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Planning for Growing Electric Generation Demands

Planning for Growing Electric Generation Demands. Kansas Energy Council – Electric Subcommittee. March 12, 2008. Topics. The Power Supply Planning Process Conventional Power Supply Technologies Renewable Technologies Nuclear Developments Summary Questions and Answers.

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Planning for Growing Electric Generation Demands

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  1. Planning for Growing Electric Generation Demands Kansas Energy Council – Electric Subcommittee March 12, 2008

  2. Topics • The Power Supply Planning Process • Conventional Power Supply Technologies • Renewable Technologies • Nuclear Developments • Summary • Questions and Answers 2

  3. New Generation Planning Process • In Parallel with a power market assessment and siting study. Usually also in parallel with DSM and existing generator life extension / retirement analysis 3

  4. Historical and Forecast Demand & Energy GrowthSample 4

  5. Load and Capability ForecastSample 5

  6. Hourly Load Pattern Dictates Need for Various Generation Types Peaking Intermediate Baseload % Time 6

  7. Power Supply Options Renewable Purchased Power Conventional Generators Demand Side Management Nuclear 7

  8. Comparative CostsConventional Generation ResourcesSample Baseload Intermediate Peaking 150 MW CT 600 MW PC 500 MW CC 8

  9. Generation Resource ScreeningRepresentative Sample Assumes $6.80/MBtu gas in 2012 escalating at 4% per year and $1.45/MBtu coal escalating at 3% per year. Solar and Wind technologies are not firm resources. 9

  10. Baseload Resource Screening with CO2 CostsRepresentative Sample Note: Assumes biomass is CO2 neutral per the Intergovernmental Panel on Climate Change (IPCC). Assumes $6.80/MBtu gas in 2012 escalating at 4% per year and $1.45/MBtu coal escalating at 3% per year. 10

  11. Purchased Power or Power Sales OptionsRequire Analysis of Available Transmission CapacitySample

  12. New Generators Should Complement the Existing MixSample Load Duration Curve Screening-2011 Options Of 425 MW of firm capacity needed by 2011, up to 350 MW of new solely-owned coal capacity can be added while keeping coal and combined cycle in a least cost mix. The remaining 75 MW added should be peakers. 12

  13. Develop Alternative Power Supply Plans for Testing Sample 13

  14. Comparative Rate ImpactsCompare Plans Using Detailed Production Cost and Financial Models Sample 14

  15. Desirable Plans Minimize Revenue Requirements Under a Range of Risk ScenariosSample 15

  16. Consider Corporate Financial Impacts-AdverseImpacts on Bond Ratings Also Increase Revenue RequirementsSample Coverage Ratio Typical Target is 3 to 4. 16

  17. Selected Plan(s) Must Consider Lead Times Air Permit Start Start Permitting Engineering and and Preliminary Begin Receive Air Procurement Construction Engineering Permit In Service Studies and Permitting Detail Engineering Construction Conceptual Preliminary and Procurement Engineering Engineering Cost Estimate Schedule 17

  18. Power Supply Options Renewable Purchased Power Conventional Generators Nuclear 18

  19. Generation Technology OverviewConventional Generation • Simple Cycle Combustion Turbine (SCCT or CT) • Combined Cycle Combustion Turbine (CCCT) • Atmospheric Circulating Fluidized Bed (CFB) • Pulverized Coal (PC) • Integrated Gasification Combined Cycle (IGCC) • Nuclear 19

  20. Comparison of Conventional Technologies Simple Cycle Combustion Turbines • Description: • Simple cycle combustion turbine generates power by compressing and heating ambient air and then expanding those hot gases through a turbine which turns an electric generator. • Advantages: • Low capital costs • Short design and installation schedules • Choice for peaking service with rapid startup and modularity for ease of maintenance • High reliability and mature technology • Disadvantages • Typically higher operations and maintenance costs than combined cycle units • Typically not used for baseload operation • Sizes typically less than 300 MW • High fuel costs 20

  21. Comparison of Conventional Technologies Combined Cycle Combustion Turbines • Description: • Combined cycle combustion turbine generates power by compressing and heating ambient air and then expanding those hot gases through a turbine which turns an electric generator. In addition, heat from the hot gases of combustion are captured in a heat recovery steam generator (HRSG) producing steam which is passed through a steam turbine generator. • Advantages: • Low emissions • Higher efficiency than SCCT • Disadvantages: • Higher capital cost than SCCT • Volatile natural gas prices • Higher non-fuel O&M than coal units • High fuel costs 21

  22. Conventional Technologies Pulverized Coal • Description: • Pulverized coal is burned in a steam generator constructed of membrane waterwalls and tube bundles which absorb the radiant heat of combustion producing steam that is fed into a steam turbine generator. • Advantages: • Most mature coal burning technology • More experience than any other power generation technology • Very reliable and easy to operate and maintain • Can accommodate up to 1,300 MW, and economies of scale can result in low busbar costs • Low fuel cost • Future units (advanced supercritical) higher efficiency and lower GHG emissions • Disadvantages: • Less fuel flexibility than CFB units • More sensitive to fuel characteristics, slagging, and fouling • Siting and Permitting has become more difficult 22

  23. Comparison of Conventional Technologies Circulating Fluidized Bed (CFB) • Description: • Combustion air is introduced through the bottom of the bed material normally consisting of fuel, limestone, and ash. • Heat generated from burning fuel produces steam which is fed into a steam turbine generator. • Advantages: • Ability to burn a wide variety of fuels – greater fuel diversity than PC • Very reliable and easy to operate and maintain • Slagging and fouling tendencies minimized because of low combustion temperatures • Disadvantages: • No units larger than 300 MW have been built • Slightly higher operations and maintenance cost than PC units • Less suited for numerous startups and cycling than PC units • Typically less efficient than PC plants 23

  24. Comparison of Conventional Technologies Integrated Gasification Combined Cycle • Description: • Fuel (petcoke, coal, or other solid fuel) converted to syngas then combusted in modified gas turbines in a combined cycle power generation unit. • Advantages: • Capability of operating at relatively low emissions compared to PC/CFB’s. • Efficiencies comparable to supercritical PC technologies • Costs associated with reducing Hg and capturing CO2 emissions generally thought to be incrementally lower for IGCC than for CFB and PC technologies • Disadvantages: • Capital costs, operating costs, and availability • Reliability lower than PC and CFB • Startup and shutdown flaring reduces emission benefits of IGCC over PC and CFB • To date, large-scale, U.S. based power producing IGCC plant not proven to be economically feasible without subsidization 24

  25. Comparison of Conventional Technologies Representative Emissions Levels 25

  26. 10 12 8 2 4 6 Comparison of Conventional TechnologiesRepresentative Development Schedules Schedule and Costs Are Increasing The schedules and costs of all technologies, including renewables, are being adversely impacted by the current scarcity of labor and materials. SCCT CCCT PC IGCC Nuclear Units 5+ Years 26

  27. Generation Technology OverviewRenewable Generation • Wind • Biomass • Landfill Gas • Solar 27

  28. Comparison of Renewable Technologies Wind • Description: • Convert movement of air to electric power by means of a rotating turbine and a generator • Fastest growing energy source (+30% annually forlast 5 years) • Project Sizes 1 to 300+ MW • Cut-in wind speed: 8 mph • WTG Specs: 1985 2007Rotor: 15m 90mHub Height: 20m 80mRating: 50kW 2,000kW • Advantages: • Clean generation technology • Disadvantages: • Wind is an intermittent resource and capacity factors range from 25 to 40 percent • High capital costs, maintenance costs on the order of $35/kW-yr • Capacity factor directly impacts economic performance • Cannot be relied upon as firm capacity for peak power demands 28

  29. Comparison of Renewable Technologies Direct-fired Biomass • Description: • Similar in operation to coal plants. By burning biomass, pressurized steam is produced in boiler then expanded through a turbine. Biomass traditionally from direct combustion at pulp and paper mills, lumber mills, etc. • Prior to combustion in boiler, biomass fuel may require some processing to improve physical and chemical properties of feedstock. Stoker and fluidized bed combustion technologies are well proven. • 6,500 MW of capacity installed in the U.S. • Advantages: • Burn wide variety of fuels • Carbon-neutral power generation (per IPCC) • Biomass fuels contain little sulfur and trace amounts of toxic metals • Disadvantages: • Capacities range up to 85 MW, average 20 MW • Plant must be located at or within 50 to 75 miles from fuel source to be economically feasible • Lower heating values of fuels make biomass plants less efficient than coal plants 29

  30. Comparison of Renewable Technologies Biomass Co-firing • Description: • Biomass and coal are co-fired in existing coal plants • Two basic approaches to co-firing: 1. Blend fuels and feed together in coal processing equipment 2. Separately processing and then injecting biomass in boiler • Advantages: • One of the most economical ways to burn biomass ($50–400/kW) • Using Method 1: in a cyclone boiler, up to 10 percent of the coal heat input could be replaced with biomass • Using Method 2: in a PC boiler, 10 to 15 percent of coal heat input could be replaced with biomass • Disadvantages: • Disperse nature of feedstock and high associated transportation costs as in Direct-fired Biomass and Biomass IGCC • Limited capacity by amount of resource available • Reduced plant capacity, boiler efficiency • Ash contamination, increased O&M cost, boiler fouling/slagging, SCR catalyst poisoning 30

  31. Comparison of Renewable Technologies Landfill Gas (LFG) • Description: • LFG is produced by the decomposition of the organic portion of waste stored in landfills. LFG primarily consists of methane which can be burned in reciprocating engines or small gas turbines. • Advantages: • Burns gas that would otherwise be emitted into the atmosphere as GHG • Regarded as one of the more mature and successful waste-to-energy technologies • Disadvantages: • Power production from LFG typically less than 10 MW • Pretreatment of gas prior to combustion 31

  32. Parabolic Trough Parabolic Dish Central Receiver Compact Linear Fresnel Reflector Comparison of Renewable Technologies Solar-Thermal Technologies • Description: • Solar thermal technologies convert the sun’s energy to electricity by capturing heat, producing steam and passes through a steam turbine. • Parabolic trough currently most prevalent technology. • Advantages: • Appropriate for a wide range of intermediate and peaking applications • Clean generation technology • Commercial solar thermal trough plants in California currently generate more than 350 MW • Thermal energy can be stored to allow for generation when sun is not shining • Disadvantages: • Large land to MW ratio • Dependant on sunlight availability • High capital cost 32

  33. Nuclear Reactor Technology • Description: • Inside a nuclear reactor, uranium atoms are bombarded by neutrons • When a neutron is absorbed by a uranium atom, atom becomes unstable and splits, a process known as fission • Fission process generates heat in the reactor core and generated heat is transferred to water which is circulated to the steam generator • Electricity generated by applying steam to a turbine generator, much like coal-fired power plants • Advantages: • Virtually no emissions • Relatively low fuel cost • Disadvantages: • Obstacles related to public perception • Capital costs • Political risks • Environmental issues concerning disposal of spent fuel 33

  34. 2005 Energy Policy Act Assists New Nuclear • Production Tax Credits • 1.8¢ / kwh for 8 years up to $125 million annually per 1,000 MW • Requires COLA Submittal NLT 12/31/2008 & First Safety Concrete Pour NLT 1/1/2014 • Loan Guarantees • Standby Support • 100% for first two units up to $500 million each • 50% for next four units up to $250 million each • Renewal of Price-Anderson Act • Continuation of Nuclear Power 2010 Program • Nuclear Decommissioning Tax Relief 34

  35. Nuclear Power 2010 Program • Nuclear Power 2010 Program is a Joint Government-Industry Cost Sharing Program That Will Pay up to Half of The Nuclear Industry’s Costs for Development of Generation III+ Technologies • Current Program Participants Include: • NuStart Energy LLC: AP1000 (Bellefonte) • Dominion Energy: ESBWR (North Anna) 35

  36. Other Changes for New Nuclear Construction • Regulatory Change to Single Step Licensing Process • Previous Generation Reactors Required Construction Permits and Operating License Hearings • New Generation III/III+ Reactors Obtaining SER As Generic Designs • Utility Submits COLA (Combined Operating License Application) for Site Specific Aspects of Project • Process Only Applies if Utility Uses Generic Designs- All Modifications Require USNRC Review 36

  37. Status of Nuclear Industry 37

  38. Status of Nuclear Industry 38

  39. Limits to Foreign Ownership of Nuclear Generating Plants Partial foreign ownership of a nuclear plant is not specifically prohibited by regulation - 100% foreign ownership is prohibited. The NRC reviews the makeup of the ownership as part of the license applications and makes a judgment regarding the ownership, considering whether the foreign component is just financial or the foreign component is acting as the licensee. A prior NRC ruling in the case of Amergen (PECO and British Energy) involved a 50-50 JV where PECO maintained the operating responsibility and BE was solely a financial vehicle. In this review, one of the main considerations by the NRC was the control of safety related activities (considered licensee activities) and that they be under the control of a US citizen. The NRC found it acceptable for the 50-50 ownership provided the day-to-day control of the plant and the licensee activities were under the control of the US entity. The same would hold true for Unistar, the EDF - Constellation JV. Source: NRC SECY-98-252 39

  40. Summary / Conclusions • Generation additions are capital intensive and capital requirements have been increasing dramatically for all technologies • Electric generation has long-lead time requirements • Planning must consider rate-payers, stock holders, and Wall Street requirements • Planning must allow for all these factors • Recognition of risk and development of contingency plans • Value flexibility 40

  41. Q&A Page - 41

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