Load Forecasting and Resource Planning for Extreme Cold
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Load Forecasting and Resource Planning
for Extreme Cold
James F. Wilson*
Principal, Wilson Energy Economics
participating on behalf of
Southern Alliance for Clean Energy and Vote Solar
Florida Public Service Commission
Workshop on Ten-Year Site Plans
June 1, 2022
* Economist and independent consultant; see last slides for additional speaker information.
Views expressed are my own and not necessarily those of any client.Topics
1. Recent extreme winter events in Texas and elsewhere:
primary causes and recommendations
2. Standard industry practices in load forecasting and resource
adequacy analysis for extreme cold:
– Forecasting the likelihood of extreme cold and its impact on loads
– Evaluating capacity reserve needs given the risk of extreme cold events
3. Comments on Florida Power and Light’s proposed approach to
winter peak load forecasting and resource adequacy planning
4. Demand-side opportunities for extreme cold preparation
2From Virginia to Texas and Beyond,
Loads Can Spike Under Extreme Cold
● Rarely-used electricity-based space heating is the main cause
– Regions further north, while colder, are less reliant on electricity for
space heating and generally do not experience such load spikes
● Typical pattern under extreme FP&L Highest Winter Loads Days 2018-2021
(MW; listing daily minimum temperature Miami Airport)
cold: A steep morning peak, a 20,000
19,000
lower and flatter evening peak
18,000
17,000
16,000
● Forecasting such load spikes is 15,000
14,000
challenging because the most
13,000
12,000
1/5/2018 (46 degrees)
11,000
extreme cold occurs so rarely
1/18/2018 (44 degrees)
10,000 1/4/2018 (44 degrees)
9,000 2/4/21 (49 degrees)
● Temperatures in the teens can also
8,000 1/22/2020 (40 degrees)
7,000 1/6/2018 (49 degrees)
6,000
lead to cold-related plant outages
HR-1
HR-2
HR-3
HR-4
HR-5
HR-6
HR-7
HR-8
HR-9
HR-10
HR-11
HR-12
HR-13
HR-14
HR-15
HR-16
HR-17
HR-18
HR-19
HR-20
HR-21
HR-22
HR-23
HR-24
31. Recent Extreme Winter Events in Texas
and Other Regions: Causes, Actions
● Texas, February 2021: temperatures fall to single digits, about 100
consecutive hours below freezing (extreme, but not unprecedented cold).
Power plant outages over two days average 49% of the all-time peak load
due to cold-related causes, fuel supply disruptions, other factors.
● Analysis by the North American Electric Reliability Corporation (NERC)
and Federal Energy Regulatory Commission (FERC) led to many
recommendations for better preparedness (some details in an appendix slide).
Inadequate installed capacity was not considered a cause of the problems, nor
was building more capacity a recommended action.
● FP&L has been pursuing the NERC and FERC recommendations (per
responses to Staff 2nd Data Request).
42. Standard Practices in Load Forecasting
and Resource Adequacy Analysis
Capacity Requirement = Peak Load Forecast + Reserve Margin
1. Peak Load Forecasting: Two Key Elements
– A Long-Term 50-50 (“P50”) or Median Forecast
– Analysis of how high peak loads might rise over this forecast under the
most extreme weather, and how frequent the most extreme weather and
resulting high loads are expected to occur going forward; key inputs to
the reserve margin analysis (more details in an appendix)
2. Probabilistic Simulation to Determine the Reserve Margin Over
P50 Forecast to Satisfy a Resource Adequacy Criteria
– Probabilistic simulation of extreme winter loads, power plant outages,
and other risks to determine the summer and winter reserve margins to
satisfy a probabilistic resource adequacy criteria (“one day in ten years”)
53. Comments on FP&L’s Proposal re:
Resource Adequacy Planning
FP&L’s proposal does not follow this standard approach.
1. FP&L developed its Recommended Plan Extreme Winter Peak
load “forecast” (Schedule 4) employing a questionable
methodology, and the value is very extreme.
2. FP&L did not evaluate the winter reserve margin needed to
meet a resource adequacy criteria; instead, the extreme winter
peak forecast is apparently used as an installed capacity
requirement (Schedule 7).
– Among other shortcomings, this approach gives no recognition to many
considerations that affect resource adequacy, such as power plant
availability in peak hours, assistance from neighboring regions, possible
fuel supply limitations, to name a few.
6FP&L’s Extreme Winter Peak Forecast
FP&L’s Extreme Winter Forecast is 40% above BAU; details of
the methodology were not available.
– What are the appliances that could suddenly add over 9,000 MW??
FP&L + Gulf Summer and Winter Net Firm Peak Demand FP&L Forecast Monthly Winter Total Peak Demand (2023)
History and Forecast 35,000
40,000 Recommended Plan - Extreme Winter Forecast BAU P50 Winter Forecast
Summer Net Firm Demand (P50) 30,000
35,000
+40%, 9,000 MW
Winter Net Firm Demand (P50)
30,000 Extreme Winter Forecast 25,000
25,000
20,000
20,000
15,000
15,000
10,000
10,000
5,000
5,000
0 0
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Source: FPL Ten-Year Power Plant Site Plan 2022-2031 Schedules 3.1 and 3.2. Source: FPL Ten-Year Power Plant Site Plan 2022-2031 Schedule 4.
7Estimate of Extreme Winter Peak Load
(FP&L w/o Gulf)
Using FP&L load and temperature FP&L Loads Under the Lowest Temperatures 2013-2021 and
Estimate for 1989 Conditions
data for 2013 to 2021, I analyzed 24,000
how loads rise under the coldest 22,000
1989 freeze event, 21,150
temperatures, to estimate the loads 20,000
2/20/15 7:00
under conditions analogous to the 18,000
1/18/18 7:00
1/4/18 8:00
1/5/18 7:00
1989 Christmas Freeze.
1/23/14 7:00
y = -386x + 33639
1/22/20 8:00
R² = 0.71
16,000
This analysis suggests FP&L loads
could rise to 21,150 MW, almost
14,000
The analysis focused on peak loads during winter weekday mornings, and used the 3-hour average temperature leading up
to the peak (the 3-hour average temperature had more predictive power than the daily minimum or other measures).
1,500 MW higher (7%) than the
12,000
30 32 34 36 38 40 42
highest winter peak loads seen
This is an estimated extreme peak,
recently (e.g., February 2015).
not a planning target!
8FP&L’s Proposal re: Winter Peak
Resource Adequacy Planning: Summary
● Does not follow standard industry practices
● Extreme Winter “Forecast” is based on a non-transparent,
highly questionable methodology, and is far too high
● The usual probabilistic analysis of resource adequacy to
determine a reserve margin has not been performed
● The proposal could lead to construction of unneeded, “one day
in thirty year” power plants and unnecessary cost to customers
● The potential for very rare, very extreme load spikes warrants
further analysis; and demand-side approaches should be
considered
94. Possible Demand-Side Approaches for
Extreme Cold Preparation
● The most extreme cold that creates the extreme load spikes is
expected to occur only very rarely if at all, and does not arrive by
surprise; it is forecasted days in advance
● In other regions, many schools, stores, restaurants, offices, and other
facilities do not have heating equipment to maintain comfortable
temperatures under the most extreme cold, and choose to open late
or stay closed when rare and extreme cold is in the forecast
● A program to obtain voluntary commitments to keep usage very low
when very extreme cold is forecast (with bill incentives,
measurement, testing, and enforcement) could be a cost-effective
alternative to generating capacity that is almost never needed
10FYI: My Recent Work on Electric Load Forecasting and
Resource Planning
1. Georgia: Testimony in Georgia Power Company IRP cases (May 2022; May 2019)
2. Alabama: Testimony in Alabama Power Company’s application for CPCN (March 2020; September 2020)
3. South Carolina: Testimony in Duke Energy IRP cases (April 2021; February 2021; October 2019;
September 2019)
4. North Carolina: Testimony in Duke Energy IRP and avoided cost cases (March 2021; March 2019;
February 2019; February 2017)
5. Virginia: Testimony on Virginia Electric and Power Company IRP cases (October 2020; September 2020;
April 2019; September 2018; August 2018; September 2017; August 2017; October 2016; August 2016)
6. California: Testimony on San Diego Gas & Electric Company’s 2022 Electric Sales Forecast (October 2021)
7. Nova Scotia: Testimony on Nova Scotia Power’s 2021 Load Forecast Report (July 2021)
8. New England: Testimony on ISO New England’s Energy Security proposal (May 2020)
9. PJM: Testimony in FERC cases, presentations and participation in PJM stakeholder processes (2008-
2022)
Other relevant work and additional details are available in CV at www.wilsonenec.com
11Speaker Information
James F. Wilson
Principal, Wilson Energy Economics
4800 Hampden Lane Suite 200
Bethesda, MD 20814
301-535-6571
jwilson@wilsonenec.com
www.wilsonenec.com
James Wilson is an economist with over 35 years of consulting experience in the electric power and natural
gas industries. His work has pertained to the economic and policy issues arising from the interplay of
competition and regulation in these industries, including restructuring policies, market design, market
analysis and market power. Recent engagements have involved resource adequacy and capacity markets,
contract litigation, rate cases, modeling of utility planning problems, and many other economic issues arising
in these industries. Mr. Wilson has been involved in electricity restructuring and wholesale market design for
over twenty years in PJM, New England, Ontario, California, Russia, and other regions. He also spent five
years in Russia in the early 1990s advising on the reform, restructuring, and development of the Russian
electricity and natural gas industries for the World Bank and other clients.
Prior to founding Wilson Energy Economics, Mr. Wilson was a Principal at LECG, LLC. He holds a B.A. in
Mathematics from Oberlin College and an M.S. in Engineering-Economic Systems from Stanford University.
12Appendix: Further Details of NERC and
FERC Recommendations
● Analysis by NERC and FERC lead to many recommendations, including:
weatherization; operating plans and action plans for extreme conditions;
improved reporting of power plant status; evaluation of electric import
capability; identification of natural gas supply chain risks; dual fuel
assessments; protect critical infrastructure from load shedding; preparations
for de-icing; plans to request emissions waivers; training; fuel delivery system
flexibility to meet changing loads; energy efficiency incentives; rapid-
deploying demand response.
– FERC, NERC, and Regional Entity Staff, The February 2021 Cold Weather Outages in
Texas and the South Central United States, November 2021
– NERC, Cold Weather Preparations for Extreme Weather Events: Recommendations to
Industry, August 2021
– FERC, Order Approving Cold Weather Reliability Standards, 176 FERC ¶ 61,119, August
24, 2021
13Appendix: Approaches to Forecasting
Winter Load Spikes Under Extreme Cold
1. Forecasting winter extreme peak loads is challenging due to a
lack of recent instances of extreme cold in most regions.
– Regression approaches are used to FP&L Loads Under the Lowest Temperatures 2013-2021 and
understand the impact of weather 24,000
Estimate for 1989 Conditions
(temperatures over one or more 22,000
hours) on load by time of day
1989 freeze event, 21,150
20,000
2/20/15 7:00
– The regressions focus on extreme
1/5/18 7:00
1/18/18 7:00
18,000 1/4/18 8:00
1/23/14 7:00
cold because the relationship changes
y = -386x + 33639
1/22/20 8:00
R² = 0.71
16,000
at the lowest temperatures (when all
heating appliances are in use, and
14,000
The analysis focused on peak loads during winter weekday mornings, and used the 3-hour average temperature leading up
to the peak (the 3-hour average temperature had more predictive power than the daily minimum or other measures).
some facilities may choose to open 12,000
30 32 34 36 38 40 42
late or remain closed)
14Appendix: Approaches to Forecasting
Winter Load Spikes (cont’d)
2. Estimating the likely future frequency of extreme cold
– Historical weather data for 60
Minimum annual temperatures at Miami Airport, 1976-2001
multiple stations is typically
used (load-weighted averages) 50
– Long-term trends should be
40
reflected – annual minimum 30
temperatures are trending 20
1976-2021
Linear (1976-2021) y = 0.20x - 360
upward (at the FP&L weather 10
stations, by about one degree
every five or six years since 0
1972 1977 1982 1987 1992 1997 2002 2007 2012 2017 2022
1976)
15Appendix: Extreme Cold Across the
South and in Florida
Tenth Percentile Minimum Annual Temperatures
35
In about one of every ten years
30 temperatures drop below 30 degrees
in West Palm Beach; 33 in Miami, 29
in Fort Meyers, 22 in Daytona Beach
25
20
Across the south outside of
15 Florida, temperatures drop
into the single digits at least
once in ten years.
10
5
0
Miami Fort West Palm Daytona Pensacola SoCo (GA & Charlotte Dallas TX
Meyers Beach Beach AL) NC
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