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Long-term Fuel Price Forecasts for the Sixth Power Plan

Long-term Fuel Price Forecasts for the Sixth Power Plan. Northwest Power & Conservation Council Generating Resources Advisory Committee August 21, 2008. NPCC long-term fuel price forecasts. Determine a range of plausible long-term trends in natural gas, world oil and western coal prices

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Long-term Fuel Price Forecasts for the Sixth Power Plan

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  1. Long-term Fuel Price Forecasts for the Sixth Power Plan Northwest Power & Conservation Council Generating Resources Advisory Committee August 21, 2008

  2. NPCC long-term fuel price forecasts • Determine a range of plausible long-term trends in natural gas, world oil and western coal prices • Commodity cycles around the trend and short-term volatility are simulated in the Portfolio Model analysis • Fuel prices affect resource selection, generation cost, and price of electricity • Retail prices affect demand for fuels and electricity (directly through competition, indirectly through cost of generation) • Delivered prices for residential, commercial, industrial and electric generation are estimated for the AURORA, GENESYS, Energy 2020 and Portfolio Risk model • Seasonality is estimated where significant

  3. NPCC Fuel price forecast history • Fifth Power Plan (Summer 2004) • Revised Council Forecast (Sep. 2007) • Revisions proposed to the Natural Gas Advisory Committee (Aug. 2008) • Draft for Sixth Power Plan (Oct. 2008)

  4. Natural Gas

  5. Working wellhead natural gas price forecast(2006 $ Per MMBtu at wellhead)

  6. Delivery costs to AURORA LRAs

  7. World Oil Prices

  8. Working Crude Oil Price Forecasts(Imported RAQ in 2006 $ / Bbl.)

  9. Coal Prices

  10. Recent spot coal pricesApril 05 To April 08 Source: EIA

  11. 6th Plan working forecast

  12. Working coal price forecast(Powder River in 2000$/ MMBtu)

  13. At its August 15 meeting, the NGAC ... generally agreed with the proposed medium oil price forecast (about $80 in the long-run) recommended use of a wider range of oil prices - well above $100 in the high; below $40 in the low (see poll results) generally agreed on a somewhat higher medium long-term gas price (about $8), based on a 10:1 oil:gas price parity recommended against a fixed oil:gas price parity across the cases (see chart of history) generally agreed the spread of gas prices be increased on the high side, but not to exceed $12. Disagreement regarding low (arguments ranged between $4 to $6).

  14. $40 & lower $125 & higher The NGAC poll of long-term world oil price

  15. Where to from here • Digest NGAC and other comments • Proposed revisions for draft 6th Plan to Power Committee in October • Incorporate into planning models by December for use in 6th Plan analyses

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