A portfolio-building approach to creating alternatives in
energy resource planning
Creating and evaluating a range of well-defined, internally
coherent alternatives is central to good decision making. In
public planning processes, having stakeholders participate in
the process of alternative creation is important both for
ensuring that a wide range of possible solutions to the problem
are heard and explored, and for ensuring participant buy-in of
the process. In very complex decisions, however, alternatives
may require considerable effort to describe properly. In this
case study, we examine how in its 2006 Integrated Electricity
Plan (IEP) consultation process, BC Hydro overcame these
difficulties through the use of a simple but effective
spreadsheet tool.
For the purposes of the IEP, a valid alternative had to meet
the following constraints:
- Describe a portfolio of resource options (e.g. wind, small
hydro etc) that could be deployed in the next 20 years to meet
forecasted demand.
- Meet targets for total energy supply (20,000 GWh) and
capacity (the amount of energy that can be reliably deployed
at any give time: 2,600 MW).
- Use only quantities of each resource option that are known
to exist in BC
A spreadsheet tool allowed stakeholders to build alternatives
by assembling ‘building blocks’ of energy from a variety of
resource options. For most of the resource options the block
size used was 500 GWh, but for others, such as geothermal and
large hydro, the block size represented the actual projects
available in BC. For example, since there was only one potential
large hydro site in the province under consideration at the
time, participants could choose whether to use the one block of
5,000 GWh hours of large hydro in an alternative or not.
Each time an energy block of a particular resource option was
added to an alternative, the user was presented with a running
tally of the implications of the alternative in terms of various
indicators of interest to participants. These included the cost
of the alternative, GHG gases emissions, local air emissions,
jobs, the proportion of ‘clean energy’ (an indicator important
to provincial energy policy), and the area of land affected.
Supply curves for each resource option were built into the
tool, providing both the marginal cost of the next block of
energy available of each type, and preventing of adding
quantities of a particular resource option that did not exist. A
simple lookup table built into the tool contained emission
factors etc required to calculate other impacts)
An illustration of the tool in action is shown below:
(Click image to enlarge)
Before starting, the tool shows various resource options as
columns in a table, with the indicators we are interested in as
rows. Under each resource option’s label is a reminder of the
estimated maximum quantity of energy available in BC of that
resource (for biomass, 1250 GWh). Beneath this is the marginal
cost of each resource, that is, the cost of the next block of
energy of that type, in $/kWh.
Suppose we are interested in building an alternative that
focuses on renewable energy. We might decide to start by adding
one, 500 GWh block of biomass energy to our alternative (called
‘Portfolio 1’ here). We do this by clicking on the up button of
the ‘spinner’ control as indicated by the black arrow. The
results of doing so are shown below.
(Click image to enlarge)
By adding the first 500GWh block of biomass, participants can
see that they have accounted for 3% of the energy total, 2% of
the capacity target, have created 98 full time jobs and 475
tons/year of NOX, and that the alternative so far comprises 100%
BC clean energy. Since there are only 1250 GWh of biomass
available, however, participants will soon need to start looking
at other resource options to fill out the alternative.
The image below shows such an alternative nearing completion.
(Click image to enlarge)
At this point, the alternative is close to meeting its target
for energy but because of its reliance on intermittent resources
such as wind has a way to go to meet its capacity obligations.
Once an alternative is completed, the data in it are sent to
a consequence table (see below) for subsequent evaluation using
trade-off analysis techniques. Later in the process, each
alternative was modeled more completely by BC Hydro, with
transmission, temporal issues and other complicating factors
overlaid.
(Click image to enlarge)
Using this technique meeting participants were able to sketch
out alternatives interactively in a constructive, discursive
environment. The approach was well received by a wide range of
people. It helped keep the alternatives with the realm of
possibility but otherwise did not constrain creativity.
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An example of developing a consequence table through
portfolio building