Utility Integrated Resource Planning Research Articles

Implications of a regional resource adequacy program for utility integrated resource planning

Resource adequacy (RA) is the ability of an electricity system to reliably satisfy loads using its available resources. Assessing and maintaining RA is becoming more challenging due to increasing coal plant retirements, penetration of wind and solar resources, reliance on bilateral and market transactions, and emerging technologies. RA evaluation and planning have traditionally been conducted by utilities and overseen by their state regulators using integrated resource planning (IRP) processes. However, the Northwest Power Pool (NWPP) is developing a proposal for a regional RA program in the Western U.S. that would set and enforce capacity obligations for member utilities, and achieve RA more cost-effectively by pooling resources and load profiles from across the region. In this paper, we investigate the policy implications of a regional RA program for existing IRP regulations, with the proposed NWPP RA program as our main object of study. We compile the RA assessment practices of Western U.S. utilities, the proposed NWPP RA program design, and lessons from the historical experience of the Southwest Power Pool’s RA program. Our analysis reveals that the IRP components which would be most heavily impacted by the regional program are RA targets, load forecasts, capacity accreditation factors, and transmission upgrades. We conclude by discussing the policy issues that RA program design and state IRP policy would have to address.

Solar Energy in Utility Integrated Resource Plans: Factors That Can Impact Customer Clean Energy Goals

Many electric utilities utilize Integrated Resource Plans (IRPs) to develop and communicate a long-term vision for their resource development. As such, IRPs play a significant role in solar development and in how customers achieve their clean energy goals. For large-scale energy customers, including corporations and local governments, understanding how IRP processes impact resource decisions—and how this relates to achieving their clean energy targets—can influence their engagement with utilities and regulators. A range of barriers can limit solar energy in IRPs, including outdated or unfounded solar technology assumptions and modeling practices that do not enable solar to compete fairly with other resources in the process. These barriers can reduce the amount of solar in the grid mix or available to customers through utility programs, impacting the ability of customers to meet their clean energy targets. This working paper aims to raise awareness among large-scale customers, utilities, and regulators of some of the current barriers that limit solar energy in utility IRPs.

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. 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.

Balancing Cost and Risk: The Treatment of Renewable Energy in Western Utility Resource Plans

Markets for renewable energy have historically been motivated by policy efforts, but a less widely recognized driver is poised to also play a major role in the coming years: utility integrated resource planning. A review of the planning efforts of 12 western utilities reveals that resource plans are becoming increasingly sophisticated in their treatment of renewable resources and the costs and risks that they both entail and mitigate. However, further improvements are possible.

Utility integrated resource planning: An emerging driver of new renewable generation in the western United States

In the United States, markets for renewable energy 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). Mark Bolinger and Ryan Wiser, Lawrence Berkeley National Laboratory report.

The potential contribution of renewable energy to electricity supply in Saudi Arabia

Saudi Arabia has enormous oil resources. At the same time, the Kingdom has other resources, notably solar energy that may figure in future supplies of electricity. In the past several years, considerable operational experience has been gained throughout the world in the implementation of renewable energy systems of types that would be relevant to the Kingdom. This paper reviews the nature of this experience and applies it in a quantitative assessment of the costs, savings, and environmental benefits of renewable energy conducted as a part of an electric utility integrated resource planning (IRP) project in the Kingdom. Integrated resource planning is an approach that systematically evaluates potential electricity supply and demand-side resources with the aim of developing a plan that provides energy services to customers at the least societal cost. The analysis summarized in this paper has shown that, when some of the non-market benefits of renewable energy are also included in the assessment of their overall costs and benefits, a supply expansion plan that includes wind and solar resources can provide energy services for the Kingdom at a lower societal cost than a “Business-as-usual” plan utilizing only fossil-fueled generating resources.

A New Concept for Utility Integrated Resource Planning: “Start with the Customer”

The competitive restructuring of the electric power industry is intensifyin g pressures for electric utilities to control cost s through improved utilization of existing assets and by minimizing capital investment in new generation, transmission, and distribution capacity. This article introduces a new planning approach that can provide more informed bu siness de cisions, resulting in higher asset utilization, lower ove rall costs, and enhanced customer ser vice. Unlike traditional planning methods, which assumed captive customer load growth, this process starts at the customer, focusing on how the customer's energy service needs can best be met. Expe rience garnered from utilities on four continents illustrates the potential of this new approach to reduce capital expenditure for energy resource additions, often at less than one-half the cost of con ventional solutions. By reorienting how utilities think, plan, and are internally organized , this new approach can assist utilities in making the fundamental transition to a customer-driven industry. Additional benefits include accurate costing of ene rgy resources and wheeling, reduced vulnerability to conflicts over facility siting, reduced risk in a time of rapid industry change. The process proposed here may not be the best IRP process for utilities ill the future but could be of significant benefit during the restructuring period.

Monte Carlo simulation techniques and electric utility resource decisions

This paper explores the use of Monte Carlo simulation techniques as an approach to electric utility integrated resource planning (IRP) that explicitly identifies key risks imposed on decision makers and/or shareholders. We discuss in general methods of examining risk, including sensitivity analysis, decision analysis and Monte Carlo simulation. We also present an example of how Monte Carlo simulation can be used in the context of resource planning. When used in conjunction with a model that captures the main engineering, economic and financial operations of a utility, Monte Carlo simulation can be used to account for planning uncertainties and examine tradeoffs between expected costs and risk.

The surprising role of risk in utility integrated resource planning

Integrated resource planning, as currently practiced, has a fatal flaw: the revenue-requirements method of evaluating new capacity options improperly ignores risk features. When risk is properly accounted for, the cost of supposed ‘high-cost’ resources—photovoltaics, for example—drops dramatically while the cost of supposed ‘low-cost’ resources like natural gas-fired generation goes up.

Integrated resource planning survey: Where the states stand

The December 1989 issue of this journal contained an article which discussed the results of a survey conducted on the status of electric utility integrated resource planning (IRP) in the various states. Recognizing that much has happened over the last two years to broaden the practice of IRP and to refine it in jurisdictions where it was already practiced, the author has conducted an update of the 1989 survey. To assess the key procedural and substantive components identified in 1989 as contributing to a full-featured IRP process, the author asked the same questions as part of the 1991 survey. Responses to this first set of questions were used to develop 1991 state ratings for traditional IRP. In addition, she inquired into regulatory and utility developments in key areas she believed to be related to successful integrated resource planning and acquisition. Those topics included: demand-side management (DSM) acquisition; competitive bidding processes; financial incentives to encourage utility investment in DSM; incorporation of environmental externalities into IRP; and gas utility IRP. These advanced IRP topic areas were developed to recognize and assess how the IRP process has evolved beyond the traditional, full-featured IRP process identified in the 1989 survey. The results of themore » 1991 survey are presented.« less