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EWEB charts energy supply choices for next 2-3 years

July 21, 2023 Aaron Orlowski, EWEB Communications

After 18 months of study to assess Eugene’s future electricity needs, EWEB has identified next steps to pursue in the next two to three years.

The analysis contained in the 2023 Integrated Resource Plan (IRP) anticipates that demand for electricity will rise over the next two decades, and that a diverse portfolio of energy resources will be needed to meet that demand. Crucially, EWEB found that a key strategy moving forward will be partnering with customers to use less electricity overall and to use less electricity at times of peak demand.

The next steps identified in the IRP largely focus on conducting additional studies and preparing for more in-depth analysis of regional trends that will shape how EWEB procures and delivers electricity to our customers. 

"Today, EWEB has enough electricity to continue to reliably meet the community’s needs. However, in 2026, EWEB may need to procure additional resources," said Brian Booth, EWEB’s chief energy resources officer. "This means we have time for additional analysis and community discussion, even as we need to make real strides towards an updated energy resource portfolio in the years ahead."

EWEB’s five-member, elected Board of Commissioners approved the action items during their regular meeting in August.

IRP action items focus on conservation, demand response and future analysis.

The approved action items highlight the quickly evolving conditions that EWEB must confront in the years ahead, while demonstrating a need for additional analysis on several key methods of managing growth in electricity demand.

"Each of these action items reflects how EWEB’s grid and electricity supply is interconnected to the larger regional grid, and that we need to adapt accordingly," Booth said. "The energy system in the Northwest is transforming, and we are all in this together. All utilities need to work together to ensure reliable, affordable and environmentally responsible power for all our customers."

The eight approved action items are: 

Actively engage in the Bonneville Power Administration’s (BPA) ongoing contract negotiations to develop and analyze new power products coming in 2028.

Electricity from BPA – a federal agency that sells energy from large dams on the Columbia River – accounts for approximately 80% of EWEB’s power. Publicly owned utilities, including EWEB, are collectively negotiating with BPA on the terms of a new contract that utilities expect to sign in fall 2025 and that will start in 2028. The specific terms and elements of the contract will be essential to understanding EWEB’s other resource needs.

Study energy efficiency cost and potential in EWEB’s service territory.

For decades, EWEB has relied significantly on conservation, which is the practice of paying customers to use less electricity through home weatherization rebates and technology upgrades. The 2023 IRP analysis indicated that conservation should continue to be a part of EWEB’s resource strategy. However, it’s not clear how much potential for conservation remains in Eugene, or how much it would cost EWEB to pay customers to conserve more. Many homes are already fully weatherized, with energy efficient heat pumps and appliances already installed. An updated assessment of conservation potential will be essential to understanding how much local energy savings is available, and at what point the savings will not be able to keep up with increased energy demand from electrification.

Study demand response cost and potential in EWEB’s service territory and design a product plan.

The IRP analysis indicated there is significant value in reducing electricity demand when demand is at its highest. This kind of “demand response” trims peak demand and reduces the need for EWEB to procure expensive electricity that also tends to be associated with higher carbon emissions. EWEB foresees emerging opportunities to partner with customers to manage peak demand with smart devices, smart metering infrastructure, and managed electric vehicle charging. But further analysis is needed to understand the cost and availability of demand response potential in Eugene and the potential financial value of peak reduction.

Engage with existing local resource owners/operators to determine areas of opportunity.

Several of EWEB’s contracts with existing, local energy resource suppliers are set to expire in the next several years. EWEB can leverage these existing relationships to determine if mutually beneficial agreements are possible and if additional opportunities exist.

Develop a resource acquisition strategy and framework for future resource needs.

The IRP identified future resource needs as some of our existing contracts expire. Our modeling results showed that the need could come as soon as 2026. To prepare, EWEB will develop a resource acquisition strategy and decision process that aligns with strategic priorities and values to standardize and streamline future resource investment.

Track and identify organized electric market impacts and opportunities for EWEB.

The expansion of organized markets such as the California Independent System Operator’s (CAISO) Extended Day Ahead Market, or the Southwest Power Pool’s Markets +, has the potential to substantially impact how EWEB buys, sells and manages energy resources. Similarly, the onset of the Western Resource Adequacy Program (WRAP) is likely to impose new planning standards on EWEB and other regional utilities to ensure grid reliability. It’s essential for EWEB to track these initiatives and prepare for their impacts.

Update IRP modeling assumptions and tools.

The IRP is a cyclical, iterative process that uses complex computer modeling software and requires continual updates. EWEB will update assumptions and resource options in the model based on emerging information like updated resource cost projections, supply chain constraints, and new tax incentives.

Prepare key inputs for the 2025 IRP.

EWEB has already launched into the 2025 IRP, which will coincide with EWEB’s 2028 BPA contract decision. EWEB will update inputs and modeling processes to reflect new BPA product options, as well as information from EWEB’s demand response and conservation potential assessments.

The IRP analysis revealed key insights about EWEB’s energy options.

Since early 2022, EWEB has been forecasting Eugene’s future electricity needs for the next 20 years and analyzing possible portfolios of energy resources that can best meet those needs. The analysis process uses advanced modeling software to calculate least-cost portfolios that align with EWEB’s core values of reliability, affordability and environmental responsibility:

  • Reliability: Calculated portfolios must meet our peak needs, which occur during the coldest winter days.
  • Affordability: Calculated portfolios must be the least-cost option, within other constraints.
  • Environmental responsibility: Calculated portfolios must abide by EWEB’s Climate Change Policy, which states that EWEB’s energy will be 95% carbon-free by 2030.

During that modeling process, several key insights emerged.

Energy demand will rise. Over the past few decades, EWEB’s energy demand has remained flat, despite population growth. EWEB expects this trend to change. Electrification is happening due to decarbonization efforts. Massive investments in electric vehicles and electric heating and cooling will add more demand to the grid. Industrial loads may also prompt increases in demand. It’s not a question of if, but rather how much and how soon.

Legacy hydropower is a good fit. EWEB has relied on hydropower from the Bonneville Power Administration (BPA) and the utility’s own projects for many decades, and for good reason. It’s a cheap, carbon-free resource that with sufficient water levels, can be dispatched at a moment’s notice to meet customers’ demand. EWEB will start evaluating BPA’s 2028 product options in the next IRP, which is scheduled to publish in 2025.

Wind and batteries offer one viable path forward. Every portfolio suggested by the modeling software called for a potential buildout of batteries, paired with new wind resources. This makes sense. In the greater Northwest, wind is an abundant renewable resource that generally produces power during the same seasons we have peak needs (primarily winter). And utility-scale energy storage will help smooth gaps in that power generation.

Low- and zero-carbon, dispatchable resources will likely be necessary in the future. Full decarbonization will require utilities like EWEB add a new type of resource to their portfolio – one that is low- or zero-carbon, can dispatch energy on-demand, and has a fuel supply that can last weeks or months. Only this type of resource will keep costs as low as possible and allow EWEB to reliably serve electricity when conditions are the most challenging. But the list of zero-carbon options is short. To keep costs low, EWEB will need to find low- or zero-carbon, dispatchable resources to help maintain reliability while also integrating new intermittent renewable energy resources.

EWEB needs to develop customer programs responsive to energy needs. Utilities around the country are developing innovative projects and policies that partner with customers to reduce demand for electricity. Some shave peak demand through demand response programs and time-of-use rates. Others use novel rate structures to ensure that the cost of maintaining and improving the grid is equitably shared. EWEB will need to explore similar innovations to begin to understand individual customers’ electricity loads better.