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Florida projected to add 9,200 MW of new generation over next decade

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Florida projected to add 9,200 MW of new generation over next decade

SNL Image

Guy Morris, project manager for Tampa Electric Co.'s Big Bend Solar Station, works on panels in June. The utility's coal-fired Big Bend Power Station is in the background.

Source: Associated Press

Florida is projected to see 9,200 MW of new firm generation over the next decade, a reliability group told state regulators.

Although firm peak demand in the Sunshine State is projected to be slightly lower from 2017-2027 compared to 2016's 10-year outlook, the Florida Reliability Coordinating Council told the state's Public Service Commission that forecast energy sales during the 2017-2027 period will be comparable to those in the 2016-2026 time frame.

The Florida Reliability Coordinating Council, or FRCC, is a regional entity of the North American Electric Reliability Council and works with power companies on their integrated resource and 10-year site plans. Stacy Dochoda, the FRCC's president and CEO, shared an upbeat assessment of Florida's energy economy with the PSC during the workshop in an Oct. 3 presentation, praising the contributions of new gas pipelines and utility-scale solar projects.

The presentations by FRCC and Florida's four main investor-owned utilities illustrate an energy outlook for the state that tracks with changes underway in the nation's other regulated markets: transitions toward a greater generation mix of natural gas and solar, additions of gas pipeline infrastructure and tentative integrations of energy storage as costs decline — all against a backdrop of slower load growth.

Demand-response and utility-sponsored efficiency/conservation programs will dampen the growth of peak demand over the next decade, Dochoda said, with the former expected to slash firm summer peak by 6.3% on average and the latter projected to cut summer peak by 1.4%. She added that energy efficiency delivered through mandated codes and standards will reduce summer peak by at least 4.1% during the same time frame.

But firm peak summer and winter demands are still expected to increase by 1.1% and 0.9% per year, respectively, over the next decade, Dochoda said. And net energy for load will grow 0.9% per year.

Planned reserve margins across all of Florida's utilities will be at or above 20% over the next 10 years, Dochoda said, with demand-side management predicted to be a significant component of projected reserves. Changes to the FRCC's fuel mix forecast follow national trends, with natural gas expected to increase to 67% from 63% of Florida's mix during that time, renewables increasing to 5% from 2% and coal decreasing to 12% from 19%.

Gas generation will see big growth over the next decade, Dochoda said, with 6,600 MW of combined-cycle facilities and 1,400 MW of combustion-turbine plants expected to come online. If the Sabal Trail pipeline project did not start service in July, she said, pipeline capacity would have been projected to fall short to supply peak demand this year; the timing was "fortuitous," she added.

Referring to the Florida Gas Transmission, Gulfstream and Sabal Trail-Florida Southeast Connection gas pipelines, Dochoda said, "Analysis does show that [Sabal Trail] is very important to continue to have that capability, and being able to keep up with the capability of the additional natural gas generation that's planned in the future."

Of the 9,200 MW in new generation, 12% will be new solar, with that capacity skyrocketing from 151 MW of firm summer capacity in 2017 to 1,254 MW in 2026, the FRCC projects. During that time, solar will overtake municipal solid waste and biomass as the highest-capacity renewable resource in Florida.

Solar's surge is driven largely by the state's investor-owned utilities. Florida Power & Light Co. plans to add 596 MW of nameplate sited solar and 1,490 MW of nameplate unsited solar over the next nine years, and Duke Energy Florida LLC expects to add 1,504 MW of nameplate utility-scale solar during the same time frame, according to presentations given by the utilities on Oct. 3.

Tampa Electric Co.'s Big Bend Solar site started commercial operation in February, and Gulf Power Co. now has three solar projects — Eglin, Holley and Saufley — totaling 120 MW at military bases in Florida.

Utility-specific developments

Steve Sim of Florida Power & Light, or FPL, said the utility's new 10-year site plan for 2017-2027 anticipates a lower carbon emissions compliance cost forecast for two reasons: lower projected emissions and the Trump administration's likely repeal of the Clean Power Plan.

But accommodating growth can be difficult in its two most populous counties, Miami-Dade and Broward, which make up nearly half of the utility's load.

"It's a tough area to try to build generation in; it's a tough area to try to bring new transmission lines into the area," Sim said. "We need to maintain a balance between load and generation in order to ensure that transmission system down there in the two counties remains stable. It's a very important consideration that we periodically look at."

FPL's 2016 10-year plan focused on three resource options, which Sim said the utility is still considering: combined-cycle, solar and storage. The first two have emerged as the best options to address the utility's system-wide needs, but storage is not yet viable because of high capital costs.

Ben Borsch, Duke Energy Florida's director of integrated resources planning and analytics, said the utility is "transitioning from traditionally having been a winter-peaking utility. And although we are physically still a winter-peaking utility, we're expecting that there's going to be significant focus going forward on our summer planning, above our focus on meeting the winter peak."

Tampa Electric's director of generation asset strategy, Jim Rocha, also said storage has posed a challenge. Utility employees "haven't been able to make the numbers ... You have to really look at the volatility and what could happen in those hours, and so we've been doing more studies on spending reserve and quick start."

Gulf Power's next energy need will be in 2023, when a power purchase agreement for 885 MW expires. Generation resource planning manager Sybelle Fitzgerald said the utility is considering "all types of technology" for future agreements to make up for when that contract is scheduled to expire and Gulf's reserve margin would drop to negative 6.3% in 2023.

FPL is a subsidiary of NextEra Energy Inc., Duke Florida is a subsidiary of Duke Energy Corp., Tampa Electric is a subsidiary of Emera Inc. and Gulf Power is a subsidiary of Southern Co.