2014 Electricity Statement of Opportunities (ESOO) Stakeholder Workshop Neetika Kapani A/Manager, System Capacity 1 July 2015 1 Agenda Background Purpose Key Findings o Peak Demand Forecasts o Energy Forecasts Interesting Analysis o Capacity Credits by Market Participant o Individual Reserve Capacity Requirement (IRCR) o Solar PV o Battery Questions 2 2014 and 2015 ESOO deferrals Minister for Energy directed IMO on 29 April 2014 to defer certain aspects of the 2014 Reserve Capacity Cycle, by a year. 13 March 2015 to defer certain aspects of the 2015 Reserve Capacity Cycle, by a year. On 17 June 2015, the IMO published 2014 ESOO and sets the Reserve Capacity Target for the 2016-17 Capacity Year Reserve Capacity Information Pack 3 RCM Process http://www.imowa.com.au/home/electricity/reserve-capacity 4 Purpose of the 2014 ESOO Provides market data and information of interest to current and potential WEM participants and stakeholders Sets the Reserve Capacity Target (RCT) for the 2016-17 Capacity Year o RCT for 2016-17 is 4,557 MW o Based on the 10 per cent probability of exceedance (PoE) forecast plus a reserve margin 5 Key Findings • Unusual Early Peak 5 January 2015 15:30- 16:00 TI Demand of 3744 MW • SWIS demand growth flattening • IRCR mechanism continues to be effective • Customer behaviour changing rapidly • Healthy mix and diversity of generation capacity and DSM continues • No new generation or Demand Side Management (DSM) capacity will be required for the 2015 to 2025 forecast period 6 Forecasting presents Challenges Lots of moving parts Changing Solar PV & other new Economics technology Individual Reserve Energy Capacity And more… Requirement Efficiency Temperature Mining Sensitive Loads- Time Loads and Size 7 Peak demand forecasts Growing at approximately 0.8% pa 7,000 6,000 5,000 4,000 3,000 2,000 1,000 MW 10% PoE adjusted historic peak demand 2013 2014 2015 8 Energy forecasts Growing at approximately 1.3% pa 25,000 22,500 20,000 17,500 GWh 15,000 Historical (raw) High case Expected case Low case 9 And now to some INTERESTING ESOO analysis Capacity Credits by Market Participant 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Verve Energy Synergy Alinta Energy ERM Power (NewGen) Bluewaters Power Vinalco EnerNOC Western Energy Merredin Energy Collgar Wind Farm Goldfields Power Water Corporation Other Kalbarri wind farm Greenough River solar farm SWIS – Total solar PV 336 MW of installed solar PV in Nameplate Capacity: 1.6 MW Nameplate Capacity: the SWIS region Capacity Credits: 0.289 MW 10MW Capacity Credits: 4MW Mumbida wind farm Atlas landfill gas Nameplate Capacity: 55 Nameplate Capacity: 1.123 MW MW Capacity Credits: 0.671 MW Capacity Credits: 15.69 MW Alinta Walkaway wind farm Nameplate Capacity: 89.1 MW Capacity Credits: 23.934 MW Collgar wind farm Nameplate Capacity: 206 MW Emu Downs wind farm Capacity Credits: 14.598 MW Nameplate Capacity: 80 MW Capacity Credits: 16.954 MW Red Hill landfill gas Blair Fox Karakin wind farm Nameplate Capacity: 4 MW Nameplate Capacity: 5 MW Capacity Credits: 2.875 MW Capacity Credits: 1.075 MW Canning Melville landfill gas Tamala Park landfill gas Nameplate Capacity: 1.2 MW Nameplate Capacity: 5 MW Capacity Credits: Nil Capacity Credits: 4 MW Henderson landfill gas Nameplate Capacity: 3.195 MW Capacity Credits: 2.287 MW Bremer Bay wind farm Rockingham landfill gas Nameplate Capacity: 0.6 MW Capacity Credits: 0.037 MW Nameplate Capacity: 4 MW Capacity Credits: 2.558 MW Albany wind farm Nameplate Capacity: 21.6 MW South Cardup landfill gas Capacity Credits: 8.457 MW Nameplate Capacity: 3.369 MW Capacity Credits: 2.393 MW Grasmere wind farm Mt. Barker community wind farm Denmark community wind farm Nameplate Capacity: 13.8 MW Nameplate Capacity: 2.43 Nameplate Capacity: 1.6 MW Capacity Credits: 5.602 MW MW Capacity Credits: 1.286 MW Capacity Credits: 0.892 MW IRCR response – January 2015 70 60 Baseline ~50 MW 50 40 30 35°C 35°C 39°C 20 34°C 35°C 10 34°C MW 44°C 40°C 37°C 01/01/2015 06/01/2015 11/01/2015 16/01/2015 21/01/2015 26/01/2015 31/01/2015 13 Daily demand profile – observed and estimated 4,500 Difference at 12:00 (noon) 304 MW 4,000 3,500 Difference at 15:30 (system 3,000 peak) 187 MW 2,500 2,000 1,500 1,000 500 MW 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 Observed demand Estimated demand without solar PV effects 14 PV contribution to peak demand 700 600 500 400 300 200 peak at 15:30 100 peak at 17:30 MW 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Historical High case Expected case Low case 15 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Monthly PVinstallations Monthly kW Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Average size (new size systems) Average Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Average size (all systems) (all sizeAverage Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 16 Key statistics for solar PV systems Average 2010-11 2011-12 2012-13 2013-14 2014-15 annual growth Number of systems 63,384 97,722 132,621 146,890 164,483 26.9% Proportion of customers with PV 7.3% 10.9% 14.7% 16.1% 17.6% 24.6% installed Average system size 1.9 2.0 2.1 2.4 2.5 7.1% (kW) Average new installation system 2.3 1.3 3.2 4.4 3.9 14.1% size (kW) 17 Battery assumptions and forecast Battery storage has been incorporated in the forecast for the first time this year. The following table shows the peak demand reduction associated with battery storage. 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Scenario (MW) (MW) (MW) (MW) (MW) (MW) High 0.8 1.5 2.7 4.9 9.2 16.7 Expected 0.7 1.3 2.3 3.9 6.6 10.7 Low 0.7 1.2 2.1 3.4 5.2 7.9 In addition, we assume the following numbers of systems are expected to be installed over the forecast period: 1,309 systems in 2019-20 in the high case, growing to 26,268 systems in 2024-25; 1,157 systems in 2019-20 in the expected case, growing to 16,863 systems in 2024-25; and 1,081 systems in 2019-20 in the low case, growing to 12,444 systems in 2024-25. 18 Questions and feedback Neetika Kapani A/Manager System Capacity [email protected] 9254 4300 19.