# Presentation: 462039

## Northwest Power Planning Council
Pacific Northwest Power Supply
Adequacy/Reliability Study
February, 2000

- Northwest Power Planning Council
- Pacific Northwest Power Supply
- Adequacy/Reliability Study
- February, 2000

*Keep the Lights On...**Does the Pacific Northwest have a Power Supply Adequacy Problem?*

## Background

- Study requested by BPA Administrator Johansen
- Growth, lack of new resource development in recent years, implications for adequacy of power supply
- Questions:
- Is there a problem?
- If so, what are the characteristics -- energy, capacity, magnitudes and probabilities?
- Will restructured industry maintain/build enough resources to address problem?
- If not, what are the options?

## What do we mean “Adequacy”?

**RELIABILITY**

**ADEQUACY**: Ability of
- system to supply power and
- energy requirements

**SECURITY**: Ability of
- system to withstand sudden
- disturbances -- spinning,
- standby reserves

- Scenario:  A couple of dry years, reservoir levels a little low, a “Siberian Express”  forecast for the next couple of days, Plant X down for repairs.  Can system operators obtain enough resources to serve load and maintain security with high enough probability?  If not, there’s not an adequate power supply.

## Key findings - 1

- There is a problem -- over next few years without new resources, probability of being unable to serve loads *at some level* during winter is 24 percent
- Problems could be energy and/or capacity; big or little
- New resources means some combination of new generation and/or ***reliable**** *voluntary economic load reduction
- To achieve a 5 percent probability in  2003 would require almost 3000 MW new generating capacity

## GENESYS NW Structure

## Illustrative Sub-daily Operation January, 2003

## Hourly Unserved Demand Duration CurveFebruary, 2003 (No New Resources)

## Illustration of Loss of Load Probability

*Illustration of Loss of Load Probability*

-   Simulated 1,080,000 hours across Winter, 2003
-    (Dec 2002 - Feb 2003)
-   ~1300 had some level of unserved demand

-   Out of 500 winters, 120 had at least one problem of some     size

-  Loss of Load Probability (LOLP) = 120/500 = 24 percent

## Loss of Load Probability Winter, 2003

## GENESYS Backcast for February, 1989

**Notes:**
Hourly PNW Region demands from NW Power Pool
Reservoir contents set to Jan 31, 1989 levels
1989 Resources from 1989 PNUCC NRF
Actual thermal forced outages for first week
DC Intertie down from Feb 4 through Feb 18

## Feb 89 Conditions, Projected to 2001

**Notes:**
Actual Feb 89 hourly demand, scaled to 2001with a growth rate of 1.36 percent
Reservoir contents reset to end of January, 1989levels
Same thermal forced outage events
DC stays up

## Feb 89 Conditions, Projected to 2001, 88-89 Flows, Current River Operations

## Key findings - 2

- We rely heavily on imports to meet loads and help restore system when flexibility is used
- Takes advantage of the seasonal diversity in the West Coast power system
- Does mean that at times we are heavily dependent on a relatively few wires
- We have not incorporated effect of unplanned transmission outages

## Key Finding - 3

- Significant use of hydro flexibility required
- Use of NW Hydro at rate that could cause draft below non-power constraints
- Resource of last resort -- after thermal, imports, non-treaty storage, provisional draft
- Energy replaced as soon as possible
- Can affect reservoir levels and flows in drier years

## Key findings - 4

- Estimates of market-driven new generation development very difficult.  With that caveat:
- Physically could not have new generation on line before 2002
- Analysis suggests wholesale power market won’t support sufficient new generating resources soon enough for reliability
- May not be capturing full effects of high prices during periods of tight supply; ancillary services market; project/developer specific factors
- “Subsidize” some resources to be available for reliability events?

## Proposed Power Plants

## Simulating the WSCC electricity market using AURORA

**15 load - resource areas**
** ****transmission interconnections**
** ****individual generating units (>2000)**
** ****load forecast**
** ****fuel price forecast**
** ****portfolio of new resource options**
**Hourly market clearing prices**
** ****by area and trading hub**
** ****most expensive resource required to meet  load for that hour**
**Resource retirements**
** ****uneconomic going forward costs**
**Resource additions**
** ****positive net present value**

## Pacific Northwest Market Driven Resource Development 

## Caveats Re Assessment of Generation Development

- Forecast market prices and resource development patterns are sensitive to:
- Assumptions regarding cost and quantity of voluntary load curtailment.
- Water conditions (used average water conditions over 50 year water record)
- Fuel price forecasts
- Difficult to fully capture developer and project-specific factors.
- Forecast prices and development patterns appear to be fairly robust across other variables.

## Why is there a problem?

- Depending on who you ask -- it’s either too much deregulation or not enough
- Developers not assured of cost recovery for infrequently used capacity
- Generation market works -- but with a lag -- prices have to be high enough, long enough
- Limited demand response -- most end-users do not see market prices
- Uncertainty -- still not clear what the rules will be

## Options

- Stand back and let the market develop?
- The market will evolve solutions -- but it’s likely to be messy
- Jump-start the response?
- Public tolerant of interruptions attributed to “acts of God”
- May be less tolerant if attributed to institutional failure
- Potential backlash that might slow or reverse trend to more competitive and efficient power system

## Involving the End-User

- Generation lead times such that we have to look at end-user
- Real time pricing
- Reduce demand during periods of high prices
- How much, how long, how reliable?
- Demand management, e.g. water heater controls
- Economic rather than thermodynamic efficiency
- Implemented by aggregator
- Technology likely to expand opportunities in near future
- Capital investment, time to deploy

## End-User (continued)

- Load reduction
- Interruptible contracts
- Implemented by aggregator/end user
- Needs to be REALLY interruptible
- Need for procedures, technology to be in place
- Market for load reduction
- End users bid in load reduction for a price
- Needs someone to form market
- Distributed generation

## Bottom Line

*Bottom Line*

- To keep the lights on, Northwest needs
-      to address how it can:
- Support new generation development for reliability
-                            AND/OR
- Find ways for end-users to provide reliable,voluntary economic load reduction
- Can be counted on when called for
- Makes economic sense for the end-user and
-     the System

## Slide 25