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Avoided Cost and E3 Calculator Workshops

Avoided Cost and E3 Calculator Workshops. Energy and Environmental Economics, Inc. October 4, 2005. Total Electric Avoided Costs. Shape is Based on PG&E’s San Jose Planning Division. Refinements in Avoided Cost. Background Overview of Title 24 DR Progress Focus on demand response measures

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Avoided Cost and E3 Calculator Workshops

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  1. Avoided Cost and E3 Calculator Workshops Energy and Environmental Economics, Inc. October 4, 2005

  2. Total Electric Avoided Costs Shape is Based on PG&E’s San Jose Planning Division

  3. Refinements in Avoided Cost • Background • Overview of Title 24 DR Progress • Focus on demand response measures • Programmable Communicating Thermostat example • Capacity and Energy Value Refinement • Existing CPUC and CEC TDV Values are based on 1998 and 1999 PX market data • Proposed new method modifies the PX market shape based on a ‘CT Backstop’ approach • Creates a ‘peakier’ value curve

  4. Background • 2005 Title 24 Building Standards adopted ‘Time-dependent Valuation’ methodology • Analysis was completed in 2003, and much information was used in the CPUC Avoided Cost proceeding started in 2004 • 2008 Title 24 Building Standards are evaluating a new TDV curve for demand response • Refinement in energy and capacity valuation

  5. Overview of Title 24 DR Progress • 3 Public Meetings Completed • Methodology Components • Energy, reliability, and capacity most difficult • T&D, environment, other pieces adopted from prior CEC Title 24 TDV and CPUC Avoided Costs • Attempt at party consensus of approach • CEC, SCE, PG&E, SDG&E • Public comment also requested • Proposal for complete methodology has been developed – remainder of presentation

  6. Title 24 2008 Energy and Capacity Value Method and results in this slide are preliminary.

  7. Resource Planning Operations • Class Average VOS $25/kWh • -Productivity -$5/kW • Net Reliability $20/kWh Value of Energy, Capacity, Reliability + + DkW of Equivalent Capacity in Each Hour Additional DkW of Equivalent Capacity Achieved During Stage 3

  8. CT Backstop Method • Modifies the historical market price shape to reflect avoiding the need to add capacity • Assumes that the backstop technology to add capacity in the State is a CT • Observed market prices will pay for part, but not the total costs of a new CT • Differe

  9. CEC Price Shape – 2004 IEPR Note these shapes are from 2004 IEPR.

  10. Price Duration Curve CEC Shape Scaled to All-in Combined Cycle Cost Forecast Market Price - 2008

  11. Uses $72/kW-year Fixed Cost of a CT Assumption (levelized real) $85/kW-year (levelized nominal) approx. the same value. Result is approximately $20/kW-yr High number of operating hours Similar analyses for other cases / utilities show approximately 700-900 hours operation Few hours results in a larger residual capacity value Calculation of Residual Capacity Value

  12. Allocation of Residual Capacity Control Area Load 1999 Example Resulting Allocators

  13. Energy and Capacity Curve(Example from 2008) Residual Capacity – 100 Hours Residual Capacity – 250 Hours

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