Reliable Power

Future Demand and Energy Outlook (2008 2028)

Assumptions, Methodology and Processes

Reliable Markets Reliable People

April 2, 2009 9 am 11am

Agenda
Introduction
Doyle Sullivan Director, Regulatory

Long-Term Load Forecast Future Demand and Energy Outlook (2008 2028) Area Studies Recent Economic Events Impact on long term load forecast? 2009 Forecast Schedule
Confidence Bands Forecasting Group Questions

LaRhonda Papworth Supervisor, Long-Term Load Forecasting

Steven Everett Economic Analyst Rob Baker Manager, Forecasting Doyle Sullivan Rob Baker LaRhonda Papworth Steven Everett

Closing Remarks

Rob Baker
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What is the AESO?

Established in 2003 through the EUA to integrate Power Pool of Alberta and Transmission Administrator Performs Independent System Operator function Non-profit organization independent of all other electricity market participants Governed by independent board appointed by the Minister of Energy Regulated by Alberta Utilities Commission
Transmission Tariff Transmission Development

AESO Rules Operation of the AESO funded through Pool Trading Charge and Transmission Tariff
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Our Core Business

Markets: develop and operate Albertas real-time wholesale energy market to facilitate fair, efficient and open competition Transmission System Development: plan and develop the transmission system to ensure continued reliability and facilitate the competitive market and investment in new supply Transmission System Access: provide system access for both generation and load customers System Operations: direct the reliable operation of Albertas power grid
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AESO Forecasting Group Introduction

Rob Baker, Manager Forecasting

LaRhonda Papworth, Supervisor Long Term Forecasting

Steven Everett, Economic Analyst Jenni Fontaine, Forecast Analyst

Ashikur Bhuyia, Supervisor Mid Term Forecasting

Mike Wu, Senior Forecasting Engineer All can be contacted at forecast@aeso.ca

Reliable Power

Long-Term Load Forecast FC2008

Reliable Markets Reliable People

LaRhonda Papworth
Supervisor, Long-Term Load Forecasting

Long-Term Load Forecast Topics

How long-term load forecast is used Future Demand and Energy Outlook (2008 2028) Why? How? Recent Economic Events impact on long-term load forecast 2009 Forecast Schedule

How: Example of How Long Term Load Forecast Is Used

Transmission Planning Long-Term Adequacy assessments Tariff Billing Determinants Loss Forecasting Input into WECC studies Area Studies
Area or region of interest is identified Work with DFOs, TFOs, Transmission Planning, industry and mapping consultants, customers to evaluate current long-term load forecast and adjust for recent and detailed information Identify possible long-term load expectations

Why does the AESO produce a Long Term Load Forecast?

Electric Utilities Act Transmission Regulation
Part 2 Transmission System Planning Transmission planning - forecasting need 8 In forecasting the needs of Alberta under section 33 of the Act, the ISO a) Must anticipate future demand for electricity, generation capacity, and appropriate reserves required to meet the forecast load so that transmission facilities can be planned to be available in a timely manner to accommodate the forecast load and new generation facilities, b) Must make assumptions about future load growth, the timing and location of future generation additions and other related assumptions to support transmission planning,

Electric Utilities Act

Duties of Independent System Operator k) to collect, store and disseminate information relating to the current and future electricity needs of Alberta and the capacity of the interconnected electric system to meet those needs, and make information available to the public,
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Emphasis added

How Long-Term Load Forecast is Created

T-Losses, DLosses, UFE 6% Oilsands 12% Residential 13% Farm 3%

Commercial 19%

Industrial (w/o Oilsands) 47%

2008 Sector GWh

Source:

ERCB Table 11: Electric Energy Distribution Sales and Number of Customers, 2008 AESO metered volumes AESO estimation of load served by on-site generation (behind-the-fence load) 10

Customer Sector Energy Forecast Methodology

Industrial* Customer Sector Commercial* Customer Sector Residential* Customer Sector Farm* Customer Sector

Load Served by On-Site Generation (Behind-the-Fence)** Transmission Connected Customer Load**

A Picture of Alberta Internal Load (without Losses) by Following Customer Sectors:

*Source: ERCB **Source: AESO

Industrial (without Oilsands) Oilsands Commercial Residential Farm

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Economic Inputs Alberta GDP

Long-term load forecast based on economic inputs from March 2008
Alberta GDP (basic 2002 $million)
400,000

Provincial Outlook 2008 Outlook Autumn 2008 Outlook Winter 2009

350,000

300,000

250,000

200,000

150,000

20 03

20 05

20 07

20 09

20 11

20 13

20 15

20 17

20 19

20 21

20 23

20 25

Source: Conference Board of Canada 12

20 27

Industrial (w/o Oilsands) Sector Energy Forecast

Model Inputs: Alberta Mining GDP Lagged Sector Sales

70,000 60,000

FC2008 Actuals

Energy (GWh)

50,000 40,000 30,000 20,000 10,000

20 03

20 05

20 07

20 09

20 11

20 13

20 15

20 17

20 19

20 21

20 23

20 25

Source: Conference Board of Canada, AESO 13

20 27

Oilsands Sector Energy Model

Oilsands Energy = Annual Mining Production * Mining kWh/barrel + Annual In-Situ Production * In-Situ kWh/barrel
5,000 4,500 4,000 3,500

AESO *Adjusted* CAPP In-Situ AESO *Adjusted* CAPP Mining

26.0 24.0 22.0 20.0

000 bpd

3,000 2,500 2,000 1,500 1,000 500 0

kWh/bbl

18.0 16.0 14.0 12.0 10.0 8.0

Mining In-Situ

02

04

06

08

10

12

14

16

18

20

22

24

26 20

20 02

20 04

20 06

20 08

20 10

20 12

20 14

20 16

20 18

20 20

20 22

20 24

20 26

20 28

20

20

20

20

20

20

20

20

20

20

20

20

Source:

Canadian Association of Petroleum Producers Crude Oil Forecast, Markets & Pipeline Expansions June 2008 AESO adjustments included

20

28

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Oilsands Sector Energy Forecast

35,000 30,000

FC2008 Actuals

Energy (GWh)

25,000 20,000 15,000 10,000 5,000 0

20 03

20 05

20 07

20 09

20 11

20 13

20 15

20 17

20 19

20 21

20 23

20 25

Source: AESO 15

20 27

Commercial Sector Energy Forecast

Model Inputs: Alberta GDP Lagged Sector Sales (one-year) Constant
22,000 20,000

FC2008 Actuals

Energy (GWh)

18,000 16,000 14,000 12,000 10,000

20 03

20 05

20 07

20 09

20 11

20 13

20 15

20 17

20 19

20 21

20 23

20 25

Source: Conference Board of Canada, AESO 16

20 27

Residential & Farm Sectors Energy Forecast Models

7,300 7,200
100

Population

kWh/customer

7,100 7,000 6,900 6,800

FC2007 FC2008 10yr Average

000s

80 60 40 20 0 1993 -20 1996 1999 2002 2005 2008

Customers

2011

2014 2017

2020

2023

2026

6,700

19 92

19 95

19 98

20 01

20 04

20 07

20 10

20 13

20 16

20 19

20 22

20 25

20 28

-40

Model for Residential:

Model Inputs: Average Use Per Customer multiplied by # Customers (function of Population)

Model for Farm:

Model Inputs:

Alberta Agricultural GDP Heating Degree Days Constant

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FC2008 Sector Totals

160,000 140,000 120,000 100,000 T-Losses, D-Losses, UFE Oilsands Industrial (w/o Oilsands) Commercial Farm Residential 2008 Actuals FC2007

GWh

80,000 60,000 40,000 20,000 0

20 03

20 05

20 07

20 09

20 11

20 13

20 15

20 17

20 19

20 21

20 23

20 25

20 27

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Past Forecast Results - Energy

Year Actuals (GWh) Year over year change FC2005 FC2006 FC2007 FC2008

2006 2007 2008

69,370 69,660 69,946

+290 +286

-1.6% -3.4% -7.7%

+1.2% -1.5% -4.9%

-1.2% -4.8%

-1.3%

Source: AESO 19

Past Forecast Results Winter Peak

Year Actuals (MW) Year over year change FC2005 FC2006 FC2007 FC2008

2005/06 2006/07 2007/08 2008/09

9,580 9,661 9,710 9,806

+81 +49 +96

+0.5% -4.0% -5.6% -8.1%

-3.8% -5.4% -8.0%

-3.2% -6.2%

-0.3%

Source: AESO 20

How: Energy to Individual Metering Points

Oilsands
Project Information Load Forecast Assumptions DFO Information Project Information Load Forecast Assumptions DFO Information Historical Growth Rates ~500 Metering Points Annual Energy Forecast Project Information DFO Information Historical Growth Rates

Industrial
(w/o Oilsands)

Commercial Farm Residential

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Recent Economic Events . . .

What do the economic events of the last 6 months mean to the results of the 2008 Future Demand and Energy Outlook? The economic models used for the customer sector forecasts are based on 20+ years of historical data containing an number of past economic downturns Numerous opinions exist regarding severity and time length of this economic downturn Important to remember that the scope of this report is longterm 5 10. . . 1520 years. BUT it is prudent for the AESO to perform analysis to quantify what the impact could be, short-term and/or long-term
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Forecasted AIL Winter Peak

20,000

18,000

FC2007 FC2008 Autumn 2008 Update Winter 2009 Update

2028: 927 MW

16,000

MW

14,000

2018: 675 MW

12,000

10,000

8,000

20 02

20 04

20 06

20 08

20 10

20 12

20 14

20 16

20 18

20 20

20 22

20 24

20 26

Source: AESO 23

20 28

2009 Forecast Schedule

DFO substation level information to the AESO April 2009

Customer Sector Models completed May 2009

Reconciliation of Long-term forecast with Mid-Term Forecast May 2009

Conference Board of Canada Provincial Outlook 2009 delayed 2 months to May 2009
Publication of Long-term load forecast - September 2009 Stakeholder Presentation of 2009 Report Sep/Oct 2009

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Reliable Power

Confidence Bands

Reliable Markets Reliable People

Steven Everett Economic Analyst

Confidence Intervals
Alberta Internal Load (AIL) Energy Confidence Intervals
165,000

FC2008
145,000

P2.5 P97.5 P10 P90

Energy (GWh)

125,000 105,000 85,000 65,000 45,000

20 01

20 03

20 05

20 07

20 09

20 11

20 13

20 15

20 17

20 19

20 21

20 23

20 25

Source: AESO 26

20 27

Confidence Intervals
Alberta Internal Load (AIL) Winter Peak Demand Confidence Intervals
22,000 20,000

FC2008 P2.5 P97.5 P10 P90

Peak Demand (MW)

18,000 16,000 14,000 12,000 10,000 8,000

20 01

20 03

20 05

20 07

20 09

20 11

20 13

20 15

20 17

20 19

20 21

20 23

20 25

Source: AESO 27

20 27

Confidence Intervals
Alberta Internal Load (AIL) Peak Demand Confidence Intervals
FC2008 (MW) P97.5 (MW) P2.5 (MW) Actual (MW)

2008

9,833

10,219 +386

9,460 -373

9,806 -27

2018

14,659

15,668
+1,009

13,505
-1,154 17,396 -1,875

2028

19,271

21,063 +1,791

Source: AESO 28

Reliable Power

Closing Remarks

Reliable Markets Reliable People

AESO Forecasting
AESO has consolidated some forecasting into one group:
Mid term load forecasting (0 26 months)
Long term load forecasting (0 20 years) Ancillary Services Forecasting Losses Forecasting

More integration in 2009:

Mid and long term forecasts coordination/optimization continues Forecasting products - gathered to one area of our web site Updates will be posted

Formal enquiries through forecast@aeso.ca

Allows for a complete response and high standard of service
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Questions?

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Reliable Power

Conclusion

Reliable Markets Reliable People

Conclusion
Thank you for attending please forward to us any ideas not addressed or further questions:
forecast@aeso.ca

Please remember to complete exit survey.

Presentation will be posted in about a week on AESO website

Limited number of hard copies of the Future Demand and Energy Outlook (2008 2028) are available

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