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Chris Greacen Vientiane, Lao 5 March 2013

Integrated Resource Planning (IRP) -- a tool for Lao power sector planning? Lessons from the USA Pacific Northwest. Chris Greacen Vientiane, Lao 5 March 2013. Lao. Outline. A brief history of the power sector in Pacific Northwest of USA Integrated Resource Planning (IRP) What is it?

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Chris Greacen Vientiane, Lao 5 March 2013

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  1. Integrated Resource Planning (IRP) -- a tool for Lao power sector planning? Lessons from the USA Pacific Northwest Chris Greacen Vientiane, Lao 5 March 2013

  2. Lao

  3. Outline • A brief history of the power sector in Pacific Northwest of USA • Integrated Resource Planning (IRP) • What is it? • What steps are involved? • Example: IRP and energy efficiency in the Pacific Northwest

  4. A Brief POWER SECTOR HISTORY of thePACIFIC NORTHWEST usa

  5. Columbia River salmon catch

  6. History of Integrated Resource Planning • Pre-1980, utilities used “straight-line” load forecasts (a ruler) to make resource decisions

  7. Straight-line demand forecasting led to huge financial commitments to very large power plants

  8. IRP History-con’t. • Utilities and regulators ask, “Is there a better way?” • 20 Years ago WUTC adopted rules to require investor-owned utilities to prepare a Least Cost Planning or “Integrated Resource Plan (IRP). • consider demand elasticity • consider demand side resources

  9. As of 2011, 39 States Require IRP Source: Wilson & Pederson, 2011. A Brief Survey of State Integrated Resource Planning Rules and Requirements

  10. What is Integrated Resource Planning (IRP)? Simply put, IRP means meeting power sector objectives at the lowest cost. • Consider a range of different options • Include all costs (generation, transmission, social & environmental costs) • Chose option the provides best benefit at lowest cost/risk profile

  11. Objectives Defined IRP Flowchart ITERATION Data collection, systems analysis Demand forecast scenarios (by end use) Meeting electricity requirement: options T&D IMPROVEMENTS END-USE EFFICIENCY IMPROVEMENTS GENERATIONPLANTS UNIT COSTS OF ALTERNATIVES ($ / kWh) GWh YEAR B A C LEAST COST MIX $/kWh GWh Strategies Periodic Monitoring Source: D’Sa, A. (2005). "Integrated resource planning (IRP) and power sector reform in developing countries." Energy Policy 33(10): 1271-1285. Implementation

  12. Source: Puget Sound Energy

  13. “Full Featured” IRP status • the state IRP process is required by law • the process is subject to public review; • regulators require integration of construction permit and utility ratemaking processes with the IRP process

  14. Example: IRP and energy efficiency in the Pacific Northwest • IRP objective: minimize cost to meet growing electricity demand

  15. 2006 Resource Mix WA State Office of Trade & Economic Development http://www.energy.cted.wa.gov/FuelMixDisclosure.htm

  16. Variation in Hydro Generation

  17. Cost comparison for different resource options in Pacific Northwest, USA Source: Northwest Power and Conservation Council, 5th Plan.

  18. T-5 Insulate roofs to keep cool in

  19. Source: The 5th NW Electric Power and ConservationPlan Supply options in NW USA

  20. Source: The 5th NW Electric Power and ConservationPlan Supply options in NW USA

  21. Pacific NW: meeting growing demand through mainly investments in RE and EE Source: Northwest Power and Conservation Council

  22. Source: Charles, Gillian and Tom Eckman. 2010. Regional Conservation Progress Report – Results from 2010. Regional Technical Forum. http://www.nwcouncil.org/energy/rtf/consreport/2010/Default.asp

  23. Cost of new conservation less than $0.02/kWh Source: Charles, Gillian and Tom Eckman. 2010. Regional Conservation Progress Report – Results from 2010. Regional Technical Forum. http://www.nwcouncil.org/energy/rtf/consreport/2010/Default.asp

  24. Lessons Learned – Power System Planning • Energy Efficiency Reduces System Cost and Risk • Efficiency Resources Are A Low Cost (avg. 2.4 cents/kWh) Hedge Against Market Price Spikes • They’re Not Subject to Fuel Price Risk • They’re Not Subject to Carbon Control Risk • They Can Be Significant Enough In Size to delay “build decisions” on more expensive and higher risk generation • It takes REAL MONEY, DATA and ANALYSIS to properly size efficiency resources • Northwest invested about $14 per capita in 2005 acquiring efficiency, several other US states are spending more

  25. For more information Chris Greacen Palang Thai chris@palangthai.org www.palangthai.org

  26. Laos: Candidate IRP questions • What is quickest and/or most cost-effective way to provide basic electrical services to the people without electricity? • What is the most cost-effective way to meet current and growing needs for electricity in the country (industrial, commercial, residential)? • What is Laos’ optimum strategy for power export?

  27. IRP-inspired group activity • Three tables • Rural electrification • Meeting domestic demand • Power export • ?

  28. At each table… • Situation in a few sentences • Resources (demand and supply side) and costs • Scenarios • Indicators for monitoring whether objectives are being met

  29. Thank you! Chris Greacen Palang Thai chris@palangthai.org www.palangthai.org

  30. IRP “Efficient Frontier” From the Northwest Power and Conservation Council – Fifth Power Plan, May 2005

  31. Lao power system objectives

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