Guam Power Authority. New Resources: Capital Costs. zzzzzzzzz. Operating Characteristics. October 26, 2012

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1 Guam Power Authority New Resources: Capital Costs & zzzzzzzzz Operating Characteristics October 26,

2 Overview The IRP was designed to look at both life extension and performance improvements for existing units as well as new resource options. This presentation focuses on new resource options, including both conventional and renewable generation alternatives, that were considered in the planning process. 2

3 Goals of the Plan GPA s goal to provide reliable, cost effective power supply with minimal environmental impact. Fuel diversity an important consideration Renewables help GPA meet a number of strategic goals The 2008 IRP set the stage for the acquisition of major renewable resources including 20 MW of solar in the near term and perhaps more. 3

4 New Resource Options Considered Repower Piti 7 to a combined cycle burning natural gas New combined cycle burning natural gas Small modular reactor, nuclear (SMR) Renewables: 4 Biomass Solar Wind Ocean Thermal Energy Conversion (OTEC) Sea Water Air Conditioning (SWAC) Geothermal Municipal Solid Waste

5 Repower Piti 7 to Combined Cycle 5

6 Repower: Details Repower Piti 7 GE Frame 6B combustion turbine generator (CTG) into a combined cycle. 6 Fire on natural gas from LNG import terminal Add heat recovery steam generator (HRSG) A steam turbine generator A condenser and heat rejection systems and associated pumps, piping, electrical, control equipment and interconnection to grid Would require use of property to north and east of existing plant and use of seawater intake structure for the abandoned Piti 4 & 5 units or additional municipal water supply for cooling tower.

7 Repower: Performance Capacity increase by 20 MW to 60 MW Heat rate improvement from 11,500 Btu/kWh to 8,400 Btu/kWh (estimated) at full load Fuel costs ranging from $113 to $157 per MWh, from 2018 thru 2028, depending on fuel price VOM decrease from $6.00 to $5.00 per MWh FOM decrease from $98.00 to $42.00 per kw-year Decrease in forced outages from 3% to 2% per year 7

8 Repower: Costs and Schedule The cost to repower Piti 7 would be approximately $81 million ($1,350 per kw). It is estimated to take 16 months to permit the repowering, actual times may be longer. It is estimated to take 24 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 34 months. Available for selection by model in 2018 due to LNG terminal construction schedule 8

9 Repower: Results The model chose the repower option under a variety of retirement and compliance scenarios, including the lowest cost scenario. The new repower option was chosen as early as 2018 in the lowest cost scenario. 9

10 Example New Combined Cycle 10

11 New Combined Cycle: Details Unit characteristics based on a GE LM 6,000 CTG firing on natural gas from an LNG import terminal Could be installed around abandoned Piti 4 and 5 units Plant would include a HRSG, an STG, a condenser, heat rejection systems and associated pumps, piping, electrical and control equipment and interconnection. Demolition and asbestos remediation costs to remove existing structures, if necessary, have not been included in cost estimates. Would likely require relocation of control room, use of existing sea water intake structure or additional municipal water supply to provide for cooling tower. 11

12 New Combined Cycle: Performance Capacity of 60 MW Estimated Heat Rate of 8,350 Btu/kWh Fuel costs ranging from $113 to $161 per MWh, from 2018 thru 2028, depending on fuel price Estimated VOM rate of $5.00 per MWh Estimated FOM rate of $42.00 per kw-year Estimated forced outages of 2% per year and planned maintenance of 6% per year 12

13 New Combined Cycle: Costs and Schedule The cost to build a new combined cycle would be approximately $128.4 million ($2,140/kW). It is estimated to take 16 months to permit the plant, actual times may be longer. It is estimated to take 28 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 38 months. Available for selection by model in 2018 due to LNG terminal construction schedule 13

14 New Combined Cycle: Results The model chose the new combined cycle option under a variety of retirement and compliance scenarios, including the lowest cost scenario. The new combined cycle option was chosen as early as 2018, with one unit added that year. 14

15 Example Small Modular Reactor, Nuclear (SMR) 15 Image Source: NuScale

16 SMR: Details Unit characteristics based on information provided by NuScale, a potential vendor. There are many things not known about this technology because there are no utility scale units operating at this time. SMR modeled to have relatively low variable cost and would provide fuel diversity. Licensing process is uncertain and the licensing and construction duration could be many years to over a decade before available. Unknown safety, emergency response, and spent fuel requirements. 16

17 SMR: Performance Capacity of 90 MW Estimated VOM rate of $1.50 per MWh Estimated FOM rate of $ per kw-year Estimated forced outages of 2% per year and planned maintenance of 8% per year 17

18 SMR: Costs and Schedule The cost to build a new SMR would be approximately $858 million ($9,533/kW). It is estimated to take 60 months to permit the plant, actual times may be longer. It is estimated to take 48 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 96 months (8 years). Available for selection by model in

19 SMR: Results Without LNG options, SMR is chosen as early as 2023, with a 90 MW facility. However, this scenario is not selected as a lower cost scenario because EPA compliance requirements would still have to be done for all existing units. 19

20 Example Biomass Facility 20 Image Source: Topaz Power Group LLC

21 Biomass: Details Unit characteristics based on information provided by Zilkha Biomass, a potential vendor. It is a sustainable and renewable generation resource. Biomass fuel would consist of wood pellets shipped to Guam. Availability and cost of fuel difficult to characterize. Operating costs expected to be high and there may be air and water permitting requirements and ash handling and disposal challenges. 21

22 Biomass: Performance Capacity of 10 MW Estimated VOM rate of $12.00 per MWh Estimated FOM rate of $ per kw-year Estimated forced outages of 6% per year and planned maintenance of 8% per year 22

23 Biomass: Costs and Schedule The cost to build a new biomass plant would be approximately $78.6 million ($7,860/kW). It is estimated to take 24 months to permit the plant, actual times may be longer. It is estimated to take 30 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 48 months. Available for selection by model in

24 Biomass: Results The model did not choose biomass in any scenario due to the high capital and operating costs. 24

25 Example Solar Stationary Photovoltaic 25 Image Source: National Renewable Energy Laboratory (NREL)

26 Solar: Details Unit characteristics based on similar installations of stationary photovoltaic solar projects. It is a sustainable and renewable generation resource with no emissions. The plant would include panels, panel mounts collection systems, inverters, and interconnection to the grid. Operating costs expected to be low, but availability is also low. Requires large footprint. 26

27 Solar: Performance Capacity of 10 MW No estimated VOM rate, covered by FOM Estimated FOM rate of $40.00 per kw-year Estimated forced outages of 1% per year and planned maintenance of 2% per year, but capacity factor depends on sunlight (estimated to be only 25%). Intermittent resource which may require stability upgrades 27

28 Solar: Costs and Schedule The cost to build a new solar plant would be approximately $45 million ($4,500/kW). It is estimated to take 12 months to permit the plant, actual times may be longer. It is estimated to take 24 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 30 months. Available for selection by model in

29 Solar: Results The model chose the solar option under a variety of retirement and compliance scenarios, however not in the lowest cost scenario. Without additional stability costs added ($100 per MWh), the solar option was cost effective as early as 2017, with between two and four units added that year. This indicates that going forward with the Phase 2 renewable acquisition makes sense. With the additional stability costs added, the solar option was chosen much later one unit in 2036 in several scenarios but none were selected in the 29 lowest cost scenario.

30 Example Wind Farm 30 Image Source: self-sufficient-blog.com

31 Wind: Details Unit characteristics based on similar installations of wind projects Comprised of ten turbines at 2 MW each. It is a sustainable and renewable generation resource with no emissions. The plant would include turbines, collection systems, and interconnection to the grid. Operating costs expected to be low, but availability is also low. Requires large footprint. 31

32 Wind: Performance Capacity of 20 MW No estimated VOM rate, covered by FOM Estimated FOM rate of $50.00 per kw-year Estimated forced outages of 2% per year and planned maintenance of 2% per year, but capacity factor depends on wind (estimated to be only 25%). Intermittent resource which may require stability upgrades 32

33 Wind: Costs and Schedule The cost to build a new wind plant would be approximately $93 million ($4,650/kW). It is estimated to take 12 months to permit the plant, actual times may be longer. It is estimated to take 24 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 30 months. Available for selection by model in

34 Wind: Results The model chose the wind option under a variety of retirement and compliance scenarios, including the lowest cost scenario. Without additional stability costs added ($100 per MWh), the wind option was cost effective as early as 2017, with between one and two units added that year. This indicates that going forward with the Phase 2 renewable acquisition makes sense. With the additional stability costs added, the wind option was chosen much later in the study period one unit in 2035 under the lowest cost scenario. 34

35 Example Ocean Thermal Energy Conversion (OTEC) 35 Image Source: Lockeed Martin

36 OTEC: Details Unit characteristics based on information gathered. Uses warm surface sea water to vaporize operating fluid (i.e. ammonia) and cold sea water to condense operating fluid. It is a sustainable and renewable generation resource. Requires pipe (20-30 feet in diameter, 1-4 miles long) to be submerged into the ocean and a land based power station. Technology in development, difficult to characterize costs and environmental impacts. Capital costs are high. 36

37 OTEC: Performance Capacity of 10 MW (equivalent demand reduction) Estimated VOM rate of $11.00 per MWh Estimated FOM rate of $ per kw-year Estimated forced outages of 6% per year and planned maintenance of 2% per year. 37

38 OTEC: Costs and Schedule The cost to build a new OTEC plant would be approximately $150 million ($15,000/kW). It is estimated to take 36 months to permit the plant, actual times may be longer. It is estimated to take 24 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 48 months. Available for selection by model in

39 OTEC: Results The model did not choose the OTEC option in any scenario due to the high capital costs. 39

40 Example Sea Water Air Conditioning (SWAC) 40 Image Source: Construction Week Online

41 SWAC: Details Unit characteristics based on information gathered from studies conducted in 2005 and Uses cold sea water to cool operating fluid in air conditioning loop on land. It is a sustainable and renewable resource. Requires large (3 to 5 foot diameter), long (1 to 4 miles) pipe submerged into the ocean and land based piping loops. Technology in operation at limited sites, difficult to characterize costs and environmental impacts. Sizes are scalable, but larger systems are more cost effective. Capital costs are estimated to be high. 41

42 SWAC: Performance Capacity of 12 MW Estimated VOM rate of $2.00 per MWh Estimated FOM rate of $80.00 per kw-year Estimated forced outages of 1% per year and planned maintenance of 2% per year. 42

43 SWAC: Costs and Schedule The cost to build a new SWAC plant would be approximately $144.6 million ($12,050/kW). It is estimated to take 36 months to permit the plant, actual times may be longer. It is estimated to take 18 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 42 months. Available for selection by model in

44 SWAC: Results The SWAC option was modeled as a reduction in demand. The SWAC option was simulated against the lowest cost scenario and resulted in higher overall costs. 44

45 Example Geothermal 45 Image Source: U.S. Department of Energy

46 Geothermal: Details Unit characteristics based on information gathered from geothermal facilities on the mainland. Uses energy from steam or hot, high pressure water from deep inside the earth to drive a turbine. It is a sustainable and renewable resource, however potential for Guam is not known. Will require significant geological surveys and research investment. Operating costs are relatively low. 46

47 Geothermal: Performance Capacity of 10 MW Estimated VOM rate of $8.00 per MWh Estimated FOM rate of $ per kw-year Estimated forced outages of 4% per year and planned maintenance of 6% per year. 47

48 Geothermal: Costs and Schedule The cost to build a new geothermal plant would be approximately $52.2 million ($5,220/kW). It is estimated to take 36 months to permit the plant, actual times may be longer. It is estimated to take 24 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 48 months. Available for selection by model in

49 Geothermal: Results The model chose the geothermal option under a variety of retirement and compliance scenarios, including the lowest cost scenario. For the lowest cost scenario, the model added one geothermal unit of 10 MW in These results indicate that for geothermal, it might be worth investing in researching the potential. 49

50 Example Municipal Solid Waste (MSW) 50 Image Source: Keep America Clean

51 MSW: Details Unit characteristics based on information gathered from municipal solid waste facilities on mainland. Municipal solid waste is not always considered sustainable or renewable. There are emissions. Guam has current laws restricting the burning of trash on island. Operating costs are relatively high. Requires adequate and reliable fuel supply. 51

52 MSW: Performance Capacity of 10 MW Estimated VOM rate of $12.00 per MWh Estimated FOM rate of $ per kw-year Estimated forced outages of 6% per year and planned maintenance of 8% per year. 52

53 MSW: Costs and Schedule The cost to build a new MSW plant would be approximately $84.6 million ($8,460/kW). It is estimated to take 24 months to permit the plant, actual times may be longer. It is estimated to take 30 months from the start of engineering to commercial operation date. Total time for permitting, engineering, and construction is 48 months. Available for selection by model in

54 MSW: Results The model did not choose the MSW option due to the high capital and operating costs. 54