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Jesse Jenkins (RNP)November 7th, 2006

Northwest Energy: A Look at the Past, Present and Future of Electricity Generation in the Pacific

Northwest

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OverviewI. Introduction

II. Past: where we’re coming from

II. Present: where we’re at

III. Future: where do we want to go?

IV. Conclusions

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I. Introduction

• Me–recent UO graduate (class of ‘06)

– now work for the Renewable Northwest Project in Portland (policy research associate)

• Renewable Northwest Project (RNP)– founded in 1994

– unique coalition of, consultants, developers, consumer & environmental groups, etc.

– seek responsible development of renewable energy in the Pacific Northwest.

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Historical Northwest Electricity Capacity by Resource

0

10,000

20,000

30,000

40,000

50,000

60,000

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2007

Year

Operating Capacity (MW)

Petroleum / Petr. Coke

Biomass

Nuclear

Wind (and other renewables)

Natural Gas

Coal

Hydro

II. The Past: a Brief History of Northwest Electricity Generation

Growth met with new Coal - 1970s-90s

Growth met with new NG - 1990s-2000s

Growth met with new Hydro - 1890s-1970s

False start with Nukes - 1970s-80sEnergy Conservation!(NW Power Act - 1980)

Date source: NW Power and Conservation Council (http://www.nwcouncil.org/energy/powersupply/existingprojects.xls)

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II. The Present:PACIFIC NORTHWEST GENERATING

CAPABILITY

Petroleum & Pet Coke

0%

Coal20%

Hydro

Biomass

Wind2%

Nuclear3%

Natural gas

NorthwestPower andConservationCouncilNorthwestPower andConservationCouncil

Average water & maximum thermal plant availability. September 2006

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- Abundant resources - >1,386 MW currently serving NW Load

Source: RNP (http://www.rnp.org/Projects/projectlist.php)

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III. The Future: Demand Continues to Grow

Source: NWPCC 5th Power Plan (vol. 2), p. 2-4

?

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III. The Future: Coal?

• Coal: – Cheap

– Relatively abundant

– Dirty!

• Utilities love their coal: – cheap baseload (reliable) power

– (For the most part) don’t have to pay for public health costs

– 150+ coal plants proposed in the West…

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Over 150 Coal-fired Power Plants Proposed in the West

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Pacific Mountain

Lower Columbia

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• Coal is a risk for everyone:– cheap now, but fuel costs already rising:

up 20% from ‘03-’05.

– Investments in coal now will cost customers later.

– Increasing environmental regulations

– Carbon restrictions coming soon…

• Regional regulations: CA and Northeast• Industry asking Congress to limit carbon emissions - want certainty

• Only a matter of time now

– Invest in coal = export NW jobs and $$$ to MT, WY for fuel

– Moral issue: people in MT, WY bare environmental costs of mining and power plant pollution for our power consumption

III. The Future: Coal = Risky Business

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III. The Future: Natural Gas?

• Natural Gas:– Low capital (upfront) costs

– High fuel costs

– Cleaner than coal

– Natural gas prices very volatile

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0123456789

10111213

199019911992199319941995199619971998199920002001200220032004200520062007200820092010

Nominal $/MMBtu (Henry Hub)

012345678910111213

Nominal $/MMBtu (Henry Hub)

Source: LBNL

NYMEXnatural gas futures strip

from 09/13/2005

Daily price history of 1st-nearbyNYMEX natural gas futures contract

U.S. Historic Natural Gas Prices(Volatile and Unpredictable)

III. The Future: Natural Gas?

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• Liquefied Natural Gas (LNG):– Imported from Indonesia, Qatar,

Iran, Russia, etc.– More dependence on foreign

fossil fuels– Exporting $$$ overseas– Potential security risk

(terminals and tankers)– Several LNG terminals

proposed for Northwest…

III. The Future: Liquefied Natural Gas

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• NW has abundant renewable energy potential:– Western Governor’s Association -

developable potential by 2015:• Wind: 2,310-7,735 MW

(693-2,321 aMW)

• Solar: 325-500 MW (71.5-111 aMW)

• Geothermal: 1,290 MW (1,187 aMW)

• Total: 3,925-9,525 MW (1,951-3,617 aMW)

• 72% of 5,000 aMW forecasted growth by 2025

III. The Future: Renewables?

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• Expected demand growth by 2025: 5,000 aMW

• Conservation and Efficiency: 2,800 aMW (NWPCC)

• Renewables: ~2,000-3,600 aMW (WGA)• Total: 4,800-6,400 aMW • So who needs coal or natural gas?

III. The Future: Conservation + Renewables =

More than Enough

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Provides power at stable, predictable price for many years

- (Fossil fuel prices volatile & unpredictable.) Helps fight global warming: no/low emissions, offsets fossil fuels

Economic Development: it creates jobs & tax revenue

Domestic resources: Keep jobs and $ local instead of sending elsewhere to buy their fuels (e.g.. coal from WY, gas from Canada).

III. The Future: Benefits of Renewables

Minimal water use

Public Health Benefits Doesn’t have air & water pollution impacts of fossil fuels Customers want it: PGE poll: 75% customers want RE and efficiency, <10% want coal.

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• Coal?

• Natural Gas?

• Conservation + Renewables?

• It’s our energy future: what do we want it to look like?

III. The Future: So Where Do We Want to Go?

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A Clean Energy Future is Possible:It’s up to us to make it happen!

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Policy Solutions

• Renewable Energy Standard / Renewable Portfolio Standard (RPS)• Purpose

– have electric utilities gradually increase amount of new RE in electricity supply to certain % by certain year.

– Gov. Kulongoski: 25% by 2025 proposed for Oregon

– Washington ballot initiative (I-937): 15% by 2020

– Create a stable market for renewables, encourage siting of domestic manufacturing, create jobs, economic development, health benefits

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20 States Have RPS Policies

WI: 10% by 2015

TX: 5880 MW by 2015

*NJ: 24% by 2021

CT: 10% by 2010

ME: 30% by 2000

*NM: 10% by 2011

CA:20%

by 2017 (2)

*AZ: 15% by 2025

*NV: 20% by 2015

MT: 15% by 2015 MN: 1,125 MW wind by 2010;10% goal by 2015

RI: 15% by 2020

*PA: 18%¹ by 2020

*DE: 10% by 2019

*MD: 7.5% by 2019

*DC: 11% by 2022

State RPS

Goal

MA: 4% by 2009 + 1% annual increase

NY: 24% by 2013

HI: 20% by 2020

*CO: 10% by 2015

*Minimum requirement and/or increased credit for solar¹ PA: 8% Tier I, 10% Tier II (includes non-renewable sources)2 CA: 33% by 2020 under review

IA: 105 MW

Source: Interstate Renewable Energy Council. www.dsireusa.org, July 2006

IL: 8% by 2013

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Policy Solutions

• Incentives– Public health, energy security and economic

development benefits of renewables all warrant incentives

– Federal Production Tax Credit is biggest factor– State incentives too (OR and WA offer strong package

of incentives)

• Environmental Regulations / Carbon Cap– Stricter environmental regulations force polluters to

pay– Renewables have no emissions so more competitive– Cost of carbon needs to be included (carbon cap or tax)