Dive Brief:
- Power providers in the Northwest should acquire at least 3,500 MW of renewable energy resources by 2027 in order to ensure grid reliability while reducing emissions, a six-year plan from the Northwest Power and Conservation Council that presents a roadmap for the energy system recommends.
- The council also recommended that the region add between 750 and 1,000 average MW of energy efficiency to its portfolio by the end of 2027, and expand that to at least 2,400 average MW by the end of 2041, noting that energy efficiency is a fundamental way to bolster resource adequacy especially as Western electricity markets change.
- The plan indicates the Northwest region will need new resources, especially if it wants to retire coal and limit the building of new gas, according to Jennifer Light, interim director of power planning at the council. But the strategy the council outlines — with energy efficiency and new renewables — “does provide a robust path that’s reliable,” she added.
Dive Insight:
Currently, there are around 63,000 MW of resource capacity available to the Pacific Northwest, and on average, the region annually generates roughly 26,000 “average megawatts” – an average megawatt represents the energy produced by the continuous operation of one megawatt of capacity over a period of one year. Hydropower continues to be a critical part of that portfolio, although hydropower generation can fluctuate dramatically depending on weather conditions.
The Northwest Power and Conservation Council is responsible for crafting a 20-year power plan for the region and updating it at least every five years. The 2021 power plan — approved by the council in February and published in the Federal Register on May 27 — is significantly different from the last one adopted five years ago, the council noted, due to reductions in the cost of renewable resources, as well as local energy policies. The plan essentially provides a roadmap as the energy system transitions to cleaner resources, Council Chair Guy Norman said in a statement when it was approved.
Electricity demand in the Northwest could be anywhere from 20,580 average MW to 25,895 average MW in 2041, according to the plan’s forecasts. Currently, demand in the region is at around 22,000 average MW, according to Light. However, a lot of coal is slated for retirement in the region, creating a potential gap in baseload resources, “so there will be a need to replace that, as well as reflecting increased demand and certainly uncertainty in that demand,” Light added.
To meet this demand, the council recommended that the region procure a minimum of 3,500 MW of renewable resources by 2027, as well as look into new market tools, like capacity and reserves products, that could benefit the Western electric grid.
“We would expect to see significant cost savings from greater regional collaboration to drive more efficiency into the system operations,” the plan notes.
Northwest utilities are spending roughly $480 million on energy efficiency measures annually, including on incentive programs and funding emerging technologies. As a result, the region has seen more than 7,200 average MW of savings since 1978, roughly translating to the energy consumption of around 5.1 million Northwest homes.
Looking forward, the council recommended that power providers in the region acquire up to 1,000 average MW of energy efficiency by the end of 2027, and a minimum of 2,400 average MW by the end of 2041. In addition, the plan recommends that utilities maintain ratepayer-funded efficiency programs, as well as continue funding the research and development of emerging technologies in the space.
Utilities in the Pacific Northwest face similar challenges to other parts of the country in terms of building out new renewable projects — supply chain constraints, logistics around procurement, interconnection and transmission challenges, said Arne Olson, senior partner with Energy and Environmental Economics.
But the numbers called for in the council’s report are “barely a blip” compared to the energy needs across the country as a whole, according to Olson.
“At a time when everything is in short supply and supply chains are stretched and raw materials are hard to come by, it definitely adds to the pressure we’re seeing in the near term. But in the long term, you wouldn’t expect numbers like that to be that difficult to accomplish,” Olson said.
