Summary—Scenario One: Focus on Economic Recovery
Basic Description:
Wide-spread Economic Growth in WECC Region with Increasing Standards of
Living and Evolutionary Changes in Electric Supply and Distribution Technology
Policy Theme:
No overriding policy theme; focus on growth
Summary:
This is a world in which an initially slow uptick out of recession is followed by rising economic
growth in the WECC region. Happening in concert with a steady pace of incremental rather than
breakthrough technology improvements in the power sector this growth supports the emergence
of the next generation power system for the region—one which is more efficient, flexible,
responsive to customers, and takes full advantage of a spreading smart grid. After a period of
international financial instability, the U.S. economy with more growth is back on a more solid
fiscal foundation with the restructuring of the national debt leading to the implementation of new
tax and fiscal policies. The U.S., with its growing population, entrepreneurial culture, and ability
to develop advanced technologies, helps to bring the global economy back into balance.
A steadily improving economy drives increasing electricity demands from consumers and
expanding businesses and industries—both large and small. In the early years, natural gas
meets this demand as increasing supplies keeps domestic prices low. As the last decade
unfolds however, there is a major shift towards renewables driven by a robust regional electricity
market facilitating the integration of renewables, and increasing environmental concerns about
land and water use and air quality. Continued concern about climate change leads to efforts to
reduce CO2 emissions and culminates in a federal energy policy, which includes a national
carbon tax. These changes contribute to economic growth as they trigger innovation, revitalize
markets and drive new investment.
Even without game-changing breakthroughs, the energy sector is a primary beneficiary of the
prowess of the U.S. in both technology development and entrepreneurial vigor and provides a
solid basis for overall economic growth for the nation. The WECC region, home to some of the
nation’s best educational and financial management institutions, leads the long-term positive
evolution of the nation’s economy.
Page 1 of 5
March, 2013
Scenario One Summary
Key Scenario Metrics in 2032:
Natural Gas Price
$10.00
Cost of Carbon
2032 Reference Case value: $37.11
Policy Adjusted Peak Load Growth Rate1
1.9% (2032 Ref Case = 1.5%)
Policy Adjusted Demand Growth Rate2
1.6% (2032 Ref Case = 1.2%)
Scenario One - Overview by Key Driver
Key Driver
Scenario Summary
The evolution of electricity
demand in WECC region
The economy begins a slow but steady recovery, and
coupled with continued population growth drives a return to
electricity demand growth. High fuel prices drive incremental
electric vehicle adoption.
The evolution of electricity
supply in the WECC region
Renewables struggle to grow in early years, but new
investment and coal plant retirements trigger a resurgence of
development, renewable generation takes off in last decade
with increased deployment of on-site generation and storage.
Innovation in electricity
supply technology &
distribution systems
Slow and incremental technology innovation in the sector is
mirrored in new generation development and operational and
communications improvements. Renewables innovations pick
up in the later years. Increased technology innovation in gasfired turbines continues to drive natural gas for new
generation.
The course of regional
economic growth in the
WECC region
Growth in the early years remains slow, and leads the WECC
states and provinces to enact legislation to support economic
development. The economy picks up in the middle years,
followed by growth in the later years.
Changes in the regulation of
electric power systems in
the WECC region
States and provinces continue to drive energy policy in early
years. The WECC region begins to manage the power
industry with better optimization of generation and
transmission across the Western Interconnection.
Changes in federal
regulation affecting electric
power industry
The U.S. and Canada establish federal national energy
policies to drive toward energy independence. A national
energy policy is enacted, including a carbon tax.
1
2
Adjusted for known electrification, DSM and energy efficiency policies included in the modeling results
Adjusted for known electrification, DSM and energy efficiency policies included in the modeling results
Page 2 of 5
Scenario One Summary
Key Driver
Scenario Summary
Changes in social values
related to energy issues
Consumer demand for customer-centric energy
independence drives demands for energy-efficiency
products, onsite generation and storage, etc. The public and
investors begin to implement local community grids with
clean generation.
Changes in society’s
preferences for
environmental & natural
resources
Impacts of natural gas extraction cause states to look at
increasing RPS standards. Centrist policies support
reasonable energy infrastructure development leaning more
towards renewables in the later years.
Shifts in national & global
financial markets
Stabilization of financial markets following changes in deficit
spending in the U.S. and other nations. Global financial
markets return to normal credit patterns.
Shifts in the availability &
prices of commodity fuels
used in the electricity sector
Natural gas remains a clear choice for new dispatchable and
replacement of coal fired generation in the early years.
Page 3 of 5
Scenario One Summary
Scenario One – Overview of Modeling Parameters
Units
2032
Reference
Value
Scenario 1
Natural Gas
$/MMBtu
$6.58
$10.00
Coal
$/MMBtu
$1.62
$1.62
$/ton
$37.11
$37.11
Geothermal
% below
2012 cost
0%
0%
IGCC w/ CCS
% below
2012 cost
0%
0%
Solar PV
% below
2012 cost
31%
31%
Solar Thermal
% below
2012 cost
25%
25%
Wind
% below
2012 cost
8%
0%
Load
GWh
1,163,526
1,210,159
Policy-Driven Load Reductions
GWh
0
0
Policy-Driven Electrification
GWh
0
0
WECC Net Energy for Load
GWh
1,163,526
1,210,159
Implied Growth Rate, Unadjusted
Load
%/yr
1.5%
1.9%
Implied Growth Rate, Adjusted Load
%/yr
1.5%
1.9%
Input Parameters
Fuel & Carbon Costs
Carbon
Capital Cost Reductions
Net Energy for Load
Page 4 of 5
Scenario One Summary
Units
2032
Reference
Value
Scenario 1
Load
MW
198,715
206,685
Policy-Driven Load Reductions
MW
-4952
-4,952
Policy-Driven Electrification
MW
0
0
WECC Coincident Peak
MW
193,763
201,733
Implied Growth Rate, Unadjusted
Load
%/yr
1.4%
1.8%
Implied Growth Rate, Adjusted Load
%/yr
1.2%
1.6%
Input Parameters
Coincident Peak Demand
LOAD NUMBERS SHOWN ARE DRAFT AND NEED TO BE REVIEWED ONCE INPUTS
ARE FINALIZED
Renewable Goals
State RPS
% of Load
Energy
Current state
policies
Current state
policies
Federal RPS
% of Load
Energy
none
none
In-state RPS Requirement
% of RPS
requirement
Page 5 of 5
Current in-state
preferences
applied to RPS
requirements
Current in-state
preferences
applied to RPS
requirements