QUADRENNIAL ENERGY REVIEW Second Installment

Transcription

1 QUADRENNIAL ENERGY REVIEW Second Installment 1 April 13, 2016 Tulsa, Oklahoma

2 QER Background and Process Presidential Memorandum stated the Administration will conduct a Quadrennial Energy Review to be led by the White House Domestic Policy Council and Office of Science and Technology Policy Supported by a Secretariat established at the Department of Energy Process involves the robust engagement of federal agencies and outside stakeholders Enables the federal government to translate policy goals into a set of analytically based, integrated actions for proposed investments over a four-year planning horizon 2

3 Changing Energy Landscape in US Increasing Energy Production Natural gas production growth Oil production growth Intermittent renewables Distributed generation/energy resources Increased generation/production/ demand efficiency Policy Developments CAFÉ Clean Air Act -111 (d), other Clean Water Act/other RFS RPS (state) RGGI (regional) Energy Security Changes Decreased N. American energy imports Climate change impacts Vulnerabilities more evident, including aging infrastructures, physical and cyber threats Increased interdependencies Increased energy support required by allies Technology Advances Solar (central and rooftop) Wind Demand-side Hydraulic fracturing 3

4 QER Process- General Analysis Baselines Scenarios and modeling Analysis of disruptive events Synthesis of available work Stakeholder Engagement Stakeholder meetings Stakeholder comments Technical workshops Regular briefings Interagency Collaboration Technical expertise Data, studies, analysis Interim and final product reviews 4

5 QER Focus Develop an integrated view of the short, intermediate, and long term objectives for Federal energy policy(economic, environmental, and security priorities); Outline legislative proposals; Identify executive actions (programmatic, regulatory, fiscal, etc.) coordinated across multiple agencies; Identify resource requirements for RD&D and incentive programs; and Provide a strong analytical base for decision-making, insights on industry trends and economic impacts 5

6 QER 1.1: Transmission, Storage and Distribution Infrastructure Why Did we do Transmission, Storage and Distribution Infrastructure in QER 1.1? Highly capital intensive Long-lived at the decadal scale Connective tissue of energy systems Decisions made today will strongly influence our energy mix for much of the 21st century TS&D Infrastructure is the Limiting Factor in Transforming our Energy Systems! 6

7 QER 1.1: 63 Recommendations Increasing Resilience, Reliability, Safety and Asset Security Modernizing the Electric Grid Modernizing US Energy Security Infrastructure Shared Transportation Integrating N. American Energy Markets Workforce Siting and Permitting 7

8 QER 1.1: Implementation Implementation Breakdown: Executive Action (White House) DOE 33 Other Federal Agencies 10 Legislative Action (Congress) New Appropriation 11 New Statute 9 Highlights: 3 recommendations are complete 9 recommendations are now law following Congressional action $2 billion to modernize the Strategic Petroleum Reserve 8 QER 1.1 Implementation Report Card Detailed analysis of all 63 recommendations Shows where additional work is required

9 Current Work on QER 1.1 and 1.2 QER 1.1 TS&D Implementation Energy bill Appropriations Transportation bill Interagency/DOE work QER 1.2 Electricity: Scoping Baselines National labs, consultants Framing documents Stakeholder consultations 9

10 Linking QER 1.1 and 1.2 QER 1.1 Fuels Waste QER

11 QER 1.2: Electricity Generation to End Use QER 1.1 documented major transformation of Electricity Sector: Changing generation mix Low load growth Increasing vulnerability to severe weather/climate New technologies, services and market entrants Cyber/physical threats Aging infrastructure and workforce Growing overlap between jurisdictions Given the centrality of electricity to the Nation, this transformation merits a closer examination in the next installment of the QER. 11

12 The QER Lens QER 1.2 will analyze how the electric power system as a whole is evolving, including: Integrating new technologies Changing market conditions Grid operations Financing and valuing Changing role of the customer Physical structures and the roles of a range of actors, institutions and industries are being analyzed, vis-à-vis: Maintaining reliability of supply Ensuring electricity affordability Adapting to dramatic changes in technology and services QER analyses are underway to consider issues such as: Fuel choice Distributed and centralized generation Physical and cyber vulnerabilities Federal, state, and local policy direction Expectations of residential and commercial consumers Reviewing existing and evolving business models for a range of entities, throughout the system 12

13 QER Process Timeline Sept 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 QER Kick-off Cross-Cut Teams and Analysis (business as usual) Policy Analysis and QER Drafting Key Issues, Framing, Outline, and Integration WH and Interagency Review Generation Distribution End-Use Scoping Phase Analysis Launched Markets Jurisdiction Environment Approx 100 QER-related products Findings and Insights Policy Options Chapter Drafts Review, Formatting Analytic Integration Team Issue Papers Evaluation of Policy Options 13 Formal Stakeholder Outreach & Coordination* Analysis Feedback, Refinement, Workshops, Interagency, Stakeholders Final Report Release & Roll-out (mid-nov 16) *Need to specify dates of interagency, DOE WG, S1, external stakeholders following finalization of outreach strategy

14 Stakeholder Engagement Outreach Timeline 2016 Jan Feb Mar Apr May Jun Jul Stakeholder Meetings Technical Workshops Comment Period DC Briefings 1 st Public Stakeholder Meeting (DC) 5-6 Meetings around country Number, subjects and locations (TBD) February 4 July 1, 2016 Submit comments at energy.gov/qer 3-5 to introduce QER 1.2 and also upon completion Small group meetings and individual stakeholder meetings throughout process 14

15 General Roles and Responsibilities White House Oversight of the process and broad guidance and direction to the Secretariat, interagency process Oversee process to concur on outline of final document prior to drafting Convene EOP and interagency and help guide coordination and discussion Participate in analytical briefings Review analytical products Help chair formal public meetings Participate in key outreach meetings Own review/concurrence process for draft and final documents Convene weekly calls with DOE DOE Working Group Oversee analytical work in coordination with the interagency Oversee process and timelines Oversee calendar and meeting scheduling Own document version control Support concurrence process Interagency/stakeholder outreach Ensure final production of baselines, and QER 1.2 Outreach/Coordination Public stakeholder meetings around the country Technical workshops conducted by DOE analytical teams Interagency coordination process Ad hoc key stakeholder meetings QER Secretariat 15

16 Cross-Cutting Teams Issue Areas / Work Streams End-use Grid Operations (Transmission/ Distribution) Generation Markets Jurisdictions (Institutional Arrangements, Planning, Business Models) Environment (Water, Carbon, Waste,, Land-use, end use, etc.) Other Federal Agencies HUD, FERC, EPA, DOD, DHS, USDA, DOT, DOC, DOL, DOI, GSA, Treasury FERC, DOT, USDA, DHS, DOI, DOD, EPA, NERC, FCC FERC, EPA, USDA, DOD, HUD, DHS, NERC, NRC, GSA, DOI DOC, Treasury, FERC, DOI, CFTC FERC, DOI, NERC, EPA EPA, DOI, USDA, EOP, DOI/USGS/BOR, USACE Finance Innovation / Technology* Resilience Security (Phys/Cyber) North America Jobs/Workforce 16 Valuation Treasury, USDA, DOC, HUD NSF, DOD, DOC (NIST) NOAA, EPA, USDA, USACE, DOI, DHS (IP, Policy, OCIA, OIP), DOD, HUD, EOP/CEQ DHS (NPPD: IP/OCIA, Policy), DOD, FBI, FERC DOS, DOC, EPA, FERC, HUD, NOAA DOL, Ed, Treasury, VA, NSF FERC, EPA, DHS

17 Sub-Set of Issues We Anticipate Addressing I. Electricity consumption and energy efficiency by sector (residential, commercial, industrial, transportation) status, trends and barriers. What levels and patterns of electricity consumption exist today and are forecasted for 2040 in the industrial, commercial, residential and transportation sectors? What business models and methods of customer engagement have been most successful, or show the most promise, for deploying residential efficiency measures? What is the role of policy in facilitating these models and methods? II. III. Distributed energy resources (DER): demand response, distributed generation and distributed energy storage. How should DER value streams be assessed from different perspectives customer, utility and society? What are the major barriers to distributed generation deployment, including financial, technical, transactional and distribution system limitations? What policies and regulations enable demand response to support variable energy resources at utility scale? Grid Operations and Planning How do different system architectures facilitate or inhibit efficient grid evolution? What lessons from international experiences with grids operating at high penetration levels of variable energy resources can be translated to U.S. system operations? What are the implications of having a hybrid generation system a mix of centralized and distributed resources on the grid? 17

18 Sub-Set of Issues We Anticipate Addressing IV. Generation Portfolio, Reliability, Supply Chains, and Equity What is the evolution of the generation portfolio? What are our reserve margins? What is the availability and need for backup power? What policies can be put in place to increase access to rural, low-income communities, and remote communities? V. Electricity Markets What frameworks and metrics can characterize regional markets and degree of market regulation? How have markets performed across different criteria since restructuring? How can policy levers be employed to remove barriers in each type of market to facilitate policy goals? Are there barriers to cleaner and more efficient generation given cost of capital differences? VI. Electricity Finance How sensitive are costs to inputs (commodity prices, construction costs, technology costs)? How do costs change under alternate financial scenarios (interest/debt/capital)? What are the end user cost distributions under alternate DG/centralized scenarios? VII. Electricity Valuation How are uncertainty and risk taken into account under electricity valuation practices? What value streams do electricity technologies provide to the system that are or are not monetized (and to which stakeholders do they accrue)? Do grid operators and policymakers manage tradeoffs among value streams? 18

19 Sub-Set of Issues We Anticipate Addressing VIII. Innovation and Technology What are the government, industry, and investor roles across the clean energy innovation spectrum? How has technology innovation enabled policy changes (e.g. FERC rules)? What level of innovation is required to prudently ensure availability of clean energy capabilities to meet our 2030 and 2050 goals, focusing on the electricity sector, e.g. baseload, storage? IX. 19 Jurisdiction and Regulations How did existing jurisdictional boundaries and policies evolve? What are the authorities for oversight of the electricity system? What are the responsibilities vested at each level? What policy levers that exist at each level? Distribution-level planning is becoming increasingly important, DER requires utility planners to achieve better integration of transmission planning and distribution planning and coordination between the Feds and the states. How do wholesale and retail markets complement each other (from a jurisdictional perspective)? X. Environment What are potential generation pathways for meeting the U.S. goals for economy-wide de-carbonization by 2050 and how to plan for a future that achieves deep decarbonization of the energy sector? How do the interconnected flows of energy and water compare across states? How are these changing over time? What are the key environmental justice issues that are related to the electric power sector and what policy measures should be taken to minimize impacts to EJ communities? What are the key environmental issues that arise in the context of electric infrastructure siting and what policy measures should be taken to minimize these impacts?

20 Sub-Set of Issues We Anticipate Addressing XI. Resilience What strategies and methods are available to improve the resilience of the electricity system, and how do alternative approaches compare on benefits, costs, and performance? How can system resilience be maintained in the face of evolving trends and changing conditions, i.e., increased consumer choice, DER, smart grids, climate change, regional migration, fuel diversity? What is the role of the insurance industry? XII. Security (Physical/Cyber) What are the key threats, vulnerabilities, risks and consequences associated with cyber and physical attacks on electricity systems, especially SCADA and ICS? How can we address the threat of EMPs to the grid? Have system owners and operators incorporated physical security measures in response to terrorist attacks? How do utilities view cyber threats, e.g. in response to NIST s framework and NERC s cybersecurity standards? As the economy is increasingly electrified (including DER), do cyber and physical vulnerabilities change? XIII. North American Integration Are there barriers or constraints for continuing integration with Canada s electricity sector? How will new transmission be handled? Mexico s electricity sector is less extensively integrated with the United States. Integration is not a current reality, but an objective. How does an analysis of the Canadian border inform policies with Mexico? For Canadian hydropower to backstop U.S. electricity, what are the constraints and opportunities? XIV. Employment and Workforce Development What are workforce skills and requirements in context of evolving technology and the environment 20