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Future Energy Overview

Future Energy Overview. 2009 GCAA Management Workshop February 17, 2009 Jeff Burleson Director, Resource Policy and Planning Georgia Power Company. Current Situation. Fuel prices have declined Retail gasoline $4.00 vs 1.50 per gallon

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Future Energy Overview

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  1. Future Energy Overview 2009 GCAA Management Workshop February 17, 2009 Jeff Burleson Director, Resource Policy and Planning Georgia Power Company

  2. Current Situation • Fuel prices have declined • Retail gasoline $4.00 vs 1.50 per gallon • Wholesale natural gas $13 vs 6 per million btu • Central Appalachian coal $120 vs 60 per ton • But for the wrong reason • Economic downturn lowering current and near term outlook for demand • Fuel prices will climb again in the future • Only a matter of time • Over half of U.S. oil consumption is from imports • Natural gas imports projected to rise significantly over long term • No single fix, nor quick fix • Requires holistic, sustained efforts • Environmental requirements will increase

  3. US Electricity Generation by RegionHistory and projection, 1990-2030 Projected growth 2008-2030 34% 25% 34% 22% 11% History Projection Data Source: Energy Information Administration, US Department of Energy

  4. Fuel Price Risk Coal vs. Gas Prices

  5. Environmental Uncertainty AMFA ARPAA-88 AIA ASBCAA-88 ESAA-88 FIRAA-88 TOSCAA-88 NWPAA-88 CPDRAA-88 NMSPAA-888 FCRPA MMPAA-88 ODBA SFA FWLA-88 ICPBD EDP OPA RECA CAA-90 CCRA CLFWRA HMTUSA NEEA PPA PPVA IEREA ANTPA GLCPA ASA CZMAA-90 WRDA FFCA CERFA CRAA-92 150 SDWAA-86 SARA-86 AOA BLRA ERDDAA EAWA NOPPA PTSA UMTRCA ESAA-78 QCA NCPA RCRAA-84 WLDI MPRSAA-82 NAWCA NWPA ESAA-82 WQA No. of Laws 100 NEPA EQIA CAA EPA OSHA FAWRAA-70 APA SWDA CERCLA CZMIA COWLDA FWLCA MPRSAA-80 ANISCA CAAA-77 CWA SMCRA SWRCA SDWAA-77 LLA-81 ARPA TOSCA FLPMA RCRA NFMA CZMAA-76 HMTA WSRA EA RCHSA ESA TAPA BLBA FWPCA MPRSA CZMA NCA FEPCA FWSA MMPA NHPA PFW FOIA 50 FCMHSA ESCA FHSA NFMUA FWCAA-58 AQA AEA TA FWCA BPA FWA FIFRA WRPA AFCA AEPA WLDA MBTA MBCA PAA NPS OPA FAWRA CAA-55 WA NBRA AA VA RHA NLR A WPA SCS WPCA YOS RTC FEATH IA 0 LA 1862 1872 1882 1892 1902 1912 1922 1932 1942 1952 1962 1972 1982 1992 2001

  6. US Utility Industry Capacity Additions – 1970s

  7. US Utility Industry Capacity Additions – 1980s

  8. US Utility Industry Capacity Additions – 1990s

  9. US Utility Industry Capacity Additions – 2000s

  10. Some Elements of a Sound Energy Strategy • More fuel efficient automobiles to reduce oil imports • Plug-in hybrid electric vehicles • Energy efficiency and demand reduction • Increase fuel diversity of electric generation • Fully develop all cost effective applications of renewable generation • Nuclear

  11. Planning to Ensure a Reliable and Economic Electric Supply • Uncertainties include • Long term fuel costs and availability • Long term environmental requirements • Customer response to Demand Side Management (DSM) programs • Long lead times for new resources • Typically 3 to 10 years • Resources typically last 30 to 60 years • Robust, comprehensive planning process • Integrated Resource Planning (IRP) • Frequent validation and updates, as needed

  12. Strategic Options for Meeting Generation Needs • Supply Decisions • Pulverized coal • Natural gas combined cycle • Integrated gasification combined cycle • Nuclear • Renewable energy • Demand Side Management

  13. Georgia Power Anticipated Plan for the Next Decade • 12-20% renewable and DSM • Plant Mitchell conversion to biomass • One of largest wood biomass plants in US • Solar research project • 2011 possible expansion • Limited potential • 69-76% natural gas capacity (50% add’l gas energy generation) • Price and volatility • 12% nuclear • First U.S. nuclear planned in 30 years

  14. Georgia Power Supply Capability by Fuel Type † Includes generics & PPAs

  15. Contracts with Renewable Generators • May invest more than $1 billion on capacity and energy from renewable generation developers over next 10 years if all projects proceed

  16. Nuclear Power Cost-Effective when Compared to Alternatives: • Significant lifetime savings • $2 - $6.5 billion when compared to pulverized coal • $1 - $6.5 billion when compared to natural gas combined cycle • Reduces exposure to high natural gas prices and future costs of potential carbon legislation • Natural gas prices rose 400 percent between Jan 31, 2002 and Jun 30, 2008 • Future costs of potential carbon legislation could be significant for coal • Natural gas generation more sensitive to fuel price fluctuations • 60 to 80 percent of cost per kWh from natural gas plant is fuel • About 10 percent of nuclear generation cost is fuel

  17. Base Load Generating Capacity Needed: • Georgia Power’s last base load plant was added in 1989 • Natural gas capacity increased from 7 percent to 37 percent since 1989 • New coal power plants less attractive • Increased environmental requirements • Coal fuel has more than doubled in a year • Cost of potential carbon legislation could be significant.

  18. Demand Side Management (DSM) will Play a Key Role but Cannot Displace all Generation Need • Within 10 years, Georgia Power will have 1,900–2,200 MWs DSM • DSM will play a key role, but not cost effective to achieve DSM maximum potential of 3,000 megawatts • DSM is less reliable • Energy efficiency programs do not provide constant load reductions in all hours of year • Base load generation typically operates 24 hours per day, 7 days per week, throughout entire year

  19. Summary • Planning to ensure an economic and reliable supply of electricity • Georgia Power pursuing diverse and economic portfolio of new generation resources • nuclear • renewables and usage reduction • natural gas

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