Integrated Resource Planning

Over the past decade, E3 has applied its T&D planning expertise to numerous integrated resource planning (IRP) studies.  IRP is a planning methodology that integrates supply and demand-side options for providing energy services at a cost that appropriately balances the interests of all stakeholders.  It incorporates into electricity planning the environmental and social aspects of electricity production, as well as the potential for reducing or shaping electricity demand.  The objective of IRP is to determine the least-cost solution to a capacity shortage or reliability problem by evaluating the cost-effectiveness of distributed resources, such as small-scale distributed generation (DG) and demand-side management (DSM) technologies, as well as proposed T&D capacity expansion projects. 

E3 offers clients a successfully tested approach in developing an IRP that is consistent with the goals and strategies of each client.  Specifically, E3’s approach

• Recognizes that costs vary by location and time; therefore, it is critical to use cost-effectiveness tests to compare the area- and time-specific benefits (known as avoided costs) and costs in developing an integrated resource plan

• Assists clients to identify the types of resources to include or exclude from consideration in the IRP

• Determines the most cost-effective options by employing a multi-stakeholder perspective benefit and cost analysis methodology

• Provides insights regarding the reliability and availability tradeoffs between resource options

E3 at Work

For the past several years, E3 has been assisting Bonneville Power Administration (BPA) with their evaluation of transmission non-construction alternatives (NCAs) such as distributed generation, demand response programs, and energy efficiency programs. E3 helped BPA develop a screening process and associated analytical tools to identify cost-effective and environmentally-beneficial alternatives to transmission projects in appropriate areas. Projects include:

Kangley-Echo Lake Economic Screening and Sensitivity Analysis Report

Non-Construction Alternatives for Olympic Peninsula and Lower Valley

BPA Non-Wires Solutions.

As part of a collaborative group led by the Energy Innovation Institute (E2I), E3 developed a description of costs and benefits of DG technologies and provided an economic screening tool to identify potentially cost-effective DG applications.  The tool evaluates a broad set of technologies including microturbines, fuel cells, reciprocating engines, solar PV and evaluates the economics from multiple stakeholder perspectives represented in the collaborative group.  One of the goals of this collaborative effort is to examine the specific costs and benefits of DG, and whether it is possible to achieve ‘win-win’ outcomes through innovative contracts or utility rate structures and incentive approaches. E3’s model was designed to calculate the cost and benefit tradeoffs from the utility, customer, DG-owner, and societal perspectives using the current California investor-owned utility rates and DG incentives but can be easily adapted to other jurisdictions.

Dr. Orans and Mr. Horii designed the evaluation process and the majority of the software for BC Hydro’s ongoing call for tenders for 150-300 MW of new generation on Vancouver Island.

Over the past three years, E3 has supported two New York IOUs with their response to the 2001 New York State Public Service Commission (NYS PSC) order requiring investor-owned utilities to conduct a three-year DG pilot program. E3 helped the utilities develop a process to identify high value DG opportunities within the T&D system, issue RFPs, report to the NYS PSC on the results.  E3 also conducted several seminars to establish a process to evaluate distributed generation within the existing utility planning process.

E3 is jointly-developing a project for the California Energy Commission (CEC) to evaluate the economic and engineering impacts of Distributed Energy Resources (DER) and the utility system.  In this DER ‘test-bed” project, E3 is examining DER installed at customer sites on the local distribution system in two study areas with San Francisco.  While DER offers a potential beneficial solution to electrical T&D system challenges, there have been very few studies of how actual DER operates on the grid.  The results of this analysis will provide the CEC and policy-makers throughout the United States with a tangible project that demonstrates the strengths and weaknesses of DER technologies and programs implemented on a local distribution system.

E3 Selected IRP Publications

• Hartway, R., S. Price and C.K. Woo (1999) “Smart Meters, Customer Choice and Profitable Time of Use Rate Option,” Energy - The International Journal, 24, 895-903.
• Heffner, G., C.K. Woo, B. Horii and D. Lloyd-Zannetti (1998) “Variations in Area- and Time-Specific Marginal Capacity Costs of Electricity Distribution,” IEEE Transactions on Power Systems, PE-493-PWRS-012-1997, 13:2, 560-567.
• Ball, G., D.L. Zannetti, B. Horii, D. Birch, R. Ricks and H. Lively (1997) “Integrated local T&D planning using customer outage costs,” Energy Journal, DR Special Issue, 137-160.
• Forte, V.J., R. Pupp, R. Putnam and C.K. Woo (1995) "Using Customer Outage Costs in Electricity Reliability Planning," Energy - The International Journal, 20:2, 81-87.
• Swisher, J. and R. Orans (1996) “The Use of Area-Specific Utility Costs to Target Intensive DSM Campaigns,” Utility Policy 5:3/4, 185-197.
• Pupp, R., C.K.Woo, R. Orans, B. Horii and G. Heffner (1995) "Load Research and Integrated Local T&D Planning," Energy - The International Journal, 20:2, 89-94.
• Woo, C.K., D. Lloyd-Zannetti, R. Orans, B. Horii and G. Heffner (1995) "Marginal Capacity Costs of Electricity Distribution and Demand for Distributed Generation," Energy Journal, 16:2, 111-130.
• Woo, C.K., R. Orans, B. Horii, R. Pupp and G. Heffner (1994) "Area- and Time-Specific Marginal Capacity Costs of Electricity Distribution," Energy - The International Journal, 19:12, 1213-1218.
• Orans, R., C.K. Woo and B. Horii (1994) "Targeting Demand Side Management for Electricity Transmission and Distribution Benefits," Managerial and Decision Economics, 15, 169-175.
• Orans, R., C.K. Woo, R. Pupp and I. Horowitz (1994) "Demand Side Management and Electric Power Exchange," Resource and Energy Economics, 16, 243-254.