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Translating Portfolio Analysis to a Cost Effectiveness Frontier

Translating Portfolio Analysis to a Cost Effectiveness Frontier. Ken Corum, NW Power and Conservation Council. Cost Effectiveness of DR. “Compare cost of DR to cost avoided by DR” Comprehensive evaluation of avoided cost entire power system over time uncertainty

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Translating Portfolio Analysis to a Cost Effectiveness Frontier

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  1. Translating Portfolio Analysis to a Cost Effectiveness Frontier Ken Corum, NW Power and Conservation Council

  2. Cost Effectiveness of DR • “Compare cost of DR to cost avoided by DR” • Comprehensive evaluation of avoided cost • entire power system • over time • uncertainty • For practical guidance, a simple rule approximating comprehensive method 2

  3. Council’s Portfolio Model • Uncertainties translated into 750 futures (20 years) • Resources include: • natural gas • conventional & advanced coal • wind • conservation • demand response • 1000-4000 portfolios tested against futures 3

  4. Council’s Portfolio Model • Each portfolio => 750 NPVs of costs • distribution w/ average cost, risk 4

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  8. Work in Progress • More variety in DR programs • Limits on DR calls • Can we capture potential benefits of DR in ancillary services? 8

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