2023 Electricity Annual Technology Baseline (ATB) Webinar

all right so welcome to the 2023 electricity ATV webinar um our agenda for today will consist of an introduction and an overview updates including changes affecting all Technologies Financial cases and methods and technology-specific updates we'll have a few minutes for questions and comments as a larger group before we head off to the breakout rooms so to start why the ATB Ever Changing Technologies results in conflicting reports of Technology progress based on inconsistent and often opaque assumptions a single data set is needed to credibly and transparently assess the evolving state of Energy Technologies in the United States and the annual technology Baseline enables understanding of Technology cost and performance across energy sectors and thus informs electric sector analysis Nationwide so to give an overview of the project the annual technology Baseline anchors key Department of energy and National Lab analyzes tools such as the resource planning model the regional energy deployment system and the system advisor model use ATB data and it's used in important scenario analyzes such as the recent evaluating impacts of the inflation reduction act in bipartisan infrastructure law on the US power system and the Los Angeles 100 renewable energy study now in its ninth year the ATB is frequently used by planners academics analysis and others including federal agencies grid operators utilities Consultants non-profits Academia and many others and the users on this slide are just examples of users this is not a comprehensive list the HCB data also provide inputs for the standard scenarios so the ATV presents cost and performance assumptions for renewable and conventional Technologies and in the standard scenarios it runs an ensemble of future scenarios for the U.S electric power sector which is presented at its own analysis and reports and also feeds into other eneral tools analyzes such as the slope model for state and local energy prod planning and the cambium model which is a much more detailed hourly analysis of key scenarios the HCB includes a suite of products including a spreadsheet with calculations and costs and performance assumptions a web application with documentation user guidance and additional analyzes interactive charts Tableau workbooks and formatted data which can be accessed via an application programming interface published via the open energy data initiative or OD and this PowerPoint presentation and then I'd also like to note that coming soon uh we will release open source python code for levelized cost of energy and debt fraction calculations uh we're hoping to do that in a month or so um but you'll be the first to know if you register at that ATV website register link for the ATB email list because that's where we will post the launch announcement so the HEB provides cost and performance data including metrics such as capital expenditures operation and maintenance costs and capacity factors we provide historical data for base year which for this edition of the ACB is 2021 and then provide projections out to 2050 and these are provided for each year in that data set all of the different resource classes within technology and a wide variety of Technologies we then combine those with financial assumptions to calculate the levelized cost of energy which is provided as a summary metric of technological Improvement but is not used as an input to the model's mission on the previous slides this slide summarizes the Technologies covered in the ATB I would note that new in 2023 include natural gas fuel cell Technologies and retrofits for gas and cool Technologies um in case you missed it we issued a mid-year update to the 2022 ATB which provided the higher carbon capture and sequestration rates listed in that slide the methodology of the ATB includes three steps we Define resource bins for each technology we group range of resources for the contiguous United States and Depends with common resource quality and characteristics so for example that would be Global horizontal irradians for solar PV or average annual wind speed for land-based wind or in cases where that's a less relevant way to have been a technology we develop representative plants as we do for geothermal and natural gas we also refer to these throughout the data as tech details once we have those categorizations we develop cost and performance data and so that includes both That Base year and projected values across conservative moderate and advanced technology scenarios for metrics including Capital expenditures capacity factors and operations and maintenance and then we use those along with two sets of financial assumptions in order to calculate the level of stress of energy so this summarizes the resource bins or resource bin categories and what defines them for each technology Technologies in bold had changes for this year so relative to last year land-based wind natural gas coal and the new retrofits technologies have different bins from last year and we'll get into more details of those in the technology specific updates section here's an example of how those bins are defined for land-based wind so on the left you see the average annual wind speed for 100 meters above surface level in North America and then we use that in order to develop a supply curve um and you can see an example of how those might be binned based on the availability of resource in the along the cumulative capacity of the supply curve so generally we have a little bit more density in the higher resource classes that are more likely to be built and a little bit less density in the bins uh in the lower resource glasses for step two we developed costs and performance data starting with a base year which for this year is 2021 which is informed by market reports Market data and bottom-up modeling we're using this two-year lag in the annual technology Baseline in order to ensure that these reports can be peer reviewed and meet our standards for the data that we include and then projections for subsequent years generally rely on bottom-up modeling and or published studies and we qualitatively harmonize those to three scenarios of future Technology Innovation the conservative scenario assumes today's technology with little Innovation continued industrial learning driving smaller cost declines but generally a decreased level of public and private r d relative to what we're seeing right now the moderate scenario represents widespread adopted adoption of today's Cutting Edge is what we would categorize as roughly the expected level of innovation and assumes that current levels of public and private r d continue and then the advanced technology scenario relies on Market success of a currently unproven Innovation or multiple currently unproven Innovations assumes new technology architectures achieve widespread adoption in the market and represents a potential increase in public and private r d relative to current levels uh this slide summarizes the sources of Base year costs I'm not going to read all of this off to you now and for Technologies with significant changes versus previous years of the ATP we'll be summarizing these in the technology specific updates section but when we publish these slides all of those links are clickable and we'll link you to the exact reports so you can see detailed assumptions that we use and then once we have developed these costs and performance assumptions we can combine these with two Financial cases in order to develop estimates of the levelized cost of energy I would emphasize that lcoe is a summary metric with important limitations specifically it is quantifying the costs of Technologies but not necessarily the benefits for a specific system um and so we have more on on that and and what we recommend for use of lcoe in the documentation on the website right so with that I will summarize the changes to all Technologies so in previous editions of the ATV we would Define costs in the base year and then Technologies would look at intermediate points in say 2030 or 2050 um and then fit straight lines to those or use continuous learning curves from the base here uh 2022 is already over and we know that prices increased in real terms so if you look at looked at the increase in costs of renewable Technologies relative to the Consumer Price Index from 2021 to 2022 there was an increase in many of these Technologies above and beyond just general economic inflation so all of the data in the ATB is represented in a constant 2021 dollar year but we wanted to represent these price increases in real terms so when available Technologies use technology specific reports or if they did not have specific reports that they were able to rely on we used a technology neutral average of 3.5 percent of a real price increase to specify costs for 2022. and we'll see that pretty clearly in the data when we get to graphs with the updated data uh additionally most Technologies publish additional data on cost their cost reduction assumptions so if you go to the website uh the documentation has a new section titled scenario assumptions and this covers how the analysts arrived at the cost reductions by scenario including specifics on what learning rates were used and what deployment assumptions went into those learning rates if the Technologies used learning rates as their underlying methodology and some use bottom-up cost models for specific years ultimately this year are maturity metrics uh the ATB typically represents some technologies that are not currently commercial in the market and until this Edition it was not necessarily clear which was which um on a very quick glance and so we're trying to to make that more obvious this year in order to sort these bins OR tech details by what's mature versus what's nascent we use the definition of Technology details are defined as mature if a representative plan is operating or under construction in the United States in the base year so we'll get into a little bit more how we how that definition fell out relative to our tech details but it's roughly the same as what standard scenarios published in 2022 so for an example of that we have a summary chart from the geothermal technology Below on the left side under the mature column is a conventional hydro plant a hydro flash plant and then on the right side under the nascent column are enhanced geothermal systems so you'll see that throughout the data when within a given technology there are both nascent and mature technology details we also had significant updates to our financial cases and methods this year um so this is something that David Feldman and I worked out and applied to the Technologies including the inflation reduction Act so in the HCB we have two Financial cases uh the r d case uh has specified technology specific interest rates and debt fractions but that holds those constant throughout the analysis such that the analysis shows only the influence of technological innovation and so if you see that little r d on a graph that means that's the financial scenario that you're looking at we also present a markets and policies scenario which utilizes those same debt fractions interest rates and return on equity in the base year but then adds in the effects of tax credits on the inflation reduction act which will uh or from the inflation reduction act which we'll discuss more in the following slides and so then if you see that little market uh on the graph that means that's the financial assumptions scenario that you are looking at so this slide summarizes the changes uh the 2022 ATB had a base year of 2020 uh this year we've updated both the base year uh so which you know which year is set up by market reports and then the dollar year uh to 2021 I would note that there's been you know 2022 had a significant amount of inflation um so if the prices look a little low relative to what you're seeing in the current market uh do inflate those to current dollars but then throughout the hdb historical data and just about every other metric that unless otherwise indicated that has units of dollars is in that twenty twenty one dollars um we saw a significant increase in interest rates in 2022 um so we increased interest rates three percentage points across the board from the 2022 ATB based year values for both Financial cases so for an example uh solar PV is now looking at interest rates of seven percent uh and construction financing interest rates of six and a half percent so we kept the same differential between term interest and construction interest from the previous HEB just increased everything um for cost of equity uh we increased that one percent we expect that to increase a little uh with the current relative to the interest rates uh but it is not a one-to-one correlation based on the reports that we were seeing we've updated the tax credits uh in the markets and policies case to include a simplified representation of the inflation reduction act uh one of the key assumptions there is when are the tax credits going to phase out so the tax credits are guaranteed at least through 2032 um but the phase out can be affected by when the electric sector hits a 75 reduction in CO2 emissions relative to 2022 values so in order to determine that for a base case we looked at these 2022 standard scenarios mid case um and that hit that threshold in 2038 specific tax credits we used assumes that the labor requirements of the inflation reduction act are met but no bonus credits are received so that results in a 30 ITC and a 27.50 per megawatt hour production tax credit um but that's 27.50 is in 2022 um so we had to deflate that to 2021 for the report so there may be bonus credits for your projects such as domestic content or energy communities and you would want to adjust the uh tax credit values for lcoe um in order to get that to apply to your specific project but we'll cover that more uh in the financial assumptions and inflation reduction act breakout session and then with those assumptions uh we use system advisor model to calculate debt fractions and new this year for the markets case uh those data fractions are now calculated on an annual basis so we are now including the performance improvements and cost of fines in some of those out here debt fractions to get into a little bit more specifics uh for our financial scenarios uh we're relying on this report from David Feldman Mark Bollinger and Paul Schwab Uh current and future costs of renewable energy project Finance across Technologies so uh the interest rates and cost of equity assumptions have been updated from that report based on more recent data but generally we feel that the debt service coverage ratios that were uh given to us from industry in that report are still consistent uh for current projects so you can see a summary of those debt service coverage ratios that we use to determine the debt fractions uh in the bottom slide those are the points from industry that they got in this in this report and we use those uh in our in our calculations so we include costs for both financing during the the construction period and the operating period and use different interest rates assumptions during those different periods in order to account for different levels of risk so to summarize the financial assumptions we have a few more slides here including the assumptions for the investment tax credit and production tax credit including which technology we assumed receive which the diffractions that we calculated and the weighted average Capital cost of capital and then the levelized cost of energy so this graphic uh represents which Technologies receive the production tax credit and the investment tax credit um so generally uh for many of the out years uh utility scale probable tax distributed wind and land-based wind are receiving the production tax credit um and other Technologies are receiving the investment tax credit so I mentioned on a previous slide of those tax credits start to phase out in 2038 the phase out occurs over four years and then in additional to that we assign most Technologies a four-year Safe Harbor meaning that if you start construction you have four years done until your commercial online date in which you still may be able to see receive the credit if you meet certain requirements so that's the reason that the credits don't totally phase out until about 2046 if you add up you know 2038 plus the Safe Harbor plus the phase out that's why the line goes down to zero and then offshore wind has a longer Safe Harbor so it's phase out uh doesn't start until even later the one line that's coming down sooner is distributed PVE which is specified as a specific date uh in the tax law and it's not dependent um upon that electric sector carbon value given those previous assumptions uh this is what we calculated for the term debt fraction so you can see on the right in the r d case you have those constant assumptions over time ranging from about 55 percent um for natural gas uh up to uh in the mid 70s percent for uh commercial PV um on the left we have the market assumptions and so you can see generally uh technologies have a lower debt fraction such that there is some tax appetite for those tax credits until the tax credits phase out and then they snap up to higher values in the late 2040s the few Technologies such as utility scale PV and land-based wind that continue to decline over time that's seeing that in decreasing cost and increase in performance requiring more and more tax appetite in order to use those high production tax credit values and similar story with the weighted average cost of capital um generally Equity is more expensive than debt um and so as those debt fractions go down the cost of capital is going to increase so you know you see that high line going for land-based wind on the left side and then things come down as the amount of debt increases again um once the tax credits phase out question and then here's a summary uh and comparison of levelized cost of energy between the two cases um so you can see here in 2022 uh the result of that spike in capital costs um a general decline uh driven by Technology Innovation um in the Market's case things come back up as the tax credit space out and then relative to the rid case uh even with the higher cost of capital uh the tax credits are lowering technology costs relative to the r d case where we hold Financial finances constant let me get some very low lcoe values for a few Technologies in the 2030s with the tax credits with that we'll get into technology specific updates so these two slides uh summarize the changes by technology uh this uh information is also available on the website for today we'll be covering Technologies with larger changes relative to last year which includes land-based wind PV geothermal battery storage and natural gas and coal and with that I will hand things off to Tyler all right thanks Brian um yeah so my name is Tyler Staley I was one of the analysts that supported the the land-based wind um estimates uh for the ATV along uh with a few other analysts listed on this slide um but yeah I'm here to speak very high level at what the the changes were from last year's versus this year's ATB for land-based win so the scenarios are are quite a bit different from methods used in previous editions uh in Prior editions each scenario for the land-based wind assumed one wind turbine technology uh characteristics and projected specific Innovations to overcome things like Transportation challenges uh Advanced wind turbine controls and increase the adoption of science-based modeling so in the 2023 ATB we introduced multiple wind turbine technology configurations and they're each developed independently and separately which allows for different Technologies to be used within each scenario so the scenario is now consider four different Technologies configure configurations each with three different cost and performance projections so the additional technology configurations also enable placement of appropriate wind turbines in each wind resource class so representing the range of technology that we'd expect to be available in 2030 so this includes higher specific power machines that may be more suitable for say land land constraint sites turbine ratings range from now 3.3

megawatts to about 8.3 megawatts with rotor diameter variations between 148 and 196 meters and hub Heights from 100 meters to 140 meters the analysis also now includes an assessment of three scenarios for each of the four representative wind turbine configurations and are informed by bottom-up engineering based models literature data and learning rates all the additional details should be listed in the documentation on the ATV website for further digging into those next slide please thank you uh so yeah on this slide here uh it's showing the default when class when class 4 in the graphic so this is similar to an average site you'd find in the wind belt of the United States um this is representative of a single wind turbine technology uh suitable for this uh win class over time so the primary inputs to calculate lcue are are being displayed here from the base year of 2021 projected out to 2050 our capacity Factor estimates from Technologies are derived for technology specific machines so power cords are derived based on the characteristics of the machine and then we assume improvements to system capacity factors through wind turbine and plant Advanced controls to reduce system losses the capex in 2022 you'll see it increases from the 2021 value this is due to supply chain supply chain stresses High commodity prices and increased Logistics costs review done the webinar now the capex in 2023 also estimates uh increased values in 2021 but assumes a downward trend from the 2022 values and then we assume that this will start to begin to level out in 2024 and Beyond uh o m cost values are informed by a recent o m literature review and it now vary by by wind turbine rating so with we assume greater cost reductions resulting from larger machine ratings between these yeah for for the four that we've introduced in this year's ATV and the resulting lcue costs trajectory is is a combination of these factors um and again this represents one technology pathway among many other possible combinations uh next slide please great uh so yeah this slide summarizes a year over year update uh so 2022 versus 2023 ATV uh these are a summary of the default when class values within each year uh so I wanted to you know warn caution here that this comparison is is not a direct comparison um since we're changing uh the technology assumptions from from last year to this year for example the base base year wind uh turbine rating in the 2022 ATB assumes a market average of a 2.8 megawatt machine and it steps to a 5.5 megawatt machine for the moderate scenario in 2030 uh whereas in the 2023 ATB we report data for a six megawatt wind turbine from the base year to 2030. so the technology stays the same in this year's ATB so it's not a direct comparison the 2022 ATB capex does not reflect supply chain stresses increased commodity prices or higher Logistics costs other differences include refined bottom-up engineering cost models that results in different dollars per kilowatt um for this year's update capacity factors also have differences from the assumed technology differences but illustrate similar reductions in wind turbine implant losses to increase capacity factors over time the O M estimates differ from the assumed reductions in O M costs with with turbine ratings so in the case of moving from a 2.8 megawatt to a six megawatt in the base this year you will see a large difference there it's reflected in the graphic uh yet finally the the lcuh trajectories land on on similar levels between the two ATB versions for this particular default case but yeah users may see larger variations among other scenarios and different comparisons between the the scenarios so I think that's it for the the land base wind updates on my end I think I'll pass it over to Jared to cover solar PV thank you great thanks Tyler appreciate that so we're going to talk a little bit about PV I'm not going to spend a lot of time on this slide I mean it's basically first paragraph here is we changed our references so we have a in the base years 2021 but we have the 2022 reference for a solar capex that we used for PB capex and then that uh also use that reference for o m and the projections we made a slight modification to the inverter loading ratio based on Lawrence Berkeley's track the Sun data and then we calculate projections using our 2022 report to as the starting point for the projections so we can go to the next slide so this is a little more detail I think you know one changer is the uh sort of projection year was 20 30 last year now it's 20 35. so I've kind of kind of

normalized things looking at you know PB is quite a bit higher projected cost in 2030 this year than it was last year and this just kind of lists out some of those reasons some of these reasons apply to everything in the ATB and some of things are solar specific and uh yeah we could talk about some of these things in the breakout rooms if we need more detail if anybody's interested in that but and for one thing the benchmarks in 2022 or higher the cost for higher in 2022 it was in part because of Supply chains issues that Tyler mentioned for wind as well so I think a lot of Technologies experienced that whereas the supply chain kind of make prices go up faster than inflation and then and we look at the our protected cost reductions this year so we shifted the target Year from 2030 to 2035 you know so there's sort of a methodological Choice there to use a straight line method between these and it kind of creates this geometry I mean you're stretching out with a straight line that keeps the cost higher in 2030 you know because of that that methodological choice I think it's safe to say that we will not see a straight line between 2022 and 2035 we didn't we're sort of using a simplified method there to make that assumption and we'll see what unfolds in the real world um objective module costs changed last year they were based on a combination of minimum sustainable issue their basically accommodation minimum stable price and Global spot prices whereas last year they were more uh spot price based so they were a bit lower especially in the conservative and moderate scenarios we maintain significant hardware supply chain costs residential and Commercial systems which is something we were seeing based on our more recent data collection uh if there's there's some significant markup for these systems um installer margin overhead costs are higher going forward and I have a little bit more detail on that again the breakout room we could look at and then the financing assumptions which you know applies to every every technology in ATV has a pretty big impact like if you look at uh utility scale PV the difference between the different Financial assumptions explains about 65 of the difference in 2030 for utility scale PV and price and 34 difference for residential PVE and you know the last bull there's just higher Finance exceptions affect all Technologies and the utility scale LCD did get offset a little bit the increase in price by using assuming higher capacity factors this year we assumed the use of biofacial modules through all years for utility scale TV based on recent Trends and that so that was all sort of discussion the 2030 2035 for the time during the 2050 LCD is also a bit higher this year for similar reasons and also we assumed a slightly lower module efficiency Improvement this year based on the international technology roadmap for photovoltaic okay next slide please I'm not gonna spend a lot of time on this slide either I think it's our next slide will be a little more interesting but the uh this is just kind of showing our current results for the utility scale PV here and you know for each of the scenarios you can see the bump up in 2022 and cap exhaust and then the straight line projection of 2035 and then a straight line to 2050. I think uh let's take the next slide a little more interesting I think because it'll provide a so here we see a comparison for utility scale PV comparing the different categories capex on the top capacity Factor next one down 901m then lcwe and you see the big sort of increase overall through like the 2030 2035 time frame there we see the biggest difference in a utility scale PV costs and then as you get more out towards 2050 they start to come together as that kind of the effect of those the early increase in price in 2022 and then the effect of the you know the straight line method become more muted and you can also see here in the capacity Factory you get a bit higher and uh 2023 is in 2022 because the bifacial module assumption but I think uh that is it for me and we're going to hand it over today oh foreign [Music] the geothermal changes for this year's ATV first of all our base year estimates where typically from from the geovision study with some some slight changes across the board on contingency Factory and so the the base contingency factor that that is normally used as a default in getting of 15 has now been slightly downgraded to 10 and this is based off of discussions with uh geothermal developers and also uh trying to be more consistent across the board uh relative to other renewable Technologies and another major change is the model assumption for the exploration drilling explosion drilling um initially it used to be about nine successful Wells but now we have brought it down to about five successful Wells Fargo for EGS and so uh this this helped you know to actually uh reflect you know the successes uh already you know being announced um even at our last week on Airfield EGS trillion and how many successful was I needed to move to commercial development um also we followed for the or M class we we followed what we did in 2022 um by applying a 23 reduction Factor on the outputes the direct altitude from Canada and this is also based on proprietary data from the industry uh in terms of projections um like um Brian has emphasized already we applied the technology Mutual CPI Factor um to be able to account for you know inflation area and supply chain issues um and counting in 2022 so you would see that jump from 2021 to 2022 in the graphs and um Beyond 2022 we apply the on a conservative case a 0.5 percent annual decline based on the annual energy outflow projections and then for the moderates and the advanced cases we applied um learning curves so I'm learning curves with specific running rates and the moderate case had an 18 planning rate while the advanced case had a 30 30 percent learning rate and these learning rates were um from unconventional oil and gas developments and and these were basically many rates that were heavily biased towards Drilling and because drilling costs account for a significant up to 42 you know 45 of total costs for geothermal development and so we apply these learning rates based off of the successes in unconventional Drilling and and also um based off of discussions with a geothermal developer in the EGS space and um for the moderate and advanced cases um we we apply the specific numbers the specific cost numbers in 2035 and so between 2022 and 2035 35 is where we apply the learning curve and then beyond that up to 2050 we apply the same then in learning rate as we have in the in the conservative case that's a 0.5 annual decline next slide please um so one major thing we're able to do this year was to delineate the dpgs from the near field EGS because from the technology standpoint we believe that the the near field or the shallower you know enhance geothermal systems will be um you know monumentable in the near future than the different resources um and so as we've seen already in recent announcements um and so we we have delineated both systems um based in the near field EGS on kind of like a Brownfield development adjacent to a hydrothermal system and so um we see the the reduction in in the cost the capex the pixel and M and and also the lcoe When comparing the dip to the near field AGS a capacitive factored basically remained constant across the board and um overall of course the hydrothermal systems generally will cost lesser because of the you know you already have an existing Reservoir I don't really necessarily need to you know induce any changes to the reservoir to be able to produce the to geothermal fluids and so let's move to the next slide and so for comparisons between last year and this year the major changed the hydrothermal flush system although we had some significant changes to it it did not reflect in especially if you see the lcoe and this is not because of um whether they were not significant in terms of the changes to productivity and injectivity based on industry data it was just because of the inflationarians insurance that we've seen and when you adjust you know to Dollar to the current year or to the 2021 dollar year and so we we were not able to see actual you know reductions on a normal basis with compared to the previous year but if you go to the next slide next slide in the in the near field EGS and you would see the significant reduction in in costs um whether it's capex or lcoe for the near field EGS and showing and this is this is a crossword as binary uh Flash and these reductions are basically saying that we are assuming um slightly better productivity and injectivity based off of success is already being announced in the Forge and and by geothermal developer by fervo and so we we made those adjustments prior prior to this year's um announcements of the ATV and um yeah this is and also we we made significant adjustments to the Julian's success rates um improving them um by a couple of percentage points uh so for example for the um for the exploration success rate we increase them for about 51 to about 76 percent and also the developmental drilling success rates were increased by um two percentage points as well and so we um these these um improvements in geothermal development um over the next over the past one year um you know has led to significant reduction in cost mostly for the EGS resources and so I'll be happy to talk through these changes in in the pericard sessions see if there's any questions thanks I'll hand it over to the next speaker sorry I don't have a list here for battery storage thank you well thanks that's good to be with you today um so uh battery storage in the ATB is handled a little bit differently than the other Technologies so the the initial capex estimates are based on bottom-up bottling that's pretty detailed a lot of Market work that Vignesh around with Sammy leads so that's that's what builds that initial starting cost um and then the projections this is where the primary difference relative to other Technologies is we're not looking out and saying this is what we think a battery will look like in 2030 or 2040 and therefore that's what we think the cost will be the projections are based on a literature survey where we're looking at projections out there for what people say batteries are going to cost over the next decade or two or three um and then use those to develop a low mid and high projection or Advanced moderate conservative projections so that's the way these are built which is a little bit different than the other other Technologies let's go to the next slide so we do that we get this the top showing the fixed o m the bottom one showing the OCC or the overnight Capital cost um so you'd see the conservative projection higher projection is actually increasing not just to 2022 but also out into the next couple years showing continued increases and then the lowest case the advanced projection showing rapid decreases basically immediately that then persist over time and this is reflective of what we saw in the literature and when we pulled things we made sure to pull only really recent stuff so it would capture supply chain issues and other things so these this is the spread even in the immediate term is real out there in terms of what analysts think might happen the prices some people say that when they're still going to go up other people say that we basically pass through it there was to drop really fast again so that's that's captured in in this range of projections um and then if you want to go to the next slide this shows what that looks like relative to last year so as you can see last year there was a smooth decline over time you can see that bump up in the near term uh that that respectively in the initial year um that uh much higher costs due to both higher pricing um in like the supply chain constraints as well as the the getting more robust and that bottom-up cost analysis to better you know make sure the battery size right to deal with state of charge constraints and degradation all those pieces so all those pieces lead to a higher initial cost a lot of that by the time you get out to 2050 the Gap versus last year is is pretty narrow but still a bit higher um do do I think better more rigorous evaluation of what the battery need what the needs are in order to build the robust battery the last over the lifetime that that we project from the ATV um so it's a summary of utility scale battery storage after you talk more about that in the breakout session but I'd like gives you an idea of what what's in there I just want to highlight that one piece for this is we you know people's Mass like was there no ITC in this well batteries do qualify for an ITC we didn't put that in here because it's not part of the LCD calculations we'll put an LCD for batteries in the ATV so it's part of why that's not in there so um I'm going to turn it back to Brian you're up you're back on with this and thanks Wesley uh so this is work uh presented from the uh doe office of fossil energy and carbon Management on lead analyst is Jeff Hoffman unfortunately he was not able to make it today uh so you get to to hear from me on some of the new fossil energy changes so we uh the office of fecm and the national energy technology laboratory uh uh published several new papers uh that were relevant to the ATB which are summarized on this slide um generally we're looking at uh projects that are represent representative of current commercial offerings uh and or projects that could begin commercial uh Service uh within the past 10 years um and the key references there are are listed um if you've heard of rev 4A uh from them that's that first Schmidt and all reference which is what we used to update uh the carbon capture and storage rates to 95 in the mid-year update and then the cost declines for these Technologies are based on the cost decline trajectories from the energy information and administration's 2023 annual energy Outlook so we're using these FEC and metal reports for base your data and then the eia data for declines next slide so this uh summarizes the um key trajectories uh for both mature unmitigated Technologies and nascent Technologies with ccs for both coal and natural gas um and then one new thing here you can see coming in on the nascent line in 2035 are the natural gas fuel cell Technologies um so that was how they wanted to indicate this as a nascent technology that won't be available for a few years but we are distinguishing that as its own trajectory independent of the natural gas combined cycle technology those two were combined in previous atbs and we've made them distinct for this year next slide so this uh shows the year over year for the cost projections um so we are seeing increases both in capex and in fixed o m uh relative or sorry capex relative to last year fixed o m starts a little bit higher and then declines um and I will note that we do not present levelized cost of energy for the fossil Energy Technologies some of these underlying reports uh have their own lcue numbers typically presented in in 2018 and their own fuel cost assumptions so if you're looking for an lcue for those Technologies we recommend you go there and next slide and then also knew this year are retrofits um so things of note for retrofits um these are representative retrofits there's a carbon capture retrofit database that has a ton of useful plant specific info for more detailed analysis but we wanted to be able to provide this data in order to generate a comparison of a new build with ccs to retrofitting an existing plant with ccs so we do this both for coal and natural gas the expectation is that the capture rate for these plants would be lower than a new build so for new builds for gas for example we're presenting a 95 and 97 capture rate for retrofits that's 90 and 95. and so the retrofit data includes

the additional overnight Capital cost in order to perform the retrofit a heat rate penalty to the plant based on the retrofit as well as a net output penalty and I will note that all for both the new build ccs and the retrofits all costs are within the fence line of the plant and do not include costs for CO2 transportation and storage so that's an additional cost that should be accounted for with these plant costs and I think that's it for fossil energy um so we have a couple of slides of sort of back matter here for references we have a long list of references on the website next slide acronyms and abbreviations used throughout the documentation in this presentation thank you to the team it takes a huge team to put this together many of these folks are on the call couldn't do it without them I really appreciate all of the hard work that all of these folks put in and with that thank you and I think we're ready for live q a welcome everybody I'm Laura vimerstead I'm the overall ATP Project Lead and I have been answering a lot of wonderful questions in the chat um as we roll into q a I encourage everyone to continue to pose questions in the chat that's on the Avenue uh to post questions here in the webinar um as Daniella mentioned at the beginning you'll have the opportunity to interact directly with uh the the project team in the breakout sessions um but here in the webinar please pose your questions um live and there have been several questions about uh the IRA I wonder if um someone from the team would like to field some of those to get us kicked off here girl grab uh two of those um so one uh was for technologies that qualify for either the PTC or ITC how did you decide which to apply um we did that on a levelized cost of energy basis so whichever tax credit led to the lower lcoe uh for the default technology class for that technology uh that's what we applied to the whole technology so I would note that if you're in a higher Capital cost lower resource class area that might be the reverse for those of your specific project so we definitely recommend uh doing things on a project by project basis rather than just adopting our assumptions a little bit you know old clock and mostly I saw you come on screen today we put this stuff in ATV to try to be helpful for you but don't like say it's in the ATV therefore that is the truth like there's so many nuances associated with how much tax credit you get in a different location and for different technology so it's there and you can edit it and get new numbers if you're working on a spreadsheet or what so so definitely it's there to be useful to you we're interested in if you have feedback are we made it more useful definitely give us that but um there's a lot of other analysis out there in terms of what how these things are impacted by the evolving Grid or by different conditions or locations that they can influence tax credit values and I would give everyone the fair warning and this is explicit in the spreadsheet is you can't just change the tax credit value if you change the tax credibility you also have to change the debt fraction um and so I'll be giving a quick tutorial of the way that we did it uh in the the breakout room uh which I'll keep shamelessly plugging until they review me uh Wesley before you go um did you want to address any of the questions on batteries uh sure and um so a few pieces one the people well there's a lot of questions about batteries so why don't you come to the breakout room we're happy to have as much discussion as there as you want um then other pieces the the batteries and we use a rep we use a lifetime of 15 years um so when that's part of you know there's the default cost recovery in ATVs 30 years so people you know how does that drive with batteries well this part of we don't report an lcue for a battery there's a lot of reasons for that but the the cost recovery period is only relevant if you're calculate those financial metrics if you're not then then the cost recovery periods whatever you and your project are evaluating um so definitely when we do our own modeling and we're doing cash recovery periods even longer than 15 years we make adjustments to deal with that you're gonna have to replace the battery before the cost recovery period's over um so the and there there are a lot of questions about you know what's what's the appropriate lifetime is 10 to 15 years right lifetime should be something different there's a lot of different ways you can operate the battery the way you operate the battery will pack a lifetime um 15 years is the most common value we've seen out there the batteries the I mean the large scale you know four hour batteries are too new to know what their actual lifetimes are going to be like we have no real data on what a 15 year old four hour battery looks like because there aren't any of those yet um at Large Scale so this is still a TBD and you'll see people out there say they're going to last eight years some people say in the last 30 years so it depends on the chemistry depends on your state of charge management depends on the cycling um so there's a lot of different pieces out there for for batteries um and then the last one I'll answer here and then I'll go elsewhere just that it was a conservative cases showing continue increases for batteries and the others show decreases immediately and that's just a reflection of what various analysts see for the future battery storage in the near term and these are all from recent projections so there's a lot of discrepancy in terms of what batteries are going to cost in the immediate future um that's reflected in in that range of uncertainty and if Wesley didn't answer your question here um I'd encourage you to attend the session that includes battery storage where Wesley will be available for more questions um one other thing yeah on the battery degradation topic um I would note that the 2022 ATB the assumptions between the PV battery hybrid technology and the Standalone battery on degradation lifetime were a little bit inconsistent we've made those consistent with this Edition um so the uh both Technologies are assuming a 15-year battery um and then the O M cost for the PB Plus Battery Technology levelizes a replacement at 15 years um so if you look at the year over year chart the O M for Pb Plus Battery is up pretty significantly and that's the reason why foreign thanks a lot Brian um one other theme in the questions on Q a was regarding questions about geospatial data and so um the annual technology Baseline is is not really the source for geospatial data at nrel um I did put in the chat the link for geospatial data that nrel provides on um the the various resources and you can crosswalk the ATB assumptions to those very granular data sets using the resource class descriptions of the ATB bins uh Brian other questions that you want to address before we um wrap up the Q a I think I think the rest of these might be good for the breakout rooms

2023-07-31 04:56

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