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The Future of Electricity Resource Planning

Electricity resource planning is the process of identifying longer-term investments to meet electricity reliability requirements and public policy goals at a reasonable cost. Resource planning processes provide a forum for regulators, electric utilities, and electricity industry stakeholders to evaluate the economic, environmental, and social benefits and costs of different investment options. By facilitating a discussion on future goals, challenges and strategies, resource planning processes often play an important role in shaping utility business decisions. Resource planning emerged more than three decades ago in an era of transition, where declining electricity demand and rising costs spurred fundamental changes in electricity industry regulation and structure. Despite significant changes in the industry, resource planning continues to play an important role in supporting investment decision making. Over the next two decades, the electricity industry will again undergo a period of transition, driven by technological change, shifting customer preferences and public policy goals. This transition will bring about a gradual paradigm shift in resource planning, requiring changes in scope, approaches and methods. Even as it changes, resource planning will continue to be a central feature of the electricity industry. Its functions — ensuring the reliability of high voltage (“bulk”) power systems, enabling oversight of regulated utilities and facilitating low-cost compliance with public policy goals — are likely to grow in importance as the electricity industry enters a new period of technological, economic and regulatory change. This report examines the future of electricity resource planning in the context of a changing electricity industry. The report examines emerging issues and evolving practices in five key areas that will shape the future of resource planning: (1) central-scale generation, (2) distributed generation, (3) demand-side resources, (4) transmission and (5) uncertainty and risk management. The analysis draws on a review of recent resource plans for 10 utilities that reflect some of the U.S. electricity industry’s extensive diversity.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Load Forecasting in Electric Utility Integrated Resource Planning

Integrated resource planning (IRP) is a process used by many vertically-integrated U.S. electric utilities to determine least-cost/risk supply and demand-side resources that meet government policy objectives and future obligations to customers and, in many cases, shareholders. Forecasts of energy and peak demand are a critical component of the IRP process. There have been few, if any, quantitative studies of IRP long-run (planning horizons of two decades) load forecast performance and its relationship to resource planning and actual procurement decisions. In this paper, we evaluate load forecasting methods, assumptions, and outcomes for 12 Western U.S. utilities by examining and comparing plans filed in the early 2000s against recent plans, up to year 2014. We find a convergence in the methods and data sources used. We also find that forecasts in more recent IRPs generally took account of new information, but that there continued to be a systematic over-estimation of load growth rates during the period studied. We compare planned and procured resource expansion against customer load and year-to-year load growth rates, but do not find a direct relationship. Load sensitivities performed in resource plans do not appear to be related to later procurement strategies even in the presence of large forecast errors. These findings suggest that resource procurement decisions may be driven by other factors than customer load growth. Our results have important implications for the integrated resource planning process, namely that load forecast accuracy may not be as important for resource procurement as is generally believed, that load forecast sensitivities could be used to improve the procurement process, and that management of load uncertainty should be prioritized over more complex forecasting techniques.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

NREL's Resource Planning Model

The Resource Planning Model (RPM) is a capacity expansion model designed for a regional power system, such as a utility service territory, state, or balancing authority. Designed from the ground up to include nodal detail, hourly chronological dispatch, and high spatial resolution for renewable resources, recent work has focused on inclusion of storage and other flexible technologies of interest for future power systems with more variable generation (e.g., wind and solar). This slide deck gives an overview of RPM modeling methods, provides example outputs, and briefly summarizes completed analysis projects.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Energy Storage in Integrated Resource Plans

Energy Storage in Integrated Resource Plans (IRPs) documents a review of how IRPs treated energy storage, particularly batteries and pumped storage hydro storage. The review examined IRPs available in fall 2017 and winter/early spring 2018, examining whether IRPs included storage at all, how many of the services provided by storage were included, the costs assumed for storage, and other factors. This report summarizes the results of the review.

25 ENERGY STORAGE↗

Best Practices in Integrated Resource Planning: A guide for planners developing the electricity resource mix of the future

Most states today require regulated electric utilities to file an IRP every 1 to 5 years, and some utilities voluntarily prepare these plans. Planning needs have changed in recent years due to emerging load growth, plant retirements, rising costs, and more extreme weather events – among other factors. In response, Synapse Energy Economics and Lawrence Berkeley National Laboratory produced a joint report, Best Practices in Integrated Resource Planning: A guide for planners developing the electricity resource mix of the future. The guide offers best planning practices for electricity systems undergoing a major transition, but also contains a wealth of practical guidance to develop technically sophisticated, clearer, more effective, and state-of-the-art electric utility resource plans. The guide is for resource planning professionals and stakeholders involved in resource planning processes. This diverse group includes utility personnel tasked with conducting resource planning and making investment decisions, state regulatory commissions that develop planning guidance and oversee the resource planning process, and stakeholders that represent a wide range of interests—utility consumer advocates, environmental groups, industrial customers, local governments, independent power producers, and many other

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Advanced Guide to Understanding Power System Model Results for Long-Term Resource Plans

This guide is for public utility commission staff, state energy office staff, and other stakeholders who review model results for utility integrated resource plans (IRPs). It builds on the "Beginner's Guide to Understanding Power System Model Results for Long-Term Resource Plans," and delves into more advanced topics that were not included or not fully covered in the beginner's guide. The topics included here are evolving and may or may not be important to the resource plan you are evaluating. Due to limitations in resources, it's also not possible to give the highest level of detail or attention to every topic within a plan. An important part of planning for an uncertain future involves deciding which topics deserve the most focus and resources. It's all about prioritizing efforts where they will have the most impact or be most beneficial despite uncertainties ahead. As with the beginner's guide, we intend for this guide to help improve decision-making in the electricity planning process by strengthening understanding and dialogue between electricity system planners and relevant stakeholders. The following information is designed to allow you to better engage in the planning process by evaluating results, asking questions, and thinking through what is most important. We allocate significant discussion in the guide to electricity demand evolution, demand-side resources, and resource adequacy. These topics have garnered increasing attention, hence their prominence in this guide. Other topics are also presented, but their incorporation into the planning process might vary based on interest and relevance. The absence of certain topics doesn't diminish their importance; rather, it reflects the reality that in planning, trade-offs necessitate prioritizing certain aspects over others.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Beginner's Guide to Understanding Power System Model Results for Long-Term Resource Plans

This presentation summarizes a recently published beginner's guide for understanding power system model results for long-term resource plans. This guide is designed to improve decision-making in the electricity planning process by strengthening dialogue between system planners and relevant stakeholders. It focuses on interpreting scenario results generated by power system planning models. These results are often used to inform integrated resource plans, which are long-term plans for a utility to meet future electricity requirements. Whether you are a state utility commissioner, commission staff, part of a state energy office, an intervenor in the planning process, or another stakeholder, this guide is designed to help you better weigh in on the modeling methods or interpret the model results to improve decision-making. This guide can enhance your understanding to ask the right questions, which can enable better understanding of results and key assumptions, data, and methods.

ENERGY PLANNING, POLICY, AND ECONOMY↗

A Review of Water and Climate Change Analysis in Electric Utility Integrated Resource Planning

The purpose of this paper is to examine the extent to which electric utility integrated resource plans (IRPs) evaluate the impact of water constraints on electric generation resource portfolios and the extent to which IRPs consider the impacts of climate change to generation and loads. This white paper reviewed 30 IRPs to determine best practices with respect to analyzing and reporting on potential water-based and climate change risks within the integrated resource planning process. Best practices from electric utility IRPs are identified and additional recommendations and considerations are put forth. In recent years, thermal generating facilities have experienced challenges with water availability: a shortage of cooling water, conditions in which incoming cooling water is too warm for optimal operation, and/or water discharge temperatures exceeding permit limits. S&P Global Market Intelligence recently reported on a study that identified for the year 2030, 98.2 gigawatts (GW) of coal capacity at risk due to water stress. Climate change effects on hydrological cycles may adjust the timing, temperature, and volume of water availability for thermal electric cooling and for hydropower generation, which could further exacerbate the frequency and duration of operational constraints. Climate change can also impact the timing and intensity of electric loads that utilities must serve, most notably for heating and cooling.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Review of Marine Renewable Energy in Integrated Resource Plans

As part of a literature review of reference material for grid applications of marine hydrokinetic energy capture technologies, Pacific Northwest National Laboratory (PNNL) surveyed U.S. electric utility integrated resource plans for the mention or treatment of marine renewable energy technologies, principally wave energy, tidal energy, and offshore wind energy. This review offers a window into utility decision-making and data utilization with regard to these generating technologies. The report also offers perspectives on the relationship between traditional and emerging resource planning paradigms and metrics.

16 TIDAL AND WAVE POWER↗

A Resilient Integrated Resource Planning Framework for Transmission Systems: Analysis and Optimization

This article presents a resilient Integrated Resource Planning (IRP) framework designed for transmission systems, with a specific focus on analyzing and optimizing responses to High-Impact Low-Probability (HILP) events. The framework aims to improve the resilience of transmission networks in the face of extreme events by prioritizing the assessment of events with significant consequences. Unlike traditional reliability-based planning methods that average the impact of various outage durations, this work adopts a metric based on the proximity of outage lines to generators to select HILP events. The system’s baseline resilience is evaluated by calculating load curtailment in different parts of the network resulting from HILP outage events. The transmission network is represented as an undirected graph. Graph-theoretic techniques are used to identify islands with or without generators, potentially forming segmented grids or microgrids. This article introduces Expected Load Curtailment (ELC) as a metric to quantify the system’s resilience. The framework allows for the re-evaluation of system resilience by integrating additional generating resources to achieve desired resilience levels. Optimization is performed in the re-evaluation stage to determine the optimal placement of distributed energy resources (DERs) for enhancing resilience, i.e., minimizing ELC. Case studies on the IEEE 24-bus system illustrate the effectiveness of the proposed framework. In the broader context, this resilient IRP framework aligns with energy sustainability goals by promoting robust and resilient transmission networks, as the optimal placement of DERs for resilience enhancement not only strengthens the system’s ability to withstand and recover from disruptions but also contributes to efficient resource utilization, advancing the overarching goal of energy sustainability.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Distributed Solar Adoption in Orlando: A Household-Level Model for Distribution Resource Planning

Potential for rooftop solar in Florida is massive (47% of retail sales, 3rd overall nationally), yet adoption lags (12th nationally). A 2018 Florida Public Service Commission ruling authorizing solar third-party ownership (leasing) has substantially increased attention on distributed solar in the state. The city of Orlando has committed to a 100% clean-energy target by 2050 and deployment of solar and storage are expected to contribute significantly to reaching the goal. Deployment of customer-adopted solar, unlike utility-procured solar, is uncertain, but known to be spatially correlated with demographic factors and existing adoption. We develop a new method to adapt NREL's dGen model in order to represent building-level agents in adoption forecasts for the Orlando Utility Commission (OUC) service territory. Using the agent-based model we develop projections of solar adoption, subject to scenarios varying future solar costs and valuation, and aggregate adoption predictions by OUC distribution feeder. We find substantial spatial heterogeneity in the projected level of adoption by OUC distribution feeder. For instance, 25% of all projected adoption through 2050 would be concentrated on just 5% of feeders and 88% of projected adoption on 50% of feeders. Because of the uncertainty in adoption, bottoms-up solar adoption forecasting methods at the household-level are integral to long-term resource planning by anticipating system needs as customers increasingly adopt distributed solar, storage, electric vehicles, and other distributed energy resources.

14 SOLAR ENERGY↗

Picking the Best from the All-Resources Menu: Advanced Tools for Resource Planning

Introduces the wide range of electric power systems modeling types and associated questions they can help answer. The presentation focusses on modeling needs for high levels of Distributed Energy Resources (DERs), renewables, and inverter-based technologies as alternatives to traditional centralized power systems. Covers Dynamics, Production Cost/QSTS, Metric Assessment, Resource Planning, and Integrated Simulations with examples drawn from NREL's past and on-going projects. Presented at the McKnight Foundation workshop on 'An All-Resources Approach to Planning for a More Dynamic, Low-Carbon Grid' exploring grid modernization options to replace retiring coal plants in Minnesota.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Effectively Considering the Distribution System in Integrated Resource Plans

While electricity planning practices vary by state and utility based on utility type and market structure, integrated resource planning (IRP) remains a prominent vehicle — even in states with centrally-organized wholesale electricity markets. IRP focuses on meeting forecasted long-term electricity needs. Typically, utilities have not considered impacts of design and operation of the low-voltage distribution network in IRP. With advanced capabilities of grid-edge technologies to generate and store electricity and provide load flexibility, and large utility investments in distribution systems, it's increasingly important to consider at least some distribution planning elements in IRP. This report considers the value proposition for doing so, such as reducing utility costs through resource co-optimization and strategic siting of grid-edge resources, and idenfities the most important touchpoints between planning for bulk power and distribution systems and provide a range of tactics for integrating these two processes.

Relf, Grace [Lawrence Berkeley National Laboratory↗

Long term load forecasting accuracy in electric utility integrated resource planning

Forecasts of electricity consumption and peak demand over time horizons of one or two decades are a key element in electric utilities’ meeting their core objective and obligation to ensure reliable and affordable electricity supplies for their customers while complying with a range of energy and environmental regulations and policies. These forecasts are an important input to integrated resource planning (IRP) processes involving utilities, regulators, and other stake-holders. Despite their importance, however, there has been little analysis of long term utility load forecasting accuracy. We conduct a retrospective analysis of long term load forecasts on twelve Western U. S. electric utilities in the mid-2000s to find that most overestimated both energy consumption and peak demand growth. A key reason for this was the use of assumptions that led to an overestimation of economic growth. We find that the complexity of forecast methods and the accuracy of these forecasts are mildly correlated. In addition, sensitivity and risk analysis of load growth and its implications for capacity expansion were not well integrated with subsequent implementation. As a result, we review changes in the utilities load forecasting methods over the subsequent decade, and discuss the policy implications of long term load forecast inaccuracy and its underlying causes.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Implications of a regional resource adequacy program on utility integrated resource planning: Study for the Western United States

LBNL collaborated with the Western Interstate Energy Board and the University of Texas, Austin to investigate the implications of a regional resource adequacy (RA) program on utility integrated resource planning. This report is focused on an active policy discussion to develop a novel voluntary program to share capacity resource and improve RA in the Western Interconnection. This report identifies two RA components of IRP that will be highly impacted by a regional RA program: resource capacity accreditation and RA targets. There are at least four resources that will require specific attention for their capacity credit calculation: (1) variable renewable resources, (2) demand-side resources, (3) hydropower, and (4) contracts. It will then be necessary to decide on a RA target reliability metric (e.g., a planning reserve margin) that is at least the minimum requirement in IRPs to ensure consistency in RA requirement calculations. The report finds that load forecasting and transmission expansion analyses will be moderately impacted, but that most of IRP components will not be significantly impacted. The report includes (i) a review of traditional resource adequacy practices in IRP; (ii) a case study of an existing regional RA program that interacts with IRP (Southwest Power Pool) and (iii) an overview of the NWPP regional resource adequacy proposal that is the object of this work. This paper does not (1) advocate for or against a regional RA program for the NWPP, (2) make detailed design recommendations for this program, or (3) assess its benefits and costs.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

Become EV Friendly With Planning Resources for Charging Infrastructure

State and local governments are key to the successful build-out of a nationwide electric vehicle (EV) charging infrastructure network. Visit the Alternative Fuels Data Center for resources on EV infrastructure planning, including key considerations and best practices for navigating regulatory updates to streamline infrastructure build-out.

ADVANCED PROPULSION SYSTEMS↗

Beginner's Guide to Understanding Power System Model Results for Long-Term Resource Plans

This guide was developed to improve decision-making in the electricity planning process by strengthening dialogue between electricity system planners and stakeholders throughout the process. This document was created for anyone who is first getting exposed to scenario results from power system planning models, or for those who are beginning to interact with power system modelers. It does not assume any experience with power system modeling, or familiarity with electricity planning concepts. This guide can be helpful to a wide range of people, including but not limited to state utility commissioners and commission staff, state energy offices, and intervenors in the planning process. It is targeted to those who are evaluating or reviewing model results presented by a utility, which typically span utility-scale generation and storage (and associated transmission) assets. This guide is designed to provide enough background and guidance that stakeholders can formulate and ask questions to evaluate model results through a deeper understanding of the key assumptions, data, and methods that drive decision outcomes. The ultimate purpose of this work is to increase transparency in the electricity planning process by enabling stakeholders to better engage and evaluate model results. A follow-on guide will provide a deeper dive into emerging topics, which are expected to become more prominent in the electricity planning process, but whose methods and approaches are still being refined.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗