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Geothermal Energy Portfolio from a Utility Perspective

Geothermal Energy Portfolio from a Utility Perspective. How do you know what you need and is Geothermal “it”? . Marilynn Semro Seattle City Light May 11, 2005. Agenda. The long-term strategic integrated resource plan What is a “good” resource What is “good” about geothermal

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Geothermal Energy Portfolio from a Utility Perspective

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  1. Geothermal Energy Portfoliofrom a Utility Perspective How do you know what you need and is Geothermal “it”? Marilynn Semro Seattle City Light May 11, 2005

  2. Agenda • The long-term strategic integrated resource plan • What is a “good” resource • What is “good” about geothermal • What is not so “good” about geothermal • Geothermal in the NWPCC 5th Plan • Utility conclusions • Where do we go from here? Seattle City Light

  3. Integrated Resource Plan • What are IRP Strategic Long-Term Objectives? • Reliability. • Cost. • Risk. • Environmental and Societal Mitigation. • How much is the “gap”? • How much? - load growth? resource adequacy? • What? - capacity, energy • When? - timing Seattle City Light

  4. IRP continued • What are the options? Conservation, Gas, Coal & Wind are “in”, market is “out”. but what about geothermal? • Characteristics – base-load, highly reliable. • Cost – • Production tax credit - Is it available and can you use it? • Societal and environmental impacts – site specific • Risk – • Will there be environmental regulations? • Is there a resource? • Will it be there when you need it? Seattle City Light

  5. IRP continued • Identify or select portfolios. • Determine your “best fit” options. • tradeoff between minimizing risk and cost? • Chose a resource portfolio that balances costs and risks. Seattle City Light

  6. What is a “Good” Resource? • Varies from utility to utility. • Increase reliability by adding diversity. • Reduce fuel availability risk (may look at coal, geothermal, landfill gas, and biomass if have hydro, natural gas, and wind). • Reduce reliance on one or few resource (in event of plant or transmission outages). • May provide a particular need (e.g. peaking or load following). • Minimize cost. • Low capital/high operating cost (must manage operating cost). • High capital/low operating cost (must manage investment and “out of money” potential - low fuel price risk). • Manage risk - capabilities to manage risk. • Environmental and societal values. Seattle City Light

  7. What is a “Good” Resource? • Other • I can get the resource when I need it. • I can get the amount that I want. • I can get the transmission in a “timely” manner. • The resource cost is competitive with alternatives. • The transmission costs are not “exorbitant”. • The resource “developer” is willing to meet my desire for a power purchase agreement or an ownership interest. • If there is going to be a long-term relationship with the developer/operator, the relationship must be “compatible”. • I can get value of PTC if it is a renewable resource. • The counter-parties are credit worthy. Seattle City Light

  8. What is “Good” About Geothermal? • Reliability • Very low outage rate. • Cost • Overall cost can be competitive. • Risk • Low fuel “volume” risk. • Low fuel price risk. • Environmental & Societal • Renewable and “Green”. • Green tags and tradable offsets. • Public generally accepting of idea. Seattle City Light

  9. What is “Not So Good” About Geothermal? • Hard to get in NW relative to other resource types. • Very limited candidate resource pool. • Difficulty in expanding candidate resource pool. • A lot of work to make happen relative to competitors. • Hard to put in Integrated Resource Plans with so little information. Seattle City Light

  10. Geothermal in NWPCC 5th Plan • Geothermal power generation is not considered in the 5th Power Plan. • Largely excluded due to potential for land use conflicts in the limited areas with potential geothermal. • Plan calls on utilities to acquire renewable energy (including geothermal) projects if cost-effective opportunities rise. Seattle City Light

  11. Utility Conclusions • Utilities are not going to put all their new resource eggs in the geothermal basket due to risk. • No resource • Doesn’t come on-line on time (or at all) • But if opportunities arise, and they are prepared to take advantage of those opportunities then yes. • Utilities continue to be concerned about lack of “good” renewable resources (e.g. wind and geothermal). Seattle City Light

  12. Where Do We Go From Here? • Very worthwhile resource and we should continue to pursue resolving issues. • availability and location of resource • land-use - leasing, permits, etc • transmission issues (applicable to all new resources but wind appears to try to be partnering with gas and coal) • cost - production tax credit, other financial incentives • Other Seattle City Light

  13. Questions • ? Seattle City Light

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