energy sources, renewable energy’s role in overall sustainability and, of course, hydrogen. ”
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Energy Storage (ES) – Key Addition to Portfolio Fleet
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• Position APU at forefront of transition towards renewables and ensure regulatory compliance
• Customer Benefits• Added resiliency to local grid• Absorb negative prices and shifts energy to
when it is needed the most• Provides opportunity to maximize cost
recovery during periods of peak demand
• Evaluation Factors• Direct install or power purchase
agreement• NPV/life cycle cost• Resource Adequacy considerations Actual dispatch of CAISO batteries
Presenter
Presentation Notes
CAISO Battery Dispatch 9/8/21 – 5-min Range from – (914) to 1,127 MW Other Utilities Glendale Own current BESS (1 MW/2 MWh) used for regulation Planned Grid scale BECC 50 MW 2023 +25MW 2030 BESS + solar contract PPAs 2023/2024 18.75 MW/12.5 MW IID 20 MW/30 MWh online 2016 Planning stages of 100 MW with COD 2023 Annual Capacity cost $700k – $1.2M Ancillary Services Cost – $1.5M-$2.5M annually Shift to energy arbitrage and RA over the mid to long term (expand 2 to 4) IR and consultant identified a strong economic incentive for ES Shorter duration increases value added 2 hour ES most practical given number of charge/discharge cycles per day Supplements RA Capacity 4 year payback Decommissioning costs expected to be in the range of $1M to $1.5M Current market dynamics strongly favor ES, particularly for ancillary services Shift to energy arbitrage and RA over the mid to long term (expand 2hr to 4hr)
PORTFOLIO RESILIENCY
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o Coal Free Generation Profile
o Stand-Alone Battery Storage
o 60% of Retail Load Supplied by Renewables
o Solar + Storage
o Path to 2045 100% Carbon Free
Contracted Renewables
28%
Planned Renewables32%
Magnolia Power Plant (Natural Gas)
27%
Canyon Power Plant (Natural Gas)
5%
Hoover (Hydro)
2%
Battery Storage
3%Purchases
3%
2030 RESOURCE PORTFOLIO
Presenter
Presentation Notes
Total Renewable Capacity – estimated 253 MW – 350 MW range dependent on technologies Dispatchable and Variable additions Capacity dependent on technology, ensure energy requirements of 60% 65% of new contracts length of 10-yrs or greater Coal Free Generation Profile Stand Alone Storage 50 MW BESS 2hr expand to 4 hr 60% of Retail Load Supplied by Renewables Add approximately 157 MW Dependent on technology Solar + Storage Resource Adequacy Benefit Shift Energy to evening Path to 2045 100% Carbon Free Natural Gas as a Bridge Fuel Natural Gas Generation repurpose by 2045 (could be delayed further depending on new regulations or alternative fuel sources) Magnolia - Post 2038 Canyon – Post 2040
CONCLUSIONS
• Continued focus on sustainable portfolio balanced with affordable rates
• On track for 60% RPS by 2030 & carbon free by 2045
• Financial and resource flexibility to adjust for future compliance targets and new technologies
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Presenter
Presentation Notes
Increased pressure to reach higher RPS mandates and reduce carbon State agencies are currently discussing accelerating RPS target deadlines in order to meet other climate policy goals (i.e., GHG reduction targets and all things electrification (on and off-road vehicles, buildings, ports, etc.) We are currently assessing the cost impacts of accelerated RPS targets, and what that would mean to our customers, so we can inform policy makers during their open, public rulemaking before final decisions are made Resource Portfolio adaptation, short-term deals used to meet needs at lower cost Allows contracts to be “timed” into the portfolio to maintain rates Flexibility is key in securing contracts to meet regulations while minimizing financial impacts
QUESTIONS?
