electricity in transition - umn ccaps · competitive electricity rates average retail price source:...
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Matthew Schuerger P.E., Commissioner
Electricity in Transition: A Regulatory Perspective
November 7, 2017
Minnesota Power Systems Conference
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Topics
•Overview
•Generation Fleet Transition
•Renewables Integration
• Engaged Customers
•Distributed Energy Resources
• Looking Forward 2
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Minnesota Public Utilities Commission
Ensure safe, adequate, and reliable services at fair and reasonable rates, consistent with the state’s policies, for three critical industries:
Electricity 3 investor owned – ~70% of state annual electric energy sales
Natural gas
Local telephone service (limited rate regulation)
Need for and physical location of “large energy facilities”
Mediate consumer service issues
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Integrated Resource Planning
Generic Size, Type, & Timing Approved
DSM
Alternatives Forecast
Existing Generation
Rate Increase
Approved
Forecast Adjustments
Finance Adjustments
Assign Costs
Design Rates
Specific Facility
Approved
Forecast
Alternatives Environment & Socioeconomic
s
Siting/Routing Approved & Constructed
Public Participation
Alternatives Environmental
Review
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Competitive Electricity Rates Average Retail Price
Source: U.S. Energy Information Administration, EIA-861 Average price of electricity to consumers is a weighted average of total consumer revenue (energy, demand, fuel adj., riders, etc) and total sales across all sectors.
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6.00
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2011 2012 2013 2014 2015
Ce
nts
pe
r kil
ow
atth
ou
r
Midwest Minnesota United States Michigan
Wisconsin North Dakota
South Dakota Iowa
Kansas
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Affordable Electricity Costs Average Residential Monthly Bill
Source: U.S. Energy Information Administration, EIA-861
$80
$90
$100
$110
$120
$130
2007 2008 2009 2010 2011 2012 2013 2014 2015
Do
llars
pe
r M
on
th
Minnesota Midwest United States
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Trends in MN Economic Growth, Electricity Use, and Emissions
Sources: U.S. Energy Information Administration U.S. Bureau of Economic Analysis
70
80
90
100
110
120
130
140
Gross State Product MWh CO2 tons per MWh
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Minnesota Generation Fleet Transition Experience to date: 1990 - 2016
66%62%
45%
2%6%
23%
0%
20%
40%
60%
80%
100%
1990 2005 2016
Other
Natural Gas
Renewables
Coal
Nuclear
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Minnesota Electricity in Transition Current Plans: 2016 - 2030
2016
* Based on MN IOU IRPs & announcements
2030*
Nuclear 23%
Coal 45%
Natural Gas 9%
Renewables 23%
Nuclear 21%
Coal 22%
Natural Gas 12%
Renewables 45%
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Minnesota Generation Fleet Transition Upcoming Challenge: 2020 - 2040
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Wind and Solar
Growth due to: Significantly improved technology;
Plummeting costs and increasing value;
Advancements in planning and operating with high levels of variable renewables;
Customer preferences for renewables.
Wind Capacity as of January 2017
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Wind Price Trends
Source: U.S. Department of Energy LBNL, 2016 Wind Technologies Market Report. August 2017 12
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Rate Impacts
• RES Rate Impact Reports required by Minn. Stat. 216B.1691, Subd. 2e
• Commission developed rate impact methodology in 2015; future period reflects IRP timeframe post-Commission methodology
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Solar Solar Capacity as of October 2017
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Distributed Generation Solar Capacity
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Solar Price Trends – Utility Scale
Source: U.S. Department of Energy LBNL, 2016 Utility Scale Solar Report. September 2017 16
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Grid integration of large amounts of wind generation in Minnesota and the upper Midwest began in the early 2000s:
Initial work focused on interconnection
Minnesota utilities & MISO developed regional transmission plans
Several Minnesota grid integration studies facilitated significant learning on all sides of the challenge => 2001, 2004, 2006, 2009, 2014
Today, the regional grid is planned and operated differently.
Wind Integration into the Midwest Regional Grid
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Minnesota Renewable Energy Integration and Transmission Study (MRITS 2014)
Reliability Study
– By Minnesota utilities and transmission companies; MISO
– With independent technical review
Increase Minnesota wind and solar generation
– 40% and 50% of annual electric energy
Three core and interrelated analyses:
– Developed a conceptual transmission plan;
– Evaluated hour by hour operational performance of the power system for full year; and
– Evaluated transient stability and system strength.
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MRITS Study Operational Performance Analysis Identification of Challenging Hours
% w
ind
an
d s
ola
r ge
ne
rati
on
(n
on
-syn
chro
un
ou
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% wind&solar
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Minnesota Renewable Energy Integration and Transmission Study (MRITS 2014)
Key Findings:
Wind and solar resources increased to 40% for Minnesota
– The power system can be successfully operated for all hours of the year;
– Requires some upgrades to existing transmission lines;
– No fundamental system-wide dynamic stability or voltage regulation issues.
Wind and solar resources increased to 50% for Minnesota and increased to 25% in other Midwest states
– The power system can be successfully operated for all hours of the year;
– Requires significant upgrades and expansions to the transmission system.
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Regional Grid Integration of Variable Renewables
Reducing Wind and Solar integration impacts
– Large, liquid, fast markets;
– Large balancing area with a strong grid; and
– Forecasting wind generation day-ahead
Midwest experience integrating wind
– Variability is mitigated by geographic diversity;
– Wind contributes to resource adequacy;
– Market rules have evolved to require fuller wind participation.
Wind and solar generators are power plants – Are Dispatched; Ride through disturbances; Provide reactive power;
Capable of fast and accurate ramping and active power control.
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Grid Balancing and Flexibility
Source: Harnessing Variable Renewables. IEA. 22
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Existing resources are capable of operating flexibly to manage renewable integration
Source: NREL, “The Role of Energy Storage with Renewable Electricity Generation”, Paul Denholm et al., January 2010
Robust regional grid and markets enable new and diverse technologies
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Engaged Customers
Customers are becoming increasingly involved in where their electricity comes from and in how they use it
Examples include:
• Green Tariffs
• Corporate sustainability
• Community goals
• Distributed Solar
• Demand Response 24
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Distributed Energy Resources
Supply and demand-side resources that can be used throughout an electric distribution system to meet energy and reliability needs of customers
Includes:
• Efficiency
• Distributed Generation
• Distributed Flexibility and Storage
• Distributed Intelligence
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Efficient Electrification - EPRI
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MN PUC Modernization Dockets
• Interconnection Process (2018)
• Technical Standards (2019) Interconnection
Standards
• Distribution Planning (2018)
• Grid Upgrades - AMI/ADMS Distribution Grid
• More granular pricing
• TOU/Critical Peak Pricing Rate Design
• Xcel Multi-Year Rate Case
• Metrics/Incentives Performance
Considerations
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Evolving Electric Grid
Minnesota’s electric grid is reliable, affordable, increasingly clean
The grid is at a time of significant change, as:
• Large infrastructure ages
• Consumer demands evolve
• New technology costs fall
Tomorrow’s integrated grid will optimize and extract value throughout the system:
• will be more distributed and flexible;
• will operate resiliently against natural disaster and attacks;
• will be cleaner, reliable, and affordable.
The regional transmission grid and markets will continue to be vital.
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