Questions and answers about the Zero Net Carbon Model
Platte River continually evaluates its generating resource mix and will add more non-carbon energy resources when advantageous opportunities arise, as part of its overall strategy to diversify resources while balancing financial and environmental interests. During its July 2017 meeting, the Board of Directors agreed to model a 100 percent net non-carbon resource scenario for all four communities. As part of the vote, Platte River leadership committed to communicate its intentions concerning the study to stakeholders and the public.
Platte River retained Pace Global to accomplish two primary objectives:
- Determine the least-cost portfolio of generation resources that can achieve carbon-neutrality by 2030
- Assess at a high level, the risks and risk mitigation measures associated with achieving or exceeding carbon neutrality.
The zero net carbon (ZNC) model for Platte River’s overall electric generating portfolio and high-voltage transmission system was developed by Pace Global whose modeling approach included the following steps:
- Define the average carbon emission rate of the existing regional power "market" - 1,803 lb/MWh was used as the average carbon emission rate for the regional power market based on the published eGrid Rockies data for non-baseload generation. Pace Global assumed that any purchases or sales by Platte River would not be large enough to impact baseload generation units, but rather would impact the output and resulting emission of intermediate or peaking generation units in the region. Under this approach, each non-carbon MWh that Platte River sells into the market serves to "offset" the generation of an existing fossil fueled generation unit in the broader regional market, and results in a reduction of 1,803 lb/MWh to the overall market emissions.1
- Construct a carbon accounting method to track the annual carbon emissions, carbon offsets, and achievement of carbon-neutrality.
- Establish a starting level of non-carbon energy requirements as a percentage of Platte River’s load. This is done because the model cannot simultaneously solve for both the emission reductions required to hit net zero carbon emissions and the least-cost portfolio, so model iteration is required. First, we pick a starting minimum non-carbon level (approximately 90%), solve for the least-cost portfolio, check to see if carbon-neutrality is met, and then adjust the non-carbon percentage to ensure carbon-neutrality is met in each year from 2030 and beyond.
- Solve for the least-cost mix of generation technologies based on capital costs, fixed and variable operations and maintenance costs using hourly production modeling over the forecast horizon.
- Assess the results to determine if carbon-neutrality is achieved each year beginning in 2030.
- Modify the generation capacity available from the non-carbon sources until carbon-neutrality is achieved in 2030 and then maintained beyond 2030.2
1 The 1,803 lb/MWh average market emission rate was held constant over life of the study. However, Pace Global determined that even if the market emission rate were 1,434lb/MWh “net zero” carbon emissions would be achieved in year 2030 (but possibly not in every year thereafter) with the recommended portfolio.
2 Increments of 3% were used to adjust for carbon neutrality – the iteration process was stopped when carbon neutrality was achieved. Using smaller increments would have allowed us to meet the standard without over-achieving in each year but we do not expect a material change in buildout and associated costs.
2 Increments of 3% were used to adjust for carbon neutrality – the iteration process was stopped when carbon neutrality was achieved. Using smaller increments would have allowed us to meet the standard without over-achieving in each year but we do not expect a material change in buildout and associated costs.
Carbon neutrality can be achieved by selling surplus non-carbon or low carbon power into the market to offset emissions generated by fossil-fuel plants in meeting load.
Our focus for this modeling effort is to find the least-cost method of achieving a non-carbon resource mix using current resource cost estimates.
You are involved in the process. Our Board of Directors listened to the requests of stakeholder groups and citizens, and agreed to model a 100 percent net non-carbon resource scenario for all four communities. Once the modeling is complete and our board is briefed, we plan to conduct meetings with stakeholders and interested parties. During these meetings, we will discuss in greater detail the elements of the modeling and take input concerning the data within it. We will use this feedback to fully inform our leaders so they may make better decisions concerning our energy future.
Platte River contracted with Pace Global because it is a highly respected utility industry leader in strategic business consulting, with significant experience and expertise in strategic energy resource planning. A division of Siemens Business, Pace Global has provided innovative services to support the execution of business strategies, complex energy transactions, asset development, and operations focusing on select markets in the Americas.
Platte River currently delivers wholesale energy at the lowest rate in Colorado and does evaluate rate impact as part of its decision-making process. While the model prepared by Pace Global explains the impact to production costs from a ZNC model, overall costs are unknown. Further refinements would be needed to determine the complete impact to rates.
System reliability will always be a top priority for Platte River and it was incorporated into our modeling efforts. Platte River currently achieves one of the highest levels of service reliability in the western United States.
The CRP is a study begun in early 2017 that will provide cost estimates to Estes Park, Loveland, Longmont, and Fort Collins concerning a range of energy options that each could elect to use to meet individual community goals. Initial results have been provided to utility managers at our owner communities. We will continue our customized modeling efforts with our owner communities while we move forward with the feasibility analysis of a zero net carbon model. With both modeling efforts, we will gain a full range of options for consideration by our owner communities.
Platte River conducts its IRP process every five years to detail future (generation and transmission) resource needs and develop a specific long-range plan to meet those needs. Decisions regarding any significant changes to electricity supply resources are made by the Platte River Board of Directors. Information from sources such as the ZNC and/or CRP modeling help to inform Board members.
Platte River monitors the growth of these technologies and will consider them as each becomes appropriate. In the near-term, electric vehicles and distributed solar are expected to have little overall impact on Platte River’s generation. Over the long-term, a stronger effect will likely occur as emerging energy technologies penetrate markets further. Pace Global specifically analyzed the potential for battery storage, but found that the near-term potential was low; over the long-run, Platte River expects battery storage to become a more viable technology for power system management.
Pace Global’s modeling focused specifically on the reduction of carbon dioxide emissions from Platte River’s generation resources. Emissions associated with exploration or development of methane resources would need to be studied as part of a separate industry review.
The Rawhide coal plant enjoys many economic advantages over other regional coal-fired generating facilities, and would compete favorably against other plants under a regional market structure (such as an RTO or a regional/state carbon market). Under a market structure, Rawhide would likely continue its operations further into the future than other coal plants would, delivering financial benefits to Platte River’s owner-communities. Under a net zero carbon strategy, Platte River would need to retire all its coal generation by 2030, forgoing this potential benefit.
Yes. Pace Global imposed a cost on future carbon emissions from all fossil fueled resources based on expectations from the EPA’s Clean Power Plan (CPP). Although the CPP is currently on hold, it was assumed that carbon emissions will be regulated in the future.