某咨詢加州電力危機咨詢(英)

1、Lightening Strikes Twice: California Faces a Real Risk of A Second Power CrisisLake Tahoe Energy ConferenceJuly 30, 2004CONFIDENTIALThis report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without p

2、rior written approval from McKinsey & Company. This material was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion.Taking The Right Steps To Ensure A Powerful Future5 steps that will ensure a long-term sustainable market for powerTHE STATE

3、IS AT RISK OF ANOTHER POWER CRISIS, BUT 5 KEY STEPS WILL HELP TO ENSURE A SUSTAINABLE POWER MARKETAction needs to be taken today to prevent another energy crisis1. New generation needs to be built today, given the long lead time, and a mechanism for market-based contracts with utilities needs to be

4、introduced2. California should introduce mandatory time-of-use metering for all classes of customers3. New transmission needs to be built and facilitated through a expedited and coordinated approval process by the PUC, ISO, CEC, and FERC4. A formal capacity market combined with a mandatory planning

5、reserve target (e.g., 15-20%) needs to be in place by 2006 5. The State should re-introduce elements of retail choice, providing an opportunity for large consumers to shop for powerCEC estimates indicate that operating reserves could drop below typical “emergency” levels if we have a hot summerUnfor

6、tunately, the CECs demand estimates appear low relative to trend and a “high demand case” (i.e., hot summer) may be as likely as a 1-in-5 occurrenceTaking into account realistic levels of future demand, operating reserves could be extremely tight by 2006 as low as 5.8% (in a 1-in-5 year demand case)

7、1THE STATES ENERGY AGENCIES PROJECT A NEAR-TERM RISK OF LOW RESERVE MARGINS IN A HOT YEAR* Operating reserve margin calculated as (Available Supply Peak Demand)/(Peak Demand)Source: California Energy Commission (July 8, 2004 update to June 24, 2004 report)1-in-10 year (hot)1-in-2 year (average)CEC E

8、STIMATESAugust 2005August 2006August 2007August 2008Projected California state operating reserve margin*PercentAugust 20047% target = Stage One emergency level5% target = Stage Two emergency levelReserve margins consistently drop beginning in 2006Demand2ENERGY AGENCY FORECASTS OF FUTURE DEMAND ARE O

9、PTIMISTIC COMPARED TO ALTERNATIVE PROJECTIONSESTIMATES OF 1-IN-2YEAR PEAK DEMANDPeak demand (average weather), after conservationGW* Regression projection based on historic weather, historic GSP, current GSP projections (5.6%), and average weather* Based on historic CAGR for peak demand growth befor

10、e including conservation (underlying growth of 1.88% for 1983-2003) and adjusted for expected 2004-2008 conservation in California (provided by CEC)Source: California Energy Commission; Bureau of Economic Analysis; ERegression model*CEC-July 2004Trend*Different models of demandCEC-May 2003For 2006,

11、the CECs estimate is 1,000 MW below trend-line estimates and 2,100 MW below a regression model estimate3THE POTENTIAL FOR A “HIGH DEMAND CASE” IS AS HIGH AS A 1-IN-5 EVENT, RATHER THAN JUST A 1-IN-10 EVENT1 in 2 demand1 in 5 demand1 in 10 demandDistribution of average statewide peak temperatureNumbe

12、r of years observed over past 40 years* Based on BAEF regression-model estimates of 2006 peak demandSource: California Energy CommissionTemperature rangeDegrees Fahrenheit 8 out of the last 40 years (or 20%), peak temperatures have been 101 degrees or higherThere is little demand difference, though,

13、 between 101 degrees and 101.5 degrees1 in 10101.51 in 5101Potential 2006 peak demand*GWBASED ONHISTORIC DATA+3.4%+2.7%4TAKING INTO ACCOUNT A DIFFERENT VIEW OF FUTURE DEMAND, THE RISK OF SHORTAGES IS EVEN STARKER* Operating reserve margin calculated as (Available Supply Peak Demand)/(Peak Demand)* A

14、s much as 2,000 MW would be required to maintain a planning reserve margin of 15% for the 1-in-5 case, which would equate to a 1-in-2 operating reserve of 12.1% and a 1-in-5 operating reserve of 9.1%Source: California Energy Commission (July 8, 2004 update to June 24, 2004 report); McKinsey analysis

15、1 in 5 year1 in 2 yearBAEF ESTIMATE7% target = Stage One emergency level750 MW of new capacity will be needed before 2006 to maintain a 7% operating reserve under a 1-in-5 case*Given the lead time for new construction, permitting and demand side management needs to begin todayAugust 2005August 2006A

16、ugust 2007August 2008Projected California state operating reserve margin*Percent5% target = Stage Two emergency levelDemand5THE STATE IS AT RISK OF ANOTHER POWER CRISIS, BUT 5 KEY STEPS WILL HELP TO ENSURE A SUSTAINABLE POWER MARKET5 steps that will ensure a long-term sustainable market for powerAct

17、ion needs to be taken today to prevent another energy crisis1. New generation needs to be built today, given the long lead time, and a mechanism for market-based contracts with utilities needs to be introduced2. California should introduce mandatory time-of-use metering for all classes of customers3

18、. New transmission needs to be built and facilitated through a expedited and coordinated approval process by the PUC, ISO, CEC, and FERC4. A formal capacity market combined with a mandatory planning reserve target (e.g., 15-20%) needs to be in place by 2006 5. The State should re-introduce elements

19、of retail choice, providing an opportunity for large consumers to shop for powerCEC estimates indicate that operating reserves could drop below typical “emergency” levels if we have a hot summerUnfortunately, the CECs demand estimates appear low relative to trend and a “high demand case” (i.e., hot

20、summer) may be as likely as a 1-in-5 occurrenceTaking into account realistic levels of future demand, operating reserves could be extremely tight by 2006 as low as 5.8% (in a 1-in-5 year demand case)6MARKET-BASED LONG-TERM CONTRACTS SHOULD BE ADOPTED TO FACILITATE GENERATION CONSTRUCTION and what ma

21、rket-based prices would look like under the contractsDWR contract price (2003 average)California cost of generationDollars per MWhCapacity payment*Electricity price under new market-based contracts*ILLUSTRATIVE* All-in wholesale electricity price including capacity payment, gas price, energy costs*

22、Assumes 15% ROE, 8% cost of debt, $450/kW CCGT investment cost, 10-year return periodSource: California DWR; NYMEX; McKinsey analysisHow contracts would workWho will buy:In the near term, utilities will be responsible for signing contracts with the winning bidders, with guaranteed rate recovery of c

23、ontract costsWho will build:Competitive RFP process allowing utility affiliates or merchant generators to bidHow will contracts be priced:Will be market based contracts, with an ROE on capital investment and pass through of variable generation costs Capacity payment will provide return on capital in

24、vestment Energy payment will be based on a specified plant efficiency and indexed to natural gas prices17THERE ARE A NUMBER OF SOURCES OF CAPACITY THAT COULD BE BROUGHT ON LINE BY 2006 IF THE STATE ACTS NOW* Includes projects under construction delayed more than 24 months from initial planned online

25、 date* Assumes most of these plants are 40% complete (as of July 2004)Source: California Energy Commission; McKinsey analysisPlants partly constructed , but incomplete due to financing or lack of contracts*Plants with permits from the CPUC but not under constructionCalifornia capacityGigawattsEstima

26、ted time to onlineMonthsPlants that have been mothballed, but could be brought back on lineTo ensure new capacity is brought on line by the summer of 2006, the CPUC must act now to ensure that long-term contracts are available to generators to complete existing projectsSteps to bring capacity online

27、Relaxed environmental restrictionsShort term contracts E.g., EtiwandaMid-long term contracts (5-10 years)E.g., Metcalf, PicoLong term contracts (5-10 years)Extended permit shelf lifeE.g., Tesla, San Joaquin3-68-12*12-1818CALIFORNIA LAGS OTHER STATES IN ITS DEMAND SAVINGS FROM LOAD MANAGEMENT PROGRAM

28、SNote: Includes only utilities reporting DSM activities Source: EIA; state disclosuresTop 25 states in load management DSM savings2002 annual load management savings as percent of (Savings + Peak), MWTop 25 states in peak DSM savings from energy efficiency 2002 annual peak savings from energy effici

29、ency, MWIf California achieved levels of Florida, It could see a reduction of demand by 2 GW in load management aloneEven though California is a leader in energy efficiency, there is room to improve by 900MWFloridaCalifornia29TIME OF USE PRICING IN CALIFORNIA IS A DEMAND SIDE MANAGEMENT PROGRAM THAT

30、 COULD PAY FOR ITSELF* Assumes real-time prices will cause large C&I customers to shift 4%-6% and curtail 1%-2% of their load, and time-of-use prices will cause small C&I and residential customers to shift 5%-7% and curtail 9%-11% of their load* Includes one-time real-time meter equipment ca

31、pital cost and incremental maintenance costs for the remaining 70% of large C&I customers in California without meters and one-time interval meter equipment capital cost for 50% of small C&I and residential customersSource: 1999 CalPX hourly data; interviews; McKinsey analysisBenefits of tim

32、e-of-use pricingRatepayers would save approximately $270 million-$380 million annuallyFewer new peaker plants neededGas demand reducedEnvironmental benefits (NOx reduction, water conservation, etc.)10-year savings from demand response (load shifting and curtailing*)Total 10-year savingsCost of progr

33、am*4.8-5.11.0-1.72.7-3.8Californians will benefit in many ways from time-of-use pricing$ Billions210MULTIPLE AGENCIES HAVE JURISDICTION OVER TRANSMISSION PLANS, SLOWING SITING AND CONSTRUCTIONSource: CEC reportsRequired approvalParticipating transmission ownersSystem impact studyFacilities studiesTy

34、pical time30-60 daysCAISOCPUCCertificate of Public Convenience and Necessity (above 200kV)Evaluation criteriaScope and cost of transmission upgrades necessary for interconnectionSharedDuplicateEconomic and reliability impact on overall gridEnvironmental, societal and aesthetic factorsSystem impact s

35、tudy and facilities studiesIntegrated grid assessmentVerifies PTO analysisEconomic and reliability impact on overall grid60-90 days12-30 months311OTHER STATES WITH RESERVE TARGETS AND CAPACITY MARKETS HAVE SEEN STABLE CAPACITY AND LOW VOLATILITY* Measured by standard deviation divided by average of

36、monthly wholesale prices. Later of April 1998 or market open through June 2004 (except California, through Jan 2001)* Operating reserve margin calculated as (Available Supply Peak Demand)/(Peak Demand)Source: California PX; Alberta Power Pool; PJM ISO; CAMMESA; New England ISO; New York ISO; Platts

37、PowerDatWholesale electricity price volatility*PercentMandated quantity of reservesIncentive payments for capacityNo market constraints2004 summer reserve margin*Percent1257130264034California (2001)AlbertaISO-NENYISOPJMArgentina412RETAIL CHOICE IS SOUGHT AFTER MOST BY LARGE CONSUMERS, BUT BENEFITS

38、ALL CUSTOMER CLASSESIn the UK, large consumers have been the most frequent users of competitive suppliersAll consumers have seen lower electricity bills with market restructuring and retail choiceCase example: United KingdomIndustrialSwitchedNot switchedCommercialSwitchedNot switchedResidential SwitchedNot switchedEstimated savings per customer*Percent* Estimated savings in customer bills since