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Transcript
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 8 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