ML090780880

Meeting Slides, Potential Impacts of an Advanced Energy Standard Portfolio in Pennsylvania

ML090780880
Person / Time
Site:	Three Mile Island
Issue date:	11/09/2004
From:	Pletka R Black & Veatch
To:	Office of Nuclear Reactor Regulation
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Download: ML090780880 (23)

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Potential Impacts of an Advanced Energy Portfolio Standard in Pennsylvania Ryan Pletka, P.E.

Black & Veatch November 9, 2004 Supported by:

Heinz Endowments Community Foundation for the Alleghenies

Black & Veatch:

Introduction z Global consulting, engineering, and construction firm z Involved over 100,000 MW of power projects z 7,000 employees in over 100 offices z 50 staff working on all aspects of renewable and advanced energy technologies 2 PRELIMARY - SUBJECT TO CHANGE

Study Objective Assess the Potential Economic Impacts of a 20 Percent Advanced Energy Portfolio Standard (AEPS) in Pennsylvania

1. Identify most cost effective mix of resources built in response to AEPS

2. Identify economic benefits or costs 3 PRELIMARY - SUBJECT TO CHANGE

General AEPS Assumptions 12%

AEPS Energy Requirements Timeframe 10% Tier I Technologies 2006 - 6% Tier II Technologies 8%

Increases 2%/year 2014 - 20%

6%

Evenly split in two-tiers:

2004 Tier II Baseline Tier I - RE & EE 4%

Tier II - waste coal, greenhouse gas, advanced technologies 2%

2004 Tier I Baseline No imports or exports (simplification for analysis) 0%

Production Tax Credit through 2009 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

-5

AEPS Resource Assessment Methodology z Screen Technologies z Characterize Resources z Estimate Cost to Generate and Transmit Electricity z Apply Avoided Cost of Power Model z Develop Supply Curves z Develop Least-Cost Portfolio of Projects 6 PRELIMARY - SUBJECT TO CHANGE

AEPS Eligible Resources Tier I Tier II Resources z Wind z Waste Coal z Low-impact hydro New facilities z Biogas and coal mine methane Air pollution controls at existing facilities z Biomass z Integrated gasification combined z Solar photovoltaics cycle z Energy conservation - demand z Fuel cells fueled by non-Tier I side, ie, consumers resources z Energy efficiency - supply side, z Greenhouse gas (GHG) ie, power plants reductions z Solar thermal z Ocean and lake energy z Solid waste (non combustion) z Fuel cells fueled by Tier I resources 7 PRELIMARY - SUBJECT TO CHANGE

Wind Assessment Pennsylvania wind resources relatively modest GIS analysis based on latest NREL data Capital Cost:

Base: $1,175-$1,275/kW Transmission: +$20-$110/kW Expensive resources: +$500/kW (50% of total)

Included 300 MW, class 5, offshore wind- farm 8

in Lake Erie

Biomass Cofiring Assessment z Pennsylvania has good biomass resources and lots of coal plants z Focused on cofiring at 38 existing coal units Capital cost: $100-$700/kW z Biomass resources Only sustainable and clean resources identified Assessment based on ORNL database Biomass collected from 75 mile radius around plants

-9

Energy Conservation / Efficiency Assessment Good opportunity for energy conservation/efficiency in PA Analysis Based on B&V, ACEEE assessments Residential measures Commercial & Industrial measures Over 16,000 GWh of potential identified over 20 years About 10% of PA consumption Wide range of costs and payback potential Consumers wont necessarily implement measures even if economical

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Waste Coal Combustion z Excellent waste coal resource in Pennsylvania z To be eligible for AEPS, waste coal projects must be low emissions z Analysis Based on PA DEP waste coal assessments 3 Planned New Site Developments 15 Environmental control upgrades at existing plants z Environmental control upgrade projects also receive substantial revenue from emissions credit markets 14 PRELIMARY - SUBJECT TO CHANGE

Properly Characterizing Resource Cost z One of the largest modeling differences between renewables and fossil fuels is that costs vary tremendously based on renewable resource quality z There are a limited number of very good renewable / advanced project sites z Costs rise as low-hanging projects are developed 15 z Supply curves capture these effects PRELIMARY - SUBJECT TO CHANGE

Biogas Supply Curve 2006 Premium over Avoided Costs 20 15 10 5

A 0

1 161 321 481 641 801 962

-5

- 10

~30 MW ~70 MW

~60 MW

- 15 Ge ne ration, GWh 17 PRELIMARY - SUBJECT TO CHANGE

Aggregate Tier I Supply Curve 2010 2010 Supply Curve Additional Renewable Generation Required: 3154 GWh 120 Tier I Win Windd Bio Biom masasss CCoofir firin ingg 100 Bio Bioggas as So lar So lar Hy Hydr droo 80 Fu Fuel el CCells ells -- Tier Tier I I En Ener erggyy Effic Efficien ienccyy 60 En En er g y C o n ser er g y C o n s ervvatio ationn 2010 requirement 40 20 Lev elized Cos t, $/MWh 0

23 3,476 6,929 10,382 13,835 17,288 20,741

-20

-40 Biomass Cofiring and Energy Efficiency /

Conservation add Significant Flexibility

-60 Generation,

- 18 GWh

Aggregate Tier II Supply Curve 2010 2010 Supply Curve Additional Renewable Generation Required: 2955 GWh 120 Was Wastete CCooal al New New 100 Was Was te C o al Envviriroonnm te C o al En men ental tal CCoom mplian plianccee In Integr tegrated ated Gas Gasific ificatio ationn CCoom mbin bined ed CCyyccle le FFuuel C ells - Tier II el C ells - Tier II 80 GHG GHG OOffs ffsets ets 60 Tier II Levelized Cos t, $/MWh 40 20 2010 requirement 0

16 2,354 4,693 7,032 9,371 11,710 14,049 Generation,

- 19 GWh

Tier I Cost Premium Supply Curves 120.00 2016 2006 2006 2006 2014 2012 2006 2008 2010 2008 2008 2014 2008 100.00 2012 2012 Levelized Cos t Premium, $/MWh 80.00 Las t Project Developed for 2014 Las t Projec t Developed for 2012 2006 60.00 Las t Project Developed for 2010 40.00 A

20.00 0 5,000 10,000 15,000 20,000 (20.00)

Las t Projec t Dev eloped for 2006 Last tDeveloped Las t Projec Projec t Developed in 2016 for 2008 (40.00)

(60.00)

Generation, GWh

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Tier II Cost Premium Supply Curves 120.00 2008 2008 2008 2008 2008 2010 2010 2010 2014 2014 2012 2012 2012 100.00 Levelized Cos t Premium, $/MWh 80.00 60.00 40.00 A 2016 20.00 0 5,000 10,000 15,000 20,000 (20.00) Las Lasttt Project Las Projec t Developed Project Developed for Developed for 2010 for 2012 2014 Las t Projec N o Projec ts Developed t Dev eloped for 2008 in 2016 (40.00)

(60.00)

Generation, GWh

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Optimum Mix of Resources to Meet the AEPS Requirements Energy Energy Efficiency Conservation 660 GWh 4% Waste Coal 2,256 GWh New 14% 7,818 GWh 49%

lar PV GWh Wind 0% 6,361 GWh 39%

ydro 1 GWh 2%

Waste Coal Environmental Landfill Gas Compliance Biomass 8,097 GWh Cofiring 906 GWh 51%

4,097 GWh 6%

25%

Tier I Energy Mix Tier II Energy Mix

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Tier I Least Cost Mix Landfill Biomass Energy Con- Energy nology Wind Gas Cofiring Hydro Solar PV servation Efficiency of RPS Mix (energy), % 38.6% 5.7% 24.9% 12.6% 0.0% 14.0% 4.1%

gy, GWh 6,361 906 4,097 2,011 6 2,256 660 city, MW 2,315 129 637 460 5 555 120 city Factor, % 31% 80% 73% 50% 14% 46% 63%

al Cost, $/kW 1,498 2,083 283 1,791 6,534 975 2 age Cost Premium, $/MWh 12.56 (1.51) 12.02 10.96 517.2 (30.85) (0.34) z Wind, biomass cofiring, and energy conservation comprise about 80 percent of mix z Some solar (4 MW) assumed to be built, even though not economical

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Economic Impacts Assessment z Compared building a 20% AEPS portfolio to building the Business As Usual (BAU) portfolio Cost of electricity Economic impacts (Jobs, Output, Earnings)

Fossil fuel prices z BAU Portfolio: 50% coal, 40% combined cycle, 10% simple cycle z Portfolios equated on an equivalent energy production basis RPS portfolio: 6,470 MW BAU portfolio: 2,460 MW z Environmental externalities purposely not assessed 26 PRELIMARY - SUBJECT TO CHANGE

Cumulative Economic Impacts Cost of Employment Impact Earnings Electricity (job-years) Impact Output Impact EPS Portfolio $ 3.9 Billion 165,689 $ 6.6 Billion $ 18.9 Billion AU Portfolio $ 6.6 Billion 94,753 $ 4.1 Billion $ 11.9 Billion ifference -$ 2.7 Billion 70,937 $ 2.5 Billion $ 6.9 Billion z Economic Benefits of the AEPS Portfolio compared to Business as Usual Cost of electricity: reduced by $2.7 billion (cumulative present value),

about 1% when spread over all consumption Employment: Creates over 70,000 additional job-years over 20 years (average of new 3,500 jobs)

State output: Creates about $7 billion in increased state output Personal Income: Creates about $2.5 billion in additional earnings

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Pennsylvania Employment Impacts, Job-years per MW RPS portfolio: 6,470 MW Impacts proportional to the percent of project expenditures made in PA BAU portfolio: 2,460 MW in various industries 3.5 Construct ruct ii on on Op e ra t i on Construction Const Construction 3.0 Operation 2.5 2.0 1.5 1.0 0.5 0.0

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Open Issues z Regional Supply and Demand Balance z Benefits and Drawbacks of Credit Trading z Location and Deliverability Requirements z Implementation and Rulemaking 29 PRELIMARY - SUBJECT TO CHANGE

Conclusions and Acknowledgements z Acknowledgements Community Foundation for the Alleghenies - Mike Kane Heinz Endowments PA DEP REPP Industry z Contact Ryan Pletka Black & Veatch 913-458-8222 pletkarj@bv.com 30 PRELIMARY - SUBJECT TO CHANGE