Download EIA Base Case 2008 - Office of Research & Economic Development

Climate Change
Challenges Facing
the Electric Industry
University of Nebraska - Lincoln
CLIMATE CHANGE CONFERENCE 2008
May 21, 2008
Ron Asche, President and CEO
Nebraska Public Power District
1
NPPD - 2007 Annual Overview

Revenue - $781 Million

Over 2,200 employees

3,132 MW of generation accredited
capability

Primarily a wholesale power supplier to
municipalities, other public power districts
and cooperatives

Provides almost half the electricity
consumed in Nebraska

Nebraska has consistently been among
the 10 lowest cost states for electricity
2
Fuel Mix for Electricity
2%
Wind/Solar/
Geo Therm al
7%
Hydro
Percent by Resource
20%
Nuclear
6%
P urchases
49%
Coal
20%
Natural Gas
9%
Hydro*
1%
Wind
24%
Nuclear
2%
Oil
National 2006
57%
Coal
4%
Natural
Gas & Oil
29%
Non-CO2 Emitting
NPPD 2007
34%
Non-CO2 Emitting
3
* Includes hydro purchases from the federal government
Carbon Dioxide Emissions by Sector
(Million Metric Tons)
United States
Nebraska
44 Million Metric Tons
5,934 Million Metric Tons
Commercial
4%
Transportation
33%
Electric
Power
42%
Transportation
28%
Industrial
14%
Industrial
15%
Residential
6%
Commercial
4%
Electric
Power
48%
Residential
6%
Reference: Nebraska Data from EIA 2004 State Emissions by Sector
US Data from EPA Inventory of US Greenhouse Gas Emissions and Sinks:
1990 - 2006 (April 2008)
4
10000
Greenhouse Gas (GHG)
Regulatory Proposals
No Controls
9000
Million Metric Tons CO 2e
8000
McCain-Lieberman
Bingaman-Specter
7000
1990 emission levels
6000
Sanders-Boxer
Lieberman-Warner
5000
4000
2005
Kerry-Snowe
2010
2015
2020
2025
2030
5
NPPD’s Projected Coal
Emissions vs. Allowances
Lieberman: Coal Emission vs. Allocation
NEBRASKA PUBLIC POWER DISTRICT
16
Business As Usual CO2 Emissions
12
10
Millions
CO2 (Metric Tons)
14
Projected CO2 Emissions
8
6
4
2
Allowance Allocation
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
NPPD Est. Allocation - Future Generation Resources
NPPD Est. Allocation - Existing Generation Resources
6
CO2 Allowance Price Projections
EPA Lieberman-Warner Forecast
(2012-2030)
Dollar per Metric Ton (nominal)
180
160
140
120
100
80
60
40
20
0
2012
2014
2016
2018
EPA - Low
2020
2022
2024
2026
EPA - High
7
NPPD’s Estimated CO2 Costs
Lieberman-Warner: Estimated Total Carbon
NEBRASKA PUBLIC POWER DISTRICT
$1,600
$1,400
Millions (nominal)
$1,200
$1,000
$800
$600
$400
$200
$0
2012
2014
2016
2018
2020
2022
2024
2026
Total Carbon Cost - High EPA
Total Carbon Cost - Low EPA
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How Can the Electric Sector
Make Significant Reductions?
• EPRI (Electric Power Research Institute) is
focusing on this issue
• EPRI PRISM Analysis –assesses the
feasibility for future CO2 emissions, based
on the potential of advanced technologies:
–
–
–
–
–
–
–
End-use energy efficiency
Renewable energy
Advanced light water nuclear reactors
Advanced coal power plants
CO2 capture and storage
Plug-in hybrid electric vehicles
Distributed energy resources
9
EPRI Prism – 2008 EIA with Energy Bill
3500
3000
Achieving all targets is very aggressive, but potentially feasible
U.S. Electric Sector
CO2 Emissions (million metric tons)
EIA Base Case 2008
2500
2000
Technology
EIA 2008 Reference
Target
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
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
None
10% of New Light-Duty Vehicle
Sales by 2017; 33% by 2030
< 0.1% of Base Load in 2030
5% of Base Load in 2030
Efficiency
1500
1000
500
0
1990
Advanced Coal
Generation
DER
1995
2000
2005
2010
2015
2020
2025
102030
Challenges (Cont’d)
• Utility executives
throughout the Nation
are concerned about
potential regional
power supply
challenges in the next
5-10 years
• Environmental
requirements associated
with Climate Change could
triple the cost or greater of
existing electric generating
facilities in Nebraska,
under certain scenarios
billion kilowatthours
6,000
US Electricity Demand
5,000
4,000
4,972
3,814
3,000
2,000
1,000
0
2006
2030
Energy Information Administration’s Annual Energy Outlook 2008 (Early Release)
11
Challenges
• Long-term challenge – slow, stop, reverse
greenhouse gas (GHG) emissions
• Current lack of technology to capture and
sequester CO2 from fossil generation
– May require new national pipeline network
for transportation to suitable storage areas
– Expected to add significant costs to coal
based generation
– Will reduce up to 1/3 of plant electricity
output
12
Challenges: Will CO2 Storage Be
Acceptable?
• Who owns the
underground storage
site? Who owns the
injected CO2?
• Who is responsible if
it escapes?
• What happens to the
injected CO2?
• Will public accept it?
• What is right legal,
policy framework?
EPRI’s role is to assess environmental impacts of potential mitigation
13
Challenges (Cont’d)
Where will electricity come from, how much will it
cost, and will it be reliable?
• COAL - proposed new plants being rejected or
withdrawn throughout the nation
• NUCLEAR - considerable uncertainty over cost and
regulatory process for new facilities
• NATURAL GAS – increased use will make the fuel even
more expensive and put stress on gas supplies
• ENERGY EFFICIENCY and RENEWABLES – very
important, but cannot completely offset growing needs
for more electricity and replace retiring baseload
capacity
14
Challenges: Availability of Offsets
•
A greenhouse gas (GHG) offset is generated by
the reduction, avoidance, or sequestration of GHG
emissions from a specific project (from a sector
not covered by a mandatory program, such as
agriculture or forestry)
•
Offsets may be essential because they potentially
can be implemented quickly and at a relatively low
cost
1.
2.
•
•
Must be “additional” - would not otherwise occur without
the funding provided by the offset purchaser
Must be rigorously quantified
Will certified offsets be available?
–
Nebraska
–
United States
–
International Community
NPPD focus is on potential Nebraska-based offsets
15
NPPD’s Climate Policy
• Recognizes the growing public concerns
about climate change
• NPPD is:
– Engaged in voluntary actions to lower GHG
emission intensity (CO2/MWh) of electricity
– Developing a strategy to address the challenges
of balancing customer’s competing concerns
about climate change and cost of energy
– Basing the strategy on our core public power
values:
• Being good stewards of the environment
• Conserving natural resources
• Providing reliable and low cost electricity
16
NPPD Initiatives
• Investigating repowering of Sheldon Station coal plant
(southwest of Lincoln) with cleaner, more efficient
technology
• Board approved goal of meeting 10% of energy needs
with renewable resources (primarily wind) by 2020
• NPPD will purchase 120-megawatts of wind generation
from facilities to be constructed near Bloomfield
• Finalizing 20-year Integrated Resource Plan to optimize
future generation and energy efficiency in a carbon
constrained economy
17
NPPD Initiatives (Cont’d)
• Develop and implement cost-effective energy efficiency
and conservation programs
– Compact Fluorescent Lighting (CFL) Campaign 30,000 CFL bulbs sold in Fall of 2007
• Exploring partnership with State Energy Office to offer
low interest customer loans for energy efficiency and
conservation applications
• Investigating pumped hydro storage generation
• Partnering with UNL – Nebraska Center for Energy
Sciences Research to investigate alternative energy
sources and potential carbon offsets utilizing Nebraska
resources
18
Summary
• Making significant CO2 emission reductions,
while providing reliable and reasonably
priced electricity to meet a growing need, will
be one of the biggest challenges the
electricity industry has ever faced
• Emission reduction policies must allow time
for new technologies to develop
• NPPD is developing a strategy to take costeffective actions to reduce CO2 emissions in
a manner that enhances the environment
and the economy of Nebraska
19