Summary—Scenario Four: Focus on Long-Term Societal Costs
Basic Description
Narrow and Slow Economic Growth in the WECC region with Stagnating Standards of
Living/Paradigm Changes in Electric Supply and Distribution Technology
Policy Theme
“Low hanging fruit” investment in clean domestic resources
Summary
Despite uneven economic growth across the western Unites States and Canada, this world
experiences a fundamental shift in the usage and generation of electricity. Economic growth is
slowed by constraints on government spending and persistent problems in the capital markets.
Sufficient government support for developing new energy technologies encourages further
private investment that lead to significant breakthroughs. Technological advances in areas
indirectly related to electric energy, such as information and communications, material science,
robotics nevertheless feed change in the power industry. The new technology picks up
momentum because of innovative features and lower costs, which drive growing rates of
adoption. Energy Efficiency as well as Demand-Side Management help to drive the shifts seen
in this world. States and companies in the WECC region play a leading role in this
transformation demonstrating the effectiveness of the new applications. Support for this
transition also comes from voters consistently expressing values in support of a cleaner and
healthier environment.
Consumers are willing to pay for cleaner and more environmentally sustainable products
because they see the benefits in improved health and lifestyles, which don’t require
exceptionally higher spending as many new technologies are very cost competitive and highly
efficient. The lagging effects from the 2008-2009 credit crises and housing bubble, higher and
more volatile oil prices, and some poor national policy choices plague the U.S. and the global
economy, allowing only short periods of sporadic growth. Despite these economic troubles, the
transformation of the U.S. energy industry, through the leadership of western states, becomes a
bright spot for the nation over the ensuing two decades.
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March, 2013
Scenario Four Summary
Key Scenario Metrics in 2032
Natural Gas Price
$5.00
Cost of Carbon
$75.00
Policy Adjusted Peak Load Growth Rate1
0.4% (2032 Ref Case = 1.5%)
Policy Adjusted Demand Growth Rate2
0.0% (2032 Ref Case = 1.2%)
Scenario Four - Overview by Key Driver
Key Driver
Scenario Summary
The evolution of electricity
demand in WECC region
Stagnant growth rates keep demand low. Little to no sign of a
quick turnaround in demand over the long term.
The evolution of electricity
supply in the WECC region
Regulatory pressure on shale-gas development leads to a
slowdown in natural gas exploration. Coal remains on a
retirement trajectory. Renewables viewed as viable
alternative because of climate change impacts. Renewables
now more cost-competitive with conventional resources.
Innovation in electricity
supply technology &
distribution systems
Smart grid technology is widely commercialized as the
industry develops an integrated vision, which includes
demand-side energy, EE, load management, DR and
variable-power generation.
The course of regional
economic growth in the
WECC region
Sustained, lower economic growth rates in North America,
Europe, and Japan lead to a belief that structural
unemployment will be permanent aspects of these
economies.
Changes in the regulation of
electric power systems in
the WECC region
U.S. and Canadian governments willing to fund renewables
demonstrations in order to spur innovation.
Changes in federal
regulation affecting electric
power industry
Federal policymakers implement tax increases and eliminate
subsidies for the oil industry. The resulting windfall in revenue
becomes the catalyst for a sustained increase in federal
funding for renewables research, development, and
deployment.
Changes in social values
related to energy issues
Informed energy consumers expect power companies to
empower them to manage their individual energy portfolios.
1
2
Adjusted for known electrification, DSM and energy efficiency policies included in the modeling results
Adjusted for known electrification, DSM and energy efficiency policies included in the modeling results
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Scenario Four Summary
Key Driver
Scenario Summary
Strong emphasis on conservation. Consumers willing to pay
higher rates in return for lower overall bills.
Changes in society’s
preferences for
environmental & natural
resources
The harmful effects of climate change lead the U.S. to sign
onto an international climate change treaty. Serious public
concern about the power industry’s impact on water quality.
Shifts in national & global
financial markets
The long-term effects of the housing bust and the credit
crunch ensure that financial markets prefer to fund low-risk
projects. Private capital makes limited investments in the
power industry.
Shifts in the availability &
prices of commodity fuels
used in the electricity sector
Coal and natural gas considered problematic due to
emissions concerns and worries about shale-oil
development. Carbon tax increases and higher energy bills
enable the transition to renewables.
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Scenario Four Summary
Scenario Four – Overview of Modeling Parameters
Units
2032
Reference Value
Scenario 4
Natural Gas
$/MMBtu
$6.58
$5.00
Coal
$/MMBtu
$1.62
$1.62
$/ton
$37.11
$75.00
Geothermal
% below
2012 cost
0%
0%
IGCC w/ CCS
% below
2012 cost
0%
0%
Solar PV
% below
2012 cost
31%
31%
Solar Thermal
% below
2012 cost
25%
25%
Wind
% below
2012 cost
8%
12%
Load
GWh
1,163,526
1,118,518
Policy-Driven Load Reductions
GWh
0
-125,085
Policy-Driven Electrification
GWh
0
+50,000
WECC Net Energy for Load
GWh
1,163,526
1,043,433
Implied Growth Rate, Unadjusted
Load
%/yr
1.5%
1.1%
Implied Growth Rate, Adjusted
Load
%/yr
1.5%
0.4%
Input Parameters
Fuel & Carbon Costs
Carbon
Capital Cost Reductions
Net Energy for Load
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Scenario Four Summary
Units
2032
Reference Value
Scenario 4
Load
MW
198,715
191,023
Policy-Driven Load Reductions
MW
-4,952
-25,182
Policy-Driven Electrification
MW
0
+5,708
WECC Coincident Peak
MW
193,763
171,548
Implied Growth Rate, Unadjusted
Load
%/yr
1.4%
1.0%
Implied Growth Rate, Adjusted
Load
%/yr
1.2%
0.0%
Input Parameters
Coincident Peak Demand
LOAD NUMBERS SHOWN ARE DRAFT AND NEED TO BE REVIEWED ONCE INPUTS ARE
FINALIZED
Renewable Goals
State RPS
% of Load
Current state policies
Energy
Federal RPS
% of Load
Energy
In-state RPS Requirement
none
Current state policies,
increased by 50%
15% minimum RPS
% of RPS Current in-state
Current in-state
requirement preferences applied preferences applied to
to RPS requirements current policy RPS
requirements; no
preference for in-state
resources to meet
increase in RPS targets
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