NorthwestPower andConservation

Council

NorthwestPower andConservation

Council

Sixth Northwest Conservation & Electric Power Plan

CHP in the Sixth Plan??

Jeff KingNorthwest Power and Conservation Council

Generating Resources Advisory CommitteeMay 6, 2009

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2004 EEA/ORNL Assessment1

Technical potential - 15,500 MW2

Large industrial - 2661 MW

Resource recovery - 76 MW (moderate - high economic potential)Wastewater - 6

Animal - 70

Small industrial - 2036 MW (difficult economics)

Commercial/Institutional - 9515 MW (v. difficult economics)

Economic potential2:Business as usual - 1191 MW (4% microturbine or fuel cell)

Accelerated case - 5105 MW (27% "")Substantial technical improvement, esp. smaller technologies

15% off capital cost

No standby charge

1. Energy and Environmental Analysis, Inc.. Combined Heat and Power in the Pacific Northwest: Market Assessment B-REP-04-5427-004r, August 2004.

2. Results for ID, OR & WA (MT not included)

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Oft-cited barriers to CHP development• Host facility ROE higher than that of utility industry• Limited availability of capital to host facility• Lending requirements for guarenteed fuel supplies (biomass)• Energy benefits not worth hassle of installing and operating a CHP

system• Utilities not motivated, see no rate of return - simply lost load• Purchase prices do not reflect full capacity & energy value of the

powerLocational valueEnvironmental values

• Onerous standby charges• Lack of uniform interconnection standards & agreements• Securing transmission access for sales of surplus power• Complexity of permitting and environmental compliance

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Recommendations from 2004 EEA Study (paraphrased in some cases)Federal:

Support technology developmentSupport advanced technology demonstration projectsEducation & outreach to increase awarenessAssess benefits of CHP deployment on transmission constraintsEconomic analysis of CHP impacts to support streamlining interconnection, reducing

standby charges, etc. Create utility partnerships to strengthen system-wide benefits of CHP deployment

StatesEstablish streamlined interconnection proceduresDevelop economic methodology for establishing standby tariffsEstablish fair avoided costsRequire cost-based wheeling of power over distribution systemEncourage IRPProvide tax and investment incentivesImprove state-level siting procedures

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What value can the Sixth Plan add?

In the form of:

- Information

- Recommended actions (more time to think about these later today)

The brutal facts:

- Limited information and no time before the draft plan

- Some additional time, possibly some additional information between draft & final