1. Input Development for SPSG Scenarios
November 13, 2014
Arne Olson, Partner
Nick Schlag, Sr. Consultant

2. Topics for Discussion Carbon capture & sequestration technologies
Enhanced geothermal
Load modifications

3. IGCC with CCS

4. Cost Reductions – IGCC w/ CCS
Reference Case cost: $8,200/kW
Consistent with expected cost of Kemper County plant
Does not reflect significant technological progress/learning
As in prior study cycle, E3 recommends using the Reference assumptions in all scenarios except Scenario 2
Scenario 2 narrative allows for a breakthrough in CCS technology
IGCC w/ CCS Capital Cost by Scenario ($/kW)
Technology breakthrough
$8,200
$4,800
$8,200
No change from Reference Case
$8,200
$8,200

5. Cost Reduction Recommendations from 2032
In 2012, E3 chose a 40% reduction for IGCC with CCS technology to represent a “breakthrough” based on the lowest available cost estimates for the technology
This level of cost reduction would also render IGCC w/ CCS technology competitive with traditional gas CCGT in a high carbon price future ($100/ton)
Origin of E3’s Original Recommendation
Slide from E3 presentation to MDTF, October 2, 2012

6. Pre- vs. Post-Combustion CCS
Availability of cost estimates for both technologies are limited:
Kemper: $5.6 billion for 580 MW unit ($9,600/kW)
Boundary Dam: $1.24 billion for 110 MW unit ($11,200/kW)
WA Parish: $1 billion for 250 MW unit ($4,000/kW)
Other public sources do not suggest substantial differences between current costs for pre- and post-combustion CCS:
Source
PC w/ CCS
IGCC w/ CCS
Pacificorp IRP
$5,611
$5,434
$6355
$6,152
Lazard
$8,568
$7,650
EIA
$6,821
$8,612
NETL
$5,160
$4,819
All costs have been adjusted to reflect AFUDC costs and are expressed in 2014 $

7. Enhanced Geothermal

8. Enhanced Geothermal Costs
Cost estimates for enhanced geothermal systems vary widely and are highly site-specific:
“NREL Base Case” costs reflect EGS systems and are obtained from Updated US Geothermal Supply Characterization and Representation for Market Penetration Model Input (Oct 2011)

9. Enhanced Geothermal Costs
Based on NREL study, a 30% capital cost reduction in EGS technology is plausible
Cost reduction could be applied to EGS technologies in Scenarios 2 & 4

10. Load Forecasts

11. Components of Load Forecast
Three independent parameters may drive differences in load between scenarios:
How much to increment/decrement Reference Case load forecasts to capture impacts of differences in economic conditions on underlying load growth?
How much incremental energy efficiency (beyond that embedded in Reference Case) to include?
How much policy-driven electrification load to include?
Assumptions used in 2032 scenarios provide a useful starting point for a framework to develop updates
GOAL: Review assumptions used in 2032 load forecasts to inform development of 2034 load forecasts

12. Changes in Underlying Load Growth (2032 Study)
In 2032 study, WECC-wide growth rates were adjusted by ±0.4%/yr between to reflect differences in underlying economic growth:
Scenarios 1 & 2: +0.4%
Scenarios 3 & 4: -0.4%
WECC-Wide CAGR Assumptions,
1.9%
1.9%
1.5%
1.1%
1.1%
Slide summarizes assumptions from 2032 study

13. Changes in Incremental Energy Efficiency (2032 Study)
LBNL’s 2032 High DSM load forecast served as the basis for assumptions related to incremental energy efficiency
Assumes average efficiency of residential/ commercial end uses in 2032 equals that of today’s best available technology
Savings reflected in the High DSM forecast scaled to reflect scenario narratives:
Scenarios 1 & 3: no additional EE
Scenario 2: very aggressive EE
Scenario 4: moderate incremental EE
WECC-Wide Incremental Efficency
(2032 Study)
100% of LBNL 2032 High DSM forecast savings
(~21% load reduction)
n/a
n/a
50% of LBNL 2032 High DSM forecast savings
(~11% load reduction)
n/a
Slide summarizes assumptions from 2032 study

14. Changes in Electrification (2032 Study)
Additional load in Scenario 2 driven by electrification of end uses across all sectors, motivated by trend towards deep decarbonization pathways
Additional load in Scenario 4 assumed to result from growing penetrations of plug-in electric vehicles
WECC-Wide Electrification Load
(2032 Study)
+160 TWh
(~13% load increase)
n/a
n/a
+50 TWh
(~5% load increase )
n/a
Slide summarizes assumptions from 2032 study

15. 2032 Load Forecast – Building Blocks
Scenario-specific load adjustments yield a range of load assumptions for studies:
Implied growth rates vary from 0.62%/yr (Scenario 4) to 1.75%/yr (Scenario 2)
Slide summarizes assumptions from 2032 study

16. 2032 Load Forecast - Results
Load levels vary widely across scenarios:
Slide summarizes assumptions from 2032 study

17. Thank You!
Energy and Environmental Economics, Inc. (E3) Montgomery Street, Suite San Francisco, CA Tel Web

18. Scenario 2 Electrification: Review of Long-Term GHG Reduction Studies
Assume incremental electrification increases (post-DSM) demand by 20% in 2032 due to electrification across all sectors
Studies demonstrate what would be needed to achieve long-term GHG reductions (rather than a forecast of what’s likely given current policies & trends):
U.K. Department of Energy and Climate Change, “2050 Pathways Analysis,” July 2010.
California Council on Science and Technology, “California’s Energy Future: The View to 2050,” May 2011.
Williams, et al. “The Technology Path to Deep Greenhouse Gas Emissions Cuts by 2050: The Pivotal Role of Electricity,” Science (2012) (written by E3 colleagues and LBNL staff).
Comparison of electrification as a share of that year’s total electricity demand

19. Scenario 4 Electrification : National Academies Press Study Scaled to the WECC
Nat’l Academies Study = 11.4 million light-duty vehicles (LDVs) by 2032 in WECC
17% of fleet
Equal to ~ 46 TWh of incremental electricity load in WECC in 2032 assuming fully-electric vehicles use ~4,000 kWh/yr
National Academies Press report, “Transitions to Alternative Transportation Technologies – Plug-in Hybrid Electric Vehicles,” (PHEVs), (2012).