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GHG Modeling Kickoff Meeting

GHG Modeling Kickoff Meeting. September 21, 2007. Modeling of Greenhouse Gas Emissions Reduction Strategies and Cap Options in the California Electricity Sector. Introductions. Snuller Price, Project Manager Dr. Ren Orans, Model Integration Dr. Jim Williams, E3 Lead Analyst

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GHG Modeling Kickoff Meeting

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  1. GHG Modeling Kickoff Meeting September 21, 2007 Modeling of Greenhouse Gas Emissions Reduction Strategies and Cap Options in the California Electricity Sector

  2. Introductions • Snuller Price, Project Manager • Dr. Ren Orans, Model Integration • Dr. Jim Williams, E3 Lead Analyst • Amber Mahone, E3 Analyst • Steven Schiller, Schiller Consulting • Eric Toolson, PLEXOS Lead • Dr. Yihsu Chen, UC Merced (Advisor)

  3. E3 Projects in California • CPUC Projects (contracting utility) • Avoided costs for energy efficiency (PG&E, SCE) • ‘E3 Calculator’ for cost-effectiveness of energy efficiency (PG&E, SCE) • Market Price Referent for the renewable portfolio standard • Cost-effectiveness of clean DG (SGIP) (PG&E) • Statewide potential for demand response (Sempra) • BC – California Renewable Energy Partnership (PG&E) • CEC Projects • 2005 and 2008 Title 24 building energy efficiency standards • Programmable Communicating Thermostat CASE study • Renewable Program, Guidebooks and SEPs calculation support • Renewable DG assessment • CAISO Projects • Sunrise transmission line • WECC RPS transmission study

  4. PLEXOS Solutions LLC Team • Eric Toolson • Project manager for CAISO’s TEAM demonstration and PVD2 transmission evaluation • 25+year of resource planning, SMUD Resource Planning Manager (‘89-’92) • Dr. Tao Guo • Principal algorithm developer for PROMOD (‘89 to ‘93) and PROSYM (’93 to ’05), • PhD in Power Systems Engineering • Recognized national expert in unit commitment and dispatch modeling • Dr. Wenxiong Huang • Principal developer for ProView, ProScreen (Strategist), ’92-’94 • Product manager for MARKETSYM, RISKYM, MAINSYM (’94-’06) • Expert in areas of market price formation, stochastic portfolio evaluation, and maintenance optimization

  5. Agenda • Project Goals and Overview • Stakeholder Process and Timeline • Modeling Approach • Technical Plan • Key Issues and Agency Proceedings

  6. Project Overview

  7. Two Stage Project Approach • Stage 1 (Now to End of November) • Develop data and methodology • Develop and test analysis tool • Focus on electricity sector-wide issues • Results feed into CPUC Interim Decision in Feb. ‘08 • Results for CARB Integration Workshop in Mar.’08 • Stage 2 (December – August 2008) • LSE-specific issues such as allocation • Cross-sector trading issues • More detail through topic-specific working groups

  8. Stage 1 Key Questions • How much CO2 reduction can be expected in the electricity sector from different policy options? • How much will these policy options increase electricity rates for consumers? • Underlying CPUC question: At what electricity sector target level do incremental improvements get expensive?

  9. Stage 2 Key Questions • What is the cost to California of complying with AB32 under different policy options for the electricity sector? • What is the cost to different LSEs and their customers of these options? • Underlying CPUC question: What option has the best combination of cost, fairness, and enforceability?

  10. Project Deliverables • Key Deliverables • Non-proprietary GHG Calculator • Unlimited “runs” to evaluate policy options • Agency staff and stakeholders can evaluate their own scenarios • PLEXOS production simulation • Validation of GHG calculator results with detailed model of California and the Western Interconnect • Stakeholder engagement and support • Timeline • Tied to AB32 timeline • Results feed into R.06-04-009 proposed decisions

  11. ‘Stylized’ View of the Results

  12. Modeling Approach • Modified SSG-WI Database • Resources • Loads • Fuel Prices • Sector Targeted Policies • Technology Development • Fuel Prices • GHG Policies Inputs Inputs to Calculator E3 GHG Calculator PLEXOS for Power SystemsTM New Resource Assessment GHG Emissions Capacity Costs Energy Costs GHG Costs Rate impact Analysis Average retail rate Zonal Supply Curves for WECC Loads Prices WECC-Wide Production Simulation Optimization Zonal or Nodal CA MRTU Detailed Emissions Results Calculation Results for Validation • Production by zone • GHG Impacts • Production by zone • GHG Impacts • Rate Impacts Outputs CARB Macro-economic Model (EDRAM) CARB Multi-Sector Model (ICF)

  13. Key Features • Spreadsheet tool is designed to help users answer key questions, not just a report • Transparent, publicly available information • Will be made available to stakeholders • Model links expansion planning, GHG emissions and costs to consumers • Right level of detail to answer policy questions through 2020 and beyond • Expert team familiar with CPUC process, GHG policy, CAISO, and targeted options

  14. Model Scoping • Years: 2008, 2020 • Sectors: Electricity and Natural Gas • Scale: LSE, California, WECC • LSEs: 7 entities • PG&E, SCE, SDG&E • LADWP, SMUD • Northern CA other, Southern CA other

  15. Joint CPUC/CEC GHG Stakeholder ProcessR.06-04-009

  16. Process Goals for GHG Modeling • Transparency in model and input data • Open stakeholder process • Inform the CPUC Decisions in R.06-04-009

  17. GHG Modeling and Process • Model results feed into R.06-04-009 • Interim Decision expected ~ February 2008 • CARB integration workshop ~ March 2008 to review sector targets • Decision expected ~ September 2008

  18. CARB Integration Workshop Project Timeline

  19. Upcoming Key Dates (Tentative) • September 21st • Kick-off Meeting for GHG Modeling • October 24th • Public release of data and methodology summaries on E3 website • November 2nd • Public release of initial model and summary of results on E3 website • November 14th • CPUC workshop on initial model data, method, and results • November 30th, Mid-December • Post-workshop Comments and Reply Comments complete http://www.ethree.com Information and Results

  20. Technical Plan

  21. Re-evaluate Assumptions with Stakeholder Process Available Publicly so that stakeholders can review, and make their own runs Technical Plan in 8 Steps • Step 1: Compile available public data • Step 2: Modify WECC data to create 2020 reference case • Step 3: Develop 2020 PLEXOS and aggregate by zone • Step 4: ‘Download’ PLEXOS dispatch in GHG Calculator • Step 5: Define scenarios using the ‘GHG Calculator’ • Step 6: Run the GHG Calculator to evaluate scenarios • Step 7: ‘Upload’ GHG Calculator results to PLEXOS • Step 8: Deliver output of selected runs to CARB models

  22. Start with WECC 2008 & 2017 Reference Cases Generation Resources Loads Fuel Prices Public Data Step 1: Compile Available Public Data

  23. Step 2: Modify WECC data to create 2020 case • WECC reference cases may not reflect CPUC desired base case • Level of renewable investment • Level of energy efficiency investment • Known new plants coming online • Plant retirement schedules • Provide publicly the changes made to the reference cases

  24. Step 3: Develop 2020 Case, and aggregate results into zones • Extend PLEXOS database to 2020 • New resources • Transmission • Loads • Summarize results

  25. Running PLEXOS with Reference Case Flow of Execution Relational Input Database Text Files • Scan the input database • Decide variables, constraints, and objective need to be used for each object • Dynamically construct and solve the LP/QP/MIP • Write solution data to one or more databases • Input and solutions viewed in PLEXOS interface • Creatable reports connect directly to solution databases PLEXOS Engine Compiler Executive Solver (LP/QP/MIP) SolutionDatabases and Text Files PLEXOS Report Writer Reports

  26. About PLEXOS • PLEXOS 4.0 first released in 2000 • Co-optimization architecture is based on the Ph.D. work of Glenn Drayton* • Advanced Mixed Integer Programming (MIP) is the core algorithm of the simulation and optimization • Foundation for the mathematical formulation of the New Zealand, Australia, and Singapore energy and spinning reserve markets • PLEXOS licensed in United States, Europe, Asia-Pacific, Russia, and Africa (17 countries, about 40 sites) • PLEXOS Solutions distributes and supports PLEXOS in the United States and Canada * G.R. Drayton. Coordinating Energy and Reserves in a Wholesale Electricity Market. University of Canterbury, New Zealand, 1997.

  27. PLEXOS and California • MRTU compliant • Integrated Forward Market • Co-Optimization of Ancillary Service and Energy • Locational Marginal Prices (LMP) • Ancillary Service Market Prices (ASMP) • Full Network Model • DC-OPF • WECC or CA focus • Used by CAISO • Competitive path assessment • MRTU LMP forecast • Transmission feasibility studies • Past studies done with PLEXOS reviewed by CPUC – TEAM, PVD2

  28. PLEXOS and GHGs • Capable of modeling WECC at any level of detail from one zone to 15,000+ nodes • Extensive emission modeling capability • Automatic decomposition takes annual or quarterly emission constraints and breaks them down into daily limits for detailed short-term simulation • Operations-quality modeling of thermal units including all CC components, dead zones, chronological constraints, limited starts per week, multi-fuel, etc. • Accurate forecast of emission shadow prices • Emission rates can be expressed multi-point or exponential curves

  29. Step 4: ‘Download’ PLEXOS Dispatch to GHG Calculator • Zonal Supply Curves • Demand and Energy • Prices Supply Curves by Zone in the WECC Demand and Energy Forecasts

  30. Step 5: Define scenarios in GHG Calculator GHG Calculator ‘Dashboard’ for Setting the Scenarios to Evaluate

  31. RPS Supply Curve Example Illustrative Example from CA ISO Sunrise Analysis • Based on publicly available data sources for generation and transmission options: CEC/PIER, CPUC, NPPC, DOE, CAISO, NTAC,WECC, utilities, developers, literature • Levelized costs of energy for California for RPS compliance • Other supply curves: energy efficiency, CHP, renewables, PV, clean DG, IGCC, carbon sequestration

  32. Step 6: Run the GHG Calculator to evaluate scenarios • GHG Calculator Calculates Two Modules • New Resource Assessment • Rates Impact Analysis

  33. Evaluating Rate Impacts Retail Rate Forecast for CEC Title 24 • A key aspect of evaluating GHG policy is in determining how costs of different policies flow through to consumers • Cost-of-service and revenue requirement calculations are an E3 practice area • Cost components for analysis • Capacity, energy, transmission, and other components • Extensive experience • Dr. Ren Orans • Brian Horii

  34. Steps 7 and 8: Upload Results • Validate 2020 case in PLEXOS • Output results to CARB models for cases identified in the working group to evaluate Outputs from the GHG Calculator Outputs from the GHG Calculator TM TM PLEXOS for Power Systems PLEXOS for Power Systems Wholesale Market Wholesale Market Generation Outputs Generation Outputs Verify Results in 2030 Verify Results in 2020 Wholesale electric prices Wholesale electric prices Expenditure on new Expenditure on new Imports / Exports Imports / Exports generation resources generation resources Expenditure on new Expenditure on new GHG Outputs GHG Outputs transmission transmission CARB Models: Energy 2020, EDRAM CARB Macro - economic Model GHG price GHG price Rate Analysis Outputs Rate Analysis Outputs WECC WECC - - wide emissions wide emissions Economic Impact of GHG Policy Economic Impact of GHG Policy Retail rate impact Retail rate impact Emissions to serve CA Emissions to serve CA Affects on California on California

  35. Data Sources and Agency Proceedings

  36. GHG Methodology GHG Policy CPUC Tool Data Inputs Targeted Policy Options and Inputs: Informing the Model Joint Agency Proceedings Stakeholder Process Agency & Industry Data

  37. GHG Policies

  38. Targeted Policies

  39. GHG Methodologies

  40. Regional Policies

  41. Data Inputs

  42. Questions? Next Steps

  43. Upcoming Key Dates (Tentative) • September 21st • Kick-off Meeting for GHG Modeling • October 24th • Public release of data and methodology summaries on E3 website • November 2nd • Public release of initial model and summary of results on E3 website • November 14th • CPUC workshop on initial model data, method, and results • November 30th, Mid-December • Post-workshop Comments and Reply Comments complete http://www.ethree.com Information and Results

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