EnergyGPS Analysis Estimates Replacement Cost of Energy at $860 Million Per Year
Vancouver, WA, January 28, 2020 – Northwest RiverPartners, a not-for-profit, member-driven organization that advocates for carbon-free hydropower, today shared the results of a newly commissioned analysis that evaluates energy replacement cost estimates for the four lower Snake River dams (LSRDs). The results show a striking 80% estimated cost increase for the Northwest when compared with the currently accepted analysis, should the LSRDs be breached.
The data refute widely accepted metrics from the now-outdated 2018 NW Energy Coalition (NWEC) study that is receiving attention in the Washington Governor’s LSRDs Taskforce and other regional dialogues currently underway to inform the future of the LSRDs and its impact on regional communities.
Performed by the consulting firm EnergyGPS, the analysis is based on new data made available after the release of the NWEC study, including current state policies and forecasted energy capacity deficit for the Pacific Northwest.
“We continue to have great respect for the Northwest Energy Coalition and its efforts, however, we now operate in a more carbon-constrained world, which means the 2018 NWEC study assumptions are simply not aligned with the current level of resource scarcity,” said Kurt Miller, NWRP executive director.
“Any decisions made over the future of the four LSRDs will affect all Northwest residents and this new analysis from EnergyGPS underscores the need for agreement on common assumptions and further research before any definitive conclusions are made.”
Since the NWEC study release, significant policy changes have occurred that shift the appropriate baseline to use for any LSRDs removal study including, notably, Washington’s Clean Energy Transformation Act (“CETA”) in early 2019.
This legislation, along with other state and utility actions to decarbonize the electric sector, significantly reduces energy resources and places additional importance on existing carbon-free resources.
The NWEC assumptions regarding energy load and supply and demand resources are also largely based on the NWPCC’s 7th Power Plan which was completed in 2016 and is now dated. E.g. the NWEC study estimated 2,800 MW of Northwest coal generation shutdowns in the next decade, which is nearly 50% less than updated assessments. (1,000 average MW is enough electricity to power a city the size of Seattle.)
Since the publication of the NWEC study, the Northwest Power & Conservation Council, the Northwest Power Pool, E3, and Energy Strategies have all issued significant warnings about a potential energy shortage or even blackouts resulting from the retirement of thousands of megawatts of the region’s coal plants. Notably, all these forecasts assume that the LSRDs remain in place. The predictions would be much more severe if the LSRDs weren’t included in the resource mix.
Consistent with these warnings, EnergyGPS found that the NWEC study outcome would lead to insufficient energy to meet regional needs or would result in replacement power costs of $860 million per year or $96 per megawatt-hour (MWh) – approximately 80% greater than the cost presented in the NWEC study.
Most of the region’s hydroelectricity goes to serve not-for-profit, community-owned utilities, so the replacement costs would likely be borne by their customers in the form of much higher electric bills.
EnergyGPS found other challenges with the NWEC study, including its assumptions around attainable energy efficiency and demand response. In addition, the NWEC study does not adequately discuss the appropriate priority of LSRD replacement resources relative to competing needs for new energy resources.
The full EnergyGPS analysis can be found here.
For press interviews, contact:
Oonagh Morgan Hurst
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