Staff analyzes Ninth Power Plan’s resource costs, timelines, and first portion of energy efficiency potential

At March’s Council meeting, Power Division Resource Policy Analyst Annika Roberts led a presentation about the estimated costs and timelines to develop for generating resources that will be used to inform resource potential in the Ninth Northwest Power Plan (read presentation | watch video). Power Planning Resources Manager Kevin Smit and Senior Resources Analyst Christian Douglass provided the first in a multi-part presentation on energy efficiency resource potential in the Ninth Plan (read presentation | watch video).

Gauging energy efficiency potential

The Council, through the work of staff, the Regional Technical Forum, and the Conservation Resource Advisory Committee, assesses the costs and availability for thousands of energy efficiency measures. Staff bundle these into supply curves for specific sectors, like commercial, residential, industrial, and agricultural, that can provide apples-to-apples comparisons with the costs of building other generating resources. The Northwest Power Act prioritizes acquiring cost-effective energy efficiency to meet growing demand for electricity on the Northwest’s power system.

This spring, staff is developing these supply curves in preparation for the Ninth Plan. Staff have sent supply curves for agriculture, commercial motor measures and food service, and the industrial sector out for review in the region and with the Conservation Resources Advisory Committee. Of the measures analyzed to date, staff estimates around 900 aMW of available efficiency potential over 20 years. The cost of this potential varies by measure, with around 500 aMW available at less than $20/MWh. Staff is working to develop supply curves for the remaining commercial loads and entire residential sector, which is anticipated to significantly increase the total potential. For example, in the 2021 Power Plan, residential potential represented 47% of the total supply curve, and the remaining commercial end uses represented another 23%. Commercial and residential supply curves will be presented to the Council at the May and June meetings.

The Ninth Plan will consider an updated and expanded suite of heat pump and HVAC measures in residential and commercial buildings. The plan will also account for a new strategy for evaluating energy efficiency potential based on specific locations within the Northwest. The Council recently upgraded its computer modeling to account for the 17 zones that will be analyzed within the region. This will provide insights on whether there could be more value for energy efficiency in some parts of the region, like where it could mitigate transmission and distribution system congestion. Additionally, staff can now analyze energy efficiency measures’ benefits on an hourly basis in computer modeling. Efficiency measures that deliver specific benefits during periods of high market prices as well as during peak demands may look more valuable, which could help shape the Ninth Plan’s cost-effective resource strategy.

Resource costs and timelines

Over the past year, Power Division staff have been working on generating resources’ reference plants, which specify attributes like capacity, transmission access, or location, as well as financing and costs. They’ve been meeting and checking these estimates and assumptions with the Generating Resources Advisory Committee, which consists of Northwest utilities, energy providers, experts, and other stakeholders. Roberts provided the final assumptions that will be used in the Ninth Plan at March’s meeting. Staff is working to lock down an initial set of assumptions, and plan to use scenario analysis to explore uncertainties around costs and availability. This scenario analysis can include understanding the impacts of supply chain backlogs and interconnection queues that may slow the availability of new generating resources.

Reference plants will be fed into computer models to help solve for future energy needs in the Pacific Northwest. Each reference plant specifies:

• Availability, including maximum buildout, locations, and physical limitations;
• Timing, including online dates, development lifetimes, and resource lifespans;
• Costs, including capital, operations and maintenance, and curves that reflect how costs decrease over time as technology and performance improve;
• Shapes, which is a key factor in renewables like wind and solar that have intermittent generation.

Staff developed overnight capital costs for each resources, which is the initial investment needed to construct a power plant. To determine these cost estimates, Roberts said staff used sources such as the National Renewable Energy Laboratory, Lawrence Berkeley National Laboratory, Lazard, and utilities’ integrated resource plans for specific areas of Oregon, Washington, Idaho, Montana, as well as in nearby states such as Wyoming, California, Utah, and Nevada.

Some resources like wind, solar, batteries, and natural gas plants are assumed to be available at the beginning of the Ninth Plan’s timeline in 2027, while others such as pumped storage, offshore wind, and emerging technologies will be available later.

Land-based wind

The reference plants will vary depending on the location and daily/monthly generating shapes. Staff is working with the Climate and Weather Advisory Committee to finalize this information.

This resource will be assumed to have a development and construction period of three years. The overnight capital cost will be between $1,666/kW in Montana to $1,827/kW in the Columbia River Gorge. The lifespan is assumed to be 30 years.

Utility scale solar

Similar to on-shore wind, the reference plants for utility scale solar vary depending on location and daily/monthly generating shapes. The CWAC is helping to finalize these details as well.

This resource will be assumed to have a development and construction period of two years. The overnight capital cost is between $1,500/kW in the east side of the region to $1,612/kW in the west side. The economic life is 30 years.

Community solar

Community solar is growing quickly in some parts of the Northwest like Oregon, whose renewable portfolio standard has a small-scale renewable requirement for large investor-owned utilities like Portland General and PacifiCorp. The total installed capacity in Oregon was 30MW in 2023.

It’s assumed to have a development and construction period of 18 months. The overnight capital cost is $2,000/kW and the economic life is 30 years.

Lithium-ion batteries

Unlike wind and solar, lithium-ion batteries aren’t influenced by location. It will take two years to develop and build, with an overnight capital cost of $1,800/kW and an economic life of 15 years.

Solar + battery storage

This resource has an overnight capital cost of $2,500/kW and is assumed to need two years to develop and build. It has an economic life of 30 years.

Natural gas plants

Power Division staff will analyze combined-cycle turbines and gas peaker plants. 

For combined-cycle turbines, the reference plant assumes a time period of four years to develop and build, as well as an overnight capital cost of $1,500/kW. Peaker plants will take two to three years to develop and build, with $1,000-$1,800/kW as the overnight capital cost. The economic life for each is 30 years. 

Staff is also recommending analyzing the costs, timelines, and availability of a new gas plant converted to hydrogen pyrolsis. The conversion to hydrogen pyrolysis would be available between 2035 and 2040. Staff will be meeting with the Generating Resources Advisory Committee on March 26 to discuss costs to build this type of plant. The meeting will also focus on the maximum build-out that should be assumed for this type of plant; the economic life is assumed to be 30 years.

Pumped storage

This resource has an assumed maximum build out of 4,000 MW, based on the 11 projects currently in development in the region. The assumed lead time is five years, and a construction and development period of two years. The overnight capital cost is $4,000/kW and economic life is 50 years.

Off-shore wind

This resource is assumed to be available beginning in 2035 and has a maximum build-out of 3 GW, as it is limited by transmission capability. Its overnight capital cost is $7,000/kW and has an economic life of 30 years.

Geothermal

This is assumed to be available at the start of the Ninth Plan, and will take seven years to develop and build. The maximum buildout is 22 plants generating 462MW. The overnight capital cost is $5,000/kW and economic life is 30 years.

Emerging technologies

The Ninth Plan is using proxies for emerging technologies – covering clean long-duration storage, clean baseload, and clean peaker/medium duration storage – so models can evaluate and assess needs for their general attributes without being overly prescriptive on technologies whose costs and timelines to commercial viability are uncertain.

Clean long-duration storage

This is based on an iron-air battery. This resource is assumed to be available beginning in 2030, with a maximum buildout of 300MW. It would take two years to develop and build, its economic life is 30 years, and would have an overnight capital cost of $2,500/kW.

Clean baseload

This is characterized like a small modular nuclear reactor, and assumed to be available beginning in 2035. The maximum build-out is five units. It would take five years to develop and build, and have an economic life of 40 years. The overnight capital cost is $9,000/kW.

Clean peaker/medium duration storage

This is based on a hydrogen peaker with onsite electrolysis. This is assumed to be available in 2040 and would take one year to develop and build. The overnight capital cost is $3,500/kW.