Utility Resource Planning Addressing Emerging Utility Operational Challenges

Transcription

1 CONFERENCE Utility Resource Planning Addressing Emerging Utility Operational Challenges Hyatt Regency O Hare Pre-Conference Workshop Integrated Decision Analysis for Resource Selection, Conversion and Retirement May 13, 2014 Sponsors Supporting Organizations is authorized by IACET to offer 0.9 CEUs for the conference and 0.3 CEUs for the preconference workshop. 1

2 Overview Utility integrated resource plan staff must possess multiple talents to conduct and interpret the forecasts, analyses and formulation of recommendations that serve as their power organization s compass heading to guide future actions. The resulting IRP documents they prepare fundamentally chart long-term directions to prescribe how load must be served in their service territory. The plan while deeply rooted in quantitative methodology and established industry norms must still be flexible enough to accommodate temporal shifts in trajectory triggered by technological, regulatory and methodological adjustments. The past few years have witnessed the need for many such mid-course corrections in integrated resource planning methodology. The advance of renewable and distributed energy resources, slumping load growth, aggressive air quality regulations, greater emphasis on energy efficiency and demand side strategies these and other shifts to what had been business as usual for utilities, have prompted innovations to the IRP process. This program will provide a solid survey of current thinking and methodologies as the basis for ensuring that current integrated resource plans measure up to a power organization s future operational requirements. It will feature leading utility and other power resource planning professionals and experts addressing the key issues associated with these emerging operational environmental mandates, intermittent and variable energy resources, regulatory policies, and uncertainty factors. Who Should Attend Integrated resource planning Resource adequacy planning Strategic and long-range planning Forecasting and analysis Energy efficiency planning Demand response planning Generation and load planning Transmission planning Reliability planning Intra-hour operations analysis and modeling Renewable energy planning Environmental and GHG planning State regulatory and commission staff Carbon/emissions management teams Carbon/emissions market consultants and advisors Environmental compliance groups Regulatory affairs Asset management Financial analysis We often find ourselves hearing and reading material that only confirms our exacting views. brings together the experience and emerging approaches of industry leaders from around the world. Much of the value of these presentations stems from discovering what we did not know. Division Director, NW Power and Conservation Council A great overview from a wide cross-section of industry experts. Energy Resource Analyst, EWEB 2

3 Learning Outcomes Attendees will gain practical skills and insights on how to: Develop resource plans that incorporate the full palette of supply and demand options Evaluate generation and transmission co-optimization under dynamic conditions Assess whether CCGT technology is flexible enough to be the resource of choice in the context of high renewable penetration Describe how IRP planners can model storage as a realistic solution to ancillary services issues Identify where a DSM portfolio fits in an IRP Evaluate what gas and electric utilities planners must do to properly address electric/gas power coordination issues Identify the flexibility resources that will be necessary, and the quantities needed, to accommodate renewable and distributed generation Apply uses of stochastic principles to ensure robust plans in the face of multiple uncertainties Explore seams issues in operational, resource adequacy, and long-term expansion planning Discover different approaches of incorporating risk analysis into IRPs Examine the elements necessary for designing and executing successful scenario planning for IRPs Agenda Tuesday, May 13, :30 1:00 p.m. Registration 1:00 1:15 p.m. welcome and Overview Excellent agenda, and list of speakers. Right on target with issues I m dealing with right now. Manager of Resource Planning, Puget Sound Energy 1:15 2:00 p.m. developing Resource Plans that Recognize Emerging Operational Challenges and Use Capab ilities from the Full Palette of Supply & Demand Options Assuring reliable, adequate resources in the coming decade will require a mix of resource attributes that are not adequately considered in either conventional, vertically integrated utility resource planning or in re-structured markets with energy and capacity markets. The problem to solve is no longer just about meeting peak and total energy demand in one service territory; rather, it s now about what resource attributes are best suited to keep the system running in balance most efficiently and economically all hours of the year. Keeping pace with these fundamental shifts in system requirements is difficult enough for utility and power resource planners. The difficulty is often compounded if legacy assumptions, tools and methodologies limit the scope of analysis. This presentation will consider a comprehensive resource planning paradigm that enables planners to best forecast, evaluate and plan for their company s operational future based on four pillars: 1. Determine what is the nature of these energy challenges confronting their service territory 2. Define what operational needs are emerging that contribute to these challenges 3. Establish a level playing field on which supply and demand-side resources compete equally to offer capabilities that fill the prescribed needs 4. Connect the dots using appropriate analytical tools - Carl Linvill, Principal, Regulatory Assistance Project 3

4 Agenda Tuesday, May 13, 2014 (CONTINUED) I. ENSURING ROBUST NEEDS ASSESSMENT & SITUATION ANALYSIS 2:00 2:45 p.m. generation and Transmission Co-optimization under Dynamic Conditions In the past few years, vertically integrated and transmission/distribution utilities have been confronted with several regulatory and policy changes that have challenged traditional resource forecasting, planning and analyses. The greater uncertainty introduced by these external mandates has required utilities to consider more flexibility into their operations. This session will address how resource planning professionals can address generation and transmission co-optimization using deterministic and stochastic tools that take into account these and related uncertainty variables. - Randell Johnson, Regional Director - U.S. East Coast, Energy Exemplar 2:45 3:30 p.m. incorporating Flexibility into Resource Planning Traditional LDC-based resource planning considers capacity requirements from the standpoint of maximum load, then works back from that measure / metric to build system support for meeting that load. This approach does not adequately address system flexibility needs that may exert a powerful influence over resource allocation solutions. This presentation will examine differences between the traditional LDC-based IRP approach and a new paradigm that considers a shorter-term, more granular, and chronological analysis to evaluate and meet net load variations. It will illustrate how such an analysis may drive different resource allocation solutions as compared to the more traditional approach, and the implications this can have for a generation portfolio. - Mikael Backman, Market Development Director Americas, Wartsila Power Plants 3:30 3:45 p.m. Afternoon Break 3:45 4:30 p.m. addressing Seams Issues in Operational, Resource Adequacy, and Long-Term Expansion Planning Separate models are typically used in operational planning, resource adequacy planning, and expansion planning. For operational planning, more detailed analysis around unit constraints is typically performed. For resource adequacy planning, a large distribution of possible load, weather, and unit performance conditions are considered. For expansion planning, simulations are often simplified to calculate system costs over a long time frame for a number of different resource plans. This presentation will explore the implications of interactions between multiple planning efforts. It will also examine the critical inputs for each type of modeling, and whether using separate models or incorporating all this analysis into one single framework is the superior approach. - Kevin Carden, Director, Astrape Consulting 4:30 5:15 p.m. methodologies and Process Improvements to Enhance Resource Planning Outcomes Making the IRP process more effective and the results more meaningful to policymakers and stakeholders often requires a revision to fundamental approaches used to develop the scenario framework, identify the planning strategies being tested, and reach consensus on the scorecard metrics that will be employed to help identify the preferred solution. In the current IRP study process, TVA has implemented new analysis methods and expanded its use of stakeholder groups to produce a more robust set of recommendations to guide long-term resource planning at the utility. - Gary Brinkworth, Senior Manager of New Generation & Portfolio Optimization Strategy & Planning, TVA 5:15 6:15 p.m. Networking Reception REGISTER 4601 TODAY! DTC Blvd., CALL Suite OR VISIT 4

5 Agenda Wednesday, May 14, :00 8:30 a.m. Continental Breakfast II. UTILIZING A FULL RANGE OF RESOURCE OPTIONS TO MEET EMERGING NEEDS 8:30 9:15 a.m. is the CCGT Flexible Enough to be the Resource of Choice in the Context of High Renewable Penetration? Growing penetration of renewable and distributed generation require that utility resource planners consider certain system requirements not customary in traditional IRPs. Considerable attention has recently been devoted to this emerging requirement, known as flexibility. This presentation will consider how one of the most common generation options the CCGT is suited to provide this flexibility. Key topics include: How to define the need Evaluating the demand(s) for flexibility, and how that is reflected operationally Capturing properly CCGT operational characteristics Factoring in and correctly reflecting trade-offs that will impact performance related to - o Efficiency and speed of technology o Fuel price o CO 2 price o Curtailment and dispatchability of renewable resource(s) - Arne Olson, Partner, Energy and Environmental Economics, Inc. (E3) 9:15 10:30 a.m. Addressing Gas/Electric Power Convergence: Panel The favorable economic profile associated with natural gas is driving utilities and load-serving entities in several regions to displace existing generation resources and expand their fleets with combustion turbines and other gas-powered generation assets. This panel will discuss how the path is often tortuous and complicated by external variables, including but not limited to: System adequacy and reliability Dual fuel requirements Generation curtailment due to pipeline constraints Gas/electric contingencies Industry task force and collaboration work efforts - Moderator: Randell Johnson, Regional Director, U.S. East Coast, Energy Exemplar - Panelists: - Phillip Popoff, Manager of Resource Planning, Puget Sound Energy - Gary Brinkworth, Senior Manager, New Generation & Portfolio Optimization - Strategy & Planning, TVA - Reed Edwards, Manager of Procurement and Resource Adequacy, Southern Company (Invited) 10:30 10:45 a.m. Morning Break 5

6 Agenda Wednesday, May 14, 2014 (CONTINUED) 10:45 11:30 a.m. Where Does a DSM Portfolio Fit in an IRP? Traditional supply-side resources are becoming increasingly difficult to site and build. Consequently, a methodology that integrates DSM more completely into the planning process is necessary to capture the full range of financial values that a utility should reflect within the context of an IRP. This presentation will illustrate several elements of such an approach, including: Discussion of how legacy and new DR programs can be effectively coupled together Using probabilistic weather scenarios to test the value of DSM in scenario planning The importance of portfolio analysis in DSM planning How to model DSM portfolios within the context of IRP scenarios - Chris Ivanov, Leader Load Forecasting & DSM, Power System Engineering, Inc 11:30 a.m. 12:15 p.m. How IRP Planners Can Model Storage as a Realistic Solution to Ancillary Services Issues As renewables penetration accelerates, and the need for ancillary services (AS) grows to support these resources, much work has been devoted to determining if/how storage s multiple attributes can be economically delivered to offset AS and distribution system requirements. This is especially true in smaller, transmission-constrained, or island utility electrical systems. This presentation will discuss a modeling approach that examines storage resources as more of an opportunity than constraint when considering future strategies to deal with the demands imposed by aggressive renewable energy resource penetration. - Navid Nowakhtar, Senior Economic Consultant, Leidos 12:15 1:30 p.m. Group Luncheon III optimizing available TOOLS TO BUILD A PORTFOLIO 1:30 2:15 p.m. Uses of Stochastic Principles to Ensure Robust Plans in the Face of Multiple Uncertainties Uncertainty has always been a part of planning an electric utility system. Planners must balance the risks of load forecasting errors, delays in resource completion, changing regulations, and volatile market prices with the requirements to provide reliable power supplies in an economical manner. This segment will examine what leading practices are with respect to: EPA regulations Fuel prices Renewable mandates Retirements Flexibility Low market yields This is a perfect forum to share, learn and take home a better/ - Gary Dorris, President, Ascend Analytics broader understanding of the issues facing our industry. Director Energy Supply Planning, Northwestern Energy 6

7 Agenda Wednesday, May 14, 2014 (CONTINUED) 2:15 3:00 p.m. weighing the Value of Incorporating Risk Analysis into IRPs This presentation will provide an informative look at how one of the country s largest vertically integrated utilities has used risk analysis tools to inform its IRP process. Some of the details reviewed include: The link between cost and certainty The preferred way to compare portfolios Comparing revenue requirement at risk (RRaR) to the base case cumulative present worth (CPW) Case studies of incorporating risk in scenario reviews Evaluating how different risk models influence IRP resource requirements - John Torpey, Director of Resource Planning, American Electric Power (AEP) 3:00 4:00 p.m. scenario Planning: How Important is it for IRPs? Scenario planning has moved into the mainstream of resource planning tools in recent years. Less evident, though, is how well utilities are designing, executing and applying the information gleaned from this instrument. A panel of utility IRP experts will discuss important elements that determine the value of scenario analysis to the IRP process and product: How is scenario planning best organized/conducted/de-briefed? Should development and execution of scenario analysis be the responsibility of the IRP/long-range planning staff or some other group w/in the utility? How should scenario planning be coordinated, chronologically connected and integrated with other tools such as base case planning, sensitivity analysis, Monte Carlo analysis, risk management, IRP and other analyses? What distinguishes scenario from sensitivity analysis? What is the relationship of drivers to themes to scenarios, how should each component be developed and who should develop them? How is useful information extracted through scenario planning? - Panel Discussion 4:00 p.m. conference Adjourns Conference had solid content with engaging speakers discussing timely issues. Good opportunity to discover a common set of shared concerns from other planning groups, and to get some fresh ideas about how to tackle these challenging issues. Senior Manager Capacity Planning, TVA This is a perfect forum to share, learn and take home a better/ broader understanding of the issues facing our industry. Director Energy Supply Planning, Northwestern Energy 7

8 Pre-Conference Workshop: Integrated Decision Analysis for Resource Selection, Conversion and Retirement Tuesday, May 13, 2014 Overview Renewable energy adoption, natural gas prices, environmental regulations (including uncertain carbon legislation) and ISO expansions have introduced significant complexity and uncertainty into resource planning at utilities and other energy providers. Long-term capital investments with multi-decade lifetimes must be considered and analyzed given the huge uncertainties associated with the fundamental drivers of portfolio costs and asset revenues; these include load, renewable generation, fuel and market prices, and future environmental regulations. This workshop will equip participants with an understanding of different modeling approaches, their relative strengths and weaknesses, and the current best practices in designing planning studies that systematically address these risks in an integrated fashion. It will also explore ways to use the results of the studies to understand exposure to various risk factors, as well as the tradeoffs between costs and risks. Additional content will include the criteria for systematically presenting complex modeling results, addressing risk, and the proper ways to value risk in decision analysis. LEARNING OUTCOMES Attendees will gain practical skills and insights on how to: Employ planning paradigms, modeling approaches and tradeoffs, presentation and visualization of planning results Apply best practices in resource planning to make robust resource decisions in the face of uncertainty Identify proper validation criteria for a stochastic simulation framework that maintains structural relationships among variables, while introducing meaningful uncertainty into simulations of future states Analyze risk factors that introduce uncertainty into the impacts of a resource portfolio decision Calculate quantification of resource decision impacts on broader energy supply portfolios, as well as regulated utilities investors and rate-payers 8

9 Workshop Agenda Tuesday, May 13, :00 8:30 a.m. Registration and Continental Breakfast 8:30 11:45 a.m. Workshop Timing Capturing Uncertainty through Validated Simulations o Price expectations and mechanisms to introduce uncertainty in risk factors o Maintaining structural relationships o Accounting for future conditions Asset Valuation in Resource Selection o Resource options o Valuing flexible versus inflexible resources o Chronologically optimized energy & ancillary service modeling o Methods for benchmarking model results Quantifying Portfolio Value and Risks o Presentation approaches of complex modeling o Risk factor identification o Distributional analysis of future costs/revenues o Analysis using payoff diagrams Applying an Integrated Decision Analysis Framework o Understanding risk tradeoffs between portfolios o Identification of risk metrics o Visualization of portfolio risks: efficient frontier and payoff diagrams o Risk premium valuation of portfolio risks o Quantification of stakeholder impacts of costs & risks workshop INSTRUCTOR Gary Dorris, Ph.D. / President / Ascend Analytics Gary Dorris, Ph.D., President, Ascend Analytics has been a pioneer of innovative solutions for energy planning and risk. For the last dozen years, Dr. Dorris has grown Ascend Analytics to be a leading provider of quantitative solutions for energy risk. His analytic innovations and expertise are sought by industry leaders including 4 of the top 5 utilities in America and many COOPs and municipalities. He has established industry standards for model validation, performance metrics, and portfolio management. He has also delivered expert testimony on best practices for portfolio management, risk management, energy trading, and asset valuation and was a lead expert witness in the Enron proceedings. In 2001, Dr. Dorris won distinguished recognition from the IPE for contributions to the field of energy risk management. Dr. Dorris holds a Ph.D. in applied economics and finance from Cornell University and a BS in mechanical engineer and BA in economics with Magna Cum Laude distinction also from Cornell University. 9

10 iacet Credits EVENT LOCATION has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET). In obtaining this accreditation, the (organization name) has demonstrated that it complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, (organization name) is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard. is authorized by IACET to offer 0.9 CEUs for the conference and 0.3 CEUs for the pre-conference workshop. Instructional Methods PowerPoint presentations and case studies will be used in program. Requirements for Successful Completion of Program Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit. A room block has been reserved at the Hotel: Hyatt Regency O Hare, 9300 Bryn Mawr Ave., Roesmont, IL 60018, for the nights of May 12-13, Room rates are $179, plus applicable tax. Call for reservations and mention the program to get the group rate. The cutoff date to receive the group rate is April 21, 2014, but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations early. sponsorship opportunities Do you want to drive new business through this event s powerful audience? Becoming a sponsor or exhibitor is an excellent opportunity to raise your profile before a manageably sized group of executives who make the key purchasing decisions for their businesses. There is a wide range of sponsorship opportunities available that can be customized to fit your budget and marketing objectives, including: Platinum, gold, or VIP sponsor Workshop sponsor Reception host Lanyard sponsor Networking break host Luncheon host Tabletop exhibit Breakfast host Custom sponsorship opportunities are also available. Please contact Stephen Coury at or scoury@euci.com for more information. PROCeEDINGS A copy of the conference proceedings will be distributed to attendees at the event. If you are unable to attend or would like to purchase additional copies, flash drives are available two weeks after the conference is complete. The cost per flash drive is US $395 (add US $50 for international shipments). Flash drives include visual presentations only. Upon receipt of order and payment, the flash drive will be shipped to you via regular USPS mail. NOTE: All presentation flash drive sales are final and are nonrefundable. REGISTER 4601 TODAY! DTC Blvd., CALL Suite OR VISIT 10

11 REGISTRATION INFORMATION EVENT LOCATION Mail Directly To: Electric Utility Consultants, Inc. () 4601 DTC Blvd., Ste. 800 please register the following Utility Resource Planning Conference and pre-conference workshop : US $1895 Early bird on or before may 2, 2014: US $1695 A room block has been reserved at the Hotel: Hyatt Regency O Hare, 9300 Bryn Mawr Ave., Roesmont, IL 60018, for the nights of May 12-13, Room rates are $179, plus applicable tax. Call for reservations and mention the program to get the group rate. The cutoff date to receive the group rate is April 21, 2014, but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations early. ENERG ZE WEEKLY Utility resource planning COnference only : US $1495 Early bird on or before may 2, 2014: US $1295 I'M SORRY I CANNOT ATTEND, BUT PLEASE SEND ME THE CONFERENCE PROCEEDINGS FOR US $395. (PLEASE ADD $50 FOR INTERNATIONAL SHIPPING.) s Energize Weekly newsletter compiles and reports on the latest news and trends in the energy industry. Newsletter recipients also receive a different, complimentary conference presentation every week on a relevant industry topic. The presentations are selected from a massive library of more than 1,000 current presentations that has gathered during its 26 years organizing conferences. Sign me up for Energize Weekly. How did you hear about this event? (direct , colleague, speaker(s), etc.) Print Name Job Title Company What name do you prefer on your name badge? Address City State/Province Zip/Postal Code Country Telephone List any dietary or accessibility needs here CREDIT CARD Name on Card Account Number Billing Address Billing City Billing State Billing Zip Code/Postal Code Exp. Date Security Code (last 3 digits on the back of Visa and MC or 4 digits on front of AmEx) OR Enclosed is a check for $ to cover registrations. All cancellations received on or before April 11, 2014, will be subject to a US $195 processing fee. Written cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other event or publication. This credit will be good for six months. In case of event cancellation, s liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at reserves the right to alter this program without prior notice. 11