2020 ELCC Methodology Working Group – Review of ELCC Study improvements

1. 2020 ELCC Methodology Working Group – Review of ELCC Study improvements September 6, 2019

2. Overview of Presentation 1. Background • Clarification of Objectives for ELCC study in 2020 • Building off IRP Baseline Dataset and Reference System Plan 2. Review options for study of ELCC in 2020 • Marginal vs. average • Solar/storage hybrid resources • Technology and/or locational granularity • Integration of storage into ELCC calculations • Timeline for study in 2020 and need to prioritize

3. Background

4. Objectives of ELCC studies • The Resource Adequacy (RA) Program in PU Code section 380 ensures that LSEs have secured sufficient generating and demand response capacity to meet their peak demand plus planning reserves. The RA program mandates contracting for reliability. • Effective Load Carrying Capability (ELCC) studies required by PU Code section 399.26(d) are used to quantify the eligible RA Capacity that can be offered and sold by wind and solar generators towards RA obligations. • ELCC studies attempt to measure how much “effective“ equivalent reliability value a generator class has (in terms of Loss of Load or LOLE avoided) relative to a “perfect” generator which has a 100% ELCC. • ELCC studies in RA are meant to inform contracting primarily of existing generators, and some bilateral trading of capacity, not to build new capacity. Ideally LSEs can procure standardized RA capacity that is easily tradable in a liquid market.

5. Production Cost Modeling • ELCC studies are derived from LOLE modeling • LOLE modeling is designed to analyze the capabilities of an electric system during a variety of conditions under different scenarios. The current dataset includes: • Multiple historical weather years and one fleet of generators • Each case represents one realization of a year (8760 hours) of grid operations • Multiple cases are studied to determine the range of LOLE avoided, and to determine an expected value ELCC over all weather cases. • Weather cases can be analyzed individually in order to see patterns of generator dispatch and LOLE given particularly important weather trends or to see detailed hourly patterns.

6. Build on work from IRP proceeding • For the Integrated Resource Planning (IRP) proceeding, staff has developed a complete dataset to represent electric demand and available generators in each year, 2020 to 2030. • IRP modeling focuses on long term future years, while RA focuses on near term (2020 – 2022) years. • The following data has been completed and is posted to the CPUC website • Generator unit data • Electric Demand forecast • Fuel and carbon prices • Load, wind, solar, and hydro hourly shapes • Transmission topology and constraints • System operating constraints Data linked to the CPUC website here: https://www.cpuc.ca.gov/General.aspx?id=6442461894

7. Review of ELCC Methodology Options

8. Stakeholder reaction to 2019 ELCC proposal • The Commission adopted ED’s final ELCC proposal (Jun 2019) • Parties had several reactions to it • Questions and some opposition to method of allocating diversity benefit from storage to solar • Push to include BTMPV as a resource • Push to study more location and technology granularity • Strong urgency in further studying hybrid solar and storage installations • Why did ED remove Helms? (we won’t remove Helms in the future) • Energy Division staff are able to perform more ELCC work, but may have to prioritize what is more important. Questions for stakeholders: • What do stakeholders consider most important? • Is it important to perform more studies in early 2020 for revision of ELCC before 2021 RA compliance year?

9. Marginal vs. Average ELCC study ELCC studies are done for at least two main purposes. Currently Marginal ELCC studies are done for purposes of RA procurement and compliance. Marginal ELCC studies inform investment in new construction • Study supply/demand several years in future – construction timeframe • Marginal value – most useful thing to build out of array of options on top of existing baseline Average ELCC studies assess a whole group of resources together with no prioritization or vintage. This is similar to procuring capacity for RA compliance showings • Less relevant when resource was built • Not meant to lead to new investment • Shorter term timeline for immediate reliability – not enough time to compete with new investment

10. Hybrid solar and storage • We are open to thoughts from parties (and open to the other proposals) about what to do. • No strong opinion.

11. Location and Technology

12. Review – ELCC studies are a Sequential Process This whole cascade of studies takes about three months to complete. 0.1 Weighted Average LOLE Calibrated– RA requirements Solar ELCC SoCal Solar ELCC SoCal Existing System – unknown reliability Step 2A Add/Subtract actual Capacity Solar ELCC System Solar ELCC System Step 3A Solar ELCC NorCal Solar ELCC NorCal Step 0 Remove Solar/Wind, add Perfect Capacity until 0.1 Weighted Average LOLE Step 1 Wind ELCC SoCal Wind ELCC SoCal Wind ELCC system Wind ELCC system Steps 3 could also be performed to break down solar and wind into technology granularity if that is more important than locational granularity Step 3B Step 2B Wind ELCC NorCal

13. Diversity allocated to solar – solar is charging batteries primarily Storage charging

14. Adopted changes to allocation of diversity • The Commission adopted ED’s final ELCC proposal (Jun 2019) • Part of that ELCC proposal was a proposal to amend the allocation of diversity adjustment. In particular, resources whose initial ELCC value was already 100% (i.e. storage) would not receive diversity benefit as that would raise over 100%. • Diversity benefit will first be allocated to resources that do not have ELCC of over 100%. Any excess diversity after that step that would have gone to 100% ELCC resources would go to resources that cause the diversity (i.e. storage was at 100%, caused more benefit, so that benefit went to solar) • Parties had questions and concerns – parties could propose other methods to calculate diversity adjustment. Prompt for discussion?

15. Questions for parties? • Parties are encouraged to think of these topics • Should parties file formal or informal comments? • What topics are higher priorities? • Should negative adjustments from 100% ELCC resources be allocated or just positive diversity adjustments? • How should we prorate diversity benefit to all resources that have ELCC under 100%? • Ought we perform full ELCC studies for storage? 2Hr and 4Hr storage buckets?

16. Wrap Up/Next Steps

17. Questions? • Thank you for your participation and please contact the staff below with any questions you have about this presentation. Contacts: Donald Brooks – donald.brooks@cpuc.ca.gov Patrick Young – patrick.young@cpuc.ca.gov Frederick Taylor-Hochberg – frederick.taylor-hochberg@cpuc.ca.gov