1© 2008 Electric Power Research Institute, Inc. All rights reserved.
Key Challenges Facing the Electricity Sector
National Association of Regulatory Utility Commissioners
2008 Summer Meeting
Portland, OR
Revis James
Director, Energy Technology Assessment Center
Electric Power Research Institute
2© 2008 Electric Power Research Institute, Inc. All rights reserved.
Key Points
• Technology trends and mix are driven by long-term growth in electricity demand and expected CO2 emissions constraints.
• The scale of technology expansion and transformation will be huge.
• Expansion of major technologies will be necessary.
• A diverse, full technology portfolio
– lowers GDP impact of CO2 emissions constraints
– creates long-term, growing need for workforce to support deployment
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The Scale of Electricity Demand
• Now: 2007 U.S. electricity consumption ~ 3800 TWh
• Future (EIA 2008 Annual Energy Outlook)
– Final report projects 1046 TWh (29%) increase in U.S. electricity consumption from 2006 - 2030.
– About same as addition of new load equivalent to 2006 consumption of Texas, California, Florida, Ohio, Pennsylvania
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The Scale of Emissions Reductions
Source: World Resources Institute, “COMPARISON OF LEGISLATIVE CLIMATE CHANGE TARGETS”, June 18, 2008, www.wri.org/usclimatetargets
Total 2006 emissions for all U.S. electric utility companies ~ 2.3B MMt CO2
5© 2008 Electric Power Research Institute, Inc. All rights reserved.
MROMRO2010/20102010/2010
WECC Canada2007/2009(Winter)
Rocky Mtn.2009/2011
California2009/2011
AZ/NM/SNV2009/2011
New England2009/2009
New York2011/2016+
RFC2012/2013
SPPSPP2015/2016+2015/2016+
ERCOT2009/2016+
When resources drop below target
…including uncommitted resources
Key
Capacity Reserve Margins are Declining(2007 NERC Reliability Study)
6© 2008 Electric Power Research Institute, Inc. All rights reserved.
0
500
1000
1500
2000
2500
3000
3500
1990 1995 2000 2005 2010 2015 2020 2025 2030
U.S
. Ele
ctri
c S
ecto
rC
O2 E
mis
sio
ns
(mill
ion
met
ric
ton
s)
Technology EIA 2008 Reference Target
Efficiency Load Growth ~ +1.05%/yr Load Growth ~ +0.75%/yr
Renewables 55 GWe by 2030 100 GWe by 2030
Nuclear Generation 15 GWe by 2030 64 GWe by 2030
Advanced Coal Generation
No Heat Rate Improvement for Existing Plants
40% New Plant Efficiency by 2020–2030
1-3% Heat Rate Improvement for 130 GWe Existing Plants
46% New Plant Efficiency by 2020; 49% in 2030
CCS None Widely Deployed After 2020
PHEV None10% of New Light-Duty Vehicle Sales
by 2017; 33% by 2030
DER < 0.1% of Base Load in 2030 5% of Base Load in 2030
Achieving all targets is very aggressive, but potentially feasible.
AEO2008*(Ref)
*Energy Information Administration (EIA) Annual Energy Outlook (AEO)
Technical Potential for CO2 Reductions
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The Cost of CO2 Emissions Constraints(2000 – 2050)
The Value of the Full Portfolio under a CO2 Emissions Constraint
$0.0
$0.5
$1.0
$1.5
$2.0
2007 Limited Portfolio Upper bound of 2008 FullPortfolio Scenarios
Lower bound of 2008 FullPortfolio Scenarios
2007 Full Portfolio
Increasing technology availability, decreasing costs
Dis
coun
ted
Sum
of G
DP
Loss
es
($ T
rilli
ons,
200
0 $)
8© 2008 Electric Power Research Institute, Inc. All rights reserved.
Meet Demand via Natural Gas
Emissions Reductions via
Renewables and Efficiency
Nuclear Expands
Transformation of Coal Fleet: higher efficiency new plants + CCS,
Possible CCS retrofits to existing plants
2000 20302010 2020 20502040
Timeframes for Key Technologies
Electric Transportation
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Preliminary Construction Manpower Needs(EIA 2008 AEO Capacity Projections, EPRI 2007 TAG Data)
10© 2008 Electric Power Research Institute, Inc. All rights reserved.
Conclusions
• The scale of technology expansion and transformation will be huge.
• Under a CO2 emissions reduction policy, electricity production costs will increase and Gross Domestic Product (GDP) will be less.
• A diverse, full technology portfolio
– lowers GDP impact of CO2 emissions constraints
– long-term, growing need for workforce to support deployment
– Decarbonized electricity will play a vital role
• Major expansions in all of the major technology areas will be needed.
• Considerable manpower will be needed to suppor these expansions.
Image courtesy of Image courtesy of NASA Visible EarthNASA Visible Earth
12© 2008 Electric Power Research Institute, Inc. All rights reserved.
Back-up Slides
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+45%
*Economy-wide CO2 emissions capped at 2010 levels until 2020 and then reduced at 3%/yr
+260%
Contrasting Technology Strategies
14© 2008 Electric Power Research Institute, Inc. All rights reserved.
0.0
-0.5
-1.0
-1.5
Ch
ang
e i
n G
DP
Dis
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hro
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Cost ofPolicy
Reduction in Policy Cost with AdvancedTechnology
Value of R&D Investment
Lim
ited
Po
rtfo
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+ P
HE
V O
nly
+ R
enew
able
s O
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+ E
ffic
ien
cy O
nly
+ N
ucl
ear
On
ly
+ C
CS
On
ly
Fu
ll P
ort
folio
$1 T
rilli
on
Full Technology Portfolio Reduces Costs of a CO2 Emissions Reduction Policy by 60%
15© 2008 Electric Power Research Institute, Inc. All rights reserved.
Full
Limited
$/M
Wh*
Inde
x R
elat
ive
to Y
ear
2000
*Real (inflation-adjusted) 2000$Year
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2000 2010 2020 2030 2040 2050
0.0
0.5
1.0
1.5
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3.5
4.0
In the Full Portfolio the price of electricity has a low CO2 cost component and increases less
In the Full Portfolio the price of electricity has a low CO2 cost component and increases less
Wholesale Electricity Price