Comment on the Draft 2021 Northwest Power Plan

September 14 update: The Council invites public comment and participation in hearings and Council meetings through November 19, 2021. See the 2021 Northwest Power Plan page for details.

August 25: The Council this week approved release of its draft 2021 Northwest Power Plan for public review and comment. The draft plan looks 20 years into the future and charts a course for the Northwest electricity system. That system is transitioning away from fossil fuels to adapt to the changing economics of the power supply and to comply with state and local policies to lower carbon emissions.

Electricity generating and energy efficiency resources in the Northwest have served the region’s electricity needs well, but today the region’s electricity supply is on the cusp of significant change. The draft plan emphasizes reliability, adequacy, and affordability of the power supply by meeting future demand for electricity with an evolving mix of solar; wind; existing hydropower; generation from natural gas and remaining coal power plants; and energy efficiency.

With the Council’s approval to issue the draft plan for public comment, the Council has directed staff to finalize the draft for publication. Once the draft plan is published, it will be available on the Council’s website for review and a 60-day public comment period will begin, which will include public hearings in September and October. More information will be available at that time regarding how to submit comments, how to participate in the public hearings, and the comment deadline.

The coming transition of the power supply is addressed in Section Six of the draft plan, the resource strategy. The resource strategy recommends a power supply comprising:

• existing hydropower, which provides flexibility to support new renewable energy projects;
• solar;
• wind;
• energy efficiency;
• demand response (voluntary reductions in use during periods of high demand, with compensation);
• imports of power from outside the Northwest;
• existing nuclear power;
• electricity from remaining power plants fueled by coal;
• and natural gas plants to help during periods of high demand.

As fossil fuel plants retire in the region over the next decade, the lost capacity will be replaced by new solar and wind power plants and a continued emphasis on energy efficiency.

“We expect the change in our power supply will be modest over the next five years or so, but is likely to be more aggressive after that,” Council Chair Richard Devlin said. “The draft plan prepares the Northwest to deal with the changes while maintaining the reliability and affordability of our system.”

The Council’s work on the 2021 Plan, which began nearly four years ago, included close collaboration with regional energy experts to ensure the analyses that underlie the plan are based on the best current information and assumptions about the future power supply.

The Council is an agency of the four Northwest states and is directed by the Northwest Power Act of 1980 to plan for a future electricity supply that is adequate, efficient, economical and reliable, while also protecting, mitigating, and enhancing fish and wildlife that have been affected by the construction and operation of hydropower dams in the Columbia River Basin.

Overview of Key Elements of the Draft 2021 Power Plan

• The 2021 Power Plan process was detailed and lengthy – almost four years:

1. We have been working on the Draft 2021 Power Plan for several years.
2. Our analysts forecast demand for power and assess potential cost-effective generating and energy efficiency resources to meet the anticipated demand.
3. The goal is to identify an adequate, efficient, economical, and reliable power supply for the region, consistent with requirements of the Northwest Power Act of 1980, the law that authorized the four Northwest states to form the Council.

• The future that we are analyzing and planning for in the 2021 Power Plan will be much different than the past, in terms of the electricity supply. In the last several years, a paradigm shift has occurred. In much of the region, clean energy policies and decarbonization goals have been adopted at the state, utility, and community levels, and significant coal unit retirements were announced and planned in the region and throughout the West (due not only to compliance with clean-energy policies, but also deteriorating economics of operating a coal plant in today’s power system shaped by inexpensive natural gas prices and inexpensive renewable resources). While the region adapts to new economic signals, new resource development and dispatch, changing system operations, and uncertainty about the future, the Council developed a resource strategy that propels the region through the changes while maintaining an adequate, economical, efficient, and reliable power system.

• Renewables: The Council recommends at least 3,500 megawatts of installed capacity for renewable resources for the region. These resources would meet the legislative requirements for clean and renewable energy in our region and provide energy and offset emissions from the existing fossil-fuel-based generating resources.

• Demand response: Low-cost, frequently deployable demand response is seen to be valuable in offsetting needs during peaking and ramping periods and in reducing emissions. Examples include demand voltage regulation and time-of-use rates.

• Energy Efficiency: In the 2021 Plan, the six-year cost-effective energy efficiency regional target is 750 to 1,000 average megawatts. This amount of energy efficiency reflects its value in maintaining an adequate system, offsetting load growth particularly related to future electrification, and minimizing risk from rapidly changing market dynamics with projections of significant amounts of low-cost renewable resources being developed. Energy efficiency that saves during the evening and morning net load ramping hours has the most value.

• Cost of renewables has decreased significantly over the past decade. Utility-scale solar photovoltaic and onshore wind are low-cost, carbon-free resource options that comply with clean-energy policies and goals. New renewables development is expected to increase significantly in the Western Electricity Coordinating Council (WECC) region, which comprises parts of 14 western states plus the provinces of Alberta and British Columbia, and part of Baja California, Mexico. This will cause changes to wholesale power market dynamics and generating resource dispatch.

• The region’s coal fleet is set to decline by 60 percent by 2028 with planned coal unit retirements. Across the WECC region, a similar amount of coal plant retirements is occurring and planned.

• Low market prices lead to operational challenges: Market fundamentals throughout the WECC region are changing with the advent of clean-energy policies. The subsequent renewable additions (mostly solar) are expected to cause very low prices during midday hours. This will lead to operational challenges for plants that have to commit ahead of time like coal and natural gas combined cycle combustion turbines. California has already seen some of these operational challenges. Consistently low market prices and significant market supply often leave a large portion of the region’s thermal fleet uncommitted, which means the region is less prepared for unexpected events that could lead to shortfalls and places more pressure on the region’s hydropower system.

• Policies and adequacy needs, plus the low cost of renewables, drive the renewable additions in the WECC region; policies and pressure to reduce CO₂ emissions drive the renewable additions in the Northwest: Acquisition of renewables in the WECC region appears to be driven by their lower costs, regional clean-energy policies, limitations on new natural gas plant development, and partially by load growth. In the short term, acquisition of renewables in the region will be driven primarily by their lower costs, the speed at which these resources can be brought online, clean air policies, and the pressure to reduce emissions to meet clean energy targets.
   
• Fewer adequacy issues in the short term, more uncertainty later: The strategy in the Draft 2021 Power Plan shows that the regional power supply will be adequate in the near term. In later years, with the retirement of more fossil-fuel burning generators, adequacy takes a more prominent role in the regional strategy, especially under certain policy scenarios that increase regional demand (e.g., decarbonization policies). For the plan analyses, the Council used climate-change projections for temperature and precipitation rather than historical climate data, and this tended to shift resource adequacy needs from winter to summer – more precipitation and lower temperatures in winter, less precipitation and higher temperatures in summer.
   
• Background of the Council and the power plan:

1. Under the Northwest Power Act, the Council produces a Northwest Power Plan to assure the region an adequate, efficient, economical, and reliable power supply.
2. The plan includes a 20-year demand forecast and recommendations for resources to meet the anticipated demand, with highest priority to energy efficiency and cost-effective renewable resources.
3. The administrator of the Bonneville Power Administration is required by law (Northwest Power Act, 1980) to make decisions about the agency’s future power supply that are consistent with the Council’s power plan.
4. The Council revises the plan every five years. The last revision was in 2016.