Integrated Transmission and Resource Assessment Summary of 2015 Planning Analyses System Adequacy Planning Department January, 2016 155 North 400 West, Suite 200 Salt Lake City, Utah 84103-1114 2015 Integrated Transmission and Resource Assessment 1 Table of Contents 1. Introduction .......................................................................................................... 1 2. Context ................................................................................................................. 3 2.1 2014—The Current World ............................................................................................................ 3 2.1.1. 2014 Loads ............................................................................................................................ 3 2.1.2. 2014 Generation ................................................................................................................... 4 2.1.3. 2014 Transmission ................................................................................................................ 4 2.2. 2024—The Expected Future......................................................................................................... 5 2.2.1. 2024 Loads ............................................................................................................................ 5 2.2.2. 2024 Generation ................................................................................................................... 6 2.2.3. 2024 Transmission ................................................................................................................ 8 2.3. 2034—Plausible Futures .............................................................................................................. 9 3. Analyses ...............................................................................................................11 3.1 10-Year Production Cost Model (PCM) Studies ......................................................................... 11 3.1.1 Stress Conditions................................................................................................................. 12 3.1.2 Bookends............................................................................................................................. 13 3.1.3 Policy-Driven Changes......................................................................................................... 14 3.1.4 Specific Study Cases ............................................................................................................ 14 3.1.5 Summary Observations ....................................................................................................... 24 3.2 20-Year Capital Expansion Studies ............................................................................................. 25 3.2.1 Model Enhancements ......................................................................................................... 25 3.2.2 20-Year Study Cases ............................................................................................................ 26 3.3 Cost Analyses.............................................................................................................................. 26 3.4 Regional Analyses ....................................................................................................................... 27 3.5 Base Case request of WECC ....................................................................................................... 27 3.5 Probabilistic Assessments .......................................................................................................... 28 4. Reliability Issues ...................................................................................................29 W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 4.1 2 Western Interconnection Flexibility Assessment....................................................................... 29 4.1.1 Study Implications............................................................................................................... 31 4.2 Energy-Water-Climate Change Nexus ........................................................................................ 34 4.3 Clean Power Plan........................................................................................................................ 35 4.3.1 Regional Engagement ......................................................................................................... 36 4.3.2 Internal Efforts .................................................................................................................... 36 4.4 Planning for Uncertainty ............................................................................................................ 37 4.4.1 Background ......................................................................................................................... 37 4.4.2 Study Focus ......................................................................................................................... 37 4.4.3 Methodology....................................................................................................................... 38 4.4.4 Scenarios and Deterministic vs. Probabilistic Approach to Modeling ................................ 40 4.4.5 Results and Recommendations .......................................................................................... 42 4.4.6 Implications for WECC’s Planning Activities ....................................................................... 43 4.5 Planning Tool Alignment ............................................................................................................ 43 4.6 NERC/WECC Reliability Assessments ......................................................................................... 44 4.6.1 Assessment Caveats ............................................................................................................ 53 5. Recommendations ...............................................................................................54 5.1 Priorities for Infrastructure ........................................................................................................ 54 5.2 Priorities for Policy ..................................................................................................................... 55 6. Conclusion............................................................................................................56 Appendix A: Glossary of Terms ...................................................................................57 Appendix B: Analytical Reports Completed in 2015 ....................................................62 W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 1 1. Introduction WECC’s footprint is the Western Interconnection which includes all or part of 14 Western states, two Canadian provinces and a portion of Baja California in Mexico (see below). Within that area, WECC is the entity responsible for assuring reliability and offers a unique Interconnection-wide perspective on issues that could affect the reliability of the Bulk Electric System. WECC has identified several strategic objectives, many of which directly impact transmission and resource planning including: W • Working with the Region’s leaders to provide unbiased information to inform their decisions regarding critical electric reliability issues facing the Western Interconnection; • Working in partnership with WECC’s stakeholders to help them plan, develop and operate the Bulk Electric System in accordance with industry-accepted reliability standards; • Building a shared understanding of key reliability challenges that will drive WECC’s programs; • Supporting the Region’s long-term reliability planning needs; and • Effectively integrating stakeholder expertise and ensuring transparency of WECC’s work. E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 2 Figure 1: NERC Interconnections WECC’s System Adequacy Planning (SAP) Department and the Transmission Expansion Planning Policy Committee (TEPPC) developed an analytical program for 2014-2015 designed to identify potential risks to reliability that could result from changes in loads, resources and transmission topology in the next 10-20 years, as well as to understand the impacts of evolving public policies affecting the Bulk Electric System (BES) in the Western Interconnection. WECC’s analytical program is designed to answer reliability-related questions WECC has identified, as well as to provide unbiased information to inform stakeholders about potential solutions to the many challenges facing the Western Interconnection. An important change within WECC during 2015 was its decision to reorganize its Reliability Planning and Performance Analysis (RAPA) function. One part of this reorganization was to combine the Transmission Expansion Planning and Resource Adequacy Departments into a single department known as System Adequacy Planning (SAP). As a result, the SAP department now includes additional functions not included in the former Transmission Expansion Planning Department, an enhancement reflected in the additional content included in this report. This report presents a summary of analyses completed during 2014 and 2015. It does not repeat or duplicate analytical reports published or discussed previously. Rather, it describes their context and W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 3 identifies overarching themes and recommendations based on multiple study results. This report also includes sections addressing reliability analyses completed consistent with NERC’s requirements and probabilistic analyses, two functions added to the combined SAP Department. Individual study reports and supporting documents referred to in this summary report are listed in Appendix B of the report with hyperlinks that will lead the reader to a specific report. 2. Context By definition, planning looks into the future and compares a possible future state with the present state. WECC’s SAP Department focuses on three primary planning horizons: 1-10 years into the future (for resource adequacy), 10 years into the future and 20 years into the future. The reference year for studies described in this report is 2014. In looking to the future, the key question WECC’s planning studies seeks to answer is “how might the grid in the Western Interconnection need to change in the next 10-20 years in order to reliably meet expected load with available and planned resources?” The answer to this question depends largely on understanding for each planning horizon what loads are expected to be, what resources are expected to be available to meet load and what the transmission topology will be, as well as expected regulatory mandates. 2.1 2014—The Current World Each year, WECC prepares the “State of the Interconnection” report to provide a high-level look at the general state of the Western Interconnection. Among other information, the report includes information on loads, resources and transmission in the Western Interconnection as of its publication date. The following Load, Resource and Transmission information was taken from the 2014 State of the Interconnection report. 2.1.1. 2014 Loads 2014 Load Summary Summer Peak Demand: 147,500 Mw 2013-2014 Winter Peak Demand 133,400 Mw Total Energy: 888,200 GWh The Western Interconnection has a diverse residential, commercial, industrial and agricultural load composition. From 2010 to 2014, annual energy consumption across the Interconnection increased an average of 0.98 percent (8,400 GWh) each year, while seasonal peak demand has decreased 0.04 percent (100 MW) in the summer and increased 2.33 percent (3,000 MW) in the winter each year. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 4 Large daily peak variations may occur during the shoulder periods of the year (October–November and April–May) when entities tend to schedule maintenance. The potential for large load increases should be factored into maintenance scheduling decisions. While the summer peak has remained essentially flat, the winter coincident peak has increased in each of the last four years. 2.1.2. 2014 Generation 2014 Generation Summary Nameplate Capacity: 284,300 MW Net Generation Fossil Fuels: 450,600 GWh Hydro: 216,600 GWh Wind and Solar: 63,600 GWh The Western Interconnection is comprised of a diverse mix of generation resources varying by geographic area. • The largest category of generation added in 2014 was the installation of more than 3,400 MW of new utility-scale solar generation. • Approximately 30 percent of installed wind capacity and 80 percent of installed solar capacity in the United States is located in the Western Interconnection. • The base-load nature of coal and nuclear fueled generation resources tends to keep the output from these resources relatively steady throughout the day and throughout the year. However, generation from natural gas and hydro units can vary widely during the day to respond to changes in consumer demand and output from variable generation resources, with relative proportion of these two resources varying by hydro conditions. In good hydro years when more hydro resources are available, they will be used in higher proportion to gas due to their lower cost, while gas will be used in higher proportion when less hydro is available. 2.1.3. 2014 Transmission 2014 Transmission Summary Transmission Miles (2012): WECC Paths: W E S T E R N E L E C T R I C I T Y 127,700 67 C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 5 The Western Interconnection is characterized by long transmission lines connecting remote generation to load centers. Over 127,700 circuit miles of transmission lines cross the Western Interconnection. The majority of major WECC paths are regularly operated under 75 percent of their rating. 2.2. 2024—The Expected Future The 2024 TEPPC Common Case is a collection of assumptions that are designed to depict the expected representation of the WECC Bulk Electric System in 2024. It is built from information provided by WECC’s stakeholders and is vetted thoroughly through WECC’s stakeholder process. While WECC does not predict that loads, resources and transmission topology will exactly match the 2024 Common Case, it serves as the “expected future” for planning. Individual components are described below. 2.2.1. 2024 Loads Based on the Balancing Authority (BA) load forecasts provided to WECC’s Reliability Assessment Work Group (RAWG), the peak demand in 2024 is estimated to be 27,669 MW higher than the 2014 actual peak demand (compound annual growth rate of 1.7%) and total energy is estimated to be 143,054 GWh higher than in 2014 (compound annual growth rate of 1.5%). Figure 2: Load Growth 2014 to 2024 below shows the trend from the actual peak demand in 2014 to the forecast peak demand in 2024. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 6 Figure 2: Load Growth 2014 to 2024 Peak Demand (MW) Annual Energy (GWh) 180,000 1,031,254 1,050,000 175,000 175,169 170,000 1,000,000 165,000 160,000 950,000 155,000 150,000 888,200 145,000 147,500 900,000 140,000 850,000 135,000 130,000 800,000 Trend ------------------>> 2.2.2. 2024 Generation The generation inputs for the 2024 Common Case reflect existing resources plus expected resource additions for combined cycle, combustion turbine, and renewable generation between 2014 and 2024. Conversely, plans to retire (or convert the fuel) for several coal-fired and oil-gas steam generators are also represented. The total net capacity1 changes for the referenced resource types are shown in Figure 2, with a net capacity change of 17,893 MW (excluding the Distributed Generation/Demand Response/Energy Efficiency (DG/DR/EE) load modifiers). The decrease in Steam-Other reflects the mandatory retirements of Once-Through-Cooling units along the coast of California. Figure 3: Key Resource Net Capacity Change (MW) between 1/1/2014 and 1/1/2024 shows total net generation capacity in 2024. 1 The reported capacities represent the highest “available to the grid” capacities over the study year. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 7 Figure 3: Key Resource Net Capacity Change (MW) between 1/1/2014 and 1/1/2024 Conventional Hydro Energy Storage Steam - Coal Steam - Other Nuclear Combined Cycle Combustion Turbine IC Other DG/DR/EE - Incremental Biomass RPS Geothermal Small Hydro RPS Solar Wind -15,000 W E S T E R N E -10,000 -5,000 L E C T R I C I T Y C 0 5,000 O O R D I N A T I N G 10,000 C 15,000 O U N C I L 2015 Integrated Transmission and Resource Assessment 8 Figure 4: Net Generation Capacity in 2024 Net Generation Capacity - 2024 (MW) Combustion Turbine 12.3% Combined Cycle 22.7% IC 0.4% Other 0.5% DG/DR/EE Incremental 4.6% Biomass RPS 1.0% Geothermal 1.4% Nuclear 2.6% Small Hydro RPS 0.4% Steam - Other 1.1% Solar 5.5% Steam - Coal 11.3% Wind 10.3% Energy Storage 2.2% Conventional Hydro 23.7% 2.2.3. 2024 Transmission Expected transmission in 2024 is the summation of transmission in the current grid plus new transmission expected to be added through 2024. The transmission network was derived from the Technical Studies Subcommittee (TSS) 2023-HS1 heavy summer power flow base case and updated as described in the 2024 Common Case release notes (included as part of the 2024 Common Case package). While many potential transmission projects are underway, WECC has adopted the Common Case Transmission Assumptions (CCTA) as the proposed transmission additions that are likely to be complete in 2024. This list of transmission additions is developed and approved by the Regional Planning Coordination Group (RPCG). The 2024 Common Case Transmission Assumptions (CCTA) report is posted on the WECC web site. The future projects that were either retained from the base case or added per stakeholder review are shown below in Figure 5: 2024 Common Case Transmission Projects. Note that 12 out of the 22 projects are either complete or under construction. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 9 Figure 5: 2024 Common Case Transmission Projects 2.3. 2034—Plausible Futures During the 2010-2012 planning cycle, WECC expanded its planning activities by exploring a 20-year planning horizon. While there is significant uncertainty in a planning horizon as long as 20 years, analyses in this time frame identify strategic choices that planners must consider during that period. It would be fruitless to “predict” the state of the Western Interconnection 20 years in the future. However, by describing futures that are plausible, planners can identify strategic choices that will impact the infrastructure needed to reliably serve expected load with available resources. The 2024 Common Case describes the “most likely” future 10 years from the reference year. Due to the significant uncertainties associated with looking another 10 years into the future (20 years from the reference year), WECC has developed a “Reference Case” to provide the context for studies in the 20-year planning horizon. The 2034 Reference Case extends the assumptions used in the 2024 Common Case an additional 10 years to create a reference point for studies completed in the 20-year W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 10 planning horizon. Results of study cases completed in the 20-year planning horizon would then be compared to the 2034 Reference Case. WECC has adopted a “scenario planning” approach to provide a broad context for planning in the 20year horizon and to identify plausible futures for the Western Interconnection. From 2010 through 2012, the Scenario Planning Steering Group (SPSG) identified four plausible futures shown below in Figure 5: WECC Scenario Matrix. The matrix is defined by two primary drivers: economic growth in the Western Interconnection and technological innovation in electric supply. Figure 6: WECC Scenario Matrix Scenario 1 is a future that includes high and widespread economic growth, but only evolutionary technological development. There is no overriding policy theme, and the focus is on growth. Scenario 2 is a future that includes high and widespread economic growth and breakthrough and paradigm-changing technological developments. The policy theme is on reducing greenhouse gas emissions and on developing new technologies. Scenario 3 is a future that includes relatively low and localized economic growth combined with evolutionary technological development. Slow growth would be expected to lead to tough policy choices and keeping consumers’ rates low. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 11 Scenario 4 is a future with relatively low and localized economic growth, but with breakthrough and paradigm-changing technological developments. Policies would be expected to focus on capturing “low-hanging fruit” investments in clean energy technologies. The complete WECC Scenario Report is posted on the WECC web site. From 2013 through 2015, the SPSG expanded WECC’s future scenarios with the addition of a fifth scenario focusing on the nexus between energy, water and climate change. That scenario formed a foundation for exploring potential reliability risks that could result from an average global temperature increase of 3oF. by 2035. This initiative is described in greater detail in Section 4 of this report and the complete report of the Energy-Water-Climate Change Scenario is posted on the WECC web site. 3. Analyses 3.1 10-Year Production Cost Model (PCM) Studies The 10-year studies that were run during the study program and 2015 work plan were intended to provide insights from stress conditions, “bookends” to the range of potential study cases, and policydriven changes. The completed studies are listed in Error! Reference source not found.. Table 1:2015 WECC 10-Year Study Cases Case ID PC01 PC02 PC03 PC04 PC05 PC06 PC07 PC10 PC17 PC18 PC19 PC20 PC22 PC26 PC30 Description 2024 Common Case High Load; loads increased by 10% Low Load; loads decreased by 10% High Hydro Low Hydro High NG price Low NG price Variable carbon price Wind Uncertainty High Distributed PV – California only High Distributed PV – West-wide Coal Retirement High Renewable Replace Intermountain coal with CC, Wind, and/or Compressed Air Storage BLM Resource additions In addition, some of these study cases included “expansion cases” that explored the impacts of adding various transmission expansion projects to the study case. The results from the studies were analyzed W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 12 to find the impacts to transmission utilization, generation dispatch, variable production cost, and CO2 emissions. Many evaluations of transmission utilization involve the term “congestion.” This term is used in many different ways by different stakeholders and carries with it different meanings. These different connotations can present challenges to understanding study results, since some transmission lines are designed to operate during a high portion of the year with flows approaching their rated capacities, a condition some stakeholders might refer to as congested. WECC has chosen not to use the term “congestion” in presenting study case results. Rather, it applies the metric of “heavily utilized paths.” A path is designated as “heavily utilized” if it meets one or more of the following conditions: • Flows on the path are at or above 75% of the path rating for 50% or more of the hours in the study year (“U75 > 50%); or • Flows on the path are at or above 90% of the path rating for 20% or more of the hours in the study year (“U90 > 20%); or • Flows on the path are at or above 99% of the path rating for 5% or more of the hours in the study year (“U99 > 5%). 3.1.1 Stress Conditions Some of the studies completed in 2015 were particularly stressful to the Interconnection, due to their large increases in power flows and their potential to create conditions resulting in unserved load. The “high stress” cases in the 2015 study program included PC2 (high loads), PC5 (reduced hydroelectric generation), and PC20 (large amounts of retired coal-fired generation). A few of the key results are compared to the common case in Table 2: Key Results from Selected Study Cases Table 2: Key Results from Selected Study Cases Result PC1 – Common Case PC2 – High Load PC5 – Low Hydro PC20 – Coal Retirement 0 60 0 0 1,050,342 1,153,055 1,030,860 1,047,365 168,293 166,760 167,353 224,970 358 552 375 1,481 22,843 27,026 25,354 22,200 363 420 394 277 Unserved Load (GWh) Annual Generation (GWh) Annual Renewable generation (GWh) Dump Energy (GWh) Var. Production Cost (M$) CO2 Amount (MMetrTn) W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 13 The impact to transmission utilization is shown in Table 3: Metrics for Highly Utilized Paths. Table 3: Metrics for Highly Utilized Paths Number of Hours At or Exceeding Metrics Path and Metrics PC1 – Common Case PC2 – High Load PC5 – Low Hydro PC20 – Coal Retirement 66 22 6 527 231 131 854 353 195 11 0 0 321 204 144 1246 164 7 2984 1948 0 6103 4019 2725 1058 361 156 1183 773 564 456 171 74 1707 742 457 26 15 13 297 185 134 1985 357 24 4126 2828 0 6003 3754 40 3681 2531 1945 1064 670 502 193 73 23 306 114 58 5 1 1 258 121 84 947 71 1 4121 2764 0 6789 4798 3342 739 277 142 368 184 102 563 206 89 923 332 177 712 296 155 707 477 381 184 4 0 3010 2038 0 3359 2181 1624 1794 934 572 P01 Alberta-British Columbia 75% (E-to-W) 90% 99% P18 Montana-Idaho 75% (E-to-W) 90% 99% P26 Northern-Southern CA 75% (N-to-S) 90% 99% P31 TOT 2A 75% (N-to-S) 90% 99% P45 SDG&E-CFE 75% (N-to-S) 90% 99% P48 Northern NM 75% (NW-to-SE) 90% 99% P52 Silver Pk-Control 75% (W-to-E) 90% 99% P60 Inyo-Control 75% (E-to-W) 90% 99% P83 Montana Alberta Tie 75% (N-to-S) 90% 99% 3.1.2 Bookends Several bookend cases were run to test the impact of extreme values for some of the study cases’ more significant input variables. These cases represented extreme high and low values that might be expected for loads, hydro generation availability, gas prices and carbon prices, factors that have a significant effect on study results. Many of the impacts are predictable with the expected impacts shown in Table 4: Expected Impacts of Bookend Cases. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 14 Table 4: Expected Impacts of Bookend Cases Heaviest Path Utilization Case Expected Impacts relative to Common Case Total Variable Production CO2 Dump Cost Emissions Energy2 Proportion of Renewable Energy PC2 Low Loads PC3 High Loads PC4 High Hydro Unknown PC5 Low Hydro Unknown Unknown PC6 High NG price Unknown PC7 Low NG price Unknown PC 10 High CO2 $ Unknown PC 11 Low CO2 $ Unknown Unknown 3.1.3 Policy-Driven Changes Study cases that explored policy-driven changes in the 2015 TEPPC Study Program included studies that examined various carbon prices, various levels of distributed solar PV, coal retirements, high renewable penetrations, and studies requested by the U.S. Bureau of Land Management (BLM). All except the carbon price studies involve adding additional renewable generation. In the coal retirement study, renewable generation replaces the retired coal-fired units. 3.1.4 Specific Study Cases The following study cases are selected from the complete list of cases completed during 2015 to illustrate some of the more significant study results. 2 Energy in a Production Cost Model analysis that is selected in the economic dispatch to be delivered to load but cannot actually be delivered due to modeling constraints. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 3.1.4.1 15 PC10 – Carbon Price PC10 examined the impacts of implementing various carbon prices. The carbon prices drive the model to displace coal-fired generation with gas-fired generation due to the lower CO2 intensity of natural gas. Since California already has a carbon tax (AB32), this was modeled in the common case and the non-California carbon tax was added in the increments listed in Table 5: Application of Carbon Price in 10-Year Study Cases. Table 5: Application of Carbon Price in 10-Year Study Cases Carbon Tax ($/metric ton) Description Case WECC (nonCalifornia) California PC1 0.00 27.51 Common case with AB32 in California PC10-15 15.00 27.51 Assume that California would not lower their tax PC10-27 27.51 27.51 Apply AB32 tax WECC-wide PC10-40 40.00 40.00 WECC-wide $40 tax PC10-50 50.00 50.00 WECC-wide $50 tax PC10-60 60.00 60.00 WECC-wide $60 tax The generation impacts from the carbon taxes are presented in Figure 7: Generation Impacts of Carbon Prices. The progressive shift from coal-fired to gas-fired generation reflects the increasing cost of CO2 emissions. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 16 Figure 7: Generation Impacts of Carbon Prices A simple average of capacity factors for the two fuels also shows the effect of the increasing carbon taxes. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 17 Figure 8: Capacity Factor Impacts of Carbon Prices The imports into California decreased proportionately with the increasing carbon prices, thus reducing north-to-south flows on Paths 65 and 66. 3.1.4.2 PC19 – Distributed PV PC19 included a significant increase of distributed resources. Approximately 22,648 MW (47,487,402 MWh) of generation was distributed throughout the Western Interconnection. These generators were modeled as small scale solar PV or “rooftop solar” for individual retail customers. Distributed Generators (DG) were given a Locational Marginal Price (LMP) of $0.00/MWh, which is essentially seen as a “free” resource to the model. Because of this, the model will dispatch all available Distributed PV before dispatching other energy sources. However, the model also recognizes various constraints such as local minimum generation, branch and path rating limits and others. When the model runs into one of these constraints and cannot deliver these resources, it selects a less economic resource in its place. Because of these various constraints, we observe a large increase in dump energy, most notably in California. When compared to the 2024 Common Case, there is an increase in dump energy of 3,142,084 MWh. In association with modeling constraints and dump energy, increased path utilization in Southern California and in the northeastern portion of the Western Interconnection is observed. Further investigation into this significant increase in dump energy is warranted in future studies. Changes to the generation dispatch are shown in Figure 9: Changes to Generation Dispatch - PC19. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 18 Figure 9: Changes to Generation Dispatch - PC19 Annual Generation by Category (MWh) 2024 PC1 v1.5 2024 PC19 High DG WECC Conventional Hydro Energy Storage Steam - Coal Steam - Other Nuclear Combined Cycle Combustion Turbine IC Other DG/DR/EE - Incremental Biomass RPS Geothermal Small Hydro RPS Solar Wind 0 3.1.4.3 50,000 100,000 150,000 200,000 250,000 300,000 PC21 – Coal Retirement One of the studies completed in 2015, PC21, considered several additional coal unit retirements beyond those already modeled in the 2024 Common Case. The retired coal units were replaced by renewable generation and gas-fired units. The goal was to achieve a CO2 reduction that matches the climate model trajectory of reducing carbon emissions to 80 percent below 2005 levels by 2050. Note that this study case differs from WECC’s analysis of reliability impacts related to implementing the Clean Power Plan (CPP). In 2014, WECC published a preliminary technical report on potential impact of CPP implementation. WECC continued to follow developments related to the CPP during 2015 and worked with the Western Interconnection Regional Advisory Body (WIRAB) to validate its analytical capabilities. Section 4.3 of this report discusses these activities in greater detail. The changes to the generation dispatch resulting from PC21 are shown in Figure 10: Generation Changes in PC21 Relative to 2024 Common Case. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 19 Figure 10: Generation Changes in PC21 Relative to 2024 Common Case The CO2 emissions reduction is presented in Figure 11: CO2 Emission Reductions in PC21 Relative to 2024 Common Case, where the intersection of the blue line and the 2024 vertical line represents the goal (248 million metric tons), and the red and green markers show the emissions from the PC1 common case and the PC21 coal retirement case. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 20 Figure 11: CO2 Emission Reductions in PC21 Relative to 2024 Common Case Western Interconnection CO2 (million metric tons) 400 Goal 350 PC01 300 PC21 Goal Short 250 PC21 277 248 29 200 150 100 50 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 0 3.1.4.4 PC22 – High Renewable PC22 investigated the system changes that might necessary to accommodate significantly higher levels of renewable resource penetration across the Western Interconnection (WI), focusing on penetration levels of about 50%. The study focused on five regions within the U.S. portion of the WI, since these regions tend to have similar weather and load patterns across the region; limited internal transmission constraints; some degree of existing regional coordination; and limited reliance on other regions. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L CANADA 2015 Integrated Transmission and Resource Assessment 21 Figure 12: Regions Used for PC21 NORTHWEST BASIN ROCKY MOUNTAIN CALIFORNIA DESERT SOUTHWEST Changes to generation dispatch in PC22 are shown in Figure 13: Generation Dispatch Changes in PC22 Relative to 2024 Common Case. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 22 Figure 13: Generation Dispatch Changes in PC22 Relative to 2024 Common Case The extent of renewable resources added in PC22 caused significant impacts on path flows throughout the Western Interconnection. Ten paths were highly utilized in this study, as shown below in Figure 14: Highly Utilized Paths in PC22. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 23 Figure 14: Highly Utilized Paths in PC22 3.1.4.5 PC30 – BLM Renewable Additions As a compliment to a prior 2022 CC BLM study, refined assumptions were developed with the Bureau of Land Management to include “High Priority Renewable Energy” resources. These resources are broadly defined as solar generating facilities that have a high probability of being developed in the near term. As a starting point, NREL compiled locations and capacities with greatest real-world potential for renewable development. This resulted in the addition of nine solar generators to the 2024 Common Case to become PC30. These generators were distributed across southern California and Nevada, at approximately 2800 MW (6,570,172 MWh) of potential generation. There were no significant adverse effects noted due to the increased resource additions and there was an apparent improvement in transmission utilization. Changes to the generation dispatch are shown in Figure 15: Changes to Generation Dispatch for PC30. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 24 Figure 15: Changes to Generation Dispatch for PC30 Annual Generation by Category (MWh) 2024 PC1 v1.5 2024 PC30 BLM Study Conventional Hydro Energy Storage Steam - Coal Steam - Other Nuclear Combined Cycle Combustion Turbine IC Other DG/DR/EE - Incremental Biomass RPS Geothermal Small Hydro RPS Solar Wind 0 50,000 100,000 150,000 200,000 250,000 300,000 3.1.5 Summary Observations In looking across the results of all 10-year study cases completed in 2015, WECC notes the following observations. 1. Despite analyses of many different combinations of loads, resources and transmission expansion, there were no studies that resulted in unserved load. While this observation is not sufficient to state conclusively that none of the study cases would present reliability risks, it does provide insight into potential impacts of many of the resource and policy issues currently under discussion in the Western Interconnection. 2. Path flows in the Western Interconnection were affected in different ways by each of the study cases with highly-utilized paths changing from case-to-case. While various paths were heavily utilized in one or more study cases, it is likely that Balancing Areas (BAs) would be able to maintain reliable operations without exceeding path ratings in all of the study cases examined in 2015. 3. Study cases that involved large additions of renewable energy often included significant amounts of dump energy (energy that could not be used to serve load due to various W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 25 constraints). As a result, simply increasing renewable generation injected into the grid will not guarantee a higher renewable profile across the Western Interconnection—other accommodations may be necessary. 4. When load is increased across the Western Interconnection, the incremental load is served primarily by coal and gas resources. This is a result of WECC’s economic dispatch model—the least-cost resource is selected to meet load. The economic preference for coal and gas resources to meet incremental load would be expected to lessen as the costs of other resources decrease. 5. The price assumed for carbon makes a significant impact on resource selection due to its impact on resources’ Levelized Cost of Energy (LCOE)3. Policies that implement increased carbon prices could have significant impacts on the resource mix in the Western Interconnection. 6. Agreeing on coal resources to retire in the coal retirement study case required extensive discussions with stakeholders. And, the CO2 reduction produced by the study case fell short of the target for the interim goal identified in the EPA’s Clean Power Plan. It may be challenging to identify sufficient coal-fired units to retire if states pursue coal retirements as a primary way to comply with the Clean Power Plan. 3.2 20-Year Capital Expansion Studies The starting point for 20-year capital expansion studies is the 2034 Reference Case, which is based on the 2024 Common Case. Parameters used in the 2034 Reference Case are based on values developed for the Common Case and assumptions used for the Common Case are extended an additional 10 years. In most cases, data sources for the Common Case and the Reference Case are the same, one exception being that loads used in the Reference Case were developed using the Forecast Manager System (FMS), while load in the Common Case were based on load forecasts submitted by Balancing Areas. 3.2.1 Model Enhancements During 2015, WECC continued enhancements to the Long-Term Planning Tool (LTPT), the model used to complete capital expansion studies in the 20-year planning horizon. Enhancements in progress during 2015 include: Creating a Transmission Corridor Library to correlate corridors with transmission technology types and study cases; 3 LCOE is the per-kilowatt hour cost (in real dollars) of building and operating a power plant over an assumed financial life and duty cycle. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 26 Quantifying data driven goals and constraints to provide modeling flexibility and extensibility. Goals provide information such as amounts of flexible generation and reliability generation. Modeling constraints include information such as water availability constraints, carbon emission constraints, and fuel constraints; Co-optimizing generation and transmission expansion into a single solution across multiple load duration blocks. The co-optimization addresses probable load duration blocks for heavy and lite loads across the four seasonal periods, a loss-of-load severity measure and cost minimization; Creating a hierarchy of optimization generator re-dispatch to allow grouping of re-dispatchable units into priority tiers; and Creating a network reduction model to reduce the number of busses from about 20,000 throughout the Western Interconnection to less than 200 while still maintaining the critical functionality of the model. This reduction greatly reduces the runtime of the LTPT from days to hours, thus improving the efficiency of completing 20-year studies. While WECC was able to make significant progress in developing these enhancements, they were not all complete as of December, 2015. As a result, WECC was not able to complete the 2034 Reference Case or complete capital expansion study cases based on the Reference Case, such as the scenariobased study cases and the high coal retirement case. 3.2.2 20-Year Study Cases The 2015 TEPPC Study Program included seven 20-year study cases: one for each of the original four WECC Scenarios, and one each for the Energy-Water Climate Change Scenario, the Coal Retirement Study Case and the High Renewables Study Case. Because the 2034 Reference Case was not completed in 2015, the 20-year cases based on the 2034 Reference Case also were not completed in 2015. WECC will consider these study cases in developing the 2016 TEPPC Study Program. 3.3 Cost Analyses The role of generation and transmission capital costs is quite different in the capital expansion model (Long-Term Planning Tool) than in the Production Cost Model. The generation portfolio and transmission topology are determined exogenously in the LTPT. WECC staff, with assistance from stakeholders, develops assumptions for a 10-Year Common Case, as well as a number of change cases that alter some of these assumptions. In this context, the inclusion of resource capital costs in WECC’s studies allows for a more complete quantification of the relative costs of each change case relative to the Common Case or other base case used for reference. This information complements the changes in production costs that can be taken direction from PCM result comparisons. The role of capital costs in the 20-year studies (using the LTPT) is quite different. In this process, the Study Case Development Tool (SCDT) and the Network Expansion Tool (NXT)—together, the Long-Term W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 27 Planning Tool (LTPT)—optimize the electric sector’s expansion subject to a large number of constraints in order to minimize the cost of delivered energy in 2034. Costs are a key input to the tool as costs (more specifically levelized costs) is the decision method through which the LTPT makes generation and transmission choices. The transmission capital cost estimates calculated for the 2024 transmission expansion projects were also drawn from WECC’s capital cost tool, and are estimates based on line mileage by jurisdiction for a range of voltage options and include the cost of both right-of-way and transmission line and substation construction. The annual levelized fixed cost calculation emulates the revenue requirement calculations used in utility rate cases (e.g., recognizing investment, O&M expense, depreciation, cost of capital, capital structure) and assumes a 40-year amortization (i.e., cost recovery) period. The capital cost tool originally developed by Black and Veatch provides an estimate for substation and termination costs which can be used directly to calculate the total annualized transmission cost estimate. TEPPC uses the results from these tools to develop recommendations and observations for decision makers. 3.4 Regional Analyses In response to the FERC order 1000 planning requirements, the four Regional Planning Groups (RPGs) have initiated independent planning processes and also an “Inter-Regional Coordination” of their planning efforts. Key discussion issues in 2015 across the inter-regional coordination included: • Aligning criteria for cost-allocation of selected projects • Data-sharing protocols between project developers and planning entities • Coordination on public policy considerations across regional planning groups • Identifying data needs and relevant information from WECC’s Base Case and Common Case processes The Regional Planning Groups in each of the four 2015 TEPPC meetings have in different ways confirmed the need and relevance of using WECC’s data sets (Base Case and Common Case data sets). 3.5 Base Case request of WECC On January 30, 2015, four planning Regions (Northern Tier Transmission Group, ColumbiaGrid, the California ISO and WestConnect) collectively submitted a request to WECC asking that it include a tenyear, light load case in the 2015 Annual Study Program. The Planning Coordination Committee (PCC) and Transmission Expansion Planning Policy Committee (TEPPC) supported the request using the TEPPC “placeholder” slot in the Study Program. WestConnect agreed to take the lead on providing the case description to WECC. The base case request reflects light spring loading conditions and wind generation resources operating at 30% of nameplate ratings. WECC is currently in the process of W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 28 completing this request. The base case is also intended to represent renewable resource requirements based on currently-enacted public policy requirements, such as renewable portfolio standards. The base case will also be used in regional analyses in the next regional planning cycle set to commence in 2016, and assist the Regional Planning Groups in evaluating future high renewable penetration scenarios. 3.5 Probabilistic Assessments Probabilistic studies are ways of looking at multiple future scenarios to determine the range of possibilities that may occur due to variances from the expected scenario. These variances include, but are not limited to, events such as unplanned outages among all different types of generating resources and transmission lines, changes in technology, weather, or even forecast uncertainty, and the correlation amongst variables when one variable changes. This approach differs from the standard deterministic approach that tends to produce one scenario as a base, derived by user defined assumptions, that is then compared to another deterministic scenario when studying the impact of changing one variable. The probabilistic approach provides a range of base scenarios that can then be compared to “one-off” deterministic scenarios changing one variable at a time. This approach may provide a more comprehensive understanding of a variable change impact and how the impact changes as it is compared to different base cases. In order to consider a probabilistic planning focus, a two-step phased approach is needed: Phase 1 – Develop the distributions or “ranges” for the load forecast of each area as well as for the generation capability of each resource within the Western Interconnection. Phase 2 – Apply the distributions to all planning forecasts used within WECC’s analytical models. In 2015, WECC completed phase 1 by developing the probability distributions of the loads and resources in the Western Interconnection (WI) based on historical data. These distributions are now ready to be applied to the future planning efforts through phase 2 of the analysis which is expected to occur in 2016. This work is expected to improve the analytical work being conducted across many organizations at WECC. Applying these distributions to the base forecasts will allow for a more comprehensive look at what the impacts may be across an entire range of possibilities when an impact study is conducted. Instead of being limited to reporting the impact of a study case based on a single base forecast, WECC will be able to report impacts across a range of base forecasts that will encompass almost 100% of future possibilities. At the conclusion of phase 1, WECC had sufficient information to perform loss-of-load probability (LOLP) studies which are also based on a probabilistic approach. The distributions developed in phase 1 were applied to the Loads and Resource (L&R) forecast as provided by each of the WI Balancing Authorities (BAs) which is regarded as the WI’s “official” forecast of resources and load forecasts over W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 29 the next 10 years, and is reported to the National Electric Reliability Corporation (NERC). The load distributions were compared to the resource distributions in each area to determine the LOLP if each BA was islanded from the rest of the interconnection for each hour of the 2016 forecast. This analysis determined a bookend and highlighted the extreme LOLP with no benefit from import capabilities. Next, WECC determined the level at which each area’s Planning Reserve Margin would cross a LOLP of a 1-in-10 year level of LOLP. This allows WECC to study areas with higher reserve margins needed to maintain this threshold as vulnerability areas. The higher margins are due to more volatility with either the resources or the load which may vary across regions as well as time of the year and even day. Figure 16: LOLP as A Function of Reserve Margin below shows an example of the output from the probabilistic study for one of the balancing authorities in the Western Interconnection. The results analyze the loss of load probability associated with different levels of planning reserve margins for each quarter of the study year. Figure 16: LOLP as A Function of Reserve Margin This study will be conducted each year as new data is acquired to maintain an understanding of where the reliability challenges may be in the WI when it comes to resource adequacy. A report is currently being written to highlight the findings of this study. 4. Reliability Issues 4.1 Western Interconnection Flexibility Assessment In the context of a landscape of increasing renewable policy targets and declining renewable costs in the Western Interconnection, interest in renewable generation and understanding its impacts on system operations has surged in recent years. Regulators, utilities, and policymakers have begun to confront the question of how much “flexibility” is needed to operate a system with high penetrations of renewable generation that introduces significant new challenges for power system operators. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 30 WECC, in its role as the Regional Entity responsible for reliability in the Western Interconnection, is interested in understanding the long-term adequacy of the interconnected western grid to meet the operational challenges posed by renewable resources such as wind and solar generation across a range of plausible levels of penetration. WECC stakeholders have expressed a similar interest through study requests examining high renewable futures that implicate operational and flexibility concerns. The Western Interstate Energy Board (WIEB) is interested in understanding these issues in order to inform policymakers about the implications of potential future policies targeting higher renewable penetrations. With this motivation, WECC and WIEB collaborated to jointly sponsor the WECC Flexibility Assessment. The sponsors engaged Energy + Environmental Economics (E3) to complete the analytical work for the study and present its results to WECC, WIEB and their stakeholders. The sponsors established three goals for this effort: 1. Assess the ability of the fleet of resources in the Western Interconnection to accommodate high renewable penetrations while maintaining reliable operations. Higher penetrations of renewable generation will test the flexibility of the electric systems of the West by requiring individual power plants to operate in fundamentally new ways and changing the dynamics of wholesale power markets. This study aimed to identify the major changes in operational patterns that may occur at such high penetrations and to measure the magnitude and frequency of possible challenges that may result. 2. Investigate potential enabling strategies to facilitate renewable integration that consider both institutional and physical constraints on the Western system. Existing literature has identified a wide range of possible strategies that may facilitate the integration of high penetrations of renewables into the Western Interconnection. These strategies comprise both institutional changes—increased use of curtailment as an operational strategy and greater regional coordination in planning and operations—as well as physical changes—new investments in flexible generating resources and the development of novel demand side programs. This study examines how such strategies can solve the challenge to future increases in the penetration of renewable generation. 3. Provide lessons for future study of system flexibility on the relative importance of various considerations in planning exercises. The study of flexibility and its need at high renewable penetrations is an evolving field. This effort is designed with an explicit goal of providing useful information to modelers and technical analysts to improve analytical capabilities for further investigation. E3’s analysis explored these issues by examining in detail two study cases: the 2024 Common Case and a “High Renewables Case” (PC22). W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 31 4.1.1 Study Implications The technical findings and conclusions reached through this study have a number of implications that are relevant for regulators and policymakers seeking to enable higher penetrations of renewable generation on the system and to address the associated challenges. 1. Operating an electric system reliably at high renewable penetrations is technically feasible. In both the Common Case and the High Renewables Case, the flexibility assessment demonstrates that each region’s electric system is capable of serving loads across a diverse range of system conditions. Further, no “need” for additional flexible capacity beyond existing and planned resources is identified in either case. 2. While both the Common Case and the High Renewables Case demonstrate adequate flexibility to meet loads across all conditions, a significant challenge distinguishes the high penetration scenarios examined: the frequent curtailment of renewable resources. At relatively low penetrations, renewable generation can be integrated into the system with limited need to curtail; however, once a region’s penetration surpasses a certain threshold, curtailment begins to appear in simulations. Renewable curtailment serves as an indicator that a system that is unable to absorb all the available renewable generation and is characteristic of all of the High Renewables scenarios investigated: Figure 17: Renewable Curtailment Frequency in High Renewable Case summarizes the range of curtailment frequency across all of these scenarios. Figure 17: Renewable Curtailment Frequency in High Renewable Case 3. Ensuring that the proper signals exist to enable routine economic curtailment is a fundamental necessity to achieving high penetrations. Renewable curtailment serves as the relief valve that allows the system to operate reliably in spite of the increased demand for flexibility that W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 32 renewable generation imposes on the system. Ensuring that curtailment is available and can be used efficiently in day-to-day operations requires a number of steps: a. Market structures and scheduling processes must be organized to allow renewable participation. Within organized deregulated markets, this means ensuring that utilities can submit bids into the market on behalf of renewable generators that reflect the opportunity cost of curtailing these resources as well as ensuring that renewable plants are not excessively penalized for deviations from their schedules due to forecast errors. In environments in which vertically integrated utilities or another type of scheduling coordinator is responsible for determining system dispatch, the operator must begin to consider the role of renewable curtailment in scheduling and dispatch decisions for both renewable and conventional resources. b. Contracts between utilities and renewable facilities must be structured to allow for economic curtailment. Historically, many power purchase agreements have been set up to pay renewables for the generation that they produce and have included provisions limiting curtailment under the premise that limiting risk and ensuring an adequate revenue stream to the project are necessary to secure reasonable financing; “compensated curtailment,” under which developers are paid a Power Purchase Agreement (PPA) price both for generation that is delivered to the system as well for estimated generation that is curtailed, would be one means of achieving this goal. c. Operators must fully understand the conditions and circumstances under which renewable curtailment is necessary. In some instances—namely, in oversupply conditions—the need to curtail is relatively intuitive; however, in other instances, the important role of curtailment may not be so obvious. For example, an operator faced with a choice between keeping a specific coal unit online and curtailing renewables or decommitting that coal unit to allow additional renewable generation should make that decision with knowledge of the confidence in the net load forecast as well as an understanding of the consequences of possible forecast errors. Similarly, an operator anticipating a large upward net load ramp may decide to curtail renewable generation prospectively to spread the ramp across a longer duration if the ramp rates of conventional dispatchable units are limited. Additional work is necessary to identify such operating practices and conditions in which renewable curtailment may be necessary outside of oversupply conditions to ensure reliable service. While renewable curtailment is identified as the predominant challenge in operations at high renewable penetrations, its magnitude can be mitigated through efficient coordination of operations throughout the Western Interconnection. Today’s balkanized operations may act as an institutional barrier to efficient renewable integration; by allowing full utilization of the natural diversity of loads W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 33 and resources throughout the Western Interconnection, regional coordination offers low-hanging fruit to mitigate integration challenges. A number of studies have identified the significant operational benefits that can be achieved through balancing authority consolidation, a conclusion that is supported by the reduction in renewable curtailment at high penetrations identified in this study. In addition to pursuing institutional solutions to renewable integration, entities within the Western Interconnection should create an organized decision-making framework through which appropriate procurement and investment decisions may be made. Routine economic curtailment implies a wholesale market in which the cost of energy is zero or negative throughout significant portions of the year—in many regions, a radical change from historical patterns in which the avoided cost of thermal generation has established the short-term value of energy. It also underscores the need for an establishment of an economic framework through which investments in new flexible resources or demand-side programs can be evaluated and ultimately justified. This idea is illustrated in Figure 18: Costs of Renewable Curtailment, which shows a conceptual tradeoff between the costs of renewable curtailment with the costs of measures undertaken to avoid it. Renewable curtailment, as a default solution to renewable integration challenges, serves as an “avoided cost” of flexibility. Figure 18: Costs of Renewable Curtailment Renewable curtailment imposes a cost upon ratepayers, reflected in this study by the idea of the “replacement cost,” and, to the extent it can be reduced through investments in flexibility, its avoidance provides benefits to ratepayers. At the same time, designing and investing in an electric system that is capable of delivering all renewable generation to loads at high penetrations is, itself, cost-prohibitive. Between these two extremes is a point at which the costs of some new investments or programs that provide flexibility may be justified by the curtailment they avoid, but the cost of further investments would exceed the benefits. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 34 While not performed in the context of this study, this type of economic evaluation of flexibility solutions to support renewables integration will depend on rigorous modeling of system operations combined with accurate representation of the costs and non-operational benefits of various solutions. This study provides both an example of the type of analytical exercise that could be performed to quantify the operational benefits of flexibility solutions as well as a survey of the analytical considerations and tradeoffs that must be made in undertaking such an exercise. The specific types of investments to enable renewable integration that are found necessary will vary from one jurisdiction to the next, but the overarching framework through which those necessary investments are identified may be consistent. 4.2 Energy-Water-Climate Change Nexus In June, 2014, WECC introduced its new Integrated Reliability Assurance Model, which outlines the process through which WECC will identify, analyze, and address the top reliability challenges facing the Western Interconnection. One of the identified challenges is the impacts of climate changes. Climates are constantly changing at both the global and more granular levels. Two key questions for WECC to consider are: 1. What changes to the environment, in addition to increased average global temperature, might occur as a result of global changes? 2. Would these changes impact the electrical reliability of the Western Interconnection? Changes to climactic conditions have the potential to cause electric system impacts in the Western Interconnection in a number of ways, specifically, with higher temperatures, drought and extreme weather. If not mitigated through normal and potential event-focused planning and operating practices, these system impacts could pose significant risks to the reliability of the electricity grid in the Western Interconnection. WECC has a keen interest in identifying and addressing reliability risks that could arise in the 20-year planning horizon. While implementing mitigation measures is beyond the scope of WECC’s responsibilities, the results of this scenario planning effort could lead to possible mitigation measures to be explored further by other organizations. The Scenario Planning Steering Group (SPSG), under the guidance of its consultant, the Quantum Planning Group, lead an initiative in 2014 and 2015 to describe a plausible future in 2034 in which climate changes are characterized by a 3° F. average global temperature rise (relative to the average value for 1960 to 1979). This included exploring the nexus between electricity and water. While electric and water utility services are different, they are related in that electric service providers use, transform and consume significant amounts of water and water service providers use significant amounts of electricity. The complete report on this scenario planning effort is posted on the WECC web site. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 35 The second step in this process was to identify potential impacts to the electric system from the changing climate. During 2015, WECC engaged Energy + Environmental Economics (E3) to analyze in greater detail potential impacts of climate changes on the transmission system in the Western Interconnection. A preliminary report on the study is posted on the WECC web site. While additional work is needed to fully address potential reliability risks related to changes to the climate, scenario planning work during 2015 identified several categories of risk that could be explored further: Identifying climate change-related electric system impacts that could evolve into reliability risks; Prioritizing potential reliability risks; Preemptively and selectively hardening transmission and generation assets; Improving the effectiveness and efficiency of responses to system impact events; Increasing collaboration between electric and water utility managers; and Improve overall coordination between electric industry representatives; water system managers; federal, state and local governments; tribes and First Nations; and nongovernmental organizations. Future steps in this analysis include: 1. Exploring the interactive impacts of the nexus between energy and water by defining one or more study cases for analysis (2016); 2. Identifying potential risks to the reliability of the Bulk Electric System in the Western Interconnection as a result of changes to the climate (2016-17); and 3. Suggest possible mitigation measures that could be considered to address identified reliability risks (2016-17). 4.3 Clean Power Plan The EPA’s Clean Power Plan has the potential to dramatically reshape the Bulk Electric System’s (BES’s) resource mix over the next 15 years and raises a significant number of reliability concerns for the Western Interconnection. Implementation options included in the CPP could well lead to more renewable generation, more gas and less coal generation and a significant change to the way power flows across the Western Interconnection. This may create newer vulnerabilities for the Interconnection in terms of challenges to the adequacy of resources and transmission and the reliable functioning of the high-voltage grid. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 36 The West is reliant on a coordinated Bulk Electric System as energy flows across state borders on transmission lines that span hundreds of miles. Since WECC does not operate, site, or own generation or transmission infrastructure, it has no direct economic interest in how states comply with the EPA’s proposed Clean Power Plan. However, the implementation plans that states will develop to comply with the proposed Clean Power Plan will drive BES changes that must be assessed to assure continued reliable operation of the Western Interconnection. 4.3.1 Regional Engagement Subsequent to the EPA publishing the final CPP rule in August 2015, WECC initiated efforts to discuss how it can assist the Western stakeholder community in helping assess the reliability considerations of the resultant implementation plans. In addition to submitting formal comments to the EPA in November 2014, WECC has communicated its analytical activities by participating in several meetings during 2015, including: • FERC technical forums at its Western Regional Technical Conference in March 2015; • Summer meetings of the National Association of Regulatory Utility Commissioners (NARUC) and the Environmental Committee for NARUC; and • Western Interstate Regional Advisory Board’s (WIRAB) annual Fall meeting. Finally, WECC hosted four distinguished panelists—Joe Goffman (EPA), Travis Kavulla (NARUC/Montana PSC), Bill Ritter, Jr. (Center for the New Energy Economy), and John Savage (WIRAB/Oregon PUC)—at the December meeting of WECC’s Board of Directors to discuss their views on how WECC can be instrumental in assuring reliability throughout the Western Interconnection as it is transformed by states’ implementation of CPP plans. Each of the panelists expressed interest in seeing WECC play some role in a Western Interconnection-wide assessment of reliability issues around the Clean Power Plan. 4.3.2 Internal Efforts WECC is currently evaluating existing skillsets and in-house tools, and has formed a cross-functional team to look at how various dimensions of reliability (resource and system adequacy, system stability and gas-electric interface) may be impacted by CPP implementation. The cross functional team comprises members from WECC’s Reliability Planning, Performance Analysis, System Adequacy and Operational Planning departments. During the summer of 2015, WECC also participated with WIEB to validate WECC’s capabilities to assess the reliability challenges of implementing the CPP through a “mock assessment” of future aggregated compliance plans. While this analysis of CPP implementation was only for internal assessment of tools and data needs, WECC remains committed to continually tracking any and all federal and state efforts to comply with the CPP and related reliability considerations. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 4.4 37 Planning for Uncertainty 4.4.1 Background The WECC 2013 Transmission Plan recommended that WECC Staff evaluate the role of uncertainty in future transmission planning studies. The Plan recommended that WECC: Include uncertainty in planning studies, especially beyond 2020; Assess operational and infrastructure investment approaches to providing operational flexibility; Further quantify and bound long-run uncertainties; and Acknowledge uncertainty around construction of transmission projects assumed to be completed in the 10-year planning horizon. In response to these recommendations, WECC partnered with the U.S. Department of Energy’s (USDOE’s) Lawrence Berkley National Laboratory (LBNL) to jointly seek USDOE American Recovery Reinvestment Act (ARRA) funds in 2013 to assess the implications of including uncertainty in transmission planning. WECC and LBNL partnered with Johns Hopkins University (JHU) and a Technical Advisory Committee (comprised of TEPPC members) to successfully complete a very innovative study that tested the inclusion of uncertainty variables in a deterministic and stochastic setting. The following sub-sections summarize the focus, methodology, approach and results. 4.4.2 Study Focus The John Hopkins University (JHU)-based team quantified the benefit of including uncertainty in the form of multiple scenarios over a multi-decadal time horizon, while explicitly representing the information available at different decision points. The study recognized two investment decision stages: 1. “Here and now” (first stage decisions that are made without knowing which of the scenarios will turn out to be the case); and 2. “Wait-and-see” (later investments that are made after the scenario is known, enabling the planner to adapt the system to the realized conditions). In the modeling framework, these corresponded to the year 10 and year 20 phases of the WECC Transmission Expansion Planning Policy Committee (TEPPC) planning process. This two-stage decision framework (called “stochastic programming” or “mathematical programming with recourse”) is widely used in engineering and business and applications including generation investment planning and academic research involving power network planning. The two-stage stochastic programming model for transmission planning was called JHSMINE (Johns Hopkins Stochastic Multistage Integrated Network Expansion). Compared to stochastic approaches that have been proposed previously, the W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 38 modeling was conducted under more realistic conditions with the collaboration of planners and analysts from WECC, using data bases of generation, loads, and networks from the 2013 TEPPC plan. The key focuses of this study were: • How would transmission planning recommendations differ between the stochastic and deterministic models? and • What the economic benefits can be of following the stochastic recommendations? 4.4.3 Methodology The methodology used a co-optimization model that included commitments to investment – transmission and generation – with the first set of investments in 2014 (first stage, with an in-service date of 2024) and 2024 (second stage, in service in 2034). Figure 19: Co-Optimization of Transmission and Generation Investments reflects the logic for a transmission planner anticipating how the location and types of generation investment respond to network availability. Decisions about system operations (generation dispatch and line flows) are made in 2024 (first stage) and 2034 (second stage), with the second stage operating decisions continuing for additional decades after 2034. The CCTA lines (year 10 lines that the 2013 WECC Plan recommends) were assumed to be built in every solution; the model also recommended additional year 10 lines that appear to be economically attractive by 2024. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 39 Figure 19: Co-Optimization of Transmission and Generation Investments To implement this decision tree of two-state transmission-generation optimization sequence, the following key assumptions were used so as to reflect an economic equilibrium: W • Short-run generation markets were cleared by competitive generation companies who optimize their generation schedules against locational marginal prices (LMPs), and there are no barriers to trade among regions aside from physical transmission capacity. Long-run generation investment decisions were made by maximizing the probability-weighted present worth of short-run gross margins (based on LMPs) minus investment costs. The transmission operator and owner invest in grid-expansion to maximize the probabilityweighted net social welfare (sum of surpluses in the market), and in the short-run operates the grid to maximize the value to the market provided by transmission (equivalent to maximizing transmission surplus, with price taking assumptions for LMPs). • All generators are price-takers, and all market parties are risk neutral, have the same interest rate (5%/year real), and have the same expectations concerning the probability distributions of long-run scenarios and short-run load, wind, and solar conditions. E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 40 The study incorporated the basic JHSMINE model structure with two versions of the model: a 21-zone and 300-bus versions of the WECC system which we compared in order to assess the computational effort required for more detailed models and the effects of assuming a more disaggregated network upon the results. The 21-zone model assumed a “pipes-and-bubbles” load flow, as does one version of the 300-bus model. In addition, the study applied a 300-bus model that enforces Kirchhoff’s voltage law, thus representing the physics of power flow more accurately. The result is that power flows over all parallel paths between sources and sinks, and congestion is generally greater than in the “pipesand-bubbles” formulation, which only enforces Kirchhoff’s current law. In all models, transmission capacity limits were enforced in alignment with official WECC paths between the regions of the model. 4.4.4 Scenarios and Deterministic vs. Probabilistic Approach to Modeling With the collaboration of a project technical advisory committee consisting of WECC stakeholders, 20 scenarios were considered in the stochastic planning model. These were derived by various combinations of uncertain variables that were identified by the stakeholders as potentially important uncertainties in the 2020’s and 2030’s. Table 6: 90% Confidence Values of 2024 Scenario Variables shows the assumed values of the variables in 2024. The study quantified the economic value of identifying near-term transmission investments by stochastic planning by comparing the cost performance of the first stage (year 10) investments derived with versions of JHSMINE that consider 1, 5 or 20 scenarios (Figure 20: Consideration of 1, 5 or 20 Scenarios), as follows: • • • • “Deterministic Planning” (20 plans examined) “Deterministic Heuristics” (3 approaches) “Stochastic (5)” (1 approach) “Stochastic (20)” (1 approach) These plans were then compared for their expected performance. This is done by inserting the values of the first stage (year 10) decisions that represent values of the transmission investments installed by 2024 into the 20 scenario stochastic model. All other variables (including the 2024 and 2034 generation investments, and the 2034 transmission investments) are allowed to take on their optimal values. This means that, first, generators invest anticipating the “actual” distribution of 20 scenarios, and, second, the transmission owner makes optimal decisions in the 2nd stage when it knows what scenario is realized. The economic benefit of using stochastic programming to make near-term transmission investments was then obtained by comparing the present worth of expected costs of (a) the naïve solution in which the 20-scenario stochastic program is solved while imposing the first stage transmission decisions from one of the sub-optimal models (Deterministic, Heuristic, or Stochastic(5)) with (b) the present worth of expected costs of the unconstrained 20 scenario model, which can be no worse than the value in (a). This difference was called the “value of the stochastic solution” in stochastic programming, or also called the “cost of ignoring uncertainty.” By comparing the values of W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 41 (a) for different solutions, the accuracy of heuristic strategies were compared. Furthermore, a comparison of Stochastic (5) solution performance with the other solutions was undertaken to determine if a model that includes multiple scenarios, but only a small subset of them, does almost as well as the fully optimal Stochastic (20) solution. The results validated this. Twenty scenarios based on various combinations of the variables are considered in the analyses. Table 6: 90% Confidence Values of 2024 Scenario Variables depicts the variables used to define the scenarios that included 2013 WECC stakeholder-defined scenarios and the Technical Advisory Committee. Table 6: 90% Confidence Values of 2024 Scenario Variables Variables Low Value High Value Onshore Wind ($/kW) 1,569 2,065 Offshore Wind ($/kW) 4,369 6,106 Geothermal ($/kW) 5,015 6,490 Solar PV—Residential Rooftop ($/kW) 2,855 5,209 Solar PV—Commercial Rooftop ($/kW) 2,320 4,233 Solar PV—Fixed Tilt, 1-20 MW ($/kW) 2,048 3,736 Solar Thermal, No Storage ($/kW) 3,560 4,519 Solar Thermal, 6-hour Storage ($/kW) 5,178 6,572 Integrated Gasification Combined Cycle (IGCC) with Carbon Capture and Sequestration (CCS) ($/kW) 7,600 10,000 Natural Gas ($/MMBtu) 3.86 14.50 Carbon ($/Ton) 25.9 87.5 Coal ($/MMBtu) 2.24 3.50 DG Capacity as % of Peak Demand (%) 3.2 20.0 DR Capacity as % of Peak Demand (%) 2.2 10.0 Storage Capacity as % of Peak Demand (%) 3.9 10.7 Capital Cost Fuel & Carbon Prices Net Energy for Load W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment Variables 42 Low Value High Value Total WECC Load Growth (%/year) 1.0 1.9 Energy Reductions (%/year) 0.3 4.0 Electrification (%/year) 0.3 1.8 Figure 20: Consideration of 1, 5 or 20 Scenarios 4.4.5 Results and Recommendations Using the stochastic planning models for the 21-zone or 300-bus models of the WECC system under multiple scenarios was computationally practicable. Considering more than one scenario simultaneously in a planning model resulted in distinctly different plans than when evaluating multiple scenarios separately. The reduction in probability-weighted cost that would result from implementing the stochastic model’s recommendations was on the same order of magnitude as the size of the first stage (year 10) investment. JHU research team recommended that WECC consider implementation of a stochastic model as part of its next planning cycle in order to build confidence that near term (year 10) transmission reinforcements will reflect uncertainty effectively. Adaptability and robustness is best W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 43 assessed with a model that recognizes that some line additions will be more effective in poising the system to accommodate future changes in fuel costs, loads, technologies, and policies. Such a model must consider multiple possible futures at once and how a system can adapt to them over multiple decades. Finally, because the generation siting responds to transmission availability, a co-optimization formulation is ideal to use as a methodology so as to capture savings in generation capital costs as well as expenses due to transmission additions. 4.4.6 Implications for WECC’s Planning Activities Based on the results of the JHU study, WECC should consider augmenting its future planning activities in the following ways: 4.5 Identify ways in which future WECC studies consider stochastic scenarios to be used in developing transmission assumptions that reflect risk and uncertainty conditions. Test a WECC study case using the 10-year production cost model under differing assumptions stochastic framework and currently used deterministic platform – to see if there is a significant difference in how security constrained dispatch of resources and transmission investments take place. Explore ways for the CCTA 2028 process to include a probabilistic planning framework to better reflect uncertainty in transmission planning. Planning Tool Alignment One of the challenges WECC and its stakeholders have faced in analyzing planning issues is inconsistencies between data used in planning models. In a perfect world, data used as inputs to planning models and produced as outputs from planning models would be interchangeable, regardless of the model being used. In practice, this is not the case. As an example, resource data used in a Base Case to produce a power flow cannot be used in a production cost model without modifications and adjustments. Likewise, outputs from a production cost model cannot be used as inputs to a power flow model without significant modifications. In 2015, WECC began the “Round Trip Process” to reduce these data inconsistencies and facilitate easier data interchange between planning models. The first deliverable, the ability to extract one or more hours of output from WECC’s production cost model and use the data with minimal modifications to run a power flow analysis—is targeted for completion in the First Quarter of 2016. Future enhancements of this capability would continue through 2016. The ultimate goal of a single planning model data base that is usable by any planning model will require longer to complete, but is a priority for WECC. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 4.6 44 NERC/WECC Reliability Assessments WECC is one of the eight North American Reliability Corporation (NERC) Regional Entities that provide reliability assessment information to NERC for inclusion in its summer and winter seasonal assessments, and its annual Long-Term Reliability Assessments (10-year).4 These assessments focus on resource adequacy and are introduced to this report as a component of WECC’s Integrated Transmission and Resource Assessment. In addition to the NERC assessments, WECC prepares annual Power Supply Assessments (PSAs) that are associated with, but independent from and more detailed than, the NERC Long-Term Reliability Assessments.5 The WECC and NERC assessments are based on the concept of comparing expected reserve margins against base planning margins (BPMs), which provides a simple yes/no resource adequacy result. If the expected margins exceed the base planning margins, resources are deemed to be adequate. WECC’s most recent PSA document indicates an expectation of resource adequacy throughout the 2016-2025 timeframe.6 The load and resource data used in the assessments are provided by the 38 balancing authorities within the Western Interconnection. The balancing authority data are aggregated into 19 load and generation zones to reflect inter-area transfer limitations. The data for these 19 zones are further aggregated into four subregions—the Northwest Power Pool (NWPP); the Rocky Mountain Reserve Group (RMRG); the Southwest Reserve Sharing Group (SRSG); and California/Mexico (CA/MX)—to reflect seasonal load patterns and resource type differences, and to maintain load forecast data confidentiality. 4 NERC Reliability Assessments WECC Reliability Assessments 6 The reader should note caveats presented at the end of this section of the report. 5 W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 45 Figure 21: Western Interconnection Balancing Authorities W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 46 Figure 22: Western Interconnection Subregions Table 7: Resource Class Descriptions Resource Class Description Existing Generation Generation that is available (in-service) as of December 31, 2014 New Generation Generation that will be added in the future Class 1 Generation additions/retirements that were reported to be under active construction as of the reporting date of December 31, 2014 and are projected to be in-service/retired prior to January 2020. Class 1 also includes facilities or units that have a firm retirement date within the assessment period7 as a result of regulatory requirements or corporate decisions. Class 2 Generation additions/retirements that were reported to have: received regulatory approval or are to undergo regulatory review; a signed interconnection agreement; or an expected on-line/retirement date prior to January 2022. This class includes resources that were expected to be in-service as early as Class 1 resources, but did not meet the test of being under construction; or 7 The assessment period is from 2016 through 2025 for summer and from 2016/17 through 2025/26 for winter. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment Resource Class 47 Description have an estimated retirement date within the assessment period. Class 3 Generation additions/retirements that were reported and met the North American Electric Reliability Corporation (NERC) criteria for Tier 28 but do not qualify as WECC Class 1 or 2 resources. Class 4 Generation additions/retirements that were reported and met the NERC criteria for Tier 3.9 The following graphics and tables present the peak-season margin information for each of the four assessment subregions. Explanations regarding the graphic/table abbreviations etc. are presented following the margin tabulations. Figure 23: NWPP Case 1 through 4 Winter Results NWPP: Case 1 through 4 - Winter Results 35.0% 30.0% 25.0% Existing and Class 1 20.0% Existing and Class 1 through 2 15.0% Existing and Class 1 through 3 10.0% Existing and Class 1 through 4 BBM - Winter 16.1% 5.0% 0.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 8 Definition included in the NERC Long-Term Reliability Assessment (LTRA): http://www.nerc.com/pa/RAPA/ra/Pages/default.aspx. 9 Ibidem. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 48 Figure 24: RMRG Case 1 through 4 Summer Results RMRG: Case 1 through 4 - Summer Results 40.0% 35.0% 30.0% Existing and Class 1 25.0% Existing and Class 1 through 2 20.0% Existing and Class 1 through 3 15.0% Existing and Class 1 through 4 10.0% BBM - Summer 13.9% 5.0% 0.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Figure 25: SRSG Case 1 through 4 Summer Results SRSG: Case 1 through 4 - Summer Results 35.0% 30.0% 25.0% Existing and Class 1 20.0% Existing and Class 1 through 2 15.0% Existing and Class 1 through 3 10.0% Existing and Class 1 through 4 BBM - Summer 16.1% 5.0% 0.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 49 Figure 26: CA/MX Case 1 through 4 Summer Results CA/MX: Case 1 through 4 - Summer Results 40.0% 35.0% 30.0% Existing and Class 1 25.0% Existing and Class 1 through 2 20.0% Existing and Class 1 through 3 15.0% Existing and Class 1 through 4 10.0% BBM - Summer 15.0% 5.0% 0.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 50 Table 8: NWPP Case 1 Existing/Class 1 Resources Winter Results 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net Internal Demand 71,145 72,526 73,668 74,851 75,588 76,401 77,294 77,985 78,703 79,402 Anticipated Internal Capacity 92,108 91,870 90,675 91,162 91,838 88,929 89.788 90,560 91,416 92,211 Wind Expected On-Peak MW 3,464 3,501 3,501 3,501 3,501 3,501 3,501 3,501 3,501 3,501 Percentage of Wind Capacity 28.5% 28.5% 28.5% 28.5% 28.5% 28.5% 28.5% 28.5% 28.5% 28.5% Solar Expected On-Peak MW 0 0 0 0 0 0 0 0 0 0 Percentage of Solar Capacity 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Hydro Expected On-Peak MW 34,360 34,380 34,392 34,404 34,404 34,404 34,404 34,404 34,404 34,404 Percentage of Hydro Capacity 63.9% 63.9% 63.9% 63.9% 63.9% 63.9% 63.9% 63.9% 63.9% 63.9% Imports 1,501 1,501 1,501 1,501 1,501 1,501 2,151 2,951 2,851 5,176 Exports 0 0 0 0 0 0 0 0 0 0 Anticipated Resource Reserve Margin MW 9,508 7,677 5,147 4,260 4,081 228 50 20 42 25 Anticipated Resource Reserve Margin % 29.5% 26.7% 23.1% 21.8% 21.5% 16.4% 16.2% 16.1% 16.2% 16.1% Table 9: RMRG: Case 1 – Existing/Class 1 Resources Summer Results 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net Internal Demand 12,055 12,171 12,417 12,667 12,830 13,129 13,414 13,736 13,932 14,194 Anticipated Internal Capacity 15,211 15,634 15,685 15,253 15,647 15,557 15,490 15,648 15,886 16,185 Wind Expected On-Peak MW 775 775 775 775 775 775 775 775 775 775 Percentage of Wind Capacity 29.7% 29.7% 29.7% 29.7% 29.7% 29.7% 29.7% 29.7% 29.7% 29.7% Solar Expected On-Peak MW 52 52 52 52 52 52 52 52 52 52 Percentage of Solar Capacity 42.8% 42.8% 42.8% 42.8% 42.8% 42.8% 42.8% 42.8% 42.8% 42.8% Hydro Expected On-Peak MW 1,303 1,303 1,303 1,303 1,303 1,303 1,303 1,303 1,303 1,303 Percentage of Hydro Capacity 40.8% 40.8% 40.8% 40.8% 40.8% 40.8% 40.8% 40.8% 40.8% 40.8% Imports 0 0 0 0 0 0 0 150 550 775 Exports 575 575 575 575 575 575 575 575 575 575 W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 2016 2017 51 2018 2019 2020 2021 2022 2023 2024 2025 Anticipated Resource Reserve Margin MW 1,480 1,771 1,542 825 1,033 603 211 3 17 18 Anticipated Resource Reserve Margin % 26.2% 28.5% 26.3% 20.4% 22.0% 18.5% 15.5% 13.9% 14.0% 14.0% Table 10: SRSG: Case 1 – Existing/Class 1 Resources Summer Results 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net Internal Demand 23,297 23,486 24,047 24,514 25,058 25,516 25,734 26,209 26,763 27,377 Anticipated Internal Capacity 28,703 28,650 29,044 28,974 29,176 29,710 29,959 30,598 31,278 32,004 Wind Expected On-Peak MW 164 164 164 164 164 164 163 163 163 163 Percentage of Wind Capacity 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% 19.6% Solar Expected On-Peak MW 382 382 382 382 382 382 382 382 382 382 Percentage of Solar Capacity 35.9% 35.9% 35.9% 35.9% 35.9% 35.9% 35.9% 35.9% 35.9% 35.9% Hydro Expected On-Peak MW 733 733 733 733 733 733 733 733 733 733 Percentage of Hydro Capacity 25.7% 25.7% 25.7% 25.7% 25.7% 25.7% 25.7% 25.7% 25.7% 25.7% Imports 379 379 379 379 529 1,104 1,554 2,504 3,604 4,004 Exports 3,601 3,601 3,601 3,601 3,601 3,601 3,601 3,601 3,601 3,601 Anticipated Resource Reserve Margin MW 1,655 1,383 1,149 513 83 86 82 169 206 219 Anticipated Resource Reserve Margin % 23.2% 22.0% 20.9% 18.2% 16.4% 16.4% 16.4% 16.7% 16.9% 16.9% Table 11: CA/MX: Case 1 – Existing/Class 1 Resources Summer Results 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net Internal Demand 52,669 52,919 53,142 53,373 53,637 53,873 54,109 54,249 54,367 54,412 Anticipated Internal Capacity 64,276 66,611 67,342 68,516 68,117 67,521 66,734 65,758 65,169 64,412 Wind Expected On-Peak MW 3,553 3,553 3,553 3,725 3,725 3,725 3,725 3,725 3,725 3,725 Percentage of Wind Capacity 36.1% 36.1% 36.1% 36.1% 36.1% 36.1% 36.1% 36.1% 36.1% 36.1% Solar Expected On-Peak MW 2,577 2,915 3,323 3,779 3,779 3,779 3,779 3,779 3,779 3,779 Percentage of Solar Capacity 36.4% 36.4% 36.4% 36.4% 36.4% 36.4% 36.4% 36.4% 36.4% 36.4% Hydro Expected On-Peak MW 3,590 3,593 3,593 3,593 3,801 3,801 3,801 3,801 3,801 3,801 W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment Percentage of Hydro Capacity 52 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 31.2% 31.2% 31.2% 31.2% 31.5% 31.5% 31.5% 31.5% 31.5% 31.5% Imports 2,746 2,746 2,746 2,746 2,746 2,746 2,746 2,746 2,746 2,746 Exports 450 450 450 450 600 1,175 1,625 2,575 3,675 4,075 Anticipated Resource Reserve Margin MW 3,707 5,754 6,229 7,137 6,434 5,567 4,509 3,371 2,647 1,839 Anticipated Resource Reserve Margin % 22.0% 25.9% 26.7% 28.4% 27.0% 25.3% 23.3% 21.2% 19.9% 18.4% W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 53 4.6.1 Assessment Caveats Among the important caveats that should be considered when reviewing these results are: 1. The analysis is based on Loads and Resources (LAR) data submitted in March 2015. The demand forecasts and reported resources for each BA were “locked” as of May 2015. New generation projects announced after the data were “locked” are not included in the resource totals. 2. WECC does not speculate which units may retire due to environmental requirements or financial considerations. Therefore, only generating units that were reported with a planned retirement date are incorporated in these studies. 3. Results of this assessment may differ from the results of similar assessments performed by other parties. 4. Case results are specific to the assumptions used for these studies. The use of different assumptions will produce different results. 5. Transmission constraints apply only between zones. All generation within a zone is deemed deliverable within the zone. 6. GridView is a production cost dispatch model. The model transfers resources from areas with surplus generation to deficit areas, considering transfer path constraints and transmission losses. Simultaneous flows, loop flows, and other transfer restrictions are approximated by the restricted transfer limits that were used in the studies, but the model is a transport model, not a power flow model. 7. The GridView model allows WECC staff to capture the Western Interconnection coincidental peak demand. The model uses static hourly demand curves for each BA within WECC. These curves were created by averaging five years of actual hourly demand for each BA. GridView uses an algorithm with the amounts of monthly peak and energy supplied by each BA to modify these curves for each year of the study period. The algorithm “fixes” the monthly peak at the amount supplied by the BA and adjusts the curves up or down to match the demand under the curve to the annual energy reported. This process “flattens” the annual demand curve if the energy load growth rate exceeds the peak demand growth rate. The process also “peaks” the annual curve if the energy load growth rate is less than the peak demand growth rate. 8. For hydro plants in the Northwest and California, the model employs an algorithm that shapes the available hydro energy based on the shape of the area’s energy load. This means there can be hydro capacity that is unavailable because it is constrained by the available energy in the hydro system. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 54 5. Recommendations In 2013, WECC published the 2013 WECC Interconnection-wide Transmission Plan. That report included several recommendations based on analytic work completed from 2011 through 2013. Many of those recommendations are still valid and are reflected in the following sections. In some cases, WECC has expanded on previous recommendations or added new ones based on work completed during 2014 and 2015. 5.1 Priorities for Infrastructure 1. Uncertainties in Planning When considering the likely future 10 years from now or a plausible future 20 years from now, there are significant uncertainties in loads, resources and transmission topology. Some factors could have significant impacts on loads, resources and transmission, notably natural gas prices, prices or penalties imposed on CO2 emissions and technology costs. Future planning studies should continue considering ranges of these factors as well as other variables that would be expected to affect the reliability of the Western Interconnection. 2. Expected Future Grid The expected future grid, based on existing transmission plus the Common Case Transmission Assumptions, appears to be adequate for the Western Interconnection to meet is load requirements over the 10-year study period as examined by the 2024 Common Case study program. The analyses completed by WECC during 2015 do not indicate a need for additional transmission capacity beyond projects included in the CCTA. 3. Need for Greater Collaboration and Improved Base Case Review As WECC and its stakeholders broaden their analyses to include a variety of planning tools (power flow, production cost dispatch, capital expansion), it will be increasingly important to coordinate requests for Base Cases and other planning studies. Many tools are available to analyze “reliability” in the Western Interconnection; WECC and stakeholders can maximize the efficiency of their analyses by coordinating study requests and identifying key questions and themes that will provide insight into potential reliability risks. This will also require greater coordination among the committees and subcommittees that support WECC’s planning activities. Reviews of WECC Committees’ scopes and structures that will be conducted during 2016 as a result of WECC’s Section 4.9 review should provide insight and guidance for improving coordination among committees and stakeholders. 4. Continue Investigation of Variable Resource Integration The Flexibility study was envisioned not only as a means to characterize flexibility challenges for the Western fleet under high renewable resource penetration, but to identify best practices for these W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 55 types of analyses as well as areas where additional efforts might be usefully focused. Continued refinement of modeling techniques and constructs explored in the study will serve to highlight renewable integration tradeoffs. 5. Continue to Assess Operational Flexibility Needs The Flexibility Study described above provided much-needed insight into options for operating the grid reliably in an environment that includes high penetration of intermittent renewable resources. But, more work is needed. Future assessments should expand this analysis by considering less conventional sources of flexibility such as market and operational reforms, demand-side measures and all forms of storage. 6. Investigate Flexibility Reserve Requirements A key area for additional work in assessing flexibility needs is the need to identify the level of minimum thermal generation that is needed to maintain adequate inertia and voltage support. In the TEPPC studies a minimum generation constraint is applied only to the California fleet. This assumption is not intended to suggest that such constraints might not exist on other systems, but is merely a reflection of a lack of available information on their operating constraints, particularly as low net load conditions exert pressure on dispatchable fleets to reduce output as low as possible. Further work to identify and characterize such constraints will help to provide an enhanced view of potential integration challenges outside of California. 7. Continue to Evaluate Potential Risks Related to the Gas-Electric Interface Recent progress has been made in evaluating the gas-electric interface and the risk to reliability it may pose for the Western Interconnection. Many of these studies have created the framework for additional analysis that is needed in 2016 and beyond to quantify the risks and vulnerabilities faced by the bulk power system regarding this issue. 8. Continue to Evaluate the Impacts of California’s 50% RPS California has passed legislation enacting a 50% Renewable Portfolio Standard (RPS) by 2030. This presents a need to update data used in TEPPC’s planning models and data bases and to continue to evaluate how this level of renewable resource penetration—most of which will be intermittent resources—may affect reliability in the Western Interconnection. 5.2 Priorities for Policy Policy development nationally and within the Western Interconnection is dynamic and could potentially have significant impacts on reliability. Key policy areas that WECC should consider in developing a study program for 2016 could include: W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 6. 56 Clean Power Plan-related resource mix changes. States’ plans to comply with the Clean Power Plan will likely change the resource mix in the Western Interconnection. WECC plans to evaluate the reliability implications of states’ aggregate CPP implementation plans, once they are known. Meanwhile, other studies related to potential resource changes could help to identify associated reliability and economic issues. Effects of Distributed Energy Resource (DER) technologies and policies. With costs of DER technologies continuing to fall, it is likely that deployment will continue to increase in the coming years. Potential impacts on the BES include voltage stability, frequency stability and an increased need for operational flexibility. It will be critical to monitor closely developments in DER-related policies to assess their potential reliability impacts. Transmission utilization effects of issues such as California’s SB 350 legislation, increased electric vehicle adoption, the EPA’s Clean Power Plan and related regional responses. Coal fleet flexibility potential and retirements (re-dispatch limitations). Both economic considerations and policy issues such as the Clean Power Plan are likely to have significant impact on the coal resource fleet in the Western Interconnection. Potential coal resource retirements and re-dispatch plans will continue to be a priority policy issue. System flexibility to accommodate higher levels of Variable Energy Resources (VERs). As intermittent resources such as solar and wind achieve increasing penetration levels, WECC, RPGs and BAAs within WECC’s footprint will need to consider operational and economic options for meeting daily operational needs. Impacts on the Bulk Electric System due to the expansion of the Energy-Imbalance Market in the Western Interconnection. PacifiCorp’s decision to join the CAISO Energy Imbalance Market (EIM) in November, 2014 expanded significantly the reach of a fluid market for meeting the changing imbalance energy needs within the Western Interconnection. Nevada Power and Puget Sound Energy joined the EIM in October, 2015 and several other entities have announced plans to consider joining the EIM. WECC will need to monitor closely the expansion of the EIM in the Western Interconnection to fully understand potential associated reliability impacts. It will also need to consider the appropriate analytical tools that could be used to provide insight into potential reliability impacts of EIM expansion in the Western Interconnection. Conclusion WECC’s internal staff and external stakeholders, working together during 2015, have been able to accomplish a great deal in the past year amid many significant transitions. As WECC’s staff and stakeholders continue to collaborate in 2016 to identify priority study themes and issues, they will be able to further expand their understanding of how the many technological developments, policy issues and economic drivers could affect the reliability of the Western Interconnection. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 57 Appendix A: Glossary of Terms Acronym Term Definition BA Balancing Authority The responsible entity that prepares near-term resource requirements, maintains loadinterchange-generation balance within a Balancing Authority Area, and supports Interconnection frequency in real time. BAA Balancing Authority Area The collection of generation, transmission, and loads within the metered boundaries of the Balancing Authority. The Balancing Authority maintains load-resource balance within this area. BPM Base Planning Margin Also known as “Building Block Margin,” BPM is a methodology for determining a planning reserve margin by considering Contingency Reserves, Regulating Reserves, Forced Outages and Temperature Adders. BES Bulk Electric System The electrical generation resources, transmission lines, interconnections with neighboring systems, and associated equipment, generally operated at voltages of 100 kV or higher. BLM United States Bureau of Land Management An organization within the United States Department of the Interior that is charged with sustaining the health, diversity, and productivity of America’s public lands. CA/MX California/Mexico Anentity that includes parts of CA and Mexico and that shares contingency reserves to maximize generator dispatch efficiency. CCTA Common Case Transmission Assumptions The list of transmission expansion projects currently in progress that are determined by the RPCG to be highly likely to be complete by December 2024. DG Distributed Generation Energy that is generated at or near the point of W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment Acronym Term 58 Definition consumption. Dump Energy Energy in a Production Cost Model analysis that is selected in the economic dispatch to be delivered to load but cannot actually be delivered due to modeling constraints. Energy Storage Any technology that can store energy for use later, including batteries, flywheels, compressed air, thermal technologies and pumped hydro power. LCOE Levelized Cost of Energy The per-kilowatt hour cost (in real dollars) of building and operating a power plant over an assumed financial life and duty cycle. LTPT Long-Term Planning Tool The capital expansion model used by WECC to complete 20-year planning studies. LMP Locational Marginal Price In a nodal pricing system, the LMP is the cost for dispatching the next increment of supply to meet the next increment of load. LOLP Loss of Load Probability The probability that the responsible load-serving entity may be unable to serve some or all of its customers’ loads, for example, due to multiple generation failures that result in insufficient reserves. NERC National Electric Reliability Corporation A not-for-profit international regulatory authority whose mission is to assure the reliability of the bulk power system in North America by developing and enforcing reliability standards; annually assessing seasonal and long‐term reliability; monitoring the bulk power system through system awareness; and educating, training, and certifying industry personnel. NXT Network Expansion Tool A portion of the Long-Term Planning Tool that focuses on transmission optimization. NWPP Northwest Power Pool A non-profit organization comprised of major W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment Acronym Term 59 Definition generating utilities serving the Northwestern U.S., British Columbia and Alberta that seeks to achieve benefits from coordinated operations. PCC Planning Coordination Committee A WECC Standing Committee that evaluates potential future generation and load balance (two years or greater timeframe) and adequacy of the physical infrastructure of the interconnected Bulk Electric System. PSA Power Supply Assessment An evaluation of generation resource reserve margins for the WECC summer and winter peak hours. PCM Production Cost Model A model used by WECC to complete studies in the 10-year planning horizon in which resources are dispatched according to their levelized cost to meet load in each of the 8,760 hours of the planning year. RAWG Reliability Assessment Work Group A WECC work group that defines facility outage data reporting requirements and makes recommendations on reliability performance level adjustments. The group also monitors the status and analysis of resource adequacy in the Western Interconnection. RPCG Regional Planning Coordination Group An organization consisting of representatives of each of the Regional Planning Groups in the Western Interconnection. RPG Regional Planning Group Entities within the Western Interconnection that have been organized under FERC Order 1000 or under TEPPC’s Charter to address common issues within a particular portion of the Western Interconnection and have a close relationship with smaller load serving entities such as municipal utilities and rural electric cooperatives. RMRG Rocky Mountain Reserve Sharing Group A NERC-registered entity that includes parts of CO, NE, SD and WY and that shares contingency reserves to maximize generator dispatch W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment Acronym Term 60 Definition efficiency. Solar PV Solar Photovoltaic Generation sources based on converting sunlight directly into electricity using photovoltaic technology. SAP System Adequacy Planning The WECC department responsible for various planning-related data bases, 10-year and 20-year analyses, probabilistic assessments and NERCrelated reliability assessments. SCDT Study Case Development Tool A portion of the Long-Term Planning Tool that focuses on generation optimization. SPSG Scenario Planning Steering Group A stakeholder group responsible for, among other things, developing future scenarios for the Western Interconnection. SRSG Southwest Reserve Sharing Group A NERC-registered entity that includes parts of AZ, CA, NM and TX and that shares contingency reserves to maximize generator dispatch efficiency. SWG Studies Work Group A work group under TAS that develops a proposal for TEPPC’s annual study program and establishes the resource portfolio and transmission network assumptions used in each of the study cases. TAS Technical Advisory Subcommittee A subcommittee under TEPPC that collects and disseminates data for both historic and forwardlooking congestion studies and advises TEPPC on technical matters. TSS Technical Studies Subcommittee A WECC subcommittee that performs studies, maintains data files, evaluates proposed system additions or alterations, prepares reports and recommendations, and performs such other dutiess as directed by the Planning Coordination Committee. TEPPC Transmission Expansion Planning Policy Committee A Committee created by the WECC Board of Directors to oversee and maintain public W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment Acronym Term 61 Definition databases for transmission planning; develop, implement, and coordinate planning processes and policy; conduct transmission planning studies; and prepare Interconnection-wide transmission plans. WI W Western Interconnection E S T E R N E L E C T R I C I T Y he largest and most diverse of the eight Regional Entities with delegated authority from the North American Electric Reliability Corporation (NERC) and Federal Energy Regulatory Commission (FERC). The WECC Region extends from Canada to Mexico and includes the provinces of Alberta and British Columbia, the northern portion of Baja California, Mexico, and all or portions of the 14 Western states between. C O O R D I N A T I N G C O U N C I L 2015 Integrated Transmission and Resource Assessment 62 Appendix B: Analytical Reports Completed in 2015 I. Data Bases and Tools II. III. 10 A. 2024 Common Case B. 2014 Generation Capital Cost Calculator C. 2014 Transmission Cost Calculator 10-Year (Production Cost) Study Cases A. PC01: 2024 Common Case B. PC02: High Load; loads increased by 10% C. PC03: Low Load; loads decreased by 10% D. PC04: High Hydro E. PC05: Low Hydro F. PC06: High NG price G. PC07: Low NG price H. PC10: Variable carbon price I. PC17: Wind Uncertainty J. PC18: High Distributed PV – California only K. PC19: High Distributed PV – West-wide L. PC21: Coal Retirement M. PC22: High Renewable N. PC26: Replace Intermountain coal with CC, Wind, and/or Compressed Air Storage10 O. PC30: BLM Resource additions Issue-Based Analyses A. Energy-Water-Climate Change Scenario B. Flexibility Study C. Planning For Uncertainty The report on PC26 will be posted to the WECC web site when it is available. W E S T E R N E L E C T R I C I T Y C O O R D I N A T I N G C O U N C I L