2017-044 Questions following Renewable Energy presentation
Date: 6/23/2017 Report No. 2017-044
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Questions from June 20, 2017 Presentation to Council on Renewable Energy
BACKGROUND:
DME General Manager Phil Williams made a presentation to Council on June 20, 2017 regarding
to questions that were asked by members of Council during that presentation.
DISCUSSION:
Question regarding the gas market:
A graph showing the Hi
Denton Plan as well as the current NYMEX futures is listed below on the following page.
A few things to note with respect to this information:
1. Over the 20 year period modeled in the RDP (2019-2038), current futures are a little over
10% lower than the Low gas scenario provided by The Brattle Group.
2. While gas prices have decreased, renewable prices have decreased more. Wind has
decreased between 15%-20% depending on region and solar has decreased approximately
30% from the modeling that existed when the plan was approved.
3. Even with the wind market price decrease, we have not seen a formal or indicative offer
with a better price than the wind contract that was executed last year.
4. With the continued decrease in solar pricing, it appears that waiting to execute a utility
scale solar contract was an appropriate move.
5. The breakeven point for gas as compared to current renewable prices would be
approximately $2.00/MMBtu in 2019 and remain there for 20 years.
Date: 6/23/2017 Report No. 2017-044
Question: How much energy has been put onto the grid from distributed generation sources?
FY2016
Returned to Grid: 231,004 kWh
DME Paid Customers: $15,028
(Avg. 6.51¢/kWh)
FY2017 Q1 & Q2
Returned to Grid: 122,742 kWh
DME Paid Customers: $8,322
(Avg. 6.78¢/kWh)
Question: How can we be lowering emissions if the Denton Energy Center (DEC) will be a new source
of pollution and if Gibbons Creek continues operating?
a. wer
production by building the DEC. Whenever the DEC is running and producing energy, it is
displacing another, higher emitting unit.
Date: 6/23/2017 Report No. 2017-044
To understand this concept, it is helpful to remember that generators make electricity in
response to demand. When Texans turn on lights and air conditioners, the grid responds by
calling on generators to produce more electricity. The DEC will not cause residential or
commercial customers to use more electricity. Those customers will use the same amount that
they would have used anyway. But since the DEC is a far more clean and efficient source of
power than most generators, the effect is less pollution.
Question: DME recently announced their plan to have 88% rather than 70% renewable energy starting
A. The increased renewable energy may cause DME to run the DEC less frequently, but it will not
reduce our need for 12 engines. Or, to put it another way, while we may need fewer megawatt
hours from the DEC, we will not need fewer megawatts. Lower than expected gas prices have
decreased the expected run time for the DEC from 25%-35% to 20% to 30%.
Because wind and solar energy are intermittent, it is important that we have a way to quickly
replace the energy they provide. The 12 engine configuration of the DEC is based on the load
that will be replaced when renewables are not available.
Information on the No Trees Battery Energy Storage System (BESS):
a. 36 MW, 24 MWh battery storage facility (capable of running at full power for 40
minutes before needing to recharge)
b. Owned by Duke Energy
c. Stores energy from the 153MW No Trees wind farm
d. -responding regulation service
e. Original chemistry was advanced lead-acid
i. Originally built by now bankrupt startup Xtreme Power
ii. Won a $22 million grant from Department Of Energy, matched by Duke for a
total of $44 million
iii. Unable to withstand rapid charging and discharging
iv. Designed to last 8 years but had very little capacity left after 2 years
f. Repowered with lithium-ion chemistry
i. Duke declined to disclose cost
ii. Lithium-ion also has issues with degradation due to high cycling, though not to
the extent of lead-acid
Question regarding the
Substantive Rule
25.504, otherwise known as the Small Fish Rule. The rule can be found at the following link:
https://www.puc.texas.gov/agency/rulesnlaws/subrules/electric/25.504/25.504.pdf
Date: 6/23/2017 Report No. 2017-044
STAFF CONTACT:
Brian Daskam
Manager of External Affairs
(940) 349-7567
Brian.Daskam@cityofdenton.com