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HomeMy WebLinkAboutStaff Report 2501-40582.Reliability and Resiliency Strategic Plan: Update on Studies (Discussion 6:45pm – 9:00pm) Staff: Jonathan Abendschein and Karla Dailey 2A) Supply and Resiliency Cost/Benefit Analysis and Program Ideas (Buro Happold) (6:45pm – 8:05pm) 2B) Airport Microgrid (Burns McDonnell) (8:05pm – 8:35pm) 2C) Distribution Cost/Benefit Analysis (E3) (8:35pm – 9:00pm) Item No. 2. Page 1 of 1 Utilities Advisory Commission Staff Report From: Kiely Nose, Interim Utilities Director Lead Department: Utilities Meeting Date: February 5, 2025 Report #: 2501-4058 TITLE Reliability and Resiliency Strategic Plan: Update on Studies RECOMMENDATION This is a discussion item and no recommendation is requested. EXECUTIVE SUMMARY On April 15, 2024 the City Council approved the Reliability and Resiliency Strategic Plan, which the Utilities Advisory Commission (UAC) had recommended for approval after reviewing in December 2023. The UAC received a status update on the plan in September 2024, including an overview of three studies staff intended to complete to implement the plan. At that meeting various UAC members noted the value of a check-in with the UAC when the studies were in progress. The attached presentation includes status updates on all three studies, some initial insights from the early work already completed, and requests for feedback from the UAC on the methodology for two of the studies. ATTACHMENTS 2A) Supply and Resiliency Cost/Benefit Analysis and Program Ideas (Buro Happold) (6:50pm – 8:05pm) 2B) Airport Microgrid (Burns McDonnell) (8:05pm – 8:35pm) 2C) Distribution Cost/Benefit Analysis (E3) (8:35pm – 9:00pm) AUTHOR/TITLE: Kiely Nose, Interim Utilities Director Staff: Jonathan Abendschein, Assistant Director of Sustainability Staff: Karla Dailey, Assistant Director of Utilities Resource Management February 5, 2025 www.cityofpaloalto.org Reliability & Resiliency Strategic Plan: Update on Studies Utilities Advisory Commission 2 Studies to be discussed •Item 2A) Supply and Resiliency Cost/Benefit Analysis and Program Ideas (Buro Happold) •Item 2B) Airport Microgrid Study (Burns-McDonnell) •Item 2C) Distribution Benefit Analysis (E3) Studies and Timeline 20252024 Mar 1 Oct 1Jul 1 Supply/Resiliency Cost/Benefit Analysis and Program Ideas (Buro Happold) Distribution Cost/Benefit Analysis (E3) Airport Microgrid Analysis (Burns- McDonnell) 2026 3 4 Objectives for Today •Confirm updated technology list for cost/benefit analysis •Item 2A) Updates and Feedback on Supply and Resiliency Cost/Benefit Study and Program Ideas (Buro Happold) •Share insight on energy market structures that affect supply cost benefits •Share preliminary results from survey of CA and national programs •Identify program models you believe are examples the City should consider for implementation •Confirm methodology for valuing resiliency •Item 2B) Airport Microgrid Study (Burns-McDonnell) •Confirm airport microgrid scenarios to be analyzed •Item 2C) Distribution Study (E3) •Review scope. No feedback requested – study not started Technologies to be Studied 5 Consultant: (Buro Happold)(E3)(Buro Happold) Benefits to be analyzed:Supply Distribution Resiliency Solar + Storage x x x EV Managed Charging x x V2H (explore)(explore)x V2G x X x Thermal Storage x X x Time of Use Rates x X Demand Response x (explore) Efficient electrification x Related studies •RRSP microgrid study (Burns-McDonnell) – RRSP Strategy 5, Action 4 •Energy Efficiency (EE) – CMUA-run EE Potential Study by GDS (not an RRSP study) RRSP Cost/Benefits Studies (Strategy 4) Next Steps •February / March 2025: Complete supply & resiliency cost/benefit study components (Buro Happold) •February / March 2025: Develop list of potential programs (Buro/Happold) •April / May 2025: Tentative UAC / Council review of cost/benefit results, programs •Summer 2025: Complete microgrid study (Burns-McDonnell) •Summer 2025: Complete distribution benefit analysis (E3) •Fall 2025: Integrate distribution benefit results into cost/benefit study, develop final list of recommended programs, final report •Fall 2025: UAC / Council review of full study results 6 Supply and Resiliency Cost/Benefit Analysis and Program Ideas (Buro Happold) Scope •Characterize various resiliency technologies •Calculate their costs, compare to benefits (utility supply savings, utility distribution savings, and customer resilience) •(Distribution savings calculated separately, Buro Happold to integrate) •Generate ideas for resiliency programs and estimate resource needs Preliminary Timeline •April 2025: UAC presentation of utility supply and customer resiliency benefits, program ideas •May 2025: Possible Council study session •Fall 2025: Integrate distribution benefits into study, issue final report •Fall 2025: UAC/Council review of final report 7 www.cityofpaloalto.org Supply and Resiliency Cost/Benefit Analysis and Program Ideas (Buro Happold) Buro Happold Resiliency Methodology Overview PART 1 AVOIDED SUPPLY COSTS 9 Context: A supply cost model is being developed to help inform program development, the model will provide the cost impacts from the various technologies (on absolute and a per kWh basis). This section summarizes the methodology being adopted. Modeling cost of energy on a monthly and hourly basis per year to determine avoided supply cost for various technologies, forecasted to lifetime of each technology These charts only show the benefits, not the cost of the distributed, flexible technology itself Benefits: Supply Cost Reduction 10 Methodology City’s avoided cost model differs from State avoided cost model This is due to market design. Markets as designed do not pass through all statewide avoided costs to Palo Alto – primarily due to the way capacity and transmission is handled Impact of this on each technology TBD – City benefit may be higher or lower than statewide Insight re Market Design Benefits: Supply Cost Reduction 11 2025 Cost per Hour and Month Statewide ModelCity Avoided Costs PART 2 RESILIENCE BENEFITS 12 Context: A methodology to evaluate resilience benefits is determined by collating and summarizing available research, which is used to identify and evaluate quantitative and qualitative costs and benefits for selected technologies from Part 3. A model is being developed to quantify the economic impacts based on likely outage patterns. ResilienceReliability Maintaining power delivery to customers in the face of routine uncertainty in operating conditions Fluctuating load and generation, fuel availability, outage of assets under normal operating conditions. Duration: seconds to hours Scale of impact: facilities, campuses, or neighborhoods Resilience Benefits | Defining Resilience Preparing for, absorbing, adapting to, and recovering from low-probability, high- consequence disruptive events. Duration: hours, and days to months Scale of impact: states, regions •Cascading impacts in other critical infrastructures and parts of the economy 13 Resilience and reliability are interrelated concepts, with resilience including and extending to reliability. Quantifying ResilienceValuing Resilience Understand these numbers in terms of human impact – how much is the risk reduction worth relative to other solutions Resilience Benefits | Defining the Resilience Framework Apply numbers to the amount of risk reduction a given measure (or bundle of measures) achieves and the cost of that risk reduction, i.e. projects, events, and outcomes 14 Resilience Metrics Customer outage time (hours) Load not served (kilowatt-hours) # or % of customers experiencing an outage # of critical services without power Time to recovery (hours) Avoided Outage Cost Metrics Loss of utility revenue ($) Cost of grid damages ($) Cost of recovery ($) Residential & Commercial interruption costs ($) Loss of assets and perishables ($) Part 2 Scope Part 4 Integration Long Duration Outages (> 24 hours)Economy-WideShort Duration Outages (< 24 hours)Bottom-Up Stated Preference Surveys – Residential Customers Customer damage functions (CDFs) •Outage costs to commercial & industrial customers Resource Adequacy Assessment •Value of Lost Load (VOLL) •Loss of Load Probability (LOLP) Interruption Cost-Estimate Calculator •Meta-analysis and econometric model by Energy Markets & Berkeley Lab Resilience Benefits | Methodologies Stated Preference Surveys – Limited Studies Available Input-Output (IO) models •Estimate direct and indirect economic losses in supply chains •Adaptive behavior not captured, better as an upper bound Computer General Equilibrium (CGE) Models Hybrid Models •CGE models calibrated by surveys Macro-Econometric Models •Primarily focused on GDP, unemployment, inflation, etc. 15 Focus of Study The value of resilience as the present value of •(1) avoided costs from disruptive events over the investment’s lifetime •(2) avoided cost of alternative investments (diesel generators, PV-battery systems) Resilience Benefits | CPAU Focus Short Duration Outage Impacts (<24 hours) 16 Tool Developer Methodology Outputs Interruption Cost Estimator (ICE) Lawrence Berkeley National Laboratory Based on aggregated customer survey data between 1989-2012 in 10 utilities on the West Coast and Southeast U.S $ estimate of power outages lasting 24 hours or less (per event, per avg kw, per avg kwh, total annual cost) 34 datasets from surveys fielded by 10 utility companies from 1989-2012, totaling over 105,000 observations •Survey-based methods from representative samples of customers to estimate costs experienced in a number of hypothetical outage scenarios & characteristics •Characteristics include duration, season, day of week, time of day, cause of outage, etc. •All costs updated to 2023 dollars for the CPAU study Customer damage functions applied to calculate interruption costs per event by season, time of day, day of week, and geographical regions •Output: weighted average of customer interruption costs Updated ICE Calculator 2.0 is in development, scheduled for release in early 2025 •Consists of 10 distinct surveying efforts from 2023 with over 7,000 new responses •May be able to integrate into current study Resilience Benefits | Interruption Cost Estimator (ICE) Methodology Overview 17 Resilience Benefits | Integration 18 Value of Resilience / Reliability ($) Resilience Technology / Approach Avoided Outage (kWh, Event, % annual)X ICE Model Benefits Costs Avoided Supply Costs Avoided Outage Costs Capital Expenditures Operations & Maintenance Program / Technology Assessment Methodology Qualitative Benefits Avoided outage costs determined by scenarios for avoided outage costs associated with a given program & technology Avoided Distribution Costs* *Evaluated in separate study (#2) done by E3 Commission Feedback •Does this resiliency framework reflect the quantitative and qualitative benefits you believe would be reflected by deploying these technologies in the community? 19 PART 3 PRELIMINARY PROGRAM RESEARCH 20 Context: The supply, distribution, and resiliency cost and benefit analyses are meant to support City policy decisions on whether to operate programs to encourage flexible energy technologies and efficient electrification. Buro Happold will provide a list of potential programs and their resource needs for consideration based on research of similar programs in California and nationally. Preliminary Program Research | CA, Nationwide, and POU Peers* 21 *Reflects research results to date; will continue to add based on CPAU feedback California Programs, by utility type California POU Peers P rog rams P ilots P olicies P rog rams P ilots P olicies P rog rams P ilots P olicies T OT A L T otal 10 0 0 12 4 3 8 2 9 48 Battery 3 1 0 4 2 0 2 0 0 12 T hermal S torag e 1 0 0 0 0 0 2 0 0 3 G enerator 0 0 0 0 0 0 3 0 0 3 S olar + S torag e 1 0 0 3 1 0 0 0 0 5 Manag ed E V Charg ing 1 0 0 3 0 0 0 0 1 5 V2H & V2G 0 1 0 0 0 0 0 1 0 2 E V T OU R ates 0 0 3 0 0 3 0 0 5 11 Microg rid 0 0 0 0 0 0 2 1 0 3 R esilience Hub 2 0 0 3 1 0 1 0 0 7 S mart P anels 1 0 0 0 0 0 0 0 0 1 Meter S ocket Adapters 0 0 2 0 0 0 0 0 4 6 Other 2 1 0 0 0 0 1 0 0 4 POU's CCA 's IOU's Prog ram totals by type w/DA C Component T otal 2 Battery 1 T hermal S torag e 0 G enerator 0 S olar + S torag e 0 Manag ed E V Charg ing 0 V2H & V2G 0 E V T OU R ates 0 Microg rid 0 R esilience Hub 0 S mart P anels 1 Meter S ocket Adapters 0 Other 0 2 1 0 2 1 1 0 0 0 Prog rams, Pilots and Policies 17 4 1 0 Commission Feedback •Are there specific programs you want to make sure we include in the research? 22 Airport Microgrid (Burns McDonnell) Scope •Estimate solar and storage capacity of the airport and Golf Course parking lot •Complete studies for airport FAA regulatory purposes •Evaluate three potential solar and battery storage microgrid designs under varied operational scenarios Tentative Timeline •Study in progress, aiming for completion by early summer 2025 1 Airport Microgrid (Burns McDonnell) Scenario Definitions 2 Critical Loads Outage Type #1 Outage Type #2 Outage Type #3 (tentative) 1.Airport •September outage •6-hour outage •September outage •3 days To be determined 2. Airport + Regional Water Quality Control Plan (RWQCP) •September outage •3 days (airport) •6 hours (RWQCP) •December outage •3 days (airport) •6 hours (RWQCP) 3. Airport + EV Charging Hub (10 Level 3 chargers) •September outage •3 days (airport) •200 vehicles /day •December outage •3 days (airport) •200 vehicles /day Feedback requested •Will these critical load scenarios provide adequate insight on microgrid costs, benefits and operational characteristics to inform future consideration of microgrid opportunities in Palo Alto? Distribution Cost/Benefit Analysis (E3) Scope •Estimate existing system capacity for electrification •Update and validate impact of full electrification on line-transformers •Evaluate benefit of distributed, flexible technologies and efficient electrification in making better use of capacity and reducing investment cost Timeline •Detailed timeline still in development. Aiming to complete by summer 2025 for incorporation into Buro Happold cost benefit study and final report in fall 2025 1