Principal Solar Institute

Ron Seidel

Director, Principal Solar Ron Seidel is principal of RBS Energy Consulting, working with private

equity, investment banks, and government on electric energy issues primarily in the ERCOT market. Previously, he was president of Texas Independent Energy, senior vice president of Energy Supply at City Public Service of San Antonio, and an executive at TXU where he was senior vice president of Fossil Generation and Mining, president of TXU Energy Trading, and operations manager at the Comanche Peak Nuclear Plant.

Solutions for the Texas Energy

Shortage

Source: ERCOT

The ERCOT System

ERCOT Facts & Figures

200,000 Square Miles

40,500 miles of Transmission (2010)

73,492 MW Peak Capacity

10,035 MW of wind generation

68,294 MW Peak Load (2011)

13.75% Target Reserve Margin

2011 Peak Reserve Margin 7.6%

4 DC Ties, 1100 MW (to Mexico and SPP)

Stand alone system about the size of the UK

Source: ERCOT

Wind 13%

Hydro, biomass,

other 1%

Nuclear 7%

Coal 23%

Natural Gas 56%

Installed Capacity 2011

Wind 8%

Hydro, biomass,

other 1% Nuclear

12%

Coal 39%

Natural Gas 40%

Energy Produced 2011

68,251 Megawatts 335,000 Gigawatt-hours

Source: ERCOT

ERCOT Capacity and Energy

ERCOT Load Growth

ERCOT Average Load Growth 2013 – 2022 is 2% or 1,400 MW per year

Equivalent to

–One large nuclear plant each year

– Two large coal plants each year

– Three combined cycle gas plants each year

Sources: ERCOT , RBS Energy Consulting

ERCOT Reserve Margins May 2012 Report

-2

0

2

4

6

8

10

12

14

16

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Target =13.75%

Source: ERCOT

%

Why is there a potential shortage?

Low natural gas prices reduce financial viability for new resources

Power prices have been arbitrarily capped, conflicting with the design of the energy only market

Electricity demand growth in Texas is robust, creating the need for new capacity

What is being done about it??.....

The Brattle Group Report – PUCT Options

Energy only with market-based reserve margin

Energy only with adders to support a target reserve margin

Energy only with backstop procurement at minimum acceptable reliability

Mandatory resource adequacy requirement for load serving entities

Resource adequacy requirement with a centralized forward capacity market

Source: The Brattle Group

Where Do We Go From Here?

PUCT Workshops / Deliberations / Rulemakings

No real issue until 2014/2015 with mothballed units in service and with normal summers

2013 Legislature may address the resource adequacy issue

My opinion: A capacity market in some form is inevitable – an energy market will require patience

We could go here…….

U.S. & Texas Solar Intensity

Source: NREL

Utility Scale PV Potential Urban areas

U.S Total: 1,218 GW 2,231,694 GWhrs 25,369 km2

Texas: 154 GW 294,684 GWhrs 3,214 km2 (<1%)

Source: NREL

Source: NREL

U.S Total: 152,974 GW 280,613,217 GWhrs 3,186,955 km2

Texas: 20,411 GW 38,993,582 GWhrs 425,230 km2 (61%)

Utility Scale PV Potential Rural areas

Source: NREL

U.S Total: 664 GW 818,733 GWhrs

Texas: 60 GW 68,717 GWhrs

Rooftop PV Potential

Achievable Solar PV Energy in Texas

Reference: ERCOT Maximum Load ~68 GW

Urban PV = 154 GW (13% of U.S. Total)

Rural PV = 20,000 GW (14% of U.S. Total)

Rooftop PV = 60 GW (10% of U.S. Total)

Achieving just 1% of this capability would produce over 200 GW or almost three times the current ERCOT maximum load.

Sources: NREL, RBS Energy Consulting

Solar Synergy with Load

Source: RBS Energy Consulting

0

2000

4000

6000

8000

10000

12000

0

10000

20000

30000

40000

50000

60000

70000

0:0

0

1:0

0

2:0

0

3:0

0

4:0

0

5:0

0

6:0

0

7:0

0

8:0

0

9:0

0

10

:00

11

:00

12

:00

13

:00

14

:00

15

:00

16

:00

17

:00

18

:00

19

:00

20

:00

21

:00

22

:00

23

:00

Ge

ne

rati

on

(M

W)

Syst

em

Lo

ad (

MW

)

Hour

System Load Wind Generation Solar Generation

Capacity Value

The portion of capacity that can be counted on for reliability purposes

Conventional resources - 100%

– nuclear, coal, natural gas

Wind - 5% to 40%

– 8.7% in ERCOT due to uncontrollability and intermittency

Solar PV – 25% to 75%

– Synergy with load

Sources: NREL. ERCOT

Electricity Cost and Emissions Savings with the addition of various amounts of solar PV in 2011

Solar PV CO2 Avoided Energy Cost Benefit

MW (tons) ($)

1000 323,000 167,900,000

2500 811,000 348,400,000

5000 1,612,000 520,300,000

The Brattle Group Report for The Solar Energy Industries Association

Source: The Brattle Group

Summary

ERCOT needs new capacity

Currently over 10,600 MW of wind is in operation

Only about 75 MW of utility scale solar PV operating – Between 60 MW and 480 MW in the pipeline

Texas leads the nation in solar PV capability

Solar PV has a higher capacity value than wind and is synergistic with load

While solar PV will not displace wind or conventional generation completely, shouldn’t it be a significant part of the energy equation for Texas and the nation??

Questions and Discussion

Ron Seidel Director, Principal Solar

Please enter your questions into the Chat window