Mapping Energy Futures: PSERC
Overlay of an Environmental Transmission Model on the Super OPF to Simultaneously Account for Air Quality, LocaAonal Reliability and Price Richard Schuler, William Schulze, John Taber, Ray Zimmerman,, Max Zhang, Jubo Yan, Charles Marquet, Kale Smith (Cornell) Dan Shawhan, Andy Kindle (RPI) Dan Tylavsky, Di Shi (Arizona State University) Why a Planning Tool? PSERC
•  A planning tool that opAmizes investment in generaAon is needed because the electric power industry faces the possibility of –  Increased loads consistent with the goal of energy independence (e.g., plug-­‐in hybrids). –  Increased loads from other energy users trying to find less CO2 emiYng sources of energy under threat of regulaAon –  RestricAve caps or regulaAons on CO2 emissions from generaAon –  Possible regulaAons on the emissions of fine parAculates •  As well as the need to maintain reliability •  The arAficial $1000 cap on offer prices in electricity markets prevents a free market soluAon for opAmal investment that requires planning. Importance of a Network Outcomes depend on the transmission constraints in the system
Cannot necessarily use the cheapest or least polluting power
Most planning models (EPA IPM, RFF Haiku) ignore full transmission
details, use “bubbles and pipes”
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PSERC
PSERC
No model of the naAonal electric power system exists that includes a sufficiently detailed specificaAon of the electricity network, power generaAon, and air and environmental quality, to allow opAmal investment in response to incenAves or regulaAon. We have just completed such a model and have stress tested it for the Northeastern US with plans to expand to the enAre naAon with a much more detailed network model. This model is adapted from the SuperOPF next generaAon real Ame opAmal power flow sobware under development at Cornell. Some features are not used such as co-­‐opAmizaAon, non-­‐linear AC power flow modeling (DC modeling is used), etc., to allow reasonable soluAon Ames with the addiAonal complexity of opAmal investment over mulAple hour types. Model of the Northeast Eric Allen, Jeffrey Lang, and Marija Ilic, A Combined Equivalenced-­‐Electric, Economic & Market RepresentaAon of the Northeastern Power CoordinaAng Council (NPCC) US Electric Power System, IEEE TransacAons on Power Systems, Vol. 3, Issue 3, 2008 PSERC
Model of the Northeast PSERC
Capacity of NPCC Capacity of US Genera3on of NPCC Genera3on of US Coal
20%
31%
27%
44%
Natural Gas
32%
39%
20%
23%
Oil
13%
6%
1%
1%
Nuclear
25%
10%
35%
20%
Hydro
10%
8%
15%
6%
Wind
<1%
3%
<1%
2%
Looks like future direcAon for the United States? The Northeast is more geared towards low-­‐carbon electricity generaAon Model InformaAon PSERC
•  GeneraAon unit data: Energy Visuals; EPA; and Allen, Lang and Ilic data sets matched up •  Base year is 2012. Investment allowed in 2022 and 2032. New plants must pay for capital. •  Underused plants are reAred. •  Note that old plants must only cover variable costs and taxes while new plants must addiAonally cover investment costs. If old plants go bankrupt, they are sold at a discount, and keep generaAng. •  Sixteen hour types represent the year. Vary in terms of unit availability (from NERC) and load (from all ISOs). •  Load grows at 0.59% per year (before long run demand response) per NYISO projecAons hmp://www.nyiso.com/public/webdocs/newsroom/press_releases/2009/NYISO_2009_Summer_Outlook__05212009_(2).pdf New Power Plant and Fuel Costs PSERC
Fuel Type
Capital
Recovery $/
MW/Year
Total Fixed Costs
($/MW)
Total Variable
Cost
$/MWh (in 2012)
Total Possible
Capacity
Additions
Coal (Dual Unit
Advanced PC)
Natural Gas
(Advanced NGCC)
Wind*
$497,201
$35,255
$29.05
10 GW
$181,824
$20,661
$39.05
30 GW
$392,322
$30,710
$0
3.5 GW
Nuclear
$1,141,454
$95,571
$2.04
5 GW
*Excluding incenAves for wind generaAon (included in one model run) $/MBTU 2012 2022 2032 Coal $1.68 $1.65 $1.71 Natural Gas $4.50 $5.39 $6.62 Updated Capital Cost EsAmates for Electricity GeneraAon Plants November 2010, U.S. Energy InformaAon AdministraAon, Office of Energy Analysis Annual Energy Outlook 2011 April 26, 2011, U.S. Energy InformaAon AdministraAon Long Run Demand Response (ConservaAon) PSERC
Actual Demand Response (Red) Modeled Demand Response (Blue) 25% total demand response In the long run, the elasAcity of demand for electricity is -­‐1. (1) 105 100 10 blocks, each 2.5% of load EffecAve price is at the midpoint of each interval Consistent with piecewise-­‐ linear benefits funcAon LMP: $/MWh 95 Surprisingly, in the short run, a new esAmate of elasAcity (assuming that consumers respond to monthly bills) is -­‐0.982. (2) 90 85 80 75 70 0.75 0.8 0.85 0.9 0.95 Load (Percent of Base) 1 The delivered price equals the LMP for each bus, for each representaAve hour in 2012, plus esAmated distribuAon costs ($70/MWh) 1. Dahl, Carol. A Survey of Energy Demand ElasAciAes in Support of the Development of the NEMS. bp://
bp.eia.doe.gov/pub/oiaf/elasAcitysurvey/elasAcitysurvey_dahl.pdf 2. Fell, Harrison, Shanjun Li, Anthony Paul. A New Approach to EsAmate ResidenAal Electricity Demand Using Household Expenditure Data. Model Runs for Stress TesAng Base Case: No RegulaAons Kerry-­‐Lieberman CO2 Nuclear ReAred in 2022, No RegulaAons Nuclear ReAred in 2022, Kerry-­‐Lieberman CO2 Marginal Damages Charged for SO2 and NOx Emissions (StarAng in 2022) based on NRC, Hidden Costs of Energy •  PHEV Load Filling in 2022 and 2032 •  Wind IncenAves in place •
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PSERC
Base Case: No New RegulaAon Capacity 350 90 80 300 60 40 30 20 10 250 NG NG TWh GW 70 50 Genera3on 400 100 NG Nuclear Coal Nuclear Coal Renewables Oil Renewables Nuclear Coal 2012 100 Nuclear Nuclear Coal Coal NG 0 2032 Oil Oil 20 NG 4 NG 2 Oil 0 2022 TWh GW Oil 2022 2032 NG 15 6 10 5 Coal Coal 2032 Oil 0 -­‐4 -­‐8 Renewables Genera3on Changes 8 -­‐6 NG Renewables 2012 10 -­‐2 Coal NG Renewables Capacity Changes 12 Nuclear 50 Oil 2022 200 150 Renewables Oil 0 14 PSERC
Oil 2022 -­‐5 Oil 2032 NG Proposed LegislaAon: Kerry-­‐
Lieberman PSERC
•  Why look at dead legislaAon? –  Unresolved debate over cost –  Industry has seen many policy reversals –  Demonstrate what the model can do –  Will combine with No Nuclear case for extreme stress test •  Proposal Features –  Cap and Trade aucAon begins in 2012 –  Cap starts at 2005 level –  ReducAon of 17% by 2020 –  ReducAon of 42% by 2030 –  Floor and Ceiling for prices (Price collar) –  Floor starts at $12, increases by 3% annually –  Ceiling starts at $25, increases by 5% annually Capacity K-­‐L CO2 Results Genera3on 100 400 90 350 80 300 250 60 40 30 20 10 0 NG NG Nuclear Coal NG Nuclear Coal Renewables Oil 200 150 Nuclear Renewables Coal 100 Renewables 50 Oil 0 Oil 2012 TWh GW 70 50 PSERC
2022 Nuclear Coal NG Renewables Coal NG Renewables Oil Oil 2012 2032 Capacity Changes 12 Nuclear Nuclear Coal NG Renewables Oil 2022 2032 Generaton Changes 20 NG NG 10 10 8 0 2022 4 TWh GW 6 2 Oil 0 -­‐2 Coal 2022 Coal -­‐10 -­‐20 2032 NG NG Coal -­‐30 -­‐4 -­‐6 2032 Oil Coal Oil -­‐40 Oil Marginal Damages •
PSERC
Hidden Costs of Energy (NRC) –  Health damages caused by power generaAon ($63 billion) •  SO2, NOx, Fine ParAculates –  Average coal plant causes $156 million in damages •  10% of coal plants produce 43% of damages –  Average natural gas plant causes $1.5 million in damages •  Smaller plants, less damage per kWh •  10% of NG plants produce 65% of damages •  Study also reviews •  HeaAng ($1.4 billion in damages) •  TransportaAon ($56 billion in damages) •  Damages from mining and related acAvity •  Damages related to climate change •  Infrastructure Risks and Security –  Does not include a network model for transmission and distribuAon Marginal Damages PSERC
•  Use same air transport model as in Hidden Costs of Energy for fine parAculates –  Transport coefficients from/to every county in the US and Canada •  Summed over all counAes and combined with informaAon about Value of staAsAcal life, mortality and morbidity rates to generate –  Value of Mortality and Morbidity: $6.9 million / expected life •  Example: AES Cayuga/Millikin StaAon, a coal-­‐fired power plant near Cornell University, average coal and NG plants, and the most damaging coal plants in the NPCC Unit Name CO2 Rate SO2 Rate Tonnes/MWh Tonnes/MWh NOx Rate Tonnes/MWh MD $/MWh Milikin Unit 1 0.98 <0.001 <0.001 7.22 Average Coal Plant 1.05 0.0065 0.001 89.87 Max MD Coal Plant 0.9984 0.0134 0.0012 232.20 0.65 <0.0001 <0.001 2.36 Average NG Plant MD f
or S
O
a
nd N
Ox 2
Capacity Genera3on 100 400 90 350 80 NG 40 30 20 10 NG Nuclear Coal Nuclear Renewables Oil Renewables Oil Coal 0 2012 Nuclear Renewables Oil Coal 2022 Nuclear 200 100 0 Oil Coal Oil Renewables Coal Oil 2022 2032 Genera3on Changes 150 NG NG 100 NG 50 0 2022 Oil Coal 2032 Oil TWh 10 GW Renewables 2012 20 NG 0 2022 -­‐10 -­‐50 -­‐20 -­‐100 Coal -­‐30 Nuclear NG Renewables 50 Capacity Changes 30 Nuclear Coal 150 2032 NG NG 250 60 TWh GW 300 NG 70 50 PSERC
-­‐150 Coal Coal 2032 PHEV Load Filling PSERC
U.S. Light-­‐Vehicle Sales (leb column) and Fleet ComposiAon (right column) Under Baseline Scenarios From Electric Vehicles in the United State: A New Model with Forecasts to 2030 hmp://cet.berkeley.edu/dl/CET_Technical%20Brief_EconomicModel2030_f.pdf PHEV Load Filling •
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Load added to low demand hours Total esAmates for country scaled to 25% for populaAon in Northeast Add 703 MW of demand in 2022 (Using 2020 esAmate) 593,000 PHEV (2kWh); 230,000 EV in Northeast (16 kWh) Add 5,412 MW of demand in 2032 (Using 2030 esAmate) 725,000 PHEV; 2,000,000 EV in Northeast PSERC
PHEV 100 90 80 70 60 50 40 30 20 10 0 Genera3on 400 350 300 NG NG NG Nuclear Coal Nuclear Coal Renewables Oil Nuclear Coal Renewables 100 Nuclear Nuclear Coal Coal NG NG Renewables 0 2032 12 Coal NG Renewables Oil Renewables Oil Oil 2012 2022 Capacity Changes 14 Nuclear 50 Oil 2022 200 150 Renewables Oil 2012 250 TWh GW Capacity PSERC
2032 Genera3on Changes 25 NG NG 20 10 8 15 4 TWh GW 6 NG 2 Oil 0 -­‐2 2022 2032 -­‐4 -­‐6 -­‐8 10 5 NG Coal Coal Oil 0 2022 Oil -­‐5 Oil 2032 Wind IncenAves PSERC
Incorporate federal and state level subsidies for wind generaAon and construcAon GeneraAng cost of wind is reduced $52.68 /MWh in the US and $135 -­‐ $77.50 /MWh in Canada (if current policies conAnue) Capital costs reduced at nodes that contain generaAng plants in DE, MA, MD and NJ by average of capital incenAves present 30% load factor assumed in the modeling Capacity Wind IncenAves Genera3on 100 400 90 350 80 300 70 40 30 20 10 NG NG NG Nuclear Coal Nuclear Coal 2012 100 Renewables 2022 Nuclear Nuclear Coal Coal NG NG Renewables 0 12 2022 NG 15 Wind 10 Wind 4 2 Wind 0 2022 -­‐4 NG TWh GW 2032 20 NG 6 -­‐8 Oil Genera3on Changes 8 -­‐6 NG Renewables Oil 2012 2032 10 -­‐2 Coal Renewables Oil Capacity Changes 14 Nuclear 50 Oil Oil 0 200 150 Nuclear Coal Renewables Renewables Oil 250 TWh GW 60 50 PSERC
5 Oil 0 2032 -­‐5 Coal Wind 2022 Oil Coal Oil 2032 -­‐10 Oil NG -­‐15 No Nuclear Cases PSERC
The Fukushima Daiichi nuclear disaster raised quesAons about the safety of nuclear power. In New York State, Governor Cuomo is pushing for the closure of the Indian Point Energy Center, less than 40 miles from NYC. Indian Point could be replaced by fossil fuel units (mostly NG) but the model predicts an addiAonal 8.75 fataliAes a year from the increased emissions. We consider two cases where we decommission ALL nuclear plants in 2022: Decommission with no new environmental rules Decommission with Kerry-­‐Lieberman CO2 Cap and Trade (Much like what Germany is actually doing) No N
uc, N
o N
ew R
egulaAons PSERC
Capacity Genera3on 100 400 90 NG 80 350 NG 300 70 250 40 30 20 10 TWh GW 60 50 NG 200 150 Nuclear Coal Coal Renewables Oil Renewables Oil 0 Nuclear 2012 Coal 100 Renewables Oil Nuclear 50 2022 0 NG Renewables Renewables Oil Oil Nuclear Renewables Oil Nuclear 2022 2032 NG 200 150 NG 100 10 50 Oil 0 2022 2032 Oil TWh GW Coal 250 NG 20 Coal Coal 0 -­‐50 2022 -­‐150 -­‐30 -­‐200 Nuclear -­‐250 NG 2032 -­‐100 -­‐20 -­‐40 Coal Coal Genera3on Changes 30 -­‐10 Nuclear 2012 2032 Capacity Changes 40 NG NG Nuclear No Nuc, K-­‐L CO2 Capacity Genera3on 400 100 90 80 20 10 0 TWh GW 30 300 NG Nuclear Coal 200 150 Coal Renewables Oil Renewables Oil Nuclear 2012 Coal 100 Renewables Oil Nuclear 50 2022 0 2032 40 NG Renewables Renewables Oil Oil Nuclear Coal Renewables Oil Nuclear 2022 2032 NG 200 150 100 10 NG Coal 2022 Oil Coal 2032 50 Oil TWh GW Coal 250 NG 20 NG 0 -­‐50 Coal 2022 -­‐150 -­‐30 -­‐200 Nuclear -­‐250 Oil 2032 Coal -­‐100 -­‐20 -­‐40 Coal Genera3on Changes 30 -­‐10 Nuclear 2012 Capacity Changes 0 NG NG 250 60 40 350 NG NG 70 50 PSERC
Nuclear Oil Average Wholesale Prices PSERC
105 No Nuc, K-­‐L CO2 100 K-­‐L CO2 Origin is not at $0/MWh MD for SO2 and Nox No New Environmental RegulaAons is almost collinear with wind incenAves, but wind is slightly lower. 95 $/MWh 90 No Nuc, No RegulaAons 85 80 PHEV Load Filling 75 No RegulaAons 70 65 2012 2022 2032 Wind IncenAves Although the PHEV case increases generaAon and capacity, the effect on average LMP is modest, because generaAon is only increased during the low demand hours. is not zero to highlight Total Demand Origin PSERC
differences. No Demand Response 750,000 PHEV Load Filling 700,000 Wind IncenAves 650,000 GWh No RegulaAons No Nuc, No RegulaAons 600,000 MD for SO2 and Nox 550,000 500,000 2012 2022 2032 Wind and No New Env Reg are almost collinear. Wind has slightly more generaAon because wind incenAves slightly lower the wholesale price, resulAng in less demand response. The No Demand Response case shows the total effect of demand response in the rest of the cases. K-­‐L CO2 Maximum demand response is about 21% in the Kerry-­‐
Lieberman cases. No Nuc, K-­‐L CO2 For most charts, order of entries in legend is same as final size in 2032. Total Capacity 150 No Demand Response 145 Wind IncenAves 140 135 PHEV Load Filling GW 130 No RegulaAons 125 MD for SO2 and Nox 120 115 No Nuc, No RegulaAons 110 K-­‐L CO2 105 No Nuc, K-­‐L CO2 100 2012 2022 2032 The No Demand PSERC
Response lines illustrates the importance of demand response in reducing the need for new capacity. The large capacity dips in the No Nuclear cases reflect nuclear plants being decommissioned. PHEV and No New Env Reg are almost collinear. PHEV slightly higher 2500 Lives Saved (Based on Hidden Costs of Energy)* MD for SO2 and Nox 2000 K-­‐L CO2 1500 No Nuc, K-­‐L CO2 1000 Wind IncenAves 500 -­‐500 Removing nuclear plants without imposing new environmental regulaAons is expected to cause about 100 deaths per year Every other opAon saves lives. Wind incenAves save 4-­‐10 lives per year No Nuc, No RegulaAons 0 2012 PSERC
2022 2032 *Health effects of fine parAculates remain controversial CO2 Emissions 350 No Nuc, No RegulaAons 300 No RegulaAons Megatonnes CO2 250 Wind IncenAves 200 No Nuc, K-­‐L CO2 PHEV Load Filling 150 K-­‐L CO2 100 K-­‐L Target 50 MD for SO2 and Nox 0 2012 2022 2032 PSERC
Only imposing marginal damages for SO2 and NOx and K-­‐L CO2 can meet or exceed Kerry-­‐Lieberman targets. K-­‐L CO2 prices are at the floor in 2012, very close to the ceiling in 2022, and at the ceiling in 2032. (Compared to base case, allowing investment and demand response delays the movement to the price ceiling, but does not prevent it.) This is overly opAmisAc for the US as a whole, because the Northeast starts out with more low-­‐carbon generaAon Removing nuclear plants puts the price at the ceiling in 2022 under K-­‐L PHEV: EsAmates included for CO2 reducAon from reduced gasoline use Conclusions PSERC
•  Industry advisors find results sensible –  But argue for including all high voltage lines in the network model –  Also find “open source” very desirable for planning purposes –  Want to look at a broad range of possible policies (at least a 20 year Ame horizon since generators last up to 50 years) •  Natural Gas Combined Cycle –  Unless wind is subsidized, only generaAon type built –  Other runs (not shown) included Advanced CombusAon Turbine Natural Gas for peaking units, but none were built –  Fuel switching to reduce CO2 •  MD for SO2 and NOX –  Most effecAve at reducing CO2 –  Most effecAve at reducing health effects –  Lower prices than Kerry-­‐Lieberman CO2 Future DirecAons PSERC
•  Expand network complexity –  Include all high voltage lines 5,200 nodes for Eastern Interconnect) –  Lines are important for determining investment •  Expand network scope –  Include enAre Eastern Interconnect –  Merge with ERCOT and WECC to complete naAon •  Add conAngencies •  Add but not opAmize new lines (Tres Amigas) •  SuggesAons? The Original EI System Looks like.. •
PSERC
Original system includes: 62013 buses, 8190 generators, 79766 branches, and 24 HVDC lines The Reduced EI Looks like (equivalent lines not shown) PSERC
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Reduced system includes: 5222 buses, 8190 generators, 14225 branches, and 24 HVDC lines