Upload
others
View
4
Download
0
Embed Size (px)
Citation preview
Victor Niemeyer, EPRI
RFF Modeling Workshop on Regulatory Impacts on the USElectricity Sector
Washington, DC
July 19, 2012
EPRI PRISM 2.0 Environmental ControlsAnalysis with REGEN
2© 2012 Electric Power Research Institute, Inc. All rights reserved.
Contact Information
Together…Shaping the Future of Electricity
Bryan HanneganVice President, Environment and RenewablesElectric Power Research Institute(650) [email protected]
Energy and Environmental Analysis Group
Tom Wilson Victor NiemeyerSenior Program Manager Technical Executive(650) 855-7928 [email protected] [email protected]
Geoffrey Blanford Francisco de la ChesnayeProgram Manager Program Manager(650) 855-2126 (202) [email protected] [email protected]
3© 2012 Electric Power Research Institute, Inc. All rights reserved.
Pacific
California
Mountain-N
Texas
NW-Central
SW-Central
NE-Central-R
M-Atlantic
S-Atlantic
SE-Central
Florida
NENE-Central-C NY
Mountain-S
US-REGEN Model Description
4© 2012 Electric Power Research Institute, Inc. All rights reserved.
Pacific
California
Mountain-N
Texas
NW-Central
SW-Central
NE-Central-R
M-Atlantic
S-Atlantic
SE-Central
Florida
NENE-Central-C NY
Mountain-S
US-REGEN Model Description
GeneralEquilibrium
Economy Model
• Aggregate EconomicRepresentation
• Energy Markets for Oil, NaturalGas, Coal, & Bioenergy
• Foreign Exchange
• Landuse (Ag and Forest)
Energy Demand(Electric & Non-
Electric)
• Energy Efficiency acrossCommercial, Industrial, &
Residential Sectors
• Transportation: Detailed model ofvehicle technologies and
intermodal choices
Electric SectorModule
• CO2 Mitigation Technologies
• Environmental Controls: Air,Water, Land
• Transmission
5© 2012 Electric Power Research Institute, Inc. All rights reserved.
Integrated Analysis of Retrofit Decision in Lightof Full Set of Air (non-GHG), Water, Ash Policies
• Full Control policy (stringent control for SO2, NOx, Hg,cooling, and CCRs, but no CO2)
• Assume asset owner makes single retrofit-retire decision in2015 based on full mix of requirements.
• Retrofit cost scenarios reflect cost and policy uncertainty
– High
– Ref
– Flex
6© 2012 Electric Power Research Institute, Inc. All rights reserved.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0 50 100 150 200 250 300 350
Co
ntr
olC
ost
($/k
W)
Cumulative Generation Capacity (GW)
High
Ref
Flex
Scenarios Represent Uncertainty Ranges inCosts for Technology, Policy, and Escalation
High (Current) scenario represents littletechnology flexibility, and real costescalation driven by demand for retrofits
Flex (Alternate) scenario representsavailability of lower cost technologiesand policy flexibility to apply them,lower escalation in retrofit costsassociated with extra time for MATSand Ozone compliance
7© 2012 Electric Power Research Institute, Inc. All rights reserved.
Cost to Retrofit Entire Fleet Uncertain butSeveral $100 Billions
• Chart show investment cost toretrofit entire existing fleet (sumof unit costs input to model)
• Existing coal
– 316 GW
– 40% of electric supply
– 1,100 generating units
– Diverse size/age mix
• Age, size, and market impactretrofit/retire decisions
• Many units poor candidates forenvironmental retrofits
• ~ 40 GW of coal retirementsannounced to date
0
50
100
150
200
250
300
Ref Flex High
Expenditures to Retrofit All Existing Coal
Ash
316b
Hg
NOx
SO2$
Bill
ion
s
8© 2012 Electric Power Research Institute, Inc. All rights reserved.
0
50
100
150
200
250
300
350
2010 2015 2020 2025 2030 2035
GW
Exis
tin
gC
oal
Cap
acit
y
Age Retire
Retire/Refuel
Env Retrofit
Base
Disposition of Existing Coal in Ref Scenario
9© 2012 Electric Power Research Institute, Inc. All rights reserved.
Regional Coal Disposition in Ref Scenario
Age Retire
Retire/Refuel
Environmental Retrofit
Base
0
25
50
75
100
125
2010 2015 2020 2025 2030 2035
GW
EAST
0
25
50
75
100
125
2010 2015 2020 2025 2030 2035
GW
SOUTH
0
25
50
75
100
125
2010 2015 2020 2025 2030 2035
GW
MIDWEST
0
25
50
75
100
125
2010 2015 2020 2025 2030 2035
GW
WEST
10© 2012 Electric Power Research Institute, Inc. All rights reserved.
5
227
218
8 0
57
0
50
100
150
200
250
300
350
GW
Exis
tin
gC
oal
Cap
acit
y
Retire/Refuel
> 15-year payback
10 - 15 year payback period
5 - 10 year payback period withIRR in first 10 years < 15%
5 - 10 year payback period withIRR in first 10 years > 15%
<= 5 year payback period
Already in compliance
U.S. Distribution of Pay-offs for Retrofits ofExisting Coal in Ref Scenario
Retrofits
Continued operationin question (on bubble)
Strong economicssupporting retrofits
11© 2012 Electric Power Research Institute, Inc. All rights reserved.
How Much Coal Capacity Might Convert Fuel orRetire Early?
GW Retired/Refueled
Flex Ref High
If requireNPV of 7%
25 57 61
If require paybackof <10 years
27 66 76
12© 2012 Electric Power Research Institute, Inc. All rights reserved.
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
2010 2015 2020 2025 2030 2035
Gas
Pri
ce($
/MM
Btu
,20
09
$)
+$2
+$1
Ref
-$1
-$2
NYMEX (2009$)
Sensitivity Analysis on Natural Gas Prices
13© 2012 Electric Power Research Institute, Inc. All rights reserved.
Gas Price Scenarios Show Critical Role of GasPrice Expectations for How Much Coal Survives
0
50
100
150
200
250
300
350
-$2 -$1 Ref +$1 +$2
GW
Exis
tin
gC
oal
Cap
acit
y
Age Retire
Retire/Refuel
Env Retrofit
Base
Disposition of existingcoal capacity in 2020 bygas price scenario
14© 2012 Electric Power Research Institute, Inc. All rights reserved.
0
50
100
150
200
250
300
Ref Flex High
GD
PLo
ss2
01
0-2
03
5(P
VB
20
09
$)
GDP Impacts Show Magnitude of Costs andOpportunity in Flexibility
15© 2012 Electric Power Research Institute, Inc. All rights reserved.
Note That Total GDP Impacts ~25% GreaterThan Increased Cost to Electric Sector
0
50
100
150
200
250
300
Ref Flex High
Co
sts
20
10
-20
35
(PV
B2
00
9$
)
Flex
GDP Loss Electric Sector Cost
16© 2012 Electric Power Research Institute, Inc. All rights reserved.
U.S. Electric Sector CO2 Emissions
0
0.5
1
1.5
2
2.5
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Bill
ion
ton
ne
s History
Baseline
Flex
Ref
High
17© 2012 Electric Power Research Institute, Inc. All rights reserved.
0
2
4
6
8
10
12
14
16
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Mill
ion
ton
ne
s History
Baseline
Flex
Ref
High
U.S. Electric Sector SO2 Emissions
18© 2012 Electric Power Research Institute, Inc. All rights reserved.
0
1
2
3
4
5
6
7
8
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Mill
ion
ton
ne
s History
Baseline
Flex
Ref
High
U.S. Electric Sector NOx Emissions
19© 2012 Electric Power Research Institute, Inc. All rights reserved.
Concluding Observations
• Economic cost of full control policy is $175B to $275B (PV 2010-2035) with bulk of policy costs near-term
• Cost range driven by ability to deploy low-cost technologies,which may require policy flexibility and extra time to assess
• Cost impacts greatest in high-coal regions
• Compliance decisions dependent on gas price expectations
• 50 to 100+ GW of coal may retire or convert fuels
• Most of existing coal continues to play key role
• SO2/NOx emissions drop to less than 30% of 2010 levels
• If emission reductions phased in over an extra two years therelative impact on cumulative emissions is modest