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The Western Area Power Administration is about to impose integrated resource planning requirements on its 612 public-power customers as part of its Energy Planning and Management Program (EPAM) and consistent with the Energy Policy Act of 1992. EPAM will affect public utilities over a 15-state region stretching from Minnesota to California, Montana to Texas. In this study, an assessment is made of the environmental impacts of the IRP requirements. Environmental impacts are calculated based on modeled changes in electric power generation and capacity additions.
As part of their long-term planning process, utilities and government agencies are choosing power generation and conservation strategies that will effect environmental interactions for decades to come. In the US, power marketing administrations within the US Department of Energy have a strong influence over the strategies to be implemented in large multi-state regions. Pacific Northwest Laboratories (PNL) prepared environmental impact statements (EIS) for two power marketing agencies, the Western Area Power Administration (Western) and Bonneville Power Administration (Bonneville). The Western EIS assessed the effects of integrated resource planing (IRP) on the public utilities Western serves, while the Bonneville EIS assessed the effects of acquiring new energy resources in the pacific Northwest. The results were found using models that simulated utility systems. In both cases, environmental impacts were reduced when the conservation strategy in question was considered. This paper describes the results of the environmental analyses for the two agencies and compares the results with those of another simplified approach that relies on attributing emissions of new resources based on an extrapolation of existing capacity.
Most large electric utilities and a growing number of gas utilities in the United States are using a planning method -- Integrated Resource Planning (IRP) - which incorporates demand-side management (DSM) programs whenever the marginal cost of the DSM programs are lower than the marginal cost of supply-side expansion options. Argonne National Laboratory has applied the IRP method in its socio-economic analysis of an Environmental Impact Statement (EIS) of power marketing for a system of electric utilities in the mountain and western regions of the United States. Applying the IRP methods provides valuable information to the participants in an EIS process involving capacity expansion of an electric or gas utility. The major challenges of applying the IRP method within an EIS are the time consuming and costly task of developing a least cost expansion path for each altemative, the detailed quantification of environmental damages associated with capacity expansion, and the explicit inclusion of societal-impacts to the region.
In the aftermath of the consumer price shocks and short-term power shortages of the 2000-01 electricity crisis, policymakers and regulators in Western states are placing increased emphasis on integrated resource planning (IRP), resource adequacy and assessment and a diversified portfolio of resources to meet the needs of electricity consumers. In some states, this has led to a resurgence in state and utility commitments to energy efficiency. Increasing interest in acquiring energy efficiency as a power-system resource is also driven by the desire to dampen high growth rates in electricity demand in some Western states, rapid increases in natural gas prices, concerns about the environmental impacts of electricity generation (e.g. water consumption by power plants, air quality), and the potential of energy efficiency to provide utility bill savings for households and businesses (WGA CDEAC 2006). Recognizing the cost-competitiveness and environmental benefits of energy efficiency, the Western Governor's Association (WGA) has set a high priority for energy efficiency, establishing a goal of reducing projected electricity demand by 20% across the West by 2020 in a policy resolution on Clean and Diversified Energy for the West (WGA 2004). Nationally, the need for improved tracking of demand-side resources in load forecasting is formalized in the North American Electric Reliability Council (NERC)'s recently adopted reliability standards, which utilities and regional reliability organizations will need to comply with (NERC 2005a and 2005b). In this study, we examine the treatment of energy efficiency in recent resource plans issued by fourteen investor-owned utilities (IOUs) in the Western United States and Canada. The goals of this study are to: (1) summarize energy-efficiency resources as represented in a large sample of recent resource plans prepared by Western utilities and identify key issues; (2) evaluate the extent to which the information provided in current resource plans can be used to support region-wide resource assessment and tracking of state/utility progress in meeting the WGA's energy-efficiency goals (WGA 2004); and (3) offer recommendations on information and documentation of energy-efficiency resources that should be included in future resource plans to facilitate comparative review and regional coordination. The scope of this report covers projected electric end-use efficiency investments reported in all Western utility resource plans that were publicly available as of February 2006. While a few utilities included additional demand-side resources, such as demand response, in their plans, we do not report that information. However, many of the issues and recommendations in reference to energy efficiency in this report are relevant to other demand-side resources as well. This report is organized as follows. Section 2 outlines the data sources and approach used in this study and conceptualizes methods and metrics for tracking energy-efficiency resources over time. Section 3 presents results from the review of the utility resource plans. Important issues encountered in reviewing the resource plans are discussed in section 4. Finally, section 5 concludes with recommendations for improving the tracking and reporting of energy efficiency in forthcoming resource plans.
Markets for renewable energy have historically been motivated primarily by policy efforts, but a less widely recognized driver is poised to also play a major role in the coming years: utility integrated resource planning (IRP). Resource planning has re-emerged in recent years as an important tool for utilities and regulators, particularly in regions where retail competition has failed to take root. In the western United States, the most recent resource plans contemplate a significant amount of renewable energy additions. These planned additions--primarily coming from wind power--are motivated by the improved economics of wind power, a growing acceptance of wind by electric utilities, and an increasing recognition of the inherent risks (e.g., natural gas price risk, environmental compliance risk) in fossil-based generation portfolios. This report examines how twelve western utilities treat renewable energy in their recent resource plans. In aggregate, these utilities supply approximately half of all electricity demand in the western United States. Our purpose is twofold: (1) to highlight the growing importance of utility IRP as a current and future driver of renewable energy, and (2) to identify methodological/modeling issues, and suggest possible improvements to methods used to evaluate renewable energy as a resource option. Here we summarize the key findings of the report, beginning with a discussion of the planned renewable energy additions called for by the twelve utilities, an overview of how these plans incorporated renewables into candidate portfolios, and a review of the specific technology cost and performance assumptions they made, primarily for wind power. We then turn to the utilities' analysis of natural gas price and environmental compliance risks, and examine how the utilities traded off portfolio cost and risk in selecting a preferred portfolio.
Markets for renewable electricity have grown significantly in recent years, motivated in part by federal tax incentives and in part by state renewables portfolio standards and renewable energy funds. State renewables portfolio standards, for example, motivated approximately 45% of the 4,300 MW of wind power installed in the U.S. from 2001 through 2004, while renewable energy funds supported an additional 15% of these installations. Despite the importance of these state policies, a less widely recognized driver for renewable energy market growth is poised to also play an important role in the coming years: utility integrated resource planning (IRP). Formal resource planning processes have re-emerged in recent years as an important tool for utilities and regulators, particularly in regions where retail competition has failed to take root. In the western United States, recent resource plans contemplate a significant amount of renewable energy additions. These planned additions - primarily coming from wind power - are motivated by the improved economics of wind power, a growing acceptance of wind by electric utilities, and an increasing recognition of the inherent risks (e.g., natural gas price risk, environmental compliance risk) in fossil-based generation portfolios. The treatment of renewable energy in utility resource plans is not uniform, however. Assumptions about the direct and indirect costs of renewable resources, as well as resource availability, differ, as do approaches to incorporating such resources into the candidate portfolios that are analyzed in utility IRPs. The treatment of natural gas price risk, as well as the risk of future environmental regulations, also varies substantially. How utilities balance expected portfolio cost versus risk in selecting a preferred portfolio also differs. Each of these variables may have a substantial effect on the degree to which renewable energy contributes to the preferred portfolio of each utility IRP. This article, which is based on a longer report from Berkeley Lab, examines how twelve western utilities - Avista, Idaho Power, NorthWestern Energy (NorthWestern or NWE), Portland General Electric (PGE), Puget Sound Energy (PSE), PacifiCorp, Public Service Company of Colorado (PSCo), Nevada Power, Sierra Pacific, Pacific Gas & Electric (PG & amp;E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG & amp;E) - treat renewable energy in their recent resource plans. In aggregate, these utilities supply approximately half of all electricity demand in the western United States. In reviewing these plans, our purpose is twofold: (1) to highlight the growing importance of utility IRP as a current and future driver of renewable energy, and (2) to suggest possible improvements to methods used to evaluate renewable energy as a resource option. This article begins with a discussion of the planned renewable energy additions called for by the twelve utilities in our sample, followed by an overview of how these plans incorporated renewables into candidate portfolios, and a review of the specific technology cost and performance assumptions they made, primarily for wind power. We then turn to the utilities analysis of natural gas price and environmental compliance risks, and examine how the utilities traded off portfolio cost and risk in selecting a preferred portfolio.
The nexus between water and energy raises a set of public policy questions that go far beyond water and energy. Economic vitality and management of scarce and precious resources are at stake. This book contributes to the body of knowledge and understanding regarding water, energy, and the links between the two in the American West and beyond. The research and analyses presented by the authors shed new light on the choices that must be made in order to avoid unnecessary harm in the development and management of water and energy systems to meet public needs in an ever changing environmental and economic climate. Indeed, the book shows, thoughtfully designed new technologies and approaches can help restore damaged environments and provide a range of benefits. The focus is the American West, but many of the lessons are global in their applicability. After a broad, stage-setting introductory section, the volume looks first at the use of water for energy production and then follows with chapters on the role of energy in water projects. The final section looks at the way forward, providing cases and recommendations for better, more efficient linkages in the water–energy nexus. Students and researchers in economics, public policy, environmental studies and law along with planners and policymakers will find this accessible and very current volume invaluable.