2012 GENERATION TECHNOLOGY ASSESSMENT Generation Technology Cost & Performance Technical Supplement to 2012 ENO IRP

Transcription

1 SPO PLANNING ANALYSIS 2012 GENERATION TECHNOLOGY ASSESSMENT Generation Technology Cost & Performance Technical Supplement to 2012 ENO IRP JANUARY 2012 UPDATE An understanding of generation technology cost and performance is a necessary input to planning and decision support activities. SPO Planning Analysis monitors and assesses generation alternatives on an on-going basis. This study updates technology assumptions and is intended as an input into the 2012 Integrated Resource Plan ( IRP ) process as well as other decision support activities involving resource planning and/or transaction evaluations. 1

2 TABLE OF CONTENTS Introduction.. 3 I. The Technology Landscape.. 5 II. Cost & Performance Assumptions III. Detailed Modeling 41 IV. Conclusions

3 INTRODUCTION In support of long-range planning and procurement activities System Planning & Operations ( SPO ), Planning Analysis monitors electric generation technology cost and performance. This report 2012 Generation Technology Assessment describes current assumptions and conclusions. The 2012 Generation Technology Assessment has been prepared in preparation of the 2012 IRP process. Results of this generation technology assessment will support IRP activities in 2012 and will provide the basis for portfolio modeling 3

4 STUDY METHODOLOGY I. II. III. IV. The Technology Landscape Cost & Performance Assumptions Detail Modeling Conclusions Review the state of generation technology and identify candidate technologies that may be available to meet longterm needs. Develop cost and performance assumptions for candidate technologies. Model cost of candidate technologies across relevant range of operations and assess overall attractiveness including risks. Summarize conclusions and identify technologies to be modeled in IRP portfolio design. 4

5 I. The Generation Technology Landscape I. II. III. IV. The Technology Landscape Cost & Performance Assumptions Detail Modeling Conclusions Review the state of generation technology and identify candidate technologies that may be available to meet longterm needs. Develop cost and performance assumptions for candidate technologies. Model cost of candidate technologies across relevant range of operations and assess overall attractiveness including risks. Summarize conclusions and identify reference technologies to be modeled in IRP portfolio design. 5

6 THE RANGE OF TECHNOLOGIES The 2012 Generation Technology Assessment begins by surveying available central state electricity generation technologies, generally those that are two megawatts or greater.. The objective is to identify as wide a range of generation technologies as reasonable to consider. The initial list is subject to a screening analysis to identify generation technologies that are technologically mature and could reasonably be expected to be operational in or around the Entergy regulated service territory.. 6

7 TECHNOLOGIES SCREENED Pulverized Coal Subcritical Pulverized Coal Supercritical Pulverized Coal Ultra Supercritical Pulverized Coal Fluidized Bed Atmospheric Fluidized Bed Pressurized Fluidized Bed Integrated Gasification ( IGCC ) Oxygen-Blown IGCC Air-Blown IGCC Integrated Gasification Fuel Cell Combined Cycle Combustion Turbine / Combined Cycle / Other Natural Gas Combustion Turbine Combined Cycle Small Scale Aeroderivative Steam Boiler Fuel Cells Molten Carbonate Solid Oxide Phosphoric Acid Proton Exchange Membrane Fuel Cell Combined Cycle Nuclear Advanced Boiling Water Reactor Generation IV Modular Reactors Entergy Storage Pumped Hydro Underground Pumped Hydro Battery Flywheel Compressed Air Energy Storage Renewable Technologies Biomass Solar Photovoltaic Solar Thermal Wind Power Municipal Solid Waste Landfill Gas Geothermal Ocean & Tidal 7

8 PREFERENCE FOR PROVEN TECHNOLOGY The Entergy Operating Companies prefer technologies that are proven on a commercial scale. Some technologies identified in this document lack the commercial track record to demonstrate their technical and operational feasibility. A cautious approach to technology development and deployment is therefore prudent in order to maintain System reliability and to protect Operating Company customers from undue risks. The Entergy Operating Companies generally do not plan to be the first movers for emerging technologies. 8

9 TECHNOLOGY LIFE CYCLE Technology Deployment Over Time Conceptual Research & Development Early Movers Established Mature Conventional Gas Fired Fuel Cell CCGT Aeroderivative Combustion Turbine Combined Cycle Gas Turbine Heavy Duty Combustion Turbine Gas Fired Steam Boiler Solid Fuel Integrated Gasification Fuel Cell CCGT Oxygen Blown IGCC Ultra Supercritical PC Air Blown IGCC Supercritical PC Subcritical PC Nuclear Generation IV Nuclear Modular Nuclear Generation III Nuclear Generation II Nuclear MSW Plasma Torch Geothermal Biomass - CFB Biomass Stoker Boiler Renewable Ocean and Tidal Power Wind Off- Shore Landfill Gas MSW Wind On- Shore Solar Thermal Solar PV Energy Storage Flywheel Underground Pumped Hydro Battery Compressed Air Energy Storage Pumped Storage Hydro Distributed Generation Proton Fuel Cell Small CT Internal Combustion Engine 9

10 SCREENING PROCESS The following pages provide an overview of each major technology. Description of the technology The objective is to identify technologies that merit further consideration, more detailed modeling in the following sections, and to eliminate those that do not. The current state of maturity and extent of deployment Factors which may constrain additional deployment or advancement Potential for improvements in cost or performance 10

11 PULVERIZED COAL Background: Pulverized Coal ( PC ) is a mature technology representing nearly 40% of installed utility capacity in the U.S. The generation technology incorporates a boiler that burns pulverized coal producing steam that feeds into a steam turbine to produce electricity. PC technology is categorized based on boiler pressure and temperature into three categories: Subcritical (2,400 psig and 1000 F) Supercritical (3,200 psig and 1000 F) Ultra Supercritical (3,400 psig and 1100 F) Challenges: Coal s environmental footprint, especially it s emissions profile, creates a significant challenge to future deployment and may threaten the long-term viability of existing facilities. In particular, coal fired facilities are high carbon emitters. Consequently, the imposition of a cost on CO 2 emissions would negatively affect the economics of PC. Lack of a commercial scale method for economic carbon capture and storage and the risk of significant carbon compliance cost has already limited coal deployments. Finally, coal s relatively high capital cost put it at a disadvantage to other technologies that have lower up front cost. The reduction or capture of environmental emissions, particularly carbon dioxide (CO 2 ), is the current focus for improvements in this technology. 11

12 PULVERIZED COAL Technology Description Disposition Subcritical Pulverized Coal Subcritical cycle boilers for steam coal plants have been in use for more than 20 years. Efficiency of subcritical boilers is in the 32-36% range (9,480-10,665 btu/kwh). The technology is mature and use is expected to decline as the need for increased efficiencies to reduce emissions favor the use of more efficient technology. Eliminate from analysis in favor of newer more efficient technology such as supercritical boilers. Supercritical Pulverized Coal Supercritical cycle boilers have long been utilized in international markets. Higher boiler pressures and temperatures improves efficiency to between 36-40% (9,480-8,530 btu/kwh) and reduces emissions. Environmental regulations may dictate the need for higher efficiency to reduce emissions making this the PC technology of choice. Retained for detailed analysis. Ultra Supercritical Pulverized Coal Ultra supercritical cycle boilers offer the potential of higher efficiencies and lower emissions, but these advantages come at increased operations risk and construction cost. Efficiency ranges between 40-45% (8,530-7,585 btu/kwh). The higher pressures and temperatures require higher alloy steels in the boiler resulting in higher capital cost. Eliminated from analysis until the technology has been commercially proven in order to understand cost and risk profile. 12

13 FLUIDIZED BED Background: Fluidized bed combustion, both bubbling bed and circulating bed, are mature, having been commercially available since the 1970 s. Due to the limitations of the bubbling bed design the circulating bed ( CFB ) is the preferred technology design. CFB boilers burn crushed coal or other carbon-based solid fuel in a mixture with blown air and limestone. More than 95 percent of the sulfur pollutants are captured inside the CFB boiler and falls out as ash. Challenges: Environmental concerns associated with CO 2 emissions and relatively high capital cost affect CFB technology in much the same manner as PC technology. Other Considerations: A CFB plant has the ability to burn a variety of solid fuels including coal, petroleum coke ( pet coke ), and other waste fuels resulting in lower fuel cost. Historically CFB boilers operated at atmospheric conditions limiting size to around 300 MW. Development is underway on pressurized circulating bed designs capable of electrical output up to 600 MW. 13

14 FLUIDIZED BED Technology Description Disposition Atmospheric Circulating Fluidized Bed ( ACFB ) ACFB technology is mature. The ACFB boiler is suited to burn a variety of carbon-based solid fuel feedstocks, including bituminous and subbituminous coals, petroleum coke and waste coal. Technological limitations prevent boiler sizes much above a 300 MW limit. Retained for detailed analysis. Pressurized Circulating Fluidized Bed ( PCFB ) PCFB boilers offer the advantage of larger size and reduced environmental emissions. However, the technology is at an early stage of commercialization and not proven for wide spread deployment. Eliminated from analysis because the technology lacks sufficient commercial development at this time. 14

15 INTEGRATED GASIFICATION Background: Integrated Gasification Combined Cycle ( IGCC ) is an emerging technology. An IGCC facility combines two processes or stages. First, a gasification unit converts coal or other solid fuel into a synthesis gas ( syngas ). Second, the syngas is burned in a combined cycle gas and steam power plant. Each of these processes have been widely deployed in separate applications. The uniqueness of the IGCC technology is the combining of the technologies for the purpose of electricity generation. Challenges: At this time IGCC has not been widely deployed and capital cost are higher than PC and CFB coal plants. Further, the lack of operating experience raises concerns about operating cost and performance. IGCC has attracted attention because the gasification process may facilitate the removal of carbon. Consequently, carbon capture and storage may be more feasible compared with other carbon based solid fuel technologies. IGCC demonstration units currently in operation have only demonstrated efficiencies of between percent (heat rates between 8,300 and 9,200 Btu/kWh) which is similar to current supercritical PC technology. However, IGCC has the potential to be more efficient than conventional PC with efficiency of percent (heat rate between 7,100 and 7,900 Btu/kWh). 15

16 INTEGRATED GASIFICATION Technology Description Disposition Oxygen-Blown IGCC IGCC technology is the least mature of all solid fuel technologies. The gasifier and air separation components results in high capital cost compared to other generation technologies. If carbon capture technology is required to control emissions the cost will increase and output decrease, negatively impacting economics. Eliminated from analysis because of high capital cost and lack of sufficient commercial operating history.. Air-Blown IGCC Like other IGCC technologies air-blown IGCC is immature and not proven in commercial practice. Air-blown IGCC has potential of being a lower cost alternative for IGCC by eliminating the air separation unit. Eliminated from analysis because technology lacks sufficient commercial development to fully evaluate its cost and risk. Integrated Gasification Fuel Cell Combined Cycle This technology is still in the development/ bench scale phase. It is a hybrid IGCC technology combining fuel cells with gas combustion turbines to increase efficiency and reduce emissions. The technology is based on solid oxide fuel cell (SOFC) design. The current timeline estimates the commercialization of a 100 MW unit some time around Eliminated from analysis because the technology is currently in the developmental stage and not available for deployment in commercial applications. 16

17 COMBUSTION TURBINE Background: Combustion Turbine ( CT ) generation is a mature technology first introduction into the power generation market in Aeroderivative CTs, based on aircraft engine design, are more recent having been introduced into the generation market in Heavy Duty - Heavy Duty frame CTs with a size range of between MW and heat rates between 9,000-11,500 Btu/kWh are broadly utilized in the power generation market with more than 3,000 units in operation accumulating nearly 100 million operating hours. Aeroderivative - Aeroderivative CTs, as the name implies, are based on flight engines and are smaller, lighter, and more efficient than heavy duty CTs. Size ranges between MW with heat rates in the 8,400-9,500 Btu/kWh range. New aeroderivative CTs in the 100 MW range are new to the market. Opportunities : CT technology offers quick start capability, flexible siting and short construction time, low emissions footprint, and relatively low capital cost making it suited for peaking duty applications. Challenges: Higher heat rates make CTs less economic than CCGTs for load following and base load operations. However, CTs may be designed and constructed to provide peaking duty services in the near term yet allow for the conversion to combined cycle operations if load or other circumstances require additional load following capability. Aeroderivative turbines have higher capital and maintenance cost than heavy duty CTs resulting from the use of lighter weight exotic materials and more stringent machine tolerances. 17

18 COMBUSTION TURBINE Technology Description Disposition Combustion Turbine Heavy Duty Combustion turbine ( CT ) technology, based on the heavy duty frame, is mature with thousands of units in operation around the world. Still in development are newer generation turbines with larger electrical output, better heat rates and reduced emissions. Retained for detailed analysis. Combustion Turbine - Aeroderivatives Aeroderivative combustion turbines are an Established technology. Their smaller size ( MW) and higher capital and maintenance cost could potentially limit deployment to situations such as local area problems and areas with limited space. Retained for detailed analysis. 18

19 COMBINED CYCLE GAS TURBINE Background: Combined Cycle Gas Turbine ( CCGT ) technology is mature representing over 50% of new generation capacity installed in the U.S. since CCGT arrangements typically are combinations of one or more combustion turbines each with a dedicated heat recovery steam generator ( HRSG ) and a common steam turbine. Development efforts currently underway focus on designs that incorporates closed-loop steam cooling and advanced coating materials allowing for higher firing temperatures and increased efficiency making CCGT more economic for baseload applications. Opportunities Taking into consideration moderate capital cost, low expected natural gas price forecast and flexible operating modes CCGTs are expected to be the choice technology to meet most load following roles and baseload applications over the first ten years of the planning horizon and possibly beyond. Challenges: CCGT cost competitiveness is driven by low to moderate natural gas prices. A sustained period of high gas prices would reduce the attractiveness of CCGTs particularly if a price is placed on carbon. 19

20 COMBINED CYCLE GAS TURBINE Technology Description Disposition Combined Cycle As with combustion turbines, combined cycle technology is mature with a significant number of units in operation. The development of the new CCGT designs incorporating closed loop cooling with higher pressure and firing temperature will serve to keep this technology competitive with other generation technologies for use in the power generation business during the planning horizon. Retained for detailed analysis. 20

21 NUCLEAR Background: No new nuclear power plant has been constructed in the U.S. in over 30 years. However, a nuclear generation alternative offers the potential benefits of no greenhouse or other air emissions, fuels diversity, and energy security. Nuclear technology, while considered mature, continues to push new technological advances. Generation II reactors, first installed in the 1970 s, were light water reactors and represent most all of the reactors operating in the U.S. today. Since 1996, Generation III and III+ designs have been considered by developers as the design choice. Generation III includes Economically Simplified Boiling Water Reactor ( ESBWR ), Advanced Passive Nuclear Reactor ( AP-1000 ), Advanced Boiling Water Reactor ( ABWR ), and Evolutionary Pressurized Water Reactor ( EPR ) designs. While most recent applications to construct and operate a new plant include one of these designs no applications have been approved by regulators at this time. Nuclear equipment manufactures are currently designing and developing Generation IV technology. Generation IV designs include closed fuel loop cycles for more efficient fuel burn with reduced waste and cost. Generation IV is expected to include a line of smaller modular units well below the 300+ MW size currently considered. Expectations for commercial delivery of Generation IV nuclear reactors is in the timeframe. Challenges: Among the issues facing the nuclear generation are: The large investment required and the impact on an owner s financial structure Limited government support at both state and federal levels Additional safety systems in reaction to the Fukashema Nuclear accident in Japan could raise cost. Potentially significant increases in cost estimates being planned Delays in NRC review and approval process Disposition of nuclear waste Opposition by citizen and environmental groups Opportunities: Nuclear could become attractive if the U.S. passes a stringent greenhouse gas policy and resolves concerns around nuclear waste and safety. 21

22 NUCLEAR Technology Description Disposition Advanced Boiling Water (Generation III & III+) The design of the Generation III & III+ reactors has been around for more than 10 years but the technology must still be considered in the Early Mover phase since no new construction and operating permit has yet been approved by the NRC. Retained for detailed analysis. Considering the long-lead time for development and construction the earliest COD for this technology is assumed to be after Generation IV Generation IV designs are still in the early stages of R&D with no potential deployment before the time period. Generation IV technology has the potential to reduce nuclear waste and fuel cost. Eliminated from analysis due to the expectation of commercial deployment beyond the current planning horizon. Modular Designed A sub-set of the Generation IV these smaller modular reactors offer the potential to reduce total investment cost for a new installation, but is not expected to be available for deployment until 2020 at the earliest. Eliminated from analysis due to the expectation of commercial deployment beyond the current planning horizon. 22

23 ENERGY STORAGE Background: Energy storage technologies provide load shifting peak shaving capability for utilities. These technologies are charged using lower cost off-peak energy and discharged during periods when energy cost or demand are higher. Examples of Energy Storage technologies include pumped storage hydro, battery, flywheel and compressed air energy storage. Pumped Storage Hydro- Pumped storage hydro is mature and is one of the two bulk energy storage technologies commercially available. The potential to use underground reservoirs such as old salt mines offer some opportunities for a limited number of projects in the region, but development cost are high. Compressed air energy storage ( CAES ) is mature and is the second bulk energy storage technology commercially available. CAES can use old underground salt mines as storage mediums for holding compressed air. When needed the compressed air is withdrawn and mixed with a fuel such as natural gas for firing in a combustion turbine. This process reduces fuel requirements by nearly two-thirds compared to conventional combustion turbines. Compressed Air Energy Storage- Flywheel- Flywheels stores kinetic energy in the form of a spinning mass, a rotor, which can be discharged for peak shaving or backup purposes. Currently flywheels are immature with test units ranging in size from 2-6 kw. Future plans call for scaling up to 25 kw. The discharge rate is a drawback with discharge times of up to one hour. Battery Storage- Large scale energy storage using batteries is still a Developing technology. Developers need to reduce cost, improve life cycle and reduce the use of hazardous material. Currently battery energy storage cost is high, estimates are around $3,000/kW and most battery types utilize hazardous material that can become combustible when exposed to water requiring additional protection for the battery cells. Battery energy storage may find a niche application assisting wind projects with grid integration issues. Challenges: Energy Storage technologies are more capital intensive than traditional technologies and are net energy users. These technologies may find specialized applications such as assisting with grid integration of intermittent renewable resources like wind. 23

24 ENERGY STORAGE Technology Description Disposition Pumped Hydro and Underground Pumped Hydro Battery Flywheel Pumped hydro is mature with 21.5 GW in operation. The large amount of land resources required along with the proper site elevations make this a highly site specific niche deployment option. Underground pumped storage can offer limited opportunity considering the numerous underground salt caverns in the service area. Battery energy storage is a developing technology at the utility scale. Future development is needed to improve cycle life, size, and reduce cost. Useful for grid support and possibly wind integration issues. Flywheel s limited capacity size and short discharge duration is not currently attractive for utility grid applications. Eliminated from analysis due to a lack of sufficient available sites for commercial development. Eliminate from analysis because the technology lacks sufficient benefits for widespread deployment. Eliminate from analysis because the technology lacks sufficient scale for consideration. Compressed Energy Storage CAES is one of the only bulk energy storage technologies commercially available. High capital cost and acceptable sites limit deployment opportunities. Eliminate from analysis because the technology lacks sufficient benefits or sites for widespread deployment. 24

25 RENEWABLE GENERATION Background: Renewable generation technologies offer the potential to supplement utilities traditional generation portfolio. Renewable generation can provide utilities with no or neutral emission generation to assist in reducing greenhouse gas emissions. Renewable generation, especially wind power has seen rapid growth over the past decade, due in large part to government subsidies (federal and state) and state mandates often referred to as renewable portfolio standards ( PRSs ). Mandatory RPSs currently exist in about 30 states. The only state RPS in the Entergy utility service area is Texas. RPS usually require a load serving entity to obtain a certain percent of its electricity from renewable sources often utilizing a market mechanism known as renewable energy credits ( RECs ). This technology assessment does not consider government subsidies or requirements. Wind generation is the most mature and prevalent renewable technology. For the U.S. the best wind generation sites are in the Great Plains region of the country. Manufactures of wind turbines and associated equipment continue working to improve wind plant availability and capacity factors through the use of variable speed turbines, larger turbines, maximized plant layout, and improved control systems. Biomass is a carbon neutral renewable generation resource utilizing forest and agricultural waste as fuel sources. The dispersed nature of feedstock and large quantities required to fuel a utility scale plant generally limit the capacity of biomass plants to around 50 MW. Government Policy- Wind- Biomass- Solar- Solar Photovoltaic ( PV ) employs semiconducting material to convert direct sunlight into electricity. The current generation of solar PV cells have an operating efficiency of 10-20%. Future generations of PV cells need to improve efficiency to better compete with other renewable and traditional generation technologies. Ultimately, the efficiency of solar PV installations are highly dependent on the amount of direct solar radiation making the best site location the western part of the US. Solar thermal technology concentrates solar radiation using mirrors to heat a medium, such as molten salt, to produce steam and ultimately electricity. Land requirements are large, requiring 4-6 acres per MW of peak capacity or more for lower quality locations. As with solar PV output is highly dependent on the amount of solar radiation with the best site located in the western part of the US. 25

26 RENEWABLE GENERATION Geothermal- Prime geothermal sites with high-grade steam reservoirs have been largely developed, mostly in the pacific coast region. Future projects will depend on water-steam, hot water, or dry rock technologies that are less efficient. Within the region natural deposits of hot brine found in conjunction with oil and gas deposits offer options for geothermal production, albeit, expensive to develop. Ocean and Tidal Power- Ocean and Tidal power, both in-stream hydro and ocean wave energy are mostly still in the bench-scale phase of development with few actual operating turbines in service. Time, cost and complexity of the U.S. FERC regulatory process poses a barrier for tidal project developers. Landfill gas systems collect the naturally occurring methane gas emitted by landfill decay and processes it for burning in small combustion turbines or internal combustion engines. Issues for landfill gas are mainly associated with gas processing which includes the removal of moisture and impurities, compression, and blending the gas to achieve consistent heating values. Challenges: The need to meet Renewable Portfolio Standard mandates and fill the potential void left by coal retirements will pose a significant challenge for utilities in the coming years. High capital cost, low efficiencies, and intermittent nature of most renewable technologies will need to be accounted for in the planning and operations of utilities as renewables are deployed as part of generation portfolios. Municipal Solid Waste and Landfill Gas- Municipal solid waste ( MSW ) projects offer opportunities where sufficient fuel supply can be procured. Based on current estimates a 50 MW MSW facility requires approximately 2,000 tons of solid waste per day for full output. Solid waste projects require large fuels handling systems and substantial processing of solid waste to remove unwanted containments from the fuel prior to burning. 26

27 RENEWABLE GENERATION Technology Description Disposition Biomass Solar Photovoltaics Biomass is a mature technology with a carbon neutral footprint. Dispersed nature of feedstock and large fuel requirements limit capacity to around 50 MW per site. Solar PV technology is still maturing. The biggest improvement opportunities are 1) increase efficiency and 2) lower capital cost. Retained for detailed analysis. Retain for detailed analysis as an option for the second ten years of the plan horizon. Solar Thermal Solar thermal technology is mature. However, most high quality site are not located near the Entergy area and capital cost remains high. Eliminated from analysis due to lack of sufficient commercial sites within the region. Wind Power Municipal Solid Waste Wind technology is mature, over 35 GW of capacity installed world-wide. Best site are in the upper Great Plains states so transmission is an issue. For MSW technology is mature. However, fuels handling and processing needs to be improved and site capacity is limited. Retained for detailed analysis. Eliminated from analysis due to lack sufficient potential at this time. 27

28 RENEWABLE GENERATION Technology Description Disposition Landfill Gas The basic firing system for Landfill Gas is a mature technology. The issue for landfill gas is fuel supply is low quality with numerous contaminants that must be removed before use. Most development opportunities are under 10 MW which reduces cost competitiveness. Eliminated from analysis due to lack sufficient potential at this time. Niche opportunities may exist in the future. Geothermal The greatest potential Geothermal generation in the Entergy region rests with the hot brine found in conjunction with oil and gas deposits. These are lower quality resources compared to the pure steam resources found in the West and will cost more to tap and operate. Eliminated from analysis due to lack sufficient commercial potential at this time within and in close proximity to the Entergy Operating Companies. The Southeast U.S. geological conditions are not well suited for this technology Ocean & Tidal Ocean & Tidal power has seen limited actual operating projects. Both in-stream hydro and ocean wave projects are costly and require FERC regulatory approvals. Eliminated from analysis because the technology lacks sufficient commercial development at this time. 28

29 RESULTS OF SCREEN SPO Planning Analysis through this Technology Screen has selected certain traditional and renewable generation technology alternatives which may reasonably be expected to meet the Systems primary objectives of cost, risk mitigation, and reliability. For each selected technology Planning Analysis will develop the necessary cost and performance parameter inputs into the detailed modeling used to develop the reference technologies comprising the IRP Portfolio. SPO Planning Analysis will monitor the technologies eliminated as a result of the initial screen and incorporate changes into future technology assessments and IRPs. 29

30 CANDIDATE TECHNOLOGIES The following technologies are being carried forward for development of detailed planning assumptions... Pulverized Coal Supercritical Pulverized Coal Fluidized Bed Atmospheric Fluidized Bed Natural Gas Fired Combustion Turbine Combined Cycle Small Scale Aeroderivative Nuclear Advanced Boiling Water Reactor Renewable Technologies Biomass Wind Power Solar PV 30

31 II. Cost & Performance Assumptions I. II. III. IV. The Technology Landscape Cost & Performance Assumptions Detail Modeling Conclusions Review the state of generation technology and identify candidate technologies that may be available to meet longterm needs. Develop cost and performance assumptions for candidate technologies. Model cost of candidate technologies across relevant range of operations and assess overall attractiveness including risks. Summarize conclusions and identify reference technologies to be modeled in IRP portfolio design. 31

32 Characteristic Units GE 7 FA (.03) First Year Available from Vendor* COMBUSTION TURBINES TECHNOLOGY ASSUMPTIONS (Yr) (First Ten Years of Planning Horizon) 2011$ GE 7FA (.03) GE LM 6000 GE LM 6000 GE LMS 100 GE LMS 100 GE 7FA (.05) GE 7FA (.05) Net MW at ISO (59 F) (MW) Number of Units (#) Typical Development Time Typical Construction Time (Yrs.) (Yrs.) Overnight Cost ($/kw) $850 $800 $1,600 $1,100 $1,400 $1,150 $800 $760 Installed Cost ($/kw) $940 $900 $1,800 $1,200 $1,550 $1,250 $900 $840 Heat Rate (ISO) (Btu/kWh) 9,850 9,850 9,150 9,150 8,400 8,400 9,250 9,250 Typical Capacity Factor (%) Fixed O&M ($/kw-yr) $8.50 $6.00 $16.00 $8.00 $12.00 $8.00 $7.50 $5.50 Variable O&M ($/MWh) $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 NOx (lbs/mmbtu) SO2 (lbs/mmbtu) CO2 (lbs/mmbtu) Hg (lbs/mmbtu) Useful Life (Yrs.) *First year of commercial operation equals First Year Available from Vendor plus construction time. 32

33 COMBUSTION TURBINES TECHNOLOGY ASSUMPTIONS Characteristic Units GE LM 6000 First Year Available From Vendor* (Second Ten Years of Planning Horizon) 2022$ GE LM 6000 GE LMS 100 GE LMS 100 GE 7FA.05 GE 7FA.05 (Yr) Net MW at ISO (59 F) (MW) Number of Units (#) Typical Development Time (Yrs.) Typical Construction Time (Yrs.) Overnight Cost ($/kw) $2,122 $1,459 $1,856 $1,525 $1,061 $1,008 Installed Cost ($/kw) $2,388 $1,592 $2,056 $1,658 $1,194 $1,114 Heat Rate (ISO) (Btu/kWh) 9,050 9,050 8,300 8,300 9,250 9,250 Typical Capacity Factor (%) Fixed O&M ($/kw-yr) $19.50 $9.93 $14.50 $9.75 $9.15 $7.45 Variable O&M ($/MWh) $2.48 $2.48 $2.48 $2.48 $2.48 $2.48 NOx (lbs/mmbtu) SO2 (lbs/mmbtu) CO2 (lbs/mmbtu) Hg (lbs/mmbtu) Useful Life (Yrs.) *First year of commercial operation equals First Year Available from Vendor plus construction time. 33

34 COMBINED CYCLE TECHNOLOGY ASSUMPTIONS (First Ten Years of Planning Horizon) 2011$ Characteristic First Year Available from Vendor* Units GE 7FA.03 (2x1) GE 7FA.05 (2x1) GE 7FA.03 (1x1) GE 7FA.05 (1x1) GE 7H (Yr) Net MW at ISO (59 F) (MW) Number of Units (#) Typical Development Time (Yrs.) Typical Construction Time (Yrs.) Overnight Cost ($/kw) $1,200 $1,100 $1,500 $1,350 $1,550 Installed Cost ($/kw) $1,350 $1,350 $1,650 $1,650 $1,700 Heat Rate (ISO) (Btu/kWh) 6,650 6,550 6,800 6,700 6,400 Typical Capacity Factor (%) Fixed O&M ($/kw-yr) $15.00 $15.00 $20.00 $20.00 $15.00 Variable O&M ($/MWh) $2.50 $2.50 $2.50 $2.50 $3.50 NOx (lbs/mmbtu) SO2 (lbs/mmbtu) CO2 (lbs/mmbtu) Hg (lbs/mmbtu) Useful Life (Yrs.) *First year of commercial operation equals First Year Available from Vendor plus construction time. 34

35 COMBINED CYCLE TECHNOLOGY ASSUMPTIONS (Second Ten Years of Planning Horizon) 2022$ Characteristic Units GE 7FA.05 (2x1) GE 7FA.05 (1x1) GE 7H First Year Available from Vendor* (Yr) Net MW at ISO (59 F) (MW) Number of Units (#) Typical Development Time (Yrs.) Typical Construction Time (Yrs.) Overnight Cost ($/kw) $1,478 $1814 $2,082 Installed Cost ($/kw) $1,814 $2,217 $2,284 Heat Rate (ISO) (Btu/kWh) 6,550 6,600 6,400 Typical Capacity Factor (%) Fixed O&M ($/kw-yr) $18.61 $24.82 $18.61 Variable O&M ($/MWh) $3.01 $3.10 $4.34 NOx (lbs/mmbtu) SO2 (lbs/mmbtu) CO2 (lbs/mmbtu) Hg (lbs/mmbtu) Useful Life (Yrs.) *First year of commercial operation equals First Year Available from Vendor plus construction time. 35

36 COAL & NUCLEAR TECHNOLOGIES ASSUMPTIONS (First Ten Years of Planning Horizon) 2011$ Characteristic Units PC CFB Generation III - Nuclear First Year Available from Vendor* (Yr) Size (MW) ,310 Number of Units (#) Typical Development Time (Yrs.) Typical Construction Time (Yrs.) Overnight Cost ($/kw) $2,150 $2,500 $5,000 Installed Cost ($/kw) $2,700 $3,300 $7,500 Although there are a few nuclear projects in development around the U.S., given the long lead time to develop and construct a new nuclear plant Entergy does not believe such a facility could be online prior to 2021 at the earliest. Heat Rate (Btu/kWh) 9,250 10,600 10,200 Typical Capacity Factor (%) Fixed O&M ($/kw-yr) $40.00 $45.00 $81.54 Variable O&M ($/MWh) $3.50 $10.00 $4.08 NOx (lbs/mmbtu) SO2 (lbs/mmbtu) CO2 (lbs/mmbtu) Hg (lbs/mmbtu) Useful Life (Yrs.) *First year of commercial operation equals First Year Available from Vendor plus construction time. 36

37 COAL & NUCLEAR TECHNOLOGIES ASSUMPTIONS (Second Ten Years of Planning Horizon) 2022$ Characteristic Units PC w/90% CO2 Removal CFB Generation III - Nuclear First Year Available from Vendor* (Yr) Size (MW) ,310 Number of Units (#) Typical Development Time (Yrs.) Typical Construction Time (Yrs.) Overnight Cost ($/kw) $4,922 $3,326 $6,625 Installed Cost ($/kw) $6,020 $4,390 $9,612 Heat Rate (Btu/kWh) 13,100 10,600 10,200 Typical Capacity Factor (%) Fixed O&M ($/kw-yr) $86.87 $55.84 $ Variable O&M ($/MWh) $9.93 $12.41 $5.06 Generation IV New Nuclear Commercial Operation dates in the U.S. are not expected before 2030 or later, and therefore are not considered. However, this technology will be monitored and could be incorporated into future Technology Assessments and IRPs especially if it offers significant cost or time to develop and construct savings. NOx (lbs/mmbtu) SO2 (lbs/mmbtu) CO2 (lbs/mmbtu) Hg (lbs/mmbtu) Useful Life (Yrs.) *First year of commercial operation equals First Year Available from Vendor plus construction time. 37

38 RENEWABLE TECHNOLOGIES ASSUMPTIONS (First Ten Years of Planning Horizon) 2011$ Characteristic Units Biomass - Stoker Biomass CFB Wind On Shore Wind Off Shore Solar - PV First Year Available from Vendor* (Yr) Size (MW) Number of Units (#) Typical Development Time (Yrs.) Typical Construction Time (Yrs.) Overnight Cost ($/kw) $3,000 $4,000 $1,850 $2,900 $4,500 Installed Cost ($/kw) $3,400 $4,700 $2,000 $3,500 $5,000 Heat Rate (Btu/kWh) 13,000 11,000 NA NA NA Typical Capacity Factor (%) Fixed O&M ($/kw-yr) $55.00 $70.00 $40.00 $90.00 $20.00 Variable O&M ($/MWh) $7.50 $3.00 $1.00 $1.00 $0.00 NOx (lbs/mmbtu) SO2 (lbs/mmbtu) CO2 (lbs/mmbtu) Hg (lbs/mmbtu) Useful Life (Yrs.) * Lead times preclude deployment in 2012 or First Year Available from Vendor if later than Does not include any possible cost subsidization. Does not include capacity match cost or flexible capability cost to make intermittent resources consistent with dispatchable resources. Entergy Region refers to the area served by or in close proximity to the Entergy Operating Companies. 38

39 RENEWABLE TECHNOLOGIES ASSUMPTIONS (Second Ten Years of Planning Horizon) 2022$ Characteristic Units Biomass CFB Wind On Shore Wind Off Shore Solar - PV First Year Available from Vendor* (Yr) Size (MW) Number of Units (#) Typical Development Time (Yrs.) Typical Construction Time (Yrs.) Overnight Cost ($/kw) $5,288 $2,356 $3,263 $4,791 Installed Cost ($/kw) $6,214 $2,547 $3,868 $5,428 Heat Rate (Btu/kWh) 11,000 NA NA NA Typical Capacity Factor (%) Fixed O&M ($/kw-yr) $86.87 $49.64 $ $24.82 Variable O&M ($/MWh) $3.72 $1.24 $1.24 $0.00 NOx (lbs/mmbtu) SO2 (lbs/mmbtu) CO2 (lbs/mmbtu) Hg (lbs/mmbtu) Useful Life (Yrs.) *First year of commercial operation equals first year available plus construction time. Does not include any possible cost subsidization. Does not include capacity match cost or flexible capability cost to make intermittent resources consistent with dispatchable resources. Entergy Region refers to the area served by or in close proximity to the Entergy Operating Companies. 39

40 CANDIDATE TECHNOLOGY INSTALLED CAPITAL COST PROJECTIONS ( ) Installed Capital Cost ($/kw) Combustion Turbines: CT 7F $900 $929 $974 $1,004 $1,075 $1,071 $1,076 $1,092 $1,108 $1,142 $1,170 $1,194 $1,267 $1,427 CT LM6000 $1,200 $1,239 $1,299 $1,338 $1,434 $1,427 $1,435 $1,456 $1,478 $1,522 $1,561 $1,592 $1,689 $1,828 CT LMS 100 $1,250 $1,291 $1,353 $1,394 $1,493 $1,487 $1,494 $1,517 $1,539 $1,586 $1,626 $1,658 $1,760 $1,943 Combined Cycle: CCGT 7F (2x1) $1,350 $1,395 $1,471 $1,524 $1,619 $1,635 $1,643 $1,667 $1,692 $1,734 $1,778 $1,814 $1,925 $2,125 CCGT 7F (1x1) $1,650 $1,705 $1,798 $1,863 $1,979 $1,998 $2,008 $2,037 $2,068 $2,120 $2,173 $2,217 $2,352 $2,597 CCGT 7H $1,700 $1,757 $1,853 $1,920 $2,039 $2,059 $2,069 $2,099 $2,130 $2,184 $2,239 $2,284 $2,424 $2,676 Solid Fuel: PC $2,700 $2,806 $2,959 $3,066 $3,256 $3,338 $3,304 $3,353 $3,402 $3,452 $3,521 $3,592 $3,812 $4,209 PC w/carbon Capture $5,902 $6,020 $6,388 $7,053 CFB $3,300 $3,429 $3,616 $3,747 $3,980 $4,079 $4,038 $4,098 $4,158 $4,220 $4,304 $4,390 $4,659 $5,144 Nuclear $7,500 $7,826 $8,043 $8,234 $8,461 $8,599 $8,738 $8,880 $9,057 $9,238 $9,423 $9,612 $10,200 $11,262 Biomass $4,700 $4,856 $5,067 $5,249 $5,658 $5,659 $5,571 $5,682 $5,826 $5,942 $6,092 $6,214 $6,594 $7,281 Wind (On-Shore) $2,000 $2,033 $2,086 $2,072 $2,355 $2,501 $2,399 $2,375 $2,420 $2,478 $2,512 $2,547 $2,656 $2,847 Wind (Off-Shore) $3,500 $3,558 $3,594 $3,511 $3,936 $4,116 $3,883 $3,782 $3,793 $3,822 $3,815 $3,868 $4,033 $4,323 Solar PV $5,000 $5,166 $5,287 $5,371 $5,682 $5,569 $5,371 $5,371 $5,400 $5,400 $5,428 $5,428 $5,428, $5,428 Dollars are stated in Nominal values including both Real cost changes and inflation. Does not include any cost subsidization or REC value. 40

41 III. Detailed Modeling I. II. III. IV. The Technology Landscape Cost & Performance Assumptions Detail Modeling Conclusions Review the state of generation technology and identify candidate technologies that may be available to meet longterm needs. Develop cost and performance assumptions for candidate technologies. Model cost of candidate technologies across relevant range of operations and assess overall attractiveness including risks. Summarize conclusions and identify reference technologies to be modeled in IRP portfolio design. 41

42 FUEL AND EMISSIONS ALLOWANCE CREDITS PRICES Forecasts: SPO has developed long-term forecasts for relevant fuel prices and emission allowance prices. Because these prices can have a large impact on the viability of competing technologies, where appropriate multiple forecasts have been made in order to see how robust a given technology is relative to its underlying fuel; and emissions allowance price forecasts. Delivered Natural gas prices: The technology assessment is based on the SPO Henry Hub natural gas price forecast dated January 19, Actual delivered gas prices to a specific plant could be a little higher or lower than the Henry Hub price. The Henry Hub, located at Erath Louisiana connects to nine interstate and four intrastate gas pipelines. There are three gas price forecasts cases used in this assessment: Levelized Nominal Prices for the years Low $4.22/MMBtu Reference $6.29/MMBtu High $8.46/MMBtu Delivered Coal Prices The technology assessment is based on the SPO Delivered Coal Reference Price forecast January 25, Actual delivered coal prices to a specific plant could be a little higher or lower than this forecast which is a volume weighted average of delivered coal prices at White Bluff, Independence, Nelson 6 and Entergy s minority interest at Big Cajun 2, Unit 3. In order to provide for uncertainty in long-term coal prices Low and High Coal Price Forecast were also considered. These alternative forecast were $1.00 (nominal) per MMBtu higher or lower than the Reference Case. Levelized Nominal Prices for years the (PRB) Low $2.35 $/MMBtu Reference $3.35 $/MMBtu High $4.35 $/MMBtu Levelized Nominal Prices for the years (PRB) Low $3.16 $/MMBtu Reference $4.16 $/MMBtu High $5.16 $/MMBtu Levelized Nominal Prices for the years Low $5.57/MMBtu Reference $9.08/MMBtu High $13.40/MMBtu 42

43 FUEL AND EMISSIONS ALLOWANCE CREDITS PRICES Delivered Biomass Prices The technology assessment is based on the SPO Delivered Biomass Reference Price forecast June 4, Actual delivered biomass prices to a specific plant could be higher or lower than this forecast. SPO monitors market prices for biomass and does not believe the outlook for prices has materially changed since the 2010 forecast. The forecast is based on a market survey of Pine Pulpwood Stumpage plus forecast escalations for timber and lumber and general freight trucking through Prices beyond 2020 are held constant in real terms. Levelized Nominal Price for the 30 years Reference $3.93/MMBtu Levelized Nominal Price for the 30 years Reference $4.80/MMBtu Delivered Nuclear Fuel Cost The technology assessment for long-term nuclear fuel cost is based on the SPO Generic Nuclear Fuel forecast dated December 21, This forecast is derived from a more detailed unit level longterm forecast prepared by Entergy Nuclear s Fuel Group on August 19, Due to the relative stability of nuclear fuel cost and the small share of total cost at nuclear plants, High and Low Sensitivity cases are not necessary. Levelized Nominal Price for the 40 years Reference $1.24/MMBtu Levelized Nominal Price for the 40 years Reference $1.53/MMBtu 43

44 FUEL AND EMISSIONS ALLOWANCE CREDITS PRICES CO 2 Price Forecasts The Technology Assessment ranks technologies under two different states of the world. One state is that resources are not subject to carbon constraints. The second is that resources become subject to meaningful carbon constraints in the future. The CO 2 price forecast used in the Technology Assessment assumes a cap and trade program beginning in 2023 at about $24 per ton nominal and escalating about 7 to 8 percent nominally per year through The POV assumes that price must rise faster than inflation until global goals of CO 2 reduction are reached. Levelized CO 2 Nominal Prices for the years as specified below ($/Short Ton) (30 Years For Use with CCGT, CT) $ (30 Years For Use with CCGT, CT) $ (40 Years for use with Coal Plants) $ (40 Years for use with Coal Plants) $55.32 NOx, SO 2 Price Forecasts The Technology Assessment assumes that the Cross State Air Pollution Rule CSAPR as finalized by the Environmental Protection Agency EPA in July 2011 with October 2011 EPA proposed modifications survives court challenges. Under CSAPR AR/LA/MS are only subject to seasonal NOx restrictions. While TX is also subject to annual NOx and annual SO2 restrictions, the Technology POV will use the AR/LA/MS rules for its bus bar comparisons. Because the Technology POV focuses on new technologies which are generally lower emitting that older resources, the assumptions around CSAPR rules and allowances prices for covered emissions have only a minor impact around total bus bar cost of various resources. The Technology Assessment does not consider the impacts of EPA s Acid Rain Program because allowance cost for this program are expected to be zero. Other currently proposed EPA rules that affect the power sector such as the proposed Mercury MACT Rule are not expected to utilize a cap and trade or emissions tax compliance mechanism. Levelized NO X Nominal Prices for the years as specified below ($/Short Ton) (30 Years For Use with CCGT, CT) $ (30 Years For Use with CCGT, CT) $ (40 Years for use with Coal Plants) $ (40 Years for use with Coal Plants) $

45 CCGT TECHNOLOGY State of Technology: CCGT technology is mature. However, equipment manufactures continue to push incremental technological advances. Among the expected improvements are reductions in heat rate, start up time, and emissions. Capability: Factoring in capital cost, heat rate, fuel cost, and operating performance CCGT technology is economically and operationally suited for dispatchable load following duty in the capacity factor range of 25 percent and higher. Risk: CCGT technology is economic across a wide range of operating roles and capacity factors. Favorable economics are based on reasonably low capital cost compared to solid fuel technologies and expected stable natural gas prices. CCGTs utilizing natural gas as a fuel source emit less greenhouse gases than carbon based solid fuel technologies. While CCGTs are well suited for dispatchable load following role operational stress may increase maintenance cost from repeated cycling. Once CCGT technologies such as GE s H class turbines are commercially available CCGTs are expected to be more competitive in a baseload duty applications. 45

46 CCGT COST ANALYSIS LEVELIZED NOMINAL 9.25%, $/MWh $175 $165 $155 $145 $135 $125 $115 $105 $95 $85 $75 Screening Curves (2012 COD) 25% 35% 45% 55% 65% 75% 85% Capacity Factor (%) CCGT - 2x1 7F CCGT - 1x1 7F CCGT - 1x1 7H 1x1 7H 1x1 7F 2x1 7F Cost Elements (2012 COD) $0 $50 $100 $150 65% Capacity Factor Fixed Cost Fuel VOM CO2 NOx Commodity Cost Input Assumptions 30 Year Levelized Nominal Prices Covering Years Natural Gas - $6.29/MMBtu NOx - $73.30/short ton CO 2 - $13.43/short ton SO 2 - $0/short ton 46