NorthWestern’s future plans rely heavily on new gas-fired capacity

NorthWestern Energy said April 1 that has submitted its biennial Electricity Supply Resource Procurement Plan to the Montana Public Service Commission (MPSC).

The plan, due to factors like the addition of highly variable renewable energy production in the region in recent years, relies heavily on small gas-fired additions for the future to meet peaking needs. 

NorthWestern’s relatively recent acquisition of some Montana hydroelectric facilities marks a major step in the continuing transformation of the electric supply portfolio towards a more efficient, stably priced, reliable, and lower carbon intensity portfolio. The acquisition of the hydro facilities also includes high priority opportunities at the existing dams that would result in increased installed generation capacity at multiple damss by a total of approximately 40 MW.

The resource initiatives and actions developed in this 2015 Electricity Supply Resource Procurement Plan identify the critical future needs of the portfolio including addressing significant capacity shortages. The plan identifies how to best meet the large capacity needs of the supply portfolio with least-cost, low-risk resources and includes a set of action plans which the utility will implement on a going forward basis.

Concurrent with the growth of NorthWestern’s generation fleet, a large amount of intermittent wind generation entered the portfolio to meet Renewable Portfolio Standards (RPS) and mandatory QF purchases. Today, including NorthWestern’s 2014 acquisition of hydroelectric facilities, the portfolio is energy and capacity deficit during Heavy Load (“HL”) hours and slightly energy surplus during Light Load (“LL”) hours. Significant peak capacity needs remain unfulfilled.

Retail loads at winter peak demand are forecast to grow from approximately 1,200 MW in 2016 to roughly 1,400 MW in 2035. The projected peak demand deficit for 2016 is 338 MW and forecast to grow to 688 MW, representing only half of peak demand needs, over the 20-year planning period unless additional capacity sources are secured. The peak load forecast includes reductions to peak demand associated with energy conservation measures from the 2009 Demand Side Management (“DSM”) assessment update.

Capacity needs are also increasing for NorthWestern as a result of the adoption and implementation of new operating requirements in the regional utility industry. Reliability Based Control (”RBC”), as required by the North American Electric Reliability Corp. (“NERC”), is altering how NorthWestern and its utility neighbors will be required to meet operational performance criteria beginning July 1, 2016.

The evaluation of resource alternatives using a combination of optimal capacity expansion methods and 20-year Net Present Value (“NPV”) of portfolio cost simulations has produced a resource capacity plan to meet minimum levels of adequacy calculated through loss of load probability analysis. The Economically Optimal Portfolio (“EOP”) is comprised of gas-fired capacity resources utilizing multiple technologies that provide economy, flexibility, environmental compatibility, and reliability. Resource selections include flexible reciprocating gas-fired engines, a high thermal efficiency combined cycle combustion turbine with duct firing, and low capital cost simple cycle combustion turbines.

When added to the existing portfolio, the resulting combination of multiple gas-fired technologies, hydroelectric, thermal, wind and limited solar sources creates a cost-effective and diverse portfolio with the capability to deliver sustainable and needed levels of resource reliability and adequacy while further reducing an already low carbon emission footprint. Compared to the market alternative, the 20-year NPV of portfolio cost for the EOP is roughly 7% lower.

The preferred portfolio is:

  • Internal Combustion Engine, three units, 55 MW, added in 2019;
  • Internal Combustion Engine, one unit, 18 MW, addded in 2021;
  • Internal Combustion Engine, one unit, 18 MW, added in 2024;
  • Combined Cycle Combustion Turbine, one unit, 348 MW, added in 2025;
  • Internal Combustion Engine, five units, 92 MW, added in 2028;
  • Frame Combustion Turbine, one unit, 79 MW, added in 2028;and
  • Frame Combustion Turbine, one unit, 79 MW, added in 2029.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.