A dynamic model for GA electricity planning with CO2 emissions considered

Transcription

1 A dynamic model for GA electricity planning with CO2 emissions considered Dong Gu Choi STIP Summer Internship Program September 2, 2010

2 1 First stakeholder of CO2 reduction policies Electric Utility Industry White House Energy Session Changes No NY Times June 29th Mr. Obama summoned the 23 senators, of both parties, to the White House to try to find some way out of the impasse. He repeated his call for putting a price on climate-altering pollution through a cap-and-trade system or some other sort of emissions tax Mr. Kerry suggested starting with electric utilities only, a plan tentatively embraced Tuesday by Senator Olympia J. Snowe, Republican of Maine A plan to cap greenhouse gas emissions from electric power plants while delaying regulation of other major sources of pollution for years

3 2 Georgia electric power industry needs an efficient response to federal movement Georgia s Electricity Profile Production 9 th Price 29 th CO2 emissions 8 th Energy Information Administration Georgia lacks programs to encourage CO2 reduction - GA doesn t have a state-level Renewable Electricity Standards

4 3 Purpose of Research Develop a dynamic decision model for: Identifying the optimal future electricity generation portfolio in response to legislative constraints on CO2 emissions while also minimizing the price of electricity. This will provide not only electricity generators but also policy makers with a guideline for decision making. Sustainable Economic Development

5 4 Previous Studies & Databases Scenario Electricity Demand w/ End-Use Efficiency Assumptions CO2 Reduction RES Constraints Integration of Inputs & Dynamic-Decision Model Technology 1 Existing Power Plants Cost of Technologies Fuel Prices Electricity Generation Portfolio Estimates of Electricity Price Output

6 5 Scenario : Carbon Constraint American Clean Energy Security Act 2009 (Waxman-Markey Bill) Greenhouse Gas emission limits (Benchmark is 2005 emissions level) 3% by % by % by % by 2050 Renewable electricity standard (Geothermal, Solar, Wind, biomass, new hydro, and end-use efficiency, for example) 6% by % by % by % by % by 2030 Renewable Generation s(%) * [ Total Generation Nuclear CCS Hydro ]

7 6 Scenario : GA Electricity Demand Maximum Achievable Efficiency Scenario (EIA-AEO2010, Brown 2010) 11% 16% Potential reduction from end-use efficiency initiatives. Brown et. al, 2010, ENERGY EFFICIENCY IN THE SOUTH, Southeast Energy Efficiency Alliance

8 7 Current Electricity Portfolio Total CO2 emissions from electricity industry = 90,132,501 metric ton = 198.5*10^9 2005

9 8 Technology Options New Fossil-Fuel Plants Coal Super Critical Pulverized Coal (SCPC) w/ or w/o Carbon Capture and Sequestration (CCS) Integrated Gasification Combined Cycle (IGCC) w/ or w/o CCS Natural Gas w/ or w/o CCS New Renewable Energy Plants Biomass wood chip, maximum capacity 1,800 MW (1)(2) Wind offshore, maximum capacity 130 MW (1) Solar PV Centralized (Solar farm) and Decentralized (Roof top) (Note: The specification of each technology will be shown in Handout H1) (1) G. A. Shumaker, A. Luke-Morgan, J. C. McKissick, 2009, The Economic Feasibility of Using Georgia Biomass for Electrical Energy Production, Journal of Agribusiness 27, 1/2 : 125~136 (2) Georgia Power Biomass : (3) NREL, 2010, Estimates of Windy Land Area and Wind Energy Potential by State,

10 9 Technology Options New Nuclear Plant Retrofitting existing Coal-Fired Power Plants Georgia has 5 available PC plants which cover 13 available boiler units for CCS retrofits (1),(2) - Power plants are located within 25 miles of an oil and gas sequestration opportunity - Power plants > 500 MW, and < 120,000 Btu/kWh - The addition of the CCS equipment results in a capacity derating of around 30% and reduced efficiency of 43% at existing coal-fired plants. (Note: The specification of each technology will be shown in Handout H1) (1) EIA 2010, Assumptions to the Annual Energy Outlook 2010, Electricity Module (2) NETL 2010, Assessment of Power Plants That Meet Proposed Greenhouse Gas Emission Performance Standards

11 10 Technology Options Planned Power Plants in Georgia - Georgia Power will convert plant Mitchell, currently using coal, into a biomass fuel plant by 2012 : 155 MW 96 MW - Georgia Power is moving ahead with plans to replace 1960s vintage coal-fired plant McDonough with larger natural gas power plant (1) : three 840 MW units at 2012, Two additional nuclear power units for Vogtle near August : 1,200 MW for each will come on-line in 2016 and 2017 (1)

12 11 Dynamic Decision Model Objective Function Minimize the total cost of production over specified planning horizon (2009~2035) Constraints Demand constraint The annual projected electricity demand should be satisfied. The demand can decrease from energy efficiency efforts. CO2 emission constraint Renewable electricity standard constraint Renewable Generation s(%) * [ Total Generation Nuclear CCS Hydro ]

13 Results (Electricity Portfolio in 2030) ,173, ,143,

14 Results (Electricity Portfolio in 2030) 13 Adding end-use efficiency initiatives eliminates the need for solar.

15 Results Annual Projection (see H3~H4) 14

16 15 Summary of Results Renewable Electricity Standard constraint will cover CO2 limit before No CCS investments for all cases. - No additional natural gas (NG) plants needed. - Around 2050, 1 or 2 CCS facilities may be needed. Some older coal-fired plants need to be replaced by NG plants from 2030

17 16 Summary of Results GA has insufficient renewable sources to meet Renewable Standard - Without end-use demand reduction, Georgia needs to construct additional nuclear power plants and/or a large number of solar farms. - Georgia needs to reduce end-use demand through efficiency or distributed solar panels. - With about 70% of maximum achievable reduction, utility can meet this standard.

18 17 Summary of Results Electricity prices will vary with end-use demand reduction In 2030, price of electricity will be - with carbon policy and efficiency efforts : 9.6 /kwh (2008 dollars) - with carbon policy but without efficiency efforts : 11.3 /kwh (2008 dollars) if additional nuclear plants and solar farm will be constructed : 13.7 /kwh (2008 dollars) if only solar farm will be constructed - EIA projection for South Atlantic Region = 10.9 /kwh (2008 dollars)

19 18 Future Work Base-load demand versus Peak-load demand Technology Learning Price elasticity (how consumers change their demand when prices change)