Portland General Electric Co · NYSE:POR

Portland General Electric — Technical Presentation (April 2009)

185 slides from Portland General Electric's technical presentation, Apr 10, 2009

Slide 1: Integrated Resource Plan 2009: Introduction & IRP Basics
Integrated Resource Plan 2009 Introduction & IRP Basics April 10, 2009
Slide 2: Workshop Agenda
Workshop Agenda • Introduction & IRP Basics • CO2 Costs / Price Drivers – – Dr. Mark Trexler – DNV • Future Technology Options – – Ellen Petrill – EPRI • Legislative Environment: Climate Change • CO2 Price Approach • Boardman RH BART – RH BART (Regional Haze / Best Available Retro-fit Technology) •
Slide 3: Integrated Resource Planning (IRP)
Integrated Resource Planning (IRP) The primary goal of IRP is to identify a future resource action plan, that when considered with our existing portfolio, provides the best combination of expected cost and associated risks and uncertainties for PGE and its customers. The IRP Process: PGE files an In
Slide 4: PGE Supply Portfolio
PGE Supply Portfolio 2008 2012 Natural Gas Natural Gas 25% Purchases Purchases 25% 22% 22% Hydro 14% Coal Coal Hydro 24% 24% 25% PGE Low-Impact Hydro (RPS) Wind (RPS) Wind (RPS) 2% 4% 13% After economic dispatch. Based on IRP data tracking annual energy needs on an expected basis. 4 PGE Low-Impact h
Slide 5: Projected Resource Need: Energy
Projected Resource Need: Energy 3500 Retail Load w/ Future EE 3000 Retail Load 2500 Annual Average Availability MWa 2013 Shortfall 2017 Shortfall 2020 Shortfall 615 MWa 980 MWa 1,277 Mwa 472 MWa 702 MWa 956 MWa 2000 Renewables RFP Long-term Contracts Wind (Biglow, Klondike II, Vansycle Ridge) 1500 H
Slide 6: Projected Resource Need: Capacity
Projected Resource Need: Capacity January Capacity Need 6,000 Retail Load w/ Reserves Retail Load w/ Reserves & Future EE 5,000 4,000 2013 Shortfall 2017 Shortfall 2020 Shortfall MW Capacity Available 1,336 MW 1,922 MW 2,336 MW 1,272 MW 1,726 MW 2,126 MW 3,000 Long-Term Contracts (Includes DSG) Hydr
Slide 7: RES Requirements: Energy
RES Requirements: Energy 1600 1400 1200 1000 Renewables Existing or MWa 800 Under Development Renewables 600 Required 400 New Resources Needed 200 0 2011 2015 2020 2025 Year 7
Slide 8: What Will Carbon Cost?
What Will Carbon Cost? The Trillion Dollar Question Facing Corporate and Public Strategy Dr. Mark C. Trexler April 10, 2009
Slide 9: Table of Contents
Table of Contents 1. Setting the Context 2. Forecasting Carbon Markets 3. The Key Forecasting Question 4. Making Sense of It All © Det Norske Veritas AS. All rights reserved 09 April 2009 Slide 2
Slide 11: Carbon Costs are THE Key!
Carbon Costs are THE Key! Can Society Afford Emissions Targets? Will Targets be Near Term or Long-Term? What Will Cap and Trade Compliance Cost Companies? Will Carbon Costs Promote New Technologies? What Power Plants Should Utilities be Building? Note: Carbon Costs Calculated in a Number of Ways © D
Slide 12: And GHG Markets Very Different!
And GHG Markets Very Different! Demand is (Obviously) a Function of Policy Decisions But (Less Obviously) So Is Supply! No Other Commodity With These Characteristics © Det Norske Veritas AS. All rights reserved 09 April 2009 Slide 5
Slide 13: The Search for Price Discovery
The Search for Price Discovery A Wide Variety of Price Signals - Chicago Climate Exchange: $2.50/ton - Current International Credit Prices: $10-15 - EU Emissions Trading System Prices in 2006: $45 - Voluntary Credits: $2-50 A Wide Variety of Price Projections - Inconsequential prices, based on weak
Slide 14: A Recent Literature Review
A Recent Literature Review • Highest Recent Price Projection: $257/Ton CO2e By 2025 To Reduce Emissions to 70% Below 2005 Levels By 2050 • (Lieberman-Warner; 14% Cap Met With Offsets). • Lowest Recent Price Projection: $0.35/Ton CO2e By 2025 To Stabilize at 750 ppm In The Year 2100. • Again, Carbon
Slide 15: Changing Our Perspective
Changing Our Perspective At The End of the Day, It Should Not be a Question of “What’s The Correct Prediction of 2015 Carbon Prices?” Instead: “What Carbon Value Does It Make Sense to Build Into Our Decisionmaking Given Our View of Future Policies, Our Sensitivity To Carbon Prices, And The Risks Ass
Slide 17: Market Demand - Market Supply = Market Scarcity
Market Demand - Market Supply = Market Scarcity = Market Price* * Does not apply to carbon prices not based on supply and demand © Det Norske Veritas AS. All rights reserved 09 April 2009 Slide 10
Slide 19: Carbon Market Variables
Carbon Market Variables Context Variables (influencing supply and demand) - Science, media coverage, public opinion, policy anticipation Demand Variables (determining demand for reductions) - Growth, fossil prices, targets, U.S.- D.C. role Supply Variables (determining supply magnitude) - What count
Slide 20: Implications of Fossil Fuel Prices
Implications of Fossil Fuel Prices Natural Gas Price Typical Project $2.00/MMBtu $4.00/MMBtu $8.00/MMBtu Coal Mine Methane Capture $5.80 $0.70 negative Large-Scale Wind Energy $45.78 $19.11 negative Coal-to-Gas Fuel-Switching* $15.12 $72.44 $187.07 Pulverized Coal CO2 Capture** $52.31 $59.76 $74.64
Slide 21: Implications of Additionality Screening
Implications of Additionality Screening $140 $120 $100 $80 $/ton CO2 $60 $40 $20 $0 0 1,125 2,250 3,375 4,500 5,625 6,750 7,875 9,000 -$20 -$40 Million Metric Tons of CO2 Low Stringency Moderate Stringency Severe Stringency © Det Norske Veritas AS. All rights reserved 09 April 2009 Slide 14
Slide 22: Implications of Market Flexibility
Implications of Market Flexibility Mitigation Costs for a 500 MW Coal Plant (assum ing 8% discount rate) CCS Source of Offset Projects RE + EE California US International $0 $1,000 $2,000 $3,000 $4,000 NPV of mitigation costs (million) © Det Norske Veritas AS. All rights reserved 09 April 2009 Slide
Slide 27: Scenario – Political Stalemate?
Scenario 1 – Political Stalemate? Major Political and Economic Challenges Challenges Lead to Loss of International and Domestic Policy Momentum The Odds: Low? Notes: - Scenario subject to sudden reversal - Absent a scientific reversal, very hard to see - Odds much lower than previously, but recessio
Slide 29: Scenario – Political Realism?
Scenario 2 – Political Realism? Issue is Here to Stay - Numerous policies and measures pursued Will Affect Many Sectors in Material Ways But Don’t Achieve CO2 Stabilization Or Anything Close The Odds: High? Notes: - Scenario subject to sudden “upgrading” - Absent significant political change, almost
Slide 31: Scenario – Atmospheric Stabilization?
Scenario 3 – Atmospheric Stabilization? We Develop Political Will to Tackle Climate Change - Aggressive emissions reductions - Aggressive technology development - Aggressive reliance on GHG markets Dramatic Implications for Energy Economy, and Society at Large The Odds: Low? Note: - Scenario less su
Slide 34: Conclusions
Conclusions There Is No “One Size Fits All” Forecast Forecasts Can Take a Number of Forms Companies CAN Develop Forecasts That Are Appropriate to Their Needs, and That Are Very Different From Company to Company Companies Can Do a Lot Better Than Throwing Darts - Underlying supply and demand for redu
Slide 35: Dr. Mark C. Trexler
Dr. Mark C. Trexler Director, Climate Strategies and Market DNV Climate Change Services North America mark.trexler@dnv.com © Det Norske Veritas AS. All rights reserved 09 April 2009 Slide 28
Slide 36: Generation Technology Options
Generation Technology Options Ellen Petrill Director, Public/Private Partnerships Integrated Resource Planning Workshop Portland, OR April 10, 2009
Slide 37: The Electric Power Research Institute
The Electric Power Research Institute RD&D consortium for the electricity industry founded in 1973 • Independent, unbiased, tax-exempt collaborative research organization • $335+ million funding in 2008 • Major offices in Palo Alto, CA; Charlotte, NC and Knoxville, TN • 460 participants in over 40 c
Slide 38: Outline
Outline • EPRI Prism/MERGE analysis • Technical Assessment Guide introduction • Technologies – Non-CO2 emitting • Nuclear • Renewable – wind, solar, geothermal, ocean – Energy saving technologies • Energy efficiency • Smart grid – Carbon-emitting • Coal with carbon capture and storage • Technology c
Slide 39: EPRI Prism – The Full Portfolio of Technologies
EPRI Prism – The Full Portfolio of Technologies Aggressively Deployed Can Reduce Electricity CO2 3500 3000 EIA Base Case 2008 CO2 Emissions (million metric tons) 2500 U.S. Electric Sector 2000 Technology EIA 2008 Reference Target 1500 Efficiency Load Growth ~ +1.2%/yr Load Growth ~ +0.75%/yr Renewab
Slide 40: EPRI Technical Assessment Guide (TAG)
EPRI Technical Assessment Guide (TAG®) Levelized Cost of Electricity Analysis Objective • Provide generic basis for strategic comparison of technology options for base load generation Analytical Basis • Utilize EPRI TAG® capital cost data and methodologies to calculate levelized costs of electricity
Slide 41: Estimates in Constant $ and Current $ are Very Different
Estimates in Constant $ and Current $ are Very Different Example: New Nuclear Power Plant Source: EPRI Report 1018329, Section 1.8.3 © 2009 Electric Power Research Institute, Inc. All rights reserved. 6
Slide 43: Nuclear Generation Technologies
Nuclear Generation Technologies: Available Now, 90% Capacity Factor *Westinghouse MHI APWR (1700 MWe) AREVA US EPR (1600 MWe) AP1000 (1115 MWe) *ABWR (1371 MWe) GE ESBWR (1535 MWe) * Design Certified © 2009 Electric Power Research Institute, Inc. All rights reserved. 8
Slide 44: Nuclear Data Range – 2015
Nuclear Data Range – 2015 Levelized Cost of Electricity, $/MWh All costs are in December 2007 $ 120 110 100 90 80 ($3980/kW) 70 60 50 All calculations for 1400 MW, 90% capacity factor 40 95% confidence level values based on EPRI Report 1018329 Rev. October 2008 30 0 10 20 30 40 50 Cost of CO2, $/Met
Slide 46: Wind – 2015
Wind – 2015 Levelized Cost of Electricity, $/MWh All costs are in December 2007 $ 120 110 100 Wind ($1995/kW, 32.5% Capacity Factor) 90 80 70 60 50 No investment or production tax credits are assumed. 40 95% confidence level values based on EPRI Report 1018329 Rev. October 2008 30 0 10 20 30 40 50 C
Slide 47: Biomass
Biomass Burlington, VT - 100% Wood Chips • 100% biomass available now • Co-firing – up to 10% typical, available now – Little use in US – Capital cost: $0 - $500/kw – Fuel cost drives LCOE, if more than coal, then LCOE increases – Capacity factor – similar to coal Gadsden, AL - Switch Grass Co-Firin
Slide 48: 100% Biomass – 2015
100% Biomass – 2015 Levelized Cost of Electricity, $/MWh All costs are in December 2007 $ 120 110 100 Biomass ($2.22/MMBtu, $3235/kW) 90 80 Biomass: 0.10 Metric Tons CO2/MWh 70 X $50/Ton = $5.0/MWh 60 50 No investment or production tax credits are assumed. 40 95% confidence level values based on EPR
Slide 49: Central Station Solar Power Technologies
Central Station Solar Power Technologies • Photovoltaic • Solar thermal – Concentrating PV (CPV) – Central receiver – Crystalline silicon – Dish/engine – Thin film – Linear Fresnel – Parabolic trough © 2009 Electric Power Research Institute, Inc. All rights reserved. 14
Slide 50: Solar Resource
Solar Resource Concentrating Solar Thermal (CST): Photovoltaic (PV): Direct Normal Solar Radiation Diffuse Solar Radiation • 530 MW installed worldwide • > 10,000 MW installed worldwide • > 8,000 MW planned by 2013 • > 33,000 MW expected by 2011 Source: NREL © 2009 Electric Power Research Institute,
Slide 51: New Mexico Solar Assessment: Photovoltaic Results
New Mexico Solar Assessment: Photovoltaic Results • Distributed applications more likely due to modularity • System effects and integration costs need to be better understood before a 50 MW or larger PV project is built June 3, 2004 One day output for Tucson Electric 5 MW Springerville PV Plant, Ari
Slide 52: Wide Range of Cost Results for New Mexico PV
Wide Range of Cost Results for New Mexico PV 50 MW Baseline PV Plant (IOU ownership) 45 LCOE, ¢/kWh (2009 dollars) 40 35 30 25 20 15 10 5 0 Base Case Stacked Existing (10% ITC) Stacked Existing (30% ITC) Stacked All North Fixed Crystalline South Fixed Crystalline North Tracking Crystalline South Tra
Slide 53: New Mexico Solar Assessment: Solar Thermal Results
New Mexico Solar Assessment: Solar Thermal Results • Dish/engine technology not available in 2011 due to commitments of leading technology provider • Linear Fresnel is too early in development cycle • Molten salt central receiver technology early in development cycle -- high technical and financial
Slide 54: Wide Range of Costs for New Mexico Parabolic Trough
Wide Range for Costs for New Mexico Parabolic Trough 125 MW Baseline Trough Plant (dry cooling, no storage, no hybridization, IOU ownership) 30 LCOE, ¢/kWh (2009$) 25 20 North Site 15 South Site 10 5 0 ng in on e: t l 0% ) ac C) % ec e de TC N C % era n Ta y T NM C ke Gu epa % is (10 0% em xem C Al
Slide 55: Solar Thermal Trough Design – 2015
Solar Thermal Trough Design – 2015 All costs are in Levelized Cost of Electricity, $/MWh December 2007 $ 280 260 240 LCOE range is about $120/MWh to $260/MWh 220 Source: EPRI Report 1014182 200 Average LCOE ~ $175/MWh, 180 Average Total Capital Requirement ~ $4600/kW 160 140 120 95% confidence level
Slide 57: Geothermal Energy
Geothermal Energy • Available now • High development risk • Capacity factor 70 – 90% • Cost of electricity for flash steam (>200C) $ 2008 – 2002 Status: $59.12 – 2030 Goal: $38.21 Source: © 2009 Electric Power Research Institute, Inc. All rights reserved. 22
Slide 58: Wave Energy Conversion: Emerging Technology
Wave Energy Conversion: Emerging Technology, 30- 40% Capacity Factor Linear Attenuator -- Pelamis Point Absorber-- Ocean Power Technologies Oscillating Water Column -- OceanLinx Overtopping -- Wave Dragon © 2009 Electric Power Research Institute, Inc. All rights reserved. 23
Slide 59: Active Wave Technology Projects in Oregon
Active Wave Technology Projects in Oregon OSU Northwest National Marine Research Center in Newport, OR OPT Wave Park in Reedsport,OR 1st 150 kW Buoy being built at OIW • EPRI estimates 30 MW by 2015 OPT Wave Energy Park in Coos Bay, OR • EPRI estimates 50 MW by 2018 OWC Wave Plant in Breakwater in D
Slide 60: Economics – Reedsport Oregon Plant
Economics – Reedsport Oregon 100 MW Plant (constant 2004$ - Regulated Utility – Existing Gov’t Wind Incentives) Wave Low Bound Wave Upper Bound Wind 100.00 Actual Wind COE (cents/kWh) COE History 10.00 Projected Wave Upper and Lower COE 1.00 100 1000 10000 100000 Installed Capacity (MW) EPRI Reports
Slide 62: EPRI’s National Energy Efficiency Potential Study
EPRI’s National Energy Efficiency Potential Study 7,000 Average Avoided Growth Rate 6,500 Growth Electricity Reduction Rate Consumption from AEO 2030[1] 6,000 Reference[1] 2.5% Codes and ~ Realistic te Standards Achievable 0.8% 5% 22% Ra th Energy (Billion kWh) 5,500 Potential row G Maximum Market-d
Slide 63: Opportunities for Energy Efficiency Savings
Opportunities for Energy Efficiency Savings Top 10 Energy Efficiency Achievable Potentials Includes . . . Commercial Lighting Industrial 1-5 hp motors Residential Color TV Residential Programmable Thermostat Commercial Central AC Residential Lighting Commercial Monitors 2030 Commercial Personal Comp
Slide 64: Opportunities for Energy Efficiency Savings
Opportunities for Energy Efficiency Savings Commercial Lighting Commercial Other West Residential Electronics Industrial Machine Drive Commercial Cooling Commercial Lighting Industrial Machine Drive South Residential Electronics Residential Cooling Commercial Cooling Commercial Lighting Industrial M
Slide 66: The Smart Grid: Enables Dynamic Energy Management
The Smart Grid: Enables Dynamic Energy Management and “Prices to Devices” Efficient Building Systems Utility Communications Internet Renewables PV Consumer Portal & Building EMS Advanced Distribution Metering Control Dynamic Operations Interface Systems Control Plug-In Hybrids Smart Distributed End-
Slide 67: Smart Grid = Green Grid
Smart Grid = Green Grid Enables energy savings mechanisms: • Continuous commissioning of buildings • Reduced T&D line losses • Direct feedback for customers • More effective, reliable demand response • Enhanced measurement and verification capabilities EPRI analysis shows potential reduction of 1.2
Slide 69: Coal with CO2 Capture and Sequestration (CCS)
Coal with CO2 Capture and Sequestration (CCS) Pulverized Coal with CCS Integrated Gasification Combined Cycle (IGCC) with CCS © 2009 Electric Power Research Institute, Inc. All rights reserved. 34
Slide 70: Pulverized Coal With CO2 Capture – New or Retrofit
Pulverized Coal With CO2 Capture – New or Retrofit CO2 to use or Fresh Water Sequestration Coal PC CO2 SCR ESP FGD Removal Flue Gas Air Boiler CO2 to Cleanup e.g., MEA to Stack and Compression Cleaned Flue Gas Steam Fly Ash Gypsum/Waste to Atmosphere Turbine CO2 Stripper Absorber Tower Flue Gas from
Slide 71: IGCC Without and With CO2 Removal
IGCC Without and With CO2 Removal Sulfur IGCC without CO2 Capture Coal Gas CC Air ASU Gasifier Clean Power POWER O2 Up Block Slag IGCC with CO2 Capture Sulfur CO2 Coal Gas CC Air ASU Gasifier Shift Power POWER Clean O2 Block Up H2 Slag Needs demonstration at large scale, not available until after 20
Slide 72: Cost Estimates for PC and IGCC, New and Retrofit
Cost Estimates for PC and IGCC, New and Retrofit Illinois #6 Bituminous PRB ( Western Coal)) 130 No Capture • COE Includes $10/tonne for CO2 Transportation and Sequestration 120 Retrofit Capture 30-Yr levelized COE, $/MWh (constant 2006$) New Capture • IGCC & CCS include 10% TPC contingency for firs
Slide 73: CO2 Capture and Sequestration Projects in Progress
CO2 Capture and Sequestration Projects in Progress To Achieve 2020 Goal 20052007 2010 2010 2015 2015 2020 2025 2020 Pilots Chilled Ammonia Pilot ~2 MW CCS Other Pilots (Post-Combustion and Oxy-Combustion) Demonstration Ion Transport Membrane O2 Scale-up ~20 MW CCS AEP Mountaineer Southern/SSEB Ph. I
Slide 74: NEW: Post-Combustion CO2 Retrofit Study
NEW: Post-Combustion CO2 Retrofit Study • Investigate thermal and economic impact of retrofitting CO2 capture process to an existing PC plant. – Assess practical configuration based on site – Determine required space, interfaces with plant – Estimate performance and costs • Five host sites covering
Slide 75: Coal Combustion and Gasification Comparison – 2015
Coal Combustion and Gasification Comparison – 2015 Levelized Cost of Electricity, $/MWh All costs are in December 2007 $ 120 110 100 IGCC ($2900/kW) 90 PC ($2450/kW) 80 70 60 50 40 95% confidence level values based on EPRI Report 1018329 Rev. October 2008 30 0 10 20 30 40 50 Cost of CO2, $/Metric To
Slide 76: Impact of CO2 Removal on Levelized Cost of Electricity
Impact of CO2 Removal and Cost and Performance Improvements on Levelized Cost of Electricity Levelized Cost of Electricity, $/MWh All costs are in December 2007 $ 120 IGCC ($4000/kW, + CO2 capture, 2025) PC ($4100/kW, + CO2 capture, 2025) 110 100 90 80 PC ($3400/kW, with CO2 capture, 70 with cost an
Slide 78: Representative Cost and Performance of Power Generation Technologies (2015)
Representative Cost and Performance of Power Generation Technologies (2015) Capital Levelized Cost Cost of CO2 All Costs in Capacity Efficiency (Dec. Electricity Emissions Constant Factor Sources/Assumptions (%) 2007 (Dec. 2007 (Metric Dec. 2007$ (%) $/kW) Constant Tons/MWh) TCR* $/MWh) Plant size =
Slide 79: Comparative Levelized Costs of Electricity – 2015
Comparative Levelized Costs of Electricity – 2015 Levelized Cost of Electricity, $/MWh All costs are in December 2007 $ 120 Biomass IGCC NGCC ($10/MMBtu) 110 Wind (32.5% Capacity Factor) 100 90 80 NGCC ($8/MMBtu) 70 Nuclear PC 60 50 No investment or production tax credits are assumed for wind or bio
Slide 80: Representative Cost and Performance of Power Generation Technologies (2025)
Representative Cost and Performance of Power Generation Technologies (2025) Capital Levelized Cost Capaci Cost CO2 of Electricity All Costs in Constant Efficien ty (Dec. Emissions (Dec. 2007 Sources/Assumptions Dec. 2007$ cy (%) Factor 2007 (Metric Constant (%) $/kW) Tons/MWh) $/MWh) TCR* Nuclear- E
Slide 81: Comparative Levelized Costs of Electricity – 2025
Comparative Levelized Costs of Electricity – 2025 Levelized Cost of Electricity, $/MWh All costs are in December 2007 $ 120 No investment or production tax credits are assumed for wind or biomass. 110 Solar thermal LCOE ranges between $120-$260/MWh (see earlier slide). 100 IGCC Biomass PC 90 80 70 6
Slide 82: Conclusions
Conclusions • Technology choices depend on needs and drivers of region, utility, sites • Costs and performance are site specific • Non-emitting or low carbon baseload choices available today: – Nuclear – Geothermal – Biomass • Non-emitting intermittent choices: Wind, solar PV and trough • Emerging n
Slide 85: Resources
Resources • Program on Technology Innovation: Integrated Technology Options, EPRI, Palo Alto, CA: 2008. 1018329. Available to everyone at no charge. • Renewable Energy Technical Assessment Guide—TAG-RE: 2008. EPRI, Palo Alto, CA: 2008. 1015801. Available to funders. • EPRI Reports on ocean energy av
Slide 86: Levelized Cost of Electricity Analysis
Levelized Cost of Electricity Analysis Analytical Basis • The weighted cost of capital on a constant dollar basis, after tax, is 5.5%, and a 30 year plant life with 15 year accelerated depreciation was used. • Mercury, SOX/H2S and NOX removal are included in PC and IGCC Technologies. NOX removal is
Slide 87: Levelized Cost of Electricity Analysis
Levelized Cost of Electricity Analysis Capital Cost Estimating Approach • Costs are to be reported in reference year (December 2007) dollars: – No cost escalation to startup date included. • Plant site is assumed to be clear and level. • Cost estimate assumes mature technology: – Plant is assumed to
Slide 88: Levelized Cost of Electricity Analysis
Levelized Cost of Electricity Analysis Cost Basis • Total Plant Cost (TPC): – All process and support facilities; fuel handling and storage; water intake structure and wastewater treatment; offices, maintenance shops, and warehouses; step-up transformer and transmission tie-in – Sometimes referred t
Slide 89: Levelized Cost of Electricity Analysis
Levelized Cost of Electricity Analysis Capital Cost Estimate Summary • Total Capital Requirement (TCR) = TPC + Owner’s Costs+ Project Specific Costs + AFUDC – AFUDC: Allowance For Funds Used During Construction; also known as IDC (Interest During Construction) – TCR also known as “All-In” Costs • To
Slide 90: Integrated Resource Plan 2009: Climate Policy Context
Integrated Resource Plan 2009 Climate Policy Context For Resource Planning April 10, 2009
Slide 91: Policy Drivers: UN IPCC Findings on Science
Policy Drivers: UN IPCC Findings on Science • IPCC Fourth Assessment Report (2007) – Trends in temperature rise, impacts, and emissions – Focused on atmospheric concentrations of C02, CH4, N20 • Delayed emission reductions significantly constrain opportunities to achieve lower stabilization levels a
Slide 92: Policy Drivers: International Developments
Policy Drivers: International Developments • Kyoto Expires in 2012 • Copenhagen 2009 will focus on adoption of a new agreement • Bonn Meetings will set the stage • The U.S. has announced its intention to negotiate 3
Slide 93: Policy Drivers: State, Regional & Agency Developments
Policy Drivers: State, Regional & Agency Developments State and regional programs have been moving ahead of Congress. EPA is also moving on a separate track Scenarios: • State and regional efforts continue to develop • EPA moves forward with a GHG regulatory program in response to: – Massachusetts v
Slide 94: Overview: Federal Proposals
Overview: Federal Proposals U.S. Congress • Proposals in 110th Congress • Expectations for the 111th Congress EPA • Endangerment Finding • Proposal to Regulate GHGs 5
Slide 95: Proposed Legislation – 110th Congress
Proposed Legislation – 110th Congress Key Elements of proposed bills are summarized in a separate handout Our CO2 modeling utilizes EIA analysis of 3 legislative proposals: – Bingaman-Specter – McCain-Lieberman – Lieberman-Warner 6
Slide 96: Expectations For The 111th Congress
Expectations For The 111th Congress Political Outlook in House and Senate: • Administration Budget (auction proposal) • Focus on cap & trade, but other approaches are in the mix (carbon tax, “cap and dividend”) • House: Action begins here with Waxman-Markey and related bills – Committee dynamics – p
Slide 97: Cap & Trade: Key Design Features
Cap & Trade: Key Design Features • Timing – Start Date • Emissions Cap / Reduction Glide Path • Coverage – Pollutants & Sectors • Point of Regulation • Allowances: – Percent auctioned v. allocated – Who gets them if allocated ? (generator or load serving entity) – What is the allocation methodology?
Slide 98: Cap & Trade Design: Start Date
Cap & Trade Design: Start Date Recent Proposals: • 2012 – Boxer-Lieberman-Warner – Waxman-Markey – Administration Budget: First Auction How Will Economic Conditions and Political Issues Affect Timing? 9
Slide 99: Cap & Trade Design: Targets
Cap & Trade Design: Targets 2012 2020 2050 Bingaman- 1990 levels in 2030; Specter 2012 levels 2006 levels 2050 - TBD McCain- 20% below 1990 in Lieberman 2004 levels 1990 levels 2030; 60% in 2050 36% below 2006 in Lieberman- Warner 7% below 2006 2030; 72% below in 2050 Boxer- 71% below 2005 in Lieber
Slide 100: Comparison of Reduction Targets
Comparison of Reduction Targets 11
Slide 101: Cap & Trade Design: Pollutants
Cap & Trade Design: Pollutants • 6 major greenhouse gases expressed as CO2-equivalents: – Carbon Dioxide - C02* – Methane - CH4* – Nitrous Oxide - N20* – Hydrofluorocarbons - HFC – Perfluorocarbon - PFC – Sulfur Hexaflouride - SF6 • Recent Bills Add: – Nitrogen Trifluoride * currently reported by PG
Slide 102: Cap & Trade Design: Sectors & Point of Regulation
Cap & Trade Design: Sectors & Point of Regulation Legislation Covered Sectors Point of Regulation Bingaman- Economy-wide Hybrid: upstream – gas/petroleum; downstream – Specter ~ 88 % emissions covered coal McCain- Economy-wide Hybrid: upstream – transportation; downstream – Lieberman ~ 87 % emission
Slide 103: Cap & Trade Design: Allowances
Cap & Trade Design: Allowances • Amount auctioned vs. allocated at no cost – Mix of approaches ranging from 100% auction (Obama budget) to less than 25% auctioned (Bingaman) – Most proposals take a hybrid approach combining auctions with free allocations reduced over time on a sliding scale – For th
Slide 104: Cap & Trade Design: Cost Constraining Mechanisms
Cap & Trade Design: Cost Constraining Mechanisms • Price Collar • Banking and Borrowing • Offsets & International Allowances 15
Slide 105: Cap & Trade Design: Price Collar
Cap & Trade Design: Price Collar Price Collar = Ceiling and Floor on CO2 Price • Bingaman only proposal with firm “safety valve” price ($12 per ton with adjustments going forward at 5% above rate of inflation) – Bingaman safety valve is ceiling only • Issue still in play, but the outcome is uncertai
Slide 106: Cap & Trade Design: Banking & Borrowing
Cap & Trade Design: Banking & Borrowing Mix of Design Approaches • Consensus on banking concept • Borrowing design may include: – Conditions under which borrowing may occur – Limits on the percentage of borrowed allowances for meeting compliance obligation – Repayment terms 17
Slide 107: Cap & Trade Design: Offsets & International Allowances
Cap & Trade Design: Offsets & International Allowances Offsets - Potential Design Elements • Range of approaches from 15% - 30% of compliance obligation from domestic or international sources (subject to approval) • Waxman-Markey – 2 billion credit limit per year split evenly between domestic and fo
Slide 108: Cap & Trade Design: Revenue Use
Cap & Trade Design: Revenue Use • Technology Incentives – Carbon Capture & Sequestration: allowance incentives and revenue recycling for CCS projects – Rep. Boucher “wires charge” to create fund for early deployment of commercial scale CCS projects • Incorporated into Waxman-Markey • Moderate & Low
Slide 109: Cap & Trade Design: Interaction of Federal, State & Regional Programs
Cap & Trade Design: Interaction of Federal, State & Regional Programs • Pre-emption? – Concern with the potential for multiple federal-state-regional programs that would limit GHGs – Waxman-Markey would suspend state/regional cap and trade programs from 2012 - 2017 • Other Approaches To Reconcile Fe
Slide 110: Carbon Tax
Carbon Tax • Carbon Tax as an Alternative Lurking in the Background • Features of Proposals – Carbon tax based on the carbon or CO2 content of primary fossil fuels – Imposed on any taxable fuel—coal (including lignite and peat), petroleum and any petroleum product, and natural gas—which is extracted
Slide 111: EPA Action On Climate
EPA Action On Climate • GHG Reporting • Endangerment Finding as Basis To Regulate: early to mid-April • Alternative Regulatory Scenarios For EPA – Regulation of GHGs under the Clean Air Act – Waxman-Markey would limit applicability of CAA to GHGs • Source-Specific Developments (Bonanza, Desert Rock,
Slide 112: Oregon Climate Goals
Oregon Climate Goals HB 3543 – • SECTION 2. (1) The Legislative Assembly declares that it is the policy of this state to reduce greenhouse gas emissions in Oregon pursuant to the following greenhouse gas emissions reduction goals: – (a) By 2010, arrest the growth of Oregon’s greenhouse gas emissions
Slide 113: State Legislation
State Legislation • SB 80 – Governor’s Package: – Cap and trade plus others • “Cap Only” Alternatives • SB 101 – Emission Performance Standard • Relationship to Regional Initiatives: – West Coast, Western Climate Initiative 24
Slide 114: Regional Initiatives
Regional Initiatives RGGI currently only program active and enforceable across a region Source: PEW Center on Global Climate Change 25
Slide 115: Regional Initiatives: WCI
Regional Initiatives: WCI Partners: 7 States & 4 Provinces Observers: 6 U.S. States, 1 Province & 6 Mexican States 26
Slide 116: Regional Initiatives: WCI
Regional Initiatives: WCI WCI Goal: 15% below 2005 levels by 2020 – Melding of different individual jurisdiction goals Short-term (2010-12) Medium-term (2020) Long-term (2040-50) WCI Not Established 15% below 2005 level Not Established Arizona Not Established 2000 level 50% below 2000 by 2040 Britis
Slide 117: Regional Initiatives: WCI
Regional Initiatives: WCI Program Design • Cap and Trade – Different jurisdictional goals/targets persist under this proposal – Emissions reporting to begin in 2011 – Phased coverage of 5 sectors • Jan 2012: electricity and industrial • Jan 2015: transportation, residential natural gas, commercial a
Slide 118: Summary & Key Observations
Summary & Key Observations • Public Policy Outcomes Affect Future Resource Decisions • Climate Policy Is a Moving Target • Important Issues Hang in the Balance – Timing – Approach: cap and trade, carbon tax – Sectors covered and point of regulation – Treatment of allowances: auction v. free allocati
Slide 119: Integrated Resource Plan 2009: CO2 Research & Assumptions for IRP
Integrated Resource Plan 2009 CO2 Research & Assumptions for IRP April 10, 2009
Slide 120: Agenda
Agenda • Analytical Approach for CO2 Base Case Price and Sensitivities – EIA studies used as a foundation for assessing range and base assumption – EIA engaged by Congress to study 3 proposed bills: • S280 (Lieberman/McCain) • S1766 (Bingaman/Specter) • S2191 (Lieberman/Warner) • Composite Method fo
Slide 121: CO2 Approach: Proposed Base Scenario for IRP
CO2 Approach: Proposed Base Scenario for IRP CO2 base price developed as a composite of results from EIA legislative case studies – Equally weighted 3 legislative proposals • Excluded 1 case from Lieberman/Warner study • “Limited Alternative and No International Offsets” – Price shape based on EIA r
Slide 122: Lieberman-Warner: (EIA Assumptions)
Lieberman-Warner: (EIA Assumptions) Reference Case (Non-Policy Case): – Assumes a continuance of current laws and regulation – Non-CO2 emissions growth based on EPA “with measures” and “voluntary technology adoption” cases Core Case (Policy Case): – Reference Case assumptions – 2012 implementation o
Slide 123: Lieberman-Warner - continued: (EIA Assumptions)
Lieberman-Warner - continued: (EIA Assumptions) High Cost Case: – Core Case – Plus CCS, nuclear and biomass plants cost 50% more Limited Alternatives Case: – Core Case – CCS not available until 2030 – Nuclear and biomass power plant additions limited to reference case levels – LNG import limited to
Slide 124: Lieberman-McCain: (EIA Assumptions)
Lieberman-McCain: (EIA Assumptions) Reference Case (Non-Policy Case): – Assumes a continuance of current laws and regulation – Non-CO2 emissions growth based on EPA “no measures” and “no voluntary technology adoption” cases Core Case (Policy Case): – Reference Case assumptions – Allowance auction sh
Slide 125: Lieberman-McCain - continued: (EIA Assumptions)
Lieberman-McCain - continued: (EIA Assumptions) Fixed 30 Percent Offsets: – Offsets meet a fixed, 30 percent share of allowances – Offset price equal to allowance price – International offsets meet balance of 30 percent not met by US sources Unlimited Offsets: – No limit on use of offsets to meet al
Slide 126: Bingaman: (EIA Assumptions)
Bingaman: (EIA Assumptions) Reference Case (Non-Policy Case): – Assumes a continuance of current laws and regulation – Non-CO2 emissions growth based on EPA “no measures” and “no voluntary technology adoption” cases Core Case (Policy Case): – Reference Case assumptions – Cap and trade policy – TAP*
Slide 127: Bingaman - continued: (EIA Assumptions)
Bingaman - continued: (EIA Assumptions) Limited Alternatives Case: – Core Case – CCS not available until 2030 – Nuclear and biomass power plant additions limited to reference case levels – LNG import limited to reference case level High Technology with RPS: – High Technology Case – 15 percent RPS by
Slide 128: EIA Case Study Results
EIA Case Study Results Lieberman Lieberman Bingaman Warner (2191) McCain (280) Specter (1766) Policy Case $ 38.48 $ 29.77 $ 16.96 Limited Alt $ 57.99 $ 38.11 $ 17.32 Limited Alt w/ CCS $ 33.09 Without Int $ 37.62 Limited Alt w/out International $ 103.56 Limited Gas Supply $ 38.56 High Auction $ 30.0
Slide 129: EIA Case Study Results
EIA Case Study Results $450 Lieberman – Warner: $400 Limited Alternative / No-international Case Excluded $350 $300 RL ($2009) Lieberman Warner (2191) $ 48.62 $250 Lieberman McCain (280) $ 29.62 Bingaman Specter (1766) $ 16.73 $200 Average $ 31.66 $150 $100 $50 $- 2005 2010 2015 2020 2025 2030 2035
Slide 130: Proposed IRP CO2 Scenarios
Proposed IRP CO2 Scenarios • No CO2 Tax • Low Case: $12 • Medium Low Case: $20 • Base Case: $32 – Composite price based on EIA analysis • Medium High Case: $45 • High Case: $65 All Prices Real Levelized 2009 $ 12
Slide 131: Proposed IRP CO2 Scenarios
Proposed IRP CO2 Scenarios $300.00 $12 $250.00 $20 $32 $45 $200.00 $65 $150.00 $100.00 $50.00 $- 2008 2013 2018 2023 2028 2033 2038 Nominal $ 13
Slide 132: Natural Gas / CO2 Price Relationship
Natural Gas / CO2 Price Relationship Is There a Discernable Relationship Between CO2 and Fuel Price Levels? Approach – PIRA research – Evaluation of fuel and CO2 price changes under various EIA case studies Current Findings – Insufficient evidence to demonstrate significant positive correlation – Ho
Slide 133: Lieberman-Warner (EIA Results): Fuel – CO2 Price Observations
Lieberman-Warner (EIA Results): Fuel – CO2 Price Observations Gas $/mmbtu Credit $/mmbtu Coal $/mmbtu Reference Case Core Case High Cost Limited Alternative Limited + No Int Real Levelized 2009 $ / mmBtu 15
Slide 134: Lieberman-Warner (EIA Results): Natural Gas Price
Lieberman-Warner (EIA Results): Natural Gas Price 9.00 Reference _Case 8.50 High_Cost_Case 8.00 Core_Case Limited_Alternative 7.50 Limited_Alternative_No_International 7.00 6.50 6.00 5.50 5.00 2005 2009 2013 2017 2021 2025 2029 • Upon implementation of the S2191 act, gas prices decrease due to the p
Slide 135: Lieberman-Warner (EIA Results): Allowances
Lieberman-Warner (EIA Results): Allowances 250.00 Core_Case High_Cost_Case 200.00 Limited_Alternative Limited_Alternative_No_International 150.00 100.00 50.00 0.00 2005 2009 2013 2017 2021 2025 2029 • Prices are nominal $ / Metric Ton • Real Levelized cost in 2008 $ 17
Slide 136: Gas - CO2 Relationship
Gas - CO2 Relationship Our research indicates that natural gas and CO2 prices demonstrate only a modest positive relationship – Abundant supplies at modestly higher extraction costs (mitigates upward price pressure from CO2) • Unconventional North American supplies expected to be significant and eco
Slide 137: Key Points & Observations
Key Points & Observations • Future CO2 Price is Uncertain and Dependant on: – Legislative Policy – U.S. / Global Response to Policy • Economic Growth • International Coordination of GHG / Energy Policy – Technology Development and Adoption – Supply Curve for GHG Abatement / Mitigation • Cost • Achie
Slide 139: Boardman Plant Basics
Boardman Plant Basics • 585 Megawatts capacity. PGE owns 65 percent • PGE Share = 380 MWa • PGE’s share of the plant’s output provides enough power for more than 250,000 homes • About 15 percent of PGE’s resource mix • Key element of PGE’s diverse portfolio • One-half to two-thirds cheaper to operat
Slide 140: US Coal Fleet Heat Rate
US Coal Fleet Heat Rate (2000-07 Avg, SNL Financial Database) 50,000 45,000 Boardman Colstrip Centralia 40,000 MMBTU / MWH 35,000 30,000 25,000 20,000 15,000 10,000 5,000 1 30 59 88 117 146 175 204 233 262 291 320 349 378 407 436 # of Plants 3
Slide 141: US Coal Fleet Dispatch Cost
US Coal Fleet Dispatch Cost (2000-07 Avg, SNL Financial Database) $90 $80 $70 Dispatch Cost per MWh $60 Colstrip Boardman Centralia $50 $40 $30 $20 $10 $0 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Cumulativ e Coal Fle e t Capacity (M W) 4
Slide 142: Boardman CO2 Mitigation: Current and Potential Opportunities
Boardman CO2 Mitigation: Current and Potential Opportunities Current CCS Initiatives • Biological Sequestration: Algae Project • Pilot Project Completed 2008 • Larger Project under consideration with Stimulus funding, 2010-2011 period Potential Future CCS Opportunities • Geological Sequestration: Bi
Slide 143: Boardman Algae Project
Boardman Algae Project CO2 capture in open ponds requires large land mass Algae growth ± CO2 1.2 Photo Bio Reactors offer lower land 1 mass and more efficient close loop 0.8 capture systems 0.6 Algae can capture and sequester 0.4 CO2. It also absorbs as nutrients, 0.2 NOx in the flue gases 0 1 2 3 4
Slide 144: Boardman Algae Project
Boardman Algae Project Integration of Algae-Based CO, Capture with Coal-Fired Power Plant treated —> water cooling water { holding pond E i ad Se tte iS ma fertilizer enclosed algal >» Gtbon-ich algal te (NP) o = : tune biomass (lipids) algal biodiese! residual processing solid biodiese!
Slide 146: Boardman Emissions Control Process
Boardman Emissions Control Process • DEQ/EPA rulemaking • Draft Rule proposal - December 2008 • EQC Decision expected – June 2009 • Expected EPA approval of SIP – April 2010 • Engineering, procurement and construction • 2009 - 2017 9
Slide 147: PGE Position on Regional Haze
PGE Position on Regional Haze Boardman Control Upgrades for Regional Haze BART: • Low NOX Burners and Over-fire Air Ports • Reduces NOx • Installation by July, 2011 • Dry Scrubber and Bag-house • Reduces SO2 and Particulate Matter • Installation by July, 2014 Reasonable Progress: • SCR (Selective Ca
Slide 148: DEQ Proposal for Regional Haze / BART
DEQ Proposal for Regional Haze / BART Boardman Control Upgrades for Regional Haze BART: • Low NOX Burners and Over-fire Air Ports • Reduces NOx • Installation by July, 2011 • Dry Scrubber and Bag-house • Reduces SO2 and Particulate Matter • Installation by July, 2014 Reasonable Progress: • SCR (Sele
Slide 149: PGE Comments to DEQ
PGE Comments to DEQ • PGE requested alternative BART and Reasonable Progress determinations based on specific shutdown dates Each alternative meets BART and Reasonable Progress requirements • Life of plant is statutory criterion for BART and Reasonable Progress determinations • With shortened plant
Slide 150: Decision Point Proposal
Decision Point Proposal PGE Alternative Boardman BART/Reasonable Progress Proposal Control Operate Operate Mercury through 2020 through 2029 No No Yes Yes Operate 2011 2012 2014 2015 2017 Full Plant Life Decision Decision Point Point On SO2 On SCR** Controls Install LNB/OFA Install SO2 & mercury Con
Slide 151: Factors Affecting Control Decisions
Factors Affecting Control Decisions • Carbon regulation – state and federal • Carbon capture & sequestration technology • Alternative generation technologies • Fuel diversity & costs – natural gas, coal • SO2 and NOX control technologies • Coordination of multiple schedules 14
Slide 152: No Aggregate Emissions Increase
No Aggregate Emissions Increase Aggregate Emission Comparison 1,000,000 900,000 862,793 800,000 700,000 600,000 Total Tons PM 500,000 SO2 NOx 400,000 300,000 232,453 231,292 237,149 200,000 100,000 - 2040, Existing Controls 2020, LNB/OFA 2029, LNB/OFA/SD 2040, LNB/OFA/SD/SCR Decision Points 15
Slide 153: Summary of PGE Decision Point Proposal
Summary of PGE Decision Point Proposal • Require NOx BART by 2011 • Establish two SO2 BART determinations 1. SO2 scrubber in 2014 and no plant closure requirement 2. Closure by end of 2020 with no additional SO2 controls PGE required to submit permit application requesting closure no later than July
Slide 154: Proposed Changes
Proposed Changes • The decision point dates are based on cost effectiveness of controls (under BART criteria) and emissions reductions. • 2012 decision point to Install SO2 controls or cease operating Boardman in 2020. • 2015 decision point to install SCR or cease operations in 2029. • Installation
Slide 155: Boardman
Boardman 18
Slide 156: Integrated Resource Plan 2009: Boardman Analysis
Integrated Resource Plan 2009 Boardman Analysis April 10, 2009
Slide 157: Modeling Approach
Modeling Approach Basic Modeling Parameters: – Net Present Value of Revenue Requirements • Fully Allocated Cost of Boardman vs Market Alternative – Gains = avoided customer costs – Losses = additional customer costs • Results Reflect PGE Interest in Boardman Plant – Scenarios and Futures Included: •
Slide 158: Key Assumptions & Model Inputs
Key Assumptions & Model Inputs • Fuel Price Forecasts: – Natural gas prices based on combination of forward market prices and PIRA fundamental forecast – Coal price forecast is average of EIA and PIRA • Market Price for Electricity is Composite: – Forward electric prices through 2011 – Market price
Slide 159: Key Assumptions & Model Inputs
Key Assumptions & Model Inputs Carbon Price Modeling: • 6 Carbon Price Futures – $0, $12, $20, $32, $45 and $65 / short-ton – $32 / short-ton = “Base Case” CO2 Assumption – Real, levelized 2009$ • CO2 modeled on both 2012 and 2013 start • Assumed 100% of CO2 allowances are auctioned (no free allowan
Slide 160: BART and Reasonable Progress Timeline
BART and Reasonable Progress Timeline BART I BART II Control Operate Operate Mercury through 2020 through 2029 Reasonable Progress No No Yes Yes Operate 2011 2012 2014 2015 2017 Full Plant Life Decision Decision Point Point On SO2 On SCR** Controls Install SO2 & mercury Controls Install SCR Install
Slide 161: Boardman Emissions Controls Capex
Boardman Emissions Controls Capex $160 $700 Cumulative Total $140 LNB/OFA $600 $120 Hg/FGD SCR $500 $100 $400 $80 $300 $60 $200 $40 $20 $100 $- $- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $500 $450 LNB Hg SCR Total in million$ /OFA /FGD $400 Overnight Capex $ 36 $ 341 $ 210 $ 587 $350
Slide 162: Boardman BART Scenarios
Boardman BART Scenarios • DEQ Proposal for BART + Reasonable Progress – Low NOx Burners and Over-fired Air by July, 2011 – Dry Scrubbers and Bag-house by July, 2014 – SCR by July, 2017 • Plant operations modeled through 2040 • PGE Boardman Regional Haze / BART Position * – Low NOx Burners and Over-f
Slide 163: DEQ proposal: BART + Reasonable Progress
DEQ proposal: BART + Reasonable Progress NPV (millions of 2009$) Hg, BART I & II + Reasonable Progress: Operate through 2040 2012 CO2 Policy Implementation 2013 CO2 Policy Implementation CO2 Tax in 09$/S Ton 2011 2040 Delta 2011 2040 Delta No CO2 Tax $ (58) $ 605 $ 663 $ (58) $ 605 $ 663 $12.00 (Low
Slide 164: PGE Boardman Regional Haze / BART Position
PGE Boardman Regional Haze / BART Position NPV (millions of 2009$) Hg + BART I & II only: Operate through 2040 2012 CO2 Policy Implementation 2013 CO2 Policy Implementation CO2 Tax in 09$/S Ton 2011 2040 Delta 2011 2020 Delta No CO2 Tax $ (58) $ 717 $ 775 $ (58) $ 717 $ 775 $12.00 (Low Case) $ (58)
Slide 165: Decision Point Proposal for BART + Reasonable Progress
Decision Point Proposal for BART + Reasonable Progress Hg + BART I & II: LNB/OFA, 2012 start for CO2 NPV Hg + BART I: LNB/OFA, Mercury - Hg + BART I & II + Reasonable Mercury, Scrubber - Operate (millions of 2009$) Operate through 2020 Progress: Operate through 2040 through 2029 CO2 Tax in 09$/S Ton
Slide 166: Decision Points Proposal: Matrix of Sensitivity Results
Decision Points Proposal for BART + Reasonable Progress (Matrix of Sensitivity Results)* Operate thru 2020 CO2 Level for 2012 Policy start CO2 Level for 2013 Policy start Gas input Coal input $ - $ 12 $ 20 $ 32 $ 45 $ 65 $ - $ 12 $ 20 $ 32 $ 45 $ 65 Ref_Gas Ref_Coal 586 511 461 386 304 184 586 527 4
Slide 167: Frequency of Max NPV: Across Decision Point Cases
Frequency of Max NPV: Across Decision Point Cases* CO2 Level for 2012 Policy start CO2 Level for 2013 Policy start Gas input Coal input $ - $ 12 $ 20 $ 32 $ 45 $ 65 $ - $ 12 $ 20 $ 32 $ 45 $ 65 Ref_Gas Ref_Coal 2040 2020 2020 2020 2020 2020 2040 2020 2020 2020 2020 2020 Ref_Gas Low_Coal 2040 2040 20
Slide 168: Gas Price Sensitivity: High Case
Gas Price Sensitivity: High Case 800 Reference Gas NPV When modeled with 600 reference gas price 400 forecast: NPV (million$) 200 •2020 decision point has highest NPV for - 5 of the 6 assumed (200) CO2 levels 2020_Ref 2029_Ref 2040_Ref •2020 decision point (400) is positive for all (600) assumed CO2
Slide 169: Gas Price Sensitivity: Low Case
Gas Price Sensitivity: Low Case 800 When modeled with Reference Gas NPV reference gas price 600 forecast: 400 •2020 decision point NPV (million$) is highest NPV for 5 200 of the 6 assumed - CO2 levels •2020 decision point (200) is positive for all 2020_Ref 2029_Ref 2040_Ref (400) assumed CO2 levels
Slide 170: Range of Uncertainty
Range of Uncertainty 2020 $1,400 $1,242 $1,431 2029 Starting NPV (2012 2040 CO2 Start w/ Base CO2 Price and Ref Gas) $857 $900 $386 $442 $429 $153 $319 $325 $400 $155 $208 $167 $(30) $(100) $(10) $(67) $(310) $(312) $(594) $(600) Low_Coal High_Coal Low_Gas High_Gas 2013 Start • Side by side comparis
Slide 171: Range of Uncertainty: 2020 Decision Point
Range of Uncertainty: 2020 Decision Point 2020 Decision Point 2013 Start $83 Starting NPV is 2012 CO2 Start w/ Base CO2 $480 Price and Ref Gas, all High / Low Gas $(238) Low Gas High Gas other numbers are deltas from this point. High Coal High / Low Coal $(61) $56 Low Coal CO2 Level $(202) High CO2
Slide 172: Range of Uncertainty: 2029 Decision Point
Range of Uncertainty: 2029 Decision Point 2029 Decision Point 2013 Start $98 $1,113 High / Low Gas $(538) Low Gas High Gas High Coal High / Low Coal $(207) $173 Low Coal CO2 Level $(406) High CO2 Low CO2 $459 • Uncertainty associated with changes in CO2 prices and coal are relatively symmetrical (up
Slide 173: Range of Uncertainty: 2040 Decision Point
Range of Uncertainty: 2040 Decision Point 2040 Decision Point 2013 Start $98 $1,574 High / Low Gas $(730) Low Gas High Gas High Coal High / Low Coal $(336) $274 Low Coal CO2 Level $(472) High CO2 Low CO2 $730 • Uncertainty associated with changes in CO2 prices and coal are relatively symmetrical (up
Slide 174: Summary of Model Results
Summary of Model Results • Case performance and economic outcomes are uncertain – In particular, 2029 & 2040 NPV results are highly dependent on future circumstances: • CO2 Price • Fuel Prices • 2020 decision point case is durable (performs well under a variety of circumstances) • 2029 case is stron
Slide 175: Observations from Analysis
Observations from Analysis • Today’s economic results are based on stand-alone Boardman NPV analysis – All Boardman case results must be further assessed in connection with overall IRP portfolio analysis (to be presented in the next public workshop) • Economic analysis supports the need for a decisi
Slide 176: Appendix
Appendix 21
Slide 177: Coal Price Forecast Comparison
Coal Price Forecast Comparison (Real Levelized in 2009$) Boardman Delivered Coal Price Forecast Feb 2009_RL_$2.96 $3.71 RL 2009$ Nominal $/MMBtu $2.33 RL 2009$ 2010 2015 2020 2025 2030 2035 2040 Delivery Date 22
Slide 178: Gas Price Forecast Comparison
Gas Price Forecast Comparison (Real Levelized in 2009$) Average Sumas and AECO Price Forecast Feb 2009_RL_$7.7 May 2008_RL_$8.42 $12.84 RL 2009$ Oct 2008_RL_$8.7 Nominal $/mmbtu $5.19 RL 2009$ 2010 2015 2020 2025 2030 2035 2040 Delivery Date 23
Slide 179: Historical Sumas Cash Price
Historical Sumas Cash Price $12 2008 Sumas Cash Prices illustrates $11 this commodities’ volatility: $10 •Within same calendar year, Gas $9 $/mmbtu prices ranged between $5 to $12 per $8 mmbtu $7 2008 Sumas Cash Settle •Market for Natural Gas is $6 increasingly global. Various events $5 have impact
Slide 180: Integrated Resource Plan 2009: Wrap-up & Next Steps
Integrated Resource Plan 2009 Wrap-up & Next Steps April 10, 2009
Slide 181: Wrap-up & Key Points
Wrap-up & Key Points • Boardman is a key part of PGE’s current diverse portfolio – Baseload – Dispatchable – Reliable – Low cost and helps provide price stability • The decision regarding Boardman emissions control upgrades is important to PGE’s customers • Boardman recommendation will be made: – Ba
Slide 182: Wrap-up & Key Points: Climate Policy
Wrap-up & Key Points: Climate Policy • Climate Policy is Fluid and Developing • Structure and Key Elements Remain “In Play” – Method (cap & trade, tax or mandate) – Start date and glide path – Economy wide or sector specific – State, regional or federal – Allowances (auctioned or allocated, emission
Slide 183: Wrap-up & Key Points: CO2 Approach
Wrap-up & Key Points: CO2 Approach • Future CO2 Price is Uncertain & Scenario-Dependant – Legislative Policy – U.S. / Global Response to Policy – Technology Development and Adoption – Supply Curve for GHG Abatement / Mitigation • Unable to Clearly Define Gas – CO2 Price Relationship – Some evidence
Slide 184: Wrap-up & Key Points: Economic Analysis
Wrap-up & Key Points: Economic Analysis • Results based on stand-alone Boardman analysis – Value and risk of Boardman emission control upgrades must be further assessed as part of overall IRP portfolio analysis (to be presented in the upcoming public workshop) • Analysis supports need for decision p
Slide 185: Next Steps
Next Steps • Boardman alternatives will be further evaluated in overall portfolio context • Key factors considered in portfolio analysis – Reliability (e.g. Loss of Load Probability) – Cost / Risk • Cost variance – Scenario Analysis (performance across futures) • Price volatility – Stochastic • Cust

Portland General Electric — Technical Presentation (April 2009) on 6ix

Portland General Electric — Technical Presentation (April 2009)

Slide 1: Integrated Resource Plan 2009: Introduction & IRP Basics

Slide 2: Workshop Agenda

Slide 3: Integrated Resource Planning (IRP)

Slide 4: PGE Supply Portfolio

Slide 5: Projected Resource Need: Energy

Slide 6: Projected Resource Need: Capacity

Slide 7: RES Requirements: Energy

Slide 8: What Will Carbon Cost?

Slide 9: Table of Contents

Slide 10: 1. Setting the Context

Slide 11: Carbon Costs are THE Key!

Slide 12: And GHG Markets Very Different!

Slide 13: The Search for Price Discovery

Slide 14: A Recent Literature Review

Slide 15: Changing Our Perspective

Slide 16: 2. Forecasting Carbon Markets

Slide 17: Market Demand - Market Supply = Market Scarcity

Slide 18: Modeling Forward Price Curves

Slide 19: Carbon Market Variables

Slide 20: Implications of Fossil Fuel Prices

Slide 21: Implications of Additionality Screening

Slide 22: Implications of Market Flexibility

Slide 23: Methane Supply Curve – WCI

Slide 24: Methane Supply Curve – U.S.

Slide 25: Methane Supply Curve – Global

Slide 26: 3. The Key Forecasting Question

Slide 27: Scenario – Political Stalemate?

Slide 28: Policy Stalemate Prices?

Slide 29: Scenario – Political Realism?

Slide 30: Political Realism Prices?

Slide 31: Scenario – Atmospheric Stabilization?

Slide 32: Atmospheric Stabilization Prices?

Slide 33: 4. Making Sense of it All

Slide 34: Conclusions

Slide 35: Dr. Mark C. Trexler

Slide 36: Generation Technology Options

Slide 37: The Electric Power Research Institute

Slide 38: Outline

Slide 39: EPRI Prism – The Full Portfolio of Technologies

Slide 40: EPRI Technical Assessment Guide (TAG)

Slide 41: Estimates in Constant $ and Current $ are Very Different

Slide 42: Non-Emitting Generation Technologies

Slide 43: Nuclear Generation Technologies

Slide 44: Nuclear Data Range – 2015

Slide 45: Wind Power

Slide 46: Wind – 2015

Slide 47: Biomass

Slide 48: 100% Biomass – 2015

Slide 49: Central Station Solar Power Technologies

Slide 50: Solar Resource

Slide 51: New Mexico Solar Assessment: Photovoltaic Results

Slide 52: Wide Range of Cost Results for New Mexico PV

Slide 53: New Mexico Solar Assessment: Solar Thermal Results

Slide 54: Wide Range of Costs for New Mexico Parabolic Trough

Slide 55: Solar Thermal Trough Design – 2015

Slide 56: Geothermal Resources in the US

Slide 57: Geothermal Energy

Slide 58: Wave Energy Conversion: Emerging Technology

Slide 59: Active Wave Technology Projects in Oregon

Slide 60: Economics – Reedsport Oregon Plant

Slide 61: Energy Saving Technologies

Slide 62: EPRI’s National Energy Efficiency Potential Study

Slide 63: Opportunities for Energy Efficiency Savings

Slide 64: Opportunities for Energy Efficiency Savings

Slide 65: Energy Efficiency Potential in Historical Context

Slide 66: The Smart Grid: Enables Dynamic Energy Management

Slide 67: Smart Grid = Green Grid

Slide 68: Carbon Control Technologies

Slide 69: Coal with CO2 Capture and Sequestration (CCS)

Slide 70: Pulverized Coal With CO2 Capture – New or Retrofit

Slide 71: IGCC Without and With CO2 Removal

Slide 72: Cost Estimates for PC and IGCC, New and Retrofit

Slide 73: CO2 Capture and Sequestration Projects in Progress

Slide 74: NEW: Post-Combustion CO2 Retrofit Study

Slide 75: Coal Combustion and Gasification Comparison – 2015

Slide 76: Impact of CO2 Removal on Levelized Cost of Electricity

Slide 77: Technology Comparisons

Slide 78: Representative Cost and Performance of Power Generation Technologies (2015)

Slide 79: Comparative Levelized Costs of Electricity – 2015