Horizons Energy Releases Fall 2022 National Database for EnCompass
Horizons Energy has released the Fall 2022 National Database (NDB) for the EnCompass power planning model. The Fall 2022 database reflects prominent elements contained in the Inflation Reduction Act (IRA) to incentivize development of clean energy and storage technologies. These updates include:
- Reflecting a key provision of the law, starting in 2025, that allows for ‘technology neutral’ application of either the Production Tax Credit (PTC) or the Investment Tax Credit (ITC)
- Utilizing a modified version of the Anchor Power financial Revenue Requirements spreadsheet to determine cross-over between capital costs and resource capacity factors for different technologies based upon 2022 assumptions, as outlined below:
- Solar projects with a capacity factor <= 19% receive the ITC; else uses the PTC
- Solar + 25% cost projects with a capacity factor <= 24% receive the ITC; else uses the PTC
- Wind projects with a capacity factor <= 23% receive the ITC; else uses the PTC
- Wind + 25% cost projects with a capacity factor <= 29% receive the ITC; else uses the PTC
- Nuclear and battery projects receive the ITC. A tranche of battery hybrid projects was added for 2024-2032 to act as the dependent project for the solar hybrid projects.
- Revising the North American carbon allowance limit to reflect 75% reduction by 2050 from 2022 levels.
The database also reflects the assumptions contained in Canada’s 2022 Fall Economic Statement which proposes a refundable tax credit equal to 30 percent of the capital cost of investments in clean energy. Therefore, NDB expansion projects in Canada for nuclear, wind, solar and batteries all assume a 30% ITC.
There are updates to the carbon pricing representation for Western Climate Initiative (WCI) and Regional Greenhouse Gas Initiative (RGGI) and provincial prices for Canada. The database also reflects the numerous initiatives by states, cities, and business to reflect carbon reduction and/or net zero emissions. Each release of the database includes updates for Renewable Portfolio Standards (RPS) as well as carveouts for batteries, offshore wind and solar as well as REC and SREC markets either at the state or regional level.
The NDB incorporates detailed simulation features available in the EnCompass model to address transmission expansion alternatives, hybrid resources and effective load carrying capacity (ELCC). The database incorporates ELCC for a total of 73 trajectories including solar, wind, storage, and offshore wind and seasonal ELCC for select areas.
The Fall 2022 NDB makes extensive use of the Time Series Functions released in version 6.0 of the EnCompass model. The NDB assumes real pricing for input items such as fuel, carbon, and capital costs that are then modifiable for a user-input inflation rate. In addition, Henry Hub pricing reflects nominal dollars to easily incorporate forward prices with a deflation factor to real and inflation factor to reflect user input assumptions.
In addition to the National Database, Horizons Energy also provides consulting services to deliver standard or customized forecasts of market prices in a format that can be directly imported into EnCompass portfolio databases for budgeting and resource planning. Another option, the EnCompass Ready data service, delivers nine pre-solved scenarios from the Advisory Service directly into the client’s portfolio.
About the Horizons NDB: The Horizons NDB incorporates a comprehensive set of assumptions for forecasting energy, ancillary services, and capacity markets throughout North America. The database topology and power system modeling contain 21 Balancing Authorities with interchange tariffs, ancillary service requirements and capacity demand curves set based on market rules. Within those Balancing Authorities are 78 Areas with zonal transmission limits and demand forecasts (including demand response) through 2050. There are over 23,000 existing and planning generating resources represented. Reporting is easily generated from the state/province level down to the individual area level depending on the user’s area of study interest. For more information about the NDB contact firstname.lastname@example.org.