Item 17 Staff Briefing — original pdf

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Resource, Generation and Climate Protection Plan to 2035 Briefing and Process Update Lisa Martin Deputy General Manager and Chief Operating Officer August 12, 2024 © Austin Energy 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Austin Energy's Resource Generation Plan 2035 Workshops Presented by Lynda Rife Overview: Workshop #2 • Austin Energy hosted their second in a series of monthly workshops on Friday, July 26 from 11:30 a.m. to 1:30 p.m. • The goals of Workshop #2 were to have the participants have a general understanding of ERCOT and its relationship to Austin Energy and to hear from Dr. Michael Webber with the Webber Energy Group from the Cockrell School of Engineering at UT Austin regarding Texas and Austin-area energy market and trends, resource options, and potential risks and tradeoffs. Diverse Mix of Workshop Participants AARP ADAPT AISD ARMA Citizens Climate Lobby Hispanic Chamber Solar and Storage Coalition City of Lakeway Housing Works State of Texas City of Austin HURF Sunrise Movement Residential Customers IBEW Local 520 Ascension Downtown Commercial LGBT Chamber Texas Climate Jobs Texas Assisted Living Association Texas Energy Poverty Research Institute Asian Chamber Environment Texas Pecan Street Austin Chamber Foundation Communities PODER Tri-City Region Austin Critical Home Repair Coalition CCARE Central Health Habitat for Humanity Public Citizen Urban League HACA HEB RECA UT Energy Institute Sierra Club UT Students What We Heard: Workshop #2 Top Themes & Takeaways​ From ERCOT 101Presentation • Austin Energy is bound to the ERCOT market and its rules and constructs. • The ERCOT market, like any market, has both benefits and risks. Decisions made in the marketplace have tradeoffs. For example, a decision made to maximize reliability could reduce affordability or vice versa. • Decisions we make for the Resource Generation Plan will affect the tools available in the future to minimize risks and maximize benefits in the ERCOT market – in terms of affordability, sustainability, reliability and equity. Top Themes & Takeaways - Dr. Webber, Cockrell School of Engineering UT Austin • Utilities, including Austin Energy, need to prepare for an era of unprecedented electricity consumption. The challenge before us is to simultaneously expand and decarbonize the grid while the world is warming. Austin Energy is uniquely positioned, as a municipally-owned utility, to address load growth because we can work on both the supply and demand sides of the equation. Since the service territory is its own load zone Austin Energy can avoid congestion costs by building generation close to where customers need it. • Do your best, clean up the rest through a combination of efficiency, electrification, clean molecules and carbon management. Austin Energy has an opportunity to improve the overall financial health of the utility (and therefore provide more benefit to the Austin community and customers). The key lens through which energy options should be considered: trade-offs. • • • • Questions Received: Workshop #2 Renewable Energy Demand Response What do you think Austin Energy should do to build more capacity for renewable energy? How much demand response can Austin Energy play with on ‘EV’ and other ‘DERs’? What is Austin Energy doing to prepare for controlling devices? Net Zero versus Carbon Free Talking about net zero versus carbon free – carbon management is a big topic. How do you talk to people about carbon capture? What is the value of switching from a carbon free model to a net zero model? Questions Received: Workshop #2 Local Generation Most Affordable Way Demand Management Research and Development What are the easiest ways for Austin Energy to locally increase generation to reduce price impacts from congestion? Aside from demand-side management and energy efficiency, what is the quickest, most affordable way to Austin Energy to meet resource adequacy? Do you have a lot of flexible demand response to help with keeping costs down? I'd be interested to hear how involved Austin Energy gets into R&D and how they are going to scale up software to control the grid within their territory or program design. Stakeholder Engagement: What's Next Next Workshop Date Thursday, Aug. 22 Electric Utility Commission Will continue to give ongoing updates to EUC throughout the engagement process Model Portfolios, Scenarios, and Sensitivities Austin Energy Resource, Generation and Climate Protection Plan to 2035 Michael Enger Vice President, Energy Market Operations & Resource Planning August 12, 2024 © Austin Energy Agenda Overview of Portfolio Design Demand-Side Management 2035 Projections Comparison of Portfolios Overview of Scenarios + Sensitivities Modeling Timeline and Next Steps 43 Portfolio Design Considerations Test Boundaries Establish approximate max metrics for each category of values (sustainability, reliability and affordability) using extreme resource mixes. Model Targets • 100% carbon free by 2035. • 65% renewable energy by 2027. • REACH emissions reduction strategy. Measure Risks & Tradeoffs Adjust resource mix types and quantities between portfolios strategically to measure impacts to cost and output metrics. 44 Demand-Side Management 2035 Austin Energy 2035 Commitments vs. Market Penetration Study Projections s t t a W a g e M 1200 1000 800 600 400 200 0 149 120 99 332 360 Demand Response Local Solar Energy Efficiency Austin Energy Existing Commitment - 2035 DNV Study Projection of Achievable - Additional 2035 Note: All new MW capacity figures provided in graph represent cumulative additions projected by 2035 above and beyond resources currently in place. 45 248 812 TOTAL Summary of Portfolios to be Modeled [Cumulative new 2035 capacity in MW] No New Commit 2030 Current Plan Reliability Affordability Sustainability Hydrogen Replace w/ Green (PPA) Replace w/ Green (65%) Hydrogen + Storage (Flexible Green) Replace FPP in 2028 EUC-1 (TBD pending EUC input) EUC-2 (TBD pending EUC input) 700 1,100 118 932 700 1,100 118 932 700 700 1,100 1,100 700 1,100 700 1,100 NEW RESOURCES Remote Utility Scale Solar Remote Utility Scale Wind Remote Battery Storage (2-hour duration) Remote Battery Storage (4-hour duration) Combined Cycle + SCR Combustion Turbine + SCR H2 CT + SCR Local Battery Storage (2-hour duration) Local Battery Storage (4-hour duration) Local Battery Storage (12-hour duration) Local Battery Storage (100-hour duration) Hydrogen Fuel Cell Remote Geothermal Demand Response Energy Efficiency Customer-Sited Solar Community Solar - - - - - - - - - - - - - - - - - 600 500 - - - - - - - - - - - - 75 40 9 - - - - - - - - - - - - - - - - - - - - - - 225 350 25 100 150 149 81 18 - - - - - - - - - - - - 149 81 18 - - - - - 25 100 150 120 - - - 204 149 18 - - - - - - - - 25 100 150 120 1,100 - - - - - - - - - - - 149 18 81 18 - - - - - - - 550 25 100 150 120 81 18 225 350 - - - - - - - - - - 81 18 204 149 149 149 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 46 Description of Portfolios to be Modeled PORTFOLIO DESCRIPTION No New Commitments Existing DSM commitments, no new generation 2030 Current Plan 100% Carbon-Free by 2035, 65% Renewables by 2027, existing DSM commitments Reliability Focus Affordability Focus 100% DNV projections, replace PPAs, 275 MW local storage, new local gas in 2027, Decker/SHEC run through 2035 50% DNV projections, new local gas in 2027 and to replace FPP in 2032, Decker/SHEC run through 2035 Sustainability Focus 100% DNV projections, 100% CF, 65% RE, REACH on gas, retire Decker 2027, retire SHEC 2034 Replace with Green (65%) Aggressive DNV projections, 100% CF, 65% RE, REACH on gas, retire Decker/SHEC 2034 Replace with Green (PPAs) Aggressive DNV projections, 100% CF, replace PPAs, REACH on gas, retire Decker/SHEC 2034 Hydrogen Dispatchable 100% DNV projections, 100% CF, 65% RE, REACH on gas, 1,100 MW new H2-capable local generation in 2030 (new or retrofit), retire Decker/SHEC 2034 H2 + Local Storage Replace FPP in 2028 100% DNV projections, 100% CF, 65% RE, REACH on gas, 395 MW local storage, 550 MW local H2 , retire Decker/SHEC 2034 100% DNV projections, 65% RE, REACH on gas, FPP retire end of 2028, Decker/SHEC do not retire by 2035 47 Scenarios Future states (2025-2035) through which portfolios are stress-tested to measure risk to customers Extreme grid-wide events (extreme summer heat, Uri-like winter freeze, extreme low wind) Local congestion (simulates local generation and/or transmission outages) New market regulations (models impact of potential new PUCT rules on generation capacity) Note: Extremegrid-wide events and new market regulations scenarios are based on data and assumptionspublished by ERCOT. 48 Sensitivity Analysis ▪ Adjust certain model variables between model runs to measure impact to output metrics ▪ Expected to be conducted only on short-list portfolios Austin Energy Load: Uses higher load growth projection from Webber Energy Group study Fuel Prices: Increased prices ERCOT-wide over modeling horizon Import/Export Capacity: Changes import capacity to Austin Energy Load Zone ERCOT Resource Retirements: Accelerates coal plant shutdowns across ERCOT due to new EPA regulations 49 EUC Input Austin Energy Portfolios Delivered August 8 Austin Energy provided 10 detailed portfolios and descriptions of scenarios and sensitivities to EUC via email on 8/8/2024 for review. Similar to the Modeling Framework, we request input from EUC before we finalize. Modeling Reserved for EUC Portfolios Austin Energy invites EUC to provide two (total) of its own portfolios for modeling using Excel workbook template pages provided. EUC Input Needed August 14 To maintain project schedule, Austin Energy requests all input no later than Wednesday, 8/14, at close of business. Austin Energy Office Hours Austin Energy staff are available for office hours August 12–14 to answer questions on proposals or provide guidance on portfolio design. 50 Modeling Timeline Modeling Framework to EUC 7/10/24 Portfolios + Scenarios to EUC 8/8/24 Modeling Results to EUC September 2024 JUNE JULY AUG SEPT Data Sources 7/8 Webber Draft Report 7/31 DNV Study Preliminary Results Model Runs 7/15 EUC Input on Framework 8/12 EUC Mtg on Portfolios + Scenarios 51 ©Austin Energy. All rights reserved. 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