Bob Smith Platts June 18 2014 Transmission Planning Development
1. Platts 2014 Transmission Planning and
Development Conference
June 18-19 Arlington, VA
Resource Adequacy
Methods Moving Forward to Assure Peak Deliverability
Bob Smith
Director, Energy Delivery Asset
Management & Planning
2. Outline
• APS System and Generation Resources
• Capacity Planning
• Energy Efficiency, Renewable Energy and Demand
Response
• Managing Intermittency
• Grid Modernization
2
3. Transmission System & Generation
• Electric generating resources
help balance the flow of power
around the state
• Grid built to balance sources of
energy
– Palo Verde and natural gas
generators are located West of
Valley while coal generators are
located North and East
• Generation additions or
retirements change this
balance
• Generation close to customer
demand center (metro-Phx)
improves transmission import
capabilities and maintains a
balanced system
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4. Supply-Demand Gap
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2014 2016 2018 2020 2022 2024 2026 2028
MW
Year
Existing Resources
Existing
Contracts
New Utility-Scale
Resources
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• Growth in demand
requirements expected to
resume
• Customer resources
expected to triple over
planning horizon
• Renewable Energy Standard
15% by 2025
• Energy Efficiency Standard
22% by 2020
• Additional resource needs
anticipated to be met by
increasingly diverse and
efficient technologies
Demand Requirements
5. 2014-2029 (Forecast)
Future Additional Resources
6,613 MW Expected at Peak
a. New Utility-Scale Resources
Natural Gas
4,205 MW
Renewable Energy
425 MW (818 MW nameplate capacity)
b. New Customer Resources
Energy Efficiency
1,447 MW
Distributed Energy
261 MW (722 MW nameplate capacity)
Demand Response
275 MW
Expected Future Resources
2014
8,124 MW
peak requirement
100% met with
existing resources
2029
12,982 MW
peak requirement
50% met with
existing resources
b
a
Existing Utility-Scale Resources
Existing Contracts
Existing Customer Resources
a New Utility-Scale Resources
New Customer Resourcesb
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6. Different Types of Renewables vs. Time of Day
Illustration of future peak demand
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Load Profile
Fixed Position PV
Single Axis Tracking PV
Wind
CSP w/6 Hr Storage
MW Level of Renewable Output
Hour of Day
MW of System Load
CTs
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7. Evolving Customer Demand and Markets
• Growth of solar PV is
changing customer energy
consumption patterns
• Generators must be able to
start and stop multiple times
per day
• Fast starting and ramping
capability is required in
responding to variable output
of renewable resources
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1,000
2,000
3,000
4,000
5,000
1 3 5 7 9 11 13 15 17 19 21 23
MW
HOUR
Non-Summer Customer Power Consumption
2014 2021 2025 2029
Potential over-
generation followed by
8-hr 3,000 MW
continuous up-ramp
8. Capacity Contribution of Solar PV
Declines as Deployment Levels IncreaseAPS Forecast Peak Load
With Photovoltaic (Fixed South Facing)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
MW
1st Addition MW PV 2nd Additon PV 3rd Addition PV
0%
10%
20%
30%
40%
50%
60%
0 500 1000 1500 2000 2500
Range of Possible
Penetration by 2025
0
Peak Shifts to Sunset
8
CapacityContributionPercentofNameplate
MW of Nameplate Capacity
9. Ocotillo Modernization Project
• Retire existing steam units (220 MW) constructed in 1960
• Replace aging steam units with modern combustion turbines
– Install five General Electric LMS 100 combustion turbines – 102 MW each
– Transmission and natural gas pipeline infrastructure optimized
– Net site capacity increased by 290 MW to 620 MW total
• Maintain Valley reliability
– Generation close to load center
– Contingency and voltage support
• Responsive unit operations
– Quick starting and ramping
– Renewable integration
• Environmental attributes
– Emissions and water consumption
• In-service planned for summer 2018
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11. Conclusions
• Transmission system must accommodate entirety
of peak capacity needs
– Reserves
– Back-up capacity
• Diverse resource fleet includes renewables and
energy efficiency
– Significant growth expected
• Flexible generation aligns with capacity needs and
complements growing renewable energy fleet
• Investments in modernizing grid continuing
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We will also talk about why we chose a specific type of replacement generation – our operating environment is changing especially with all the distributed roof-top solar being added to the system so we’ll provide the context for why this specific type of generation makes sense.
As we have discussed many times, the recession impacted everyone’s businesses and AZ was hit hard and took customer demand growth to essentially zero.
Based on outside population and economic forecasts as well as our own, we anticipate AZ’s economy to improve. It’s been a sluggish recovery but we expect growth to resume.
About 3% average before customer resources, 2% after customer resources
51,236 GWH - 33,609 GWH = 17,627 / 33,609 = 52.4% or about 35% after EE,DE
US Census Bureau
AZ Dept of Admin
U of A Keller School of Mgt and Bus
Other local forecasting agencies and banks for reasonableness
Expiring purchase contracts means APS will need additional resources by 2017
About 30% of resource additions are anticipated to come from customers – of course we have no operational control over these resources. Customers decide whether or not to invest, then nature decides whether they operate or not. This places a lot of dependence on the customer to actually make investment decisions, and places a lot of dependence on the utility generation fleet and grid to be able to respond in order to keep the lights on.
Let’s talk now about a concept called intermittency. As for distributed solar photovoltaic (fixed position), the typical output profile in the summer time looks like the blue line. This profile is compared against our typical hourly load profile on our system. We peak (customers demand the most energy) at around 5pm…..still very hot and people starting to get home from work and turn on lights and make dinner.
Solutions to this mis-match include single axis tracking solar that tracks the sun as it moves across the horizon, and the use of thermal energy storage like at our Solana facility.
Let’s put this in context now of what we talked about earlier when we discussed resource costs. Remember when we discussed the integration costs? The intermittency, or variability, of solar and wind resources necessitates backing wind and solar resources up with natural gas generation.
Natural gas generation is flexible and can quickly respond to changing conditions on our system. Of course this has a cost associated with it and we take all that into account when evaluating the relative economics of renewable resources against other alternatives.
While this project has little to do with our longer term procurement needs, by the same token we don’t want to be blind to these needs. So it was important that whatever the generation technology was, it had to be able to support our overall needs to add more responsive/flexible resources.
The challenges integrating renewable energy aren’t going away and will just get worse as more renewables (namely roof-top solar) are added to the system. We will need generation that can respond to the intermittency and the fact that solar doesn’t align with our peak very well. Natural gas generation, and specifically the types of fast-starting units we’re adding with this project, will be needed even more-so into the future.
So given the uncertainties around DE deployment that we’ve talked about, the bottom line is how much should we depend on in our resource plans.
Today, because of solar production peaks about 1pm and is declining by 5pm, we credit 50% of a project’s nameplate value toward meeting our peak demand. So for 100 MW of distributed solar on our system, we credit 50 MW toward meeting our peak because by the time we peak at 5pm, the sun is lower on the horizon and fixed panel solar produces about 50% of its full capacity by that time of day.
For single axis tracking, what we typically use for utility scale applications, we credit 70% capacity value.
Now let’s look at the blue chart in the upper right corner. With increasing levels of solar penetration on our system, eventually, the peak that we have to meet with conventional resources (the area in blue) will eventually move toward sunset because solar PV will no longer be producing energy at that time.
Once our peak moves to sunset, the capacity value of solar that we can credit toward meeting our peak is zero….meaning that no matter how solar pv is developed at that point, we will still have to add additional resources to meet the later peak.
Solar will continue to provide fuel savings benefits, but will not defer new resource additions.
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INVESTMENT
$170 million over the next 5 years
Over 5,000 Communicating Fault Indicators (pinpoints where to look if there is a problem)
ADMS (see third item below)
$300 million out to 2025
Communication Protocols
Cellular
Radio (ex: microwave)
Fiber optic
ADMS / EMS – Advanced Distribution Management System / Energy Management System ($25 MM investment over next five years)
Very advanced operating system that allows integration of advanced grid technologies
Provides ability to monitor the distribution system components in real-time to optimize performance.
AMI – Automated Metering Infrastructure – Project 99.9% complete, completion anticipated end of May. Total devices deployed: 1.1 million
Involves 3 basic functions
Smart meters – Two-way communication with the utility on electricity usage
Communication system – Involves both the hardware and software for encrypted communication between smart meters, substation and distribution automation equipment
Meter data management system – Data storage that enables advanced analysis and processing
Benefits:
Enables customers to manage costs by providing monitoring tools for energy usage, change of service plans, or connect and disconnect service from their computer.
Enables APS to offer a host of new programs including “Pick a Due Date”, which allows customers to choose the payment date that best fits their lifestyle.
Enables APS to monitor voltage levels and power quality to help ensure reliable service and effectively plan for future energy needs.
Provides safety and environmental benefits by avoiding millions of driving miles by APS employees to remotely perform customer read-ins, read-outs, rate changes, disconnects, and reconnects.
Produces substantial amounts of new data that can be transformed into actions such as reducing the number of unplanned transformer failures, identifying power outages, and optimizing placement of future grid modernization technologies for even more enhanced performance, monitoring, and control.
AMI Solar Production Meters
Meters that relay energy the solar installation produces back to data management centers.
Automated Switches
Provide fault detection and automatic sectionalizing, and are fully SCADA (Supervisory Control and Data Acquisition) compatible - meaning they communicate with control software. They include an integrated battery management system and battery, permitting dead-line operation.
Automated Thermostats
Demand response component that sends signals to adjust temps on customer thermostats during peak demand.
Demand Response
Change in end-users’ power usage in response to pricing mechanisms.
(Communicating) Fault Indicators – 2.500 to be installed over the next five years
Devices that can be installed on distribution lines to detect whether current is flowing on the line and then communicate that status via communications or visual indicator.
Fiber Backhaul
Refers to fiber optic facilities carrying traffic back to data centers or regional network nodes. This is relevant because all smart grid applications use communication network infrastructures.
Integrated Volt/VAR Control (VAR = voltage-ampere reactive)
Continuously analyzes and controls regulators and capacitor banks to manage power factor and voltages. This flattens each feeder’s voltage profile and lowers average voltages, resulting in energy savings.
Substation Health Monitoring
Involves the installation of dissolved gas analysis (DGA) monitors (see TOAN above), transformer health monitors, bushing and breaker monitors to detect and prevent failure of equipment resulting in reduced outages and maintenance.
TOAN – Transformer Oil Analysis
Automated online monitoring of dissolved gases in transformer oil with analysis and notification of abnormalities. APS invented this in 2005 and was the first in the nation to use it. In 2008, this product earned APS the Edison Award.
Transformer Load Management
Tool that aggregates historical AMI data to analyze overloaded transformers. “What-If” analysis allows the right-sizing of transformers based on actual meter load information
We will also talk about why we chose a specific type of replacement generation – our operating environment is changing especially with all the distributed roof-top solar being added to the system so we’ll provide the context for why this specific type of generation makes sense.
