Utility Integrated Resource Planning: An Emerging Driver of NewRenewable Generation in the Western United States
In the United States, markets for renewable generation--especially wind power--have grown substantially in recent years. This growth is typically attributed to technology improvements and resulting cost reductions, the availability of federal tax incentives, and aggressive state policy efforts. But another less widely recognized driver of new renewable generation is poised to play a major role in the coming years: utility integrated resource planning (IRP). Common in the late-1980s to mid-1990s, but relegated to lesser importance as many states took steps to restructure their electricity markets in the late-1990s, IRP has re-emerged in recent years as an important tool for utilities and regulators, particularly in regions such as the western United States, where retail competition has failed to take root. As practiced in the United States, IRP is a formal process by which utilities analyze the costs, benefits, and risks of all resources available to them--both supply- and demand-side--with the ultimate goal of identifying a portfolio of resources that meets their future needs at lowest cost and/or risk. Though the content of any specific utility IRP is unique, all are built on a common basic framework: (1) development of peak demand and load forecasts; (2) assessment of how these forecasts compare to existing and committed generation resources; (3) identification and characterization of various resource portfolios as candidates to fill a projected resource deficiency; (4) analysis of these different ''candidate'' resource portfolios under base-case and alternative future scenarios; and finally, (5) selection of a preferred portfolio, and creation of a near-term action plan to begin to move towards that portfolio. Renewable resources were once rarely considered seriously in utility IRP. In the western United States, however, the most recent resource plans call for a significant amount of new wind power capacity. These planned additions appear to be motivated by the improved economics of wind power, an emerging understanding that wind integration costs are manageable, and a growing acceptance of wind by electric utilities. Equally important, utility IRPs are increasingly recognizing the inherent risks in fossil-based generation portfolios--especially natural gas price risk and the financial risk of future carbon regulation--and the benefits of renewable energy in mitigating those risks. This article, which is based on a longer report from Berkeley Lab,i examines how twelve investor-owned utilities (IOUs) in the western United States--Avista, Idaho Power, NorthWestern Energy (NWE), Portland General Electric (PGE), Puget Sound Energy (PSE), PacifiCorp, Public Service Company of Colorado (PSCo), Nevada Power, Sierra Pacific, Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E)--treat renewable energy in their most recent resource plans (as of July 2005). In aggregate, these twelve utilities supply approximately half of all electricity demand in the western United States. In reviewing these plans, our purpose is twofold: (1) to highlight the growing importance of utility IRP as a current and future driver of renewable generation in the United States, and (2) to suggest possible improvements to the methods used to evaluate renewable generation as a resource option. As such, we begin by summarizing the amount and types of new renewable generation planned as a result of these twelve IRPs. We then offer observations about the IRP process, and how it might be improved to more objectively evaluate renewable resources.
- Research Organization:
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- Sponsoring Organization:
- USDOE. Assistant Secretary for Energy Efficiency andRenewable Energy. Office of the Solar Energy TechnologyProgram
- DOE Contract Number:
- DE-AC02-05CH11231
- OSTI ID:
- 862344
- Report Number(s):
- LBNL-59239; R&D Project: 57461F; BnR: EB2502010; TRN: US200602%%463
- Journal Information:
- Refocus, Vol. 6, Issue 6; Related Information: Journal Publication Date: November/December2005; ISSN 1471-0846
- Country of Publication:
- United States
- Language:
- English
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