TheLowerSnakeRiverDamsPowerReplacementStudy

April4,2018

Aboutthestudy

ThestudywasundertakentoinvesCgatethetechnicalfeasibilityandcostofreplacingthefourLowerSnakeRiverDamswithaporFolioofcleanandrenewableresourcesthatsupportareliableandadequateregionalpowersystemwhileminimizingincreasestogreenhousegasemissions.ThestudyseekstodevelopadeeperunderstandingoftheopConsforreplacingthegridservicestheLowerSnakeRiverDamsprovidetotheregionalpowersystem,whilealsoestablishingananalyCcframeworkthatusesmodelsandmetricsfamiliarintheNorthwest.ThestudywascommissionedbytheNWEnergyCoaliConandconductedbyEnergyStrategies,anindependentconsulCngfirmfoundedin1986andbasedinSaltLakeCity,Utah.EnergyStrategiesclientsincludepowerproducers,transmissiondevelopers,uCliCes,andgovernmentagenciesthroughoutNorthAmerica.

2

WHY

?HO

W?

WHO

?

Thedams,thefish,andtheopportunity

3

RestoraConoffishpopulaConsholdsgreatpromisefortheregionandit’srequiredbytheEndangeredSpeciesAct.

TheNorthwestPowerandConservaConCouncilhassaidweneedsustainedreturnratesof2%–4%forsalmonsurvivaland4%–6%tomovetowardsrecovery.Inthelast20years,returnratesforwildSnakeRiversalmonhavelargelyhoveredbetween0.5%and1%—farbelowwhat’srequiredforwildsalmontosurviveandthriveintothefuture.

SalmonrecoveryisessenCaltosavingotherendangeredspecies,includingorcawhales.RestoraConwouldalsospurgrowthintheregion’scommercialandsportfishingindustries,anditwouldbenefittownsandtribalcommuniCesinwhichsalmonplayacentraleconomicandculturalrole.

Despitemanyeffortsandgreatexpense,fishpopulaConsarenotrecovering.

Summaryfindings

•  BalancedporFoliosofcleanenergyresources,includingsolar,wind,energyefficiency,demand-response,andstoragecanreplacethepowerthefourLSRDamscontributetotheNorthwestregion.

•  CleanporFolioswereequalorsuperiortoanAllGasalternaCveforadequacy,gridstability,andreliability.

•  ThecostsofbalancedcleanreplacementporFoliosaresmallcomparedtothecostoftheregionalpowersystem.

•  AbalancedcleanreplacementporFoliohasonlyaminorimpactonGHGemissions(about1%).IfimplementedinconjuncConwitharegionalGHGreducConpolicy,substanCalreducConsinGHGemissionscanbeachieved.

•  Newgas-firedgeneraConisnotrequiredtoaddressregionalcapacityneeds.

•  ThestudydidnottrytoidenCfyanopCmalcleanenergyreplacementporFolio.AnefforttodososhouldproduceevenmorecosteffecCveandenvironmentallyefficientoutcomesthantheporFoliosconsideredinthisanalysis.

4

“TheregioncanremovethefourlowerSnakeRiverdamsandreplacethepowertheyprovidewithapor;olioofconserva<onandrenewableenergyresourceswhilemaintaininggridandtransmissionreliabilityatlevelsequaltoorbe?erthanthecurrentsystemandwithli?leornoincreaseingreenhousegasemissions.”

TheLowerSnakeRiverDamPowerReplacementStudy,April2018

Processandstructure

•  Thestudywasconductedin3phases:–  IdenCficaConandquanCficaConofgridservicesprovidedbytheLowerSnakeRiverDams.–  DevelopmentofreplacementporFoliosthatmeetorexceedreliability,energy,andadequacyneeds.–  AssessmentoffixedandvariableproducConandoperaCngcoststoimplementthereplacement

porFoliosandtheireffectonmarketpricesandgreenhousegasemissions.

•  ThestudystartedwithaReferenceCaseinwhichthedamsremaininoperaConunderexisCngpoliciesandinaccordancewiththeNorthwestPowerandConservaConCouncil’s20-yearPowerPlanand5-yearAcConPlan.ItthenconsideredthreereplacementporFolios,whichallstartwiththe7thPlanassumpConsforacquiringenergyefficiency,demandresponse,andrenewableenergyresources.TheporFoliosthenaddresourcesasrequired.

5

Non-Genera<ngAlterna<vePor;olioWouldreplacepowerfromthedamswithfeasiblelevelsofdemandresponse,energyefficiency,baherystorage,andincrementalmarketpurchasesofelectricity

BalancedPor;olioWouldreplacepowerfromthedamswithacombinaConofdemandresponse,energyefficiency,andwindandsolargeneraCon

All-GasPor;olioWouldreplacepowerfromthedamswithamixofcombinedcycleandreciprocaCngenginenaturalgas-firedgenerators

•  Coordinated modeling framework used three modeling tools to look at replacement portfolio impacts to reliability, resource adequacy, operations, and cost.

•  Initial portfolios were developed,

tested, and adjusted iteratively. •  The clean replacement portfolios

included “Plus” versions that ramped-up the level of clean energy resources.

•  Modeling resulted in robust

comparisons of all replacement portfolios with the Reference Case.

Study framework

RegionalResourceAdequacyAnalysis

(GENESYSmodel)

EvaluateSystemReliability

(ColumbiaGridSummer&Winterpowerflowin

PowerWorld™)

Produc<onCostModelSimula<on

(WECC2026CommonCaseinABBGridView™)

Es<mateCostsandRateImpacts(annualizedcostofporGolio)

DevelopandIterateReplacementPor;olios

Por;olioData

CommonModelingPla;orm

•  Three models were used to evaluate Pacific Northwest region

o  Two models represent the entire WECC-footprint. The third represents ties and market purchases with neighboring areas.

o  British Columbia and Alberta are factored in all three models.

•  Lower Snake River Dams are modeled explicitly.

•  Replacement portfolios are modeled with high-granularity (e.g. new resources sited at specific substations, demand response assigned to appropriate load types).

Geographic scope of the study

LowerSnakeRiverDamsWesternUS

ThereplacementporFolios

RESOURCECOMPOSITIONOFTHEREPLACEMENTPORTFOLIOSThebaseBalancedandNon-GeneraCngAlternaCve(NGA)porFolioswereenhancedbytheaddiConofextraresourcestocreate“Plus”versions.TheresulCngporFoliosaswellastheAllGasporFoliowerethenmodeledfortheireffectsbothundercurrentlawandunderascenarioinwhichNorthweststatesadoptcarbonpricingpolicies.

8

Models,datasources,andassumpCons

ResourceadequacywasassessedusingtheNorthwestPowerandConservaConCouncil’sGENESYSmodel.ReliabilityandpowerflowcharacterisCcsweremodeledusingPowerWorld.ProducConcostsandgridstabilityweremodeledusingABB’sGridView.Wind,solar,andbaherystoragelevelizedcostswerecalculatedusingthe2017WECCCapitalCostModel.DataforthestudywasprovidedbyWECC,ColumbiaGrid,andtheNorthwestPowerandConservaConCouncil.

9

Findings:Adequacy&reliability

AllthreereplacementporFoliosreducedthelikelihoodofcurtailmentsandthemagnitudeofloadlossintheeventofcurtailments.The“Plus”porFolioswerethebest-performingintermsofsystemadequacy.

10

MagnitudeofCurtailmentsProbabilityofCurtailments

Findings:Cost

•  TheBalancedPlusporFolioincreasesthesystemrevenuerequirementby3%starCngin2026,whichtranslatestoa$1.28permonthincreasefortheaverageresidenCalcustomer.Thefigureincreasesslightlyto3.21%or$1.38permonthifNorthweststatesimplementgreenhousegaspolicies.

•  TherevenuerequirementfortheBalancedPlusporFolioislessthanthatoftheAllGasporFolio.•  Ifcostsforwindpower,solarpower,andstorageconCnuetheircurrentdeclines,costsmaybelower.This

isreflectedinthecolumnCtled,“BalancedPlusw/LowRenewableCostSensiCvity”.

11

Findings:Greenhousegasemissions

TheBalancedPlusporFoliogeneratesenoughcleanelectricitytomiCgatetheimpactonregionalemissionstolessthan1%.

WhentheBalancedPlusporFolioiscombinedwithregionalgreenhousegaspolicy,emissionsdeclineby2%.

12

DecreasesinGHGemissionsarefeasibleiftheLowerSnakeRiverDamsarereplacedbycleanenergyporFoliosthatareimplementedinparallelwithaGHGreducConpolicy.

0%

5%

10%

15%

-2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

ChangeinTotalRevenue

Requirement(%)

ChangeinAnnualCO2Emissions(%)

ChangestoRegionalRegionalCostsandCO2Emissions •  When the Balanced portfolio was modified to

include additional renewable resources and then modified further to include a regional GHG policy, carbon emissions are fully mitigated at a relatively low incremental cost .

•  The All Gas portfolio started with much higher

emissions and, when mitigated by GHG policy, was more costly and higher emitting than the Balanced portfolio.

•  An optimized portfolio may result in lower costs

without increases in GHG emissions.

Costs and emissions summary

+RegionalGHGpolicy

+RegionalGHGpolicy

+RegionalGHGpolicy

+EEuptoTechnicalAchievablePoten<al(+560aMW)

+750MWwind+500MWsolar

BalancedPor;olios

NGAPor;olios

AllGasPor;olios

ReferenceCase

PolicyimplicaCons

TheLowerSnakeRiverDamsPowerReplacementStudyhasimportantimplicaConsforthecourt-orderedreviewprocessnowbeingconductedbythefederalagenciesthatownandoperatethedams.

1.  Thestudyshowsthatremovalofthedamsandreplacementoftheenergytheygeneratewithcleanandrenewableresourcesisaviable,effecCveandaffordableopCon.ThestudyalsooffersaframeworkfromwhichthefederalagenciescandrawastheydevelopanewplanfordamoperaCons.

2.  ThecleanenergyporFoliosdevelopedinthestudycanbeimprovedupon.AlthoughthisstudydemonstratestheviabilityofreplacingpowerfromthefourLSRDamswithcleanandrenewableresources,itdidnotseektoidenCfytheopCmalcleanenergysoluCon.Thecourt-orderedprocessoffersagreatopportunityforthefederalagenciestoidenCfymorecosteffecCveandenvironmentallyefficientporFoliosthanthoseconsideredinthisanalysis.

3.  Afullstudyofdamremovalneedstoaddressfactorsbeyondthescopeofthisstudy.Thesefactorsincludethecostsofdecommissioningthedamsaswellascostsavingsfromdamremoval,includingthehundredsofmillionsofdollarsthatwillbeneededinthenextfewyearstoreplacethedams’agingturbines.

14