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Electricity Supply & Reliability 2000 to 2003 Daniel Nix Energy Information and Analysis Division California Energy Commission October 17, 2000. Situation Today and Forecast 2001-2003 Problems: Reliability and Prices Contributing Factors Actions Underway Lessons for Restructuring.
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Electricity Supply & Reliability 2000 to 2003Daniel NixEnergy Information and Analysis DivisionCalifornia Energy CommissionOctober 17, 2000
Situation Today and Forecast 2001-2003 Problems: Reliability and Prices Contributing Factors Actions Underway Lessons for Restructuring Presentation Overview
CAL ISO Load/Resource Balance with 7% Operating Reserve at Coincident Peak 1 in 40 Year Peak Demand 1 in 5 Year Peak Demand 1 in 2 Year Peak Demand Existing generation excludes 2,500 MW for outages
Good news The West had no systemwide black-outs Bad news CA ISO had 32 Stage I alerts (<7% reserves) CA ISO had 17 Stage II alerts (<5% reserves) Shed firm load in San Francisco on June 14 High levels of system disturbance in West Reliability - Summer of 2000
Electricity costs for CA ISO customers 4/98 to 3/99 $ 6.7 billion 4/99 to 3/00 $ 8.1 billion 4/00 to 8/00 $12.1 billion This August, electricity cost $4.1 billion, 4 1/2 times what it cost the previous August. Wholesale Dollars at Stake
Monthly Average PX Market Clearing Price 180 160 140 Actual 1999 120 Actual 2000 100 Forecasted $/MWh 80 2001 60 40 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Energy Price vs. Demand August 1--September 19, 2000 Price is represented by PX unconstrained MCP 600 Price cap effective Aug. 1--6 500 400 $/MWh 300 Price cap effective after Aug. 6 200 100 0 15000 20000 25000 30000 35000 40000 45000 ISO Load in MW
A Country in Transition Percentage changes in population from April 1, 1990 through July 1, 1999 Fastest-growing states Slowest-growing/shrinking states MAINE +2.0% WASH. +18.3% N.D. -0.8% MASS. ORE. W. VA. +2.6% +16.7% +0.7% N.Y. IDAHO +1.1% +24.3% R.I. -1.3% PA IOWA +0.9% NEV. +3.3% CONN. +50.6% UTAH -0.2% COLO. +23.6% +23.1% ARIZ. +30.4% GEORGIA TEXAS +20.2% +18.0% FLORIDA +16.8%
ELECTRICITY SOURCES Twenty five percent of the state’s electricity comes from out-of-state generation
Daily Peak Loads California ISO Control Area January 1999 - July 2000 50,000 July 12, 1999 45,574 MW June 14, 2000 45,000 43,447 MW 40,000 MW 35,000 30,000 25,000 20,000 01/01/1999 02/01/1999 03/01/1999 04/01/1999 05/01/1999 06/01/1999 07/01/1999 08/01/1999 09/01/1999 10/01/1999 11/01/1999 12/01/1999 01/01/2000 02/01/2000 03/01/2000 04/01/2000 05/01/2000 06/01/2000 07/01/2000
Statewide Monthly Average Cost of Natural Gas for Electric Generation in California 2000 - 2002 6.50 5.50 2000 4.50 2001 3.50 2000 $/MMBtu 2002 2.50 1.50 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Are New Plants Economic? - New combined cycle need to receive about $80/kW - $100/kW/ year to cover total annual revenue requirements. - New generators would have lost money in 1998. - In 1999, a new efficient combined cycle might have covered its cost in Northern California’s energy market. It would have lost money in Southern California. - By September 1, 2000, a new generator would have already recovered two to three times its total annual revenue requirements.
In California 2001 - 2,000+ MW 2002 - 1,700 MW 2003 - 6,530 MW CA is 35% of WSCC’s load In the rest of the West 2001 - 4,500 MW 2002 - 2,400 MW 2003 - 6,900 MW Generation being built(estimated on-line dates, nameplate capacity)
What Actions Are Needed? • Enable electricity users to respond • To prices if they choose to do so • To sell their load for compensation • Encourage voluntary load reduction • Educate about the value of energy efficiency • Search for existing, but underused supplies • Work towards a regional solution
Energy Commission’sResponse to Supply Adequacy • Commission is: • processing record number of siting cases • proposing streamlined siting process laws and regulations • analyzing situation and informing market participants about options • making recommendations to CPUC and ISO • monitoring situation and identifying contingency plans • working towards a regional solution • encouraging mid-term contributions of energy efficiency, renewables and R & D
Reduce Demand for Electricity During Peak Periods Interruptible-Curtailable Program Public Utilities Commission reconsidering opt-out provision; considering replacement program Efficiency Program The Energy Commission and the Public Utilities Commission have been funded to sponsor at least 250 MW of new savings for next summer. Demand Bidding/Load Participation The ISO is revamping programs for Summer 2001.