Staff Electricity Subcommittee

Transcription

1 Staff Electricity Subcommittee

2 Fossil Energy R&D Analysis

3 Benefits Analysis of Fossil Energy R&D NARUC Clean Coal & Carbon Management Subcommittee February 2018 Chris Nichols Analyst, Systems Engineering and Analysis

4 Outline Introduction to the Systems Engineering and Analysis Directorate at NETL Overview of energy market modeling Promod Economic Dispatch NEMS/CTUS results with EOR, tax credits, and R&D MARKAL Energy Modeling Forum Results Conclusions 4

5 NETL Enduring Core Competencies Computational Engineering High Performance Computing Data Analytics Materials Engineering & Manufacturing Structural & Functional Design, Synthesis & Performance Geological & Environmental Systems Air, Water & Geology Understanding & Mitigation Energy Conversion Engineering Component & Device Design & Validation Systems Engineering & Analysis Process & System Optimization, Validation & Economics Effective Resource Development ~ Efficient Energy Conversion ~ Environmental Sustainability 5

6 Systems Engineering & Analysis Vision The Systems Engineering & Analysis Directorate s vision is to become the world s premier resource for the development and analysis of innovative advanced energy systems and to provide unprecedented breadth of integrated modeling and optimization capability to support decision making and analysis across multiple scales. This competency will support technology innovation and maturation at the process level as well as enable better identification, evaluation and prioritization of R&D concepts at earlier stages, including the consideration of broader energy system and market needs and impacts. Vision 6

7 Systems Engineering & Analysis (SEA) Teams and Scope Energy Process Analysis Energy Process Design, Analysis, and Cost Estimation Plant-level modeling, performance assessment Cost estimation for plant-level systems General plant-level technology evaluation and support Environmental Life Cycle Analysis Energy Markets Analysis Energy Systems Analysis Resource Availability and Cost Modeling CO 2 storage (saline and EOR) Fossil fuel extraction Rare earth elements General subsurface technology evaluation and support Grid modeling and analysis Process Systems Engineering Research Process synthesis, design, optimization, intensification Steady state and dynamic process model development Uncertainty quantification Advanced process control Design, optimization, and modeling framework to be expanded to all SEA systems Energy Economy Modeling and Impact Assessment Enhanced fossil energy representation Multi-model scenario/policy analysis Infrastructure, energy-water Economic impact assessment General regulatory, market and financial expertise 7

8 Outline Introduction to the Systems Engineering and Analysis Directorate at NETL Overview of energy market modeling Promod Economic Dispatch NEMS/CTUS results with EOR, tax credits, and R&D MARKAL Energy Modeling Forum Results Conclusions 8

9 Scale Models are representations of the physical world energy models span a large scale World-wide model incorporating energy, land use and climate impacts Climate Integrated Assessment Energy Market Specific energy system, such as pipelines, electricity transmission, etc. Energy Infrastructure specific Level of detail National or state-level model integrating economy, environment and energy Engineering Modeling at the power plant, reservoir or smaller level 9

10 M STB Mcf/STB Fraction Assessing Program Portfolio Impacts: Coal Program Example Baseline Data & Model Development Set R&D Goals and Evaluate Progress Project deployment of Technologies Estimate Potential Benefits of RD&D NETL Cost and Performance Baseline for Fossil Energy Plants Detailed, transparent account of plant information Key resource for government, academia and industry NETL CO 2 Saline Storage Cost Model (onshore and offshore) Borehole bottom locations mapped by play name NETL CO 2 Capture, Transport, Storage and Utilization - National Energy Modeling System (CTUS-NEMS) Adopted by EIA; used in AEO s 2014/15/16 Facilitates and encourages EPSA interactions NETL CO 2 Prophet Model Oil Bearing Formation Gas Cap Annual Oil Production 80.0 CO2 Utilization Factor 16 CO2 Retention Factor 1 Gross Pay Net Pay Oil Zone Years Years Years Aquifer/ ROZ ver 1 ver 2 ver 1 ver 2 ver 1 ver 2 10

11 Assessing Program Portfolio Impacts: Baseline Data & Model Development Set and Evaluate Progress to R&D Goals Project Deployment of Technologies Estimate Potential Benefits of RD&D Estimate Potential Benefits of CCRP RD&D R&D Success CCS Tax Credit High growth Reference Case NG Retrofits U.S. Benefits of the Program, Cumulative through 2040 Benefit Area Metric Economic Growth $ Total Electricity Expenditure Savings Employment New NG CCS Income Gross Domestic Product (GDP) New NG CCS New NG CCS Coal Retrofits Coal Retrofits New Coal CCS Environmental Sustainability Energy Security CO 2 Captured at Coal and Gas CCS Facilities Additional Domestic Oil Production via EOR

12 Outline Introduction to the Systems Engineering and Analysis Directorate at NETL Overview of energy market modeling Promod Economic Dispatch NEMS/CTUS results with EOR, tax credits, and R&D MARKAL Energy Modeling Forum Results Conclusions 12

13 Electric Sector Dispatch Analysis - PROMOD PROMOD 11.1 is a commercial, widely-used off the shelf security-constrained, economic dispatch modeling program that utilizes known power system information to identify the most economic utilization of the power system Inputs include hourly power plant characteristics for each grid-connected unit, including heat rates, operation and maintenance (O&M) and fuel costs, interconnection location, and load profiles for each power system balancing area Current types of system sensitivities evaluated: Fuel prices Demand Generation retirements/service entry Potential types of sensitivities: Monthly emissions prices Monthly forced outage rates Monthly O&M cost variation Hourly ramping Maintenance rates/duration/deration Vendor currently developing sub-hourly modeling capabilities 13

14 Fossil Market Shares depend on relative price and load growth Wind & Solar 6% Other 3% 2029 Generation: 4,786 TWh Wind & Solar 9% Other 1% Nuclear 20% Hydro 7% Gas 34% Coal 30% $5 Gas with 4% GDP & 2% Load Growth $3 Gas with 2.2% GDP & 0.9% Load Growth Nuclear 19% Hydro 13% Gas 21% Coal 37% Wind & Solar 10% Nuclear 19% Other 1% Coal 21% 2016 Generation: 4,085 TWh* Hydro 13% Gas 36% *2016 Generation from EIA Short Term Energy Outlook, January 2017; NETL calculations using PROMOD 2029 Generation: 4,636 TWh 14

15 Electricity Production from Coal (TWh) Natural Gas Price ($/MMBtu) Higher Gas Prices and Improved Heat Rates $11 2,200 $9 2,000 $7 $5 2,112 $3 1,756 1,800 1,560 1,600 1,400 1,200 1,451 1,406 1,267 1, Baseline HR Improvement Results of simulations using ABB PROMOD IV 15

16 Electricity Production from Coal (TWh) Need for Improved Availability 2,200 2,112 2,000 1,800 1,600 1,400 1,200 1,560 1,520 1,451 1,419 1,756 1,696 1,406 1,352 1, Baseline Baseline w/fo HR Improvement HRI w/fo Inclusion of forced outages reduces generation by 2-3% annually in the baseline scenario, and up to 8% with assumed heat rate improvement. 1,951 1,267 1,223 Results of simulations using ABB PROMOD IV 16

17 Existing Plant PROMOD Analysis: Coal s Increasing Role in Dispatch 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 54.7% 55.9% 92.3% Coal NGCC Nuclear 2015 Capacity Factor* 2040 Without Heat Rate Improvement 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 63.4% 2040 With Heat Rate Improvement 80.1% 94.8% Coal NGCC Nuclear 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 94.8% 83.8% 60.8% Coal NGCC Nuclear *2015 Capacity Factor from EIA Electric Power Monthly, January

18 Outline Introduction to the Systems Engineering and Analysis Directorate at NETL Overview of energy market modeling Promod Economic Dispatch NEMS/CTUS results with EOR, tax credits, and R&D MARKAL Energy Modeling Forum Results Conclusions 18

19 NEMS typical inputs and outputs Oil and gas resources Pipeline costs and tariffs Mining and transport Supply curves GDP growth Cost and performance of technologies Import/ export Equipment efficiency, industrial activity * Now known as Liquid Fuel Market Module * Building characteristics, population Vehicle miles traveled, fuel efficiency Equipment efficiency, industrial activity Outputs: Production Consumption Emissions Prices 19

20 Improving EOR representation in NEMS with CTUS NEMS did not include strong ties between captured CO 2, EOR and pipelines NETL developed the Capture Transport Utilization and Storage (CTUS) plug-in sub-module Multiple sources, sinks, and EOR sites spatially represented Estimates an optimal CCUS pipeline network Passes transport and storage cost back to potential CCUS technology options in the main CTUS-NEMS model 20

21 Tax Credit and R&D Impact Cases Sensitivities using the NETL CTUS-NEMS model to analyze the impact of sequestration tax credits and R&D AEO2016 No CPP case (Reference) High Growth case: AEO2016 No CPP case with higher gas prices, higher GDP growth, higher load growth (~ 2 percent per year); lower EOR O&M costs; low cost heat rate improvements planned coal retirements (14 GW) from 2017 onward removed (High Growth) High Growth Case plus 12-year sequestration tax credits 12 years providing $35/ton CO 2 for EOR and $50/ton CO 2 sent to geologic storage new coal CCS capacity with 90% capture, state of the art technology (Tax Credit) Tax Credit Case with CCS power plant program goals included (R&D Success) 21

22 Coal Capacity, Generation, and Consumption Reference: No new coal; High Growth: 13 GW Tax Credit: 35 GW; R&D Success: 80 GW R&D Success CCS Tax Credit High growth Reference Case R&D Success CCS Tax Credit High growth Reference Case 22

23 Growth of EOR Production, Reference: + 400k b/d High Growth: +1.1mb/d Tax Credit: +1.6 mmb/d R&D Success: mmb/d R&D Success CCS Tax Credit High growth Reference Case CCUS improves energy security 23

24 Economic Impacts Economic Impacts of NETL RD&D in the sequestration tax credit cases were evaluated using the corresponding NEMS outputs with and without R&D The NETL-WVU Econometric Input-Output (ECIO) model was utilized to assess the economic impacts 24

25 Models and Methods The NETL/WVU ECIO Model The ECIO model is a time-series enabled hybrid econometric input-output (IO) framework that combines the time series capabilities of econometric models with the interindustry modeling strengths of IO models Designed to estimate the national economic and employment impacts of NETL s technology development, deployment, and operation over a corresponding NEMS forecast period Over the last six years, the NETL/WVU ECIO model has been developed and extended to serve the impacts forecasting needs of NETL 25

26 Summary Results, All Years Category Cumulative employment Cumulative total income Cumulative GDP Total electricity expenditure savings Additional domestic oil production via EOR (billion barrels) Impact of NETL RD&D 4.1 million job years $202 billion $304 billion $49 billion (undiscounted) 2.0 Both the largest employment and income impacts are in the Construction Sector (Sector 9) 26

27 Total Income Impacts Total Emplyment Impacts National Sector Results All Years Total Employment (thousand jobs) Sector Labor Compensation (2010$M) Sector Sector Sector Description 1 Agriculture, forestry, fishing, and hunting 2 Oil and gas extraction 3 Coal mining 4 Mining, except oil and gas and coal 5 Support activities for mining 6 Electric power generation, transmission and distribution 7 Natural gas distribution 8 Water, sewage, and other systems 9 Construction 10 Primary and Fabricated metal products 11 Machinery 12 Motor vehicles and other transportation equipment 13 Other durable manufacturing 14 Other nondurable manufacturing 15 Petroleum and coal products 16 Chemical, plastics, and rubber products 17 Wholesale trade 18 Retail trade 19 Air, rail, and water transportation 20 Truck transportation 21 Pipeline transportation 22 Transit, sightseeing transportation, and transportation support services 23 Warehousing and storage 24 Information 25 Finance, insurance, real estate, rental, and leasing 26 Professional, scientific, and technical services 27 Management of companies and enterprises 28 Administrative, support, waste management, and remediation services 29 Educational services, healthcare, and social assistance 30 Arts, entertainment, recreation, accommodation, and food services 31 Other services (except public administration) 32 Government 27

28 Outline Introduction to the Systems Engineering and Analysis Directorate at NETL Overview of energy market modeling Promod Economic Dispatch NEMS/CTUS results with EOR, tax credits, and R&D MARKAL Energy Modeling Forum Results Conclusions 28

29 What is MARKAL? An energy-technology-environment model Uses a bottom-up representation of energy-producing, - transforming, and consuming technologies Finds a least cost set of technologies to satisfy end-use energy service demands AND policies specified by the user Calculates resulting environmental emissions and water consumption/withdrawals 29

30 How MARKAL Does It Primary Energy Supply Renewables e.g. -Biomass -Hydro Mining e.g. -Crude oil -Natural gas -Coal Imports e.g. -crude oil -oil products Exports e.g. -oil products -coal Stock changes The MARKAL Energy Perspective Conversion Technologies Fuel processing Plants e.g. -Oil refineries -Hydrogen prod. -Ethanol prod. Power plants e.g. -Conventional Fossil Fueled -Solar -Wind -Nuclear -CCGT -Fuel Cells -Combined Heat and Power (Final Energy) End-Use Technologies Industry, e.g. -Steam boilers -Machinery Services, e.g. -Air conditioners -Light bulbs Households, e.g. -Space heaters -Refrigerators Agriculture, e.g. -Irrigation pumps Transport, e.g. -Gasoline Car -Fuel Cell Bus (Useful Energy) Demand for Energy Service Industry, e.g. -Process steam -Motive power Services, e.g. -Cooling -Lighting Households, e.g. -Space heat -Refrigeration Agriculture, e.g. -Water supply Transport, e.g. -Person-km Developed under the Energy Technology Systems Analysis Program of IEA Linear programming type optimization ; based on Reference Energy System Detailed modeling of energy resources and supply chains Includes electricity generation and transmission planning 30

31 EMF cases NETL-SEA participates in the Energy Modeling Forum, a crossorganization, multi-model effort which examines an energy sector of interest to all participants All participants agree on base scenarios to run, then compare results across scenarios and models We used MARKAL to model the EMF scenarios and examined side issues of interest to NETL: Reference, Clean Power Plan, CO2 Tax, 80% reduction cases With and Without R&D, Vary Natural Gas Prices We found that in the reference and CPP cases, no CCS deploys, higher CO2 incentives and R&D are required to spur deployment 31

32 Quantity (PJ) Clean Power Plan (rate-based), no R&D R Industrial CHP Distributed Solar PV 30,000 25,000 Central Solar Thermal Wind Power Hydropower Geothermal Power 20,000 15,000 10,000 5,000 Biomass to IGCC-CCS Biomass to IGCC Conventional Nuclear Power NGA to Combined-Cycle-CCS NGA to Combined-Cycle-CCS Retro NGA to Combined-Cycle NGA to Combustion Turbine Coal to IGCC-CCS Coal to IGCC-CCS Retro Coal to IGCC Coal to Existing Steam-CCS Retro Coal to Existing Steam BASELINE No CCS Deploys 32

33 Quantity (PJ) Clean Power Plan (rate-based) with R&D Industrial CHP R _CCS Distributed Solar PV 30,000 Central Solar Thermal Wind Power 25,000 20,000 15,000 10,000 5,000 Hydropower Geothermal Power Biomass to IGCC-CCS Biomass to IGCC Conventional Nuclear Power NGA to Combined-Cycle-CCS NGA to Combined-Cycle-CCS Retro NGA to Combined-Cycle NGA to Combustion Turbine Coal to IGCC-CCS Coal to IGCC-CCS Retro Coal to IGCC Coal to Existing Steam-CCS Retro Coal to Existing Steam BASELINE No CCS Deploys 33

34 Quantity (PJ) Clean Power Plan (RB), High Gas Prices, with R&D 30,000 25,000 R _CCS Industrial CHP Distributed Solar PV Central Solar Thermal Wind Power Hydropower Geothermal Power 20,000 15,000 10,000 5,000 Biomass to IGCC-CCS Biomass to IGCC Conventional Nuclear Power NGA to Combined-Cycle-CCS NGA to Combined-Cycle-CCS Retro NGA to Combined-Cycle NGA to Combustion Turbine Coal to IGCC-CCS Coal to IGCC-CCS Retro Coal to IGCC Coal to Existing Steam-CCS Retro Limited CCS retrofits Coal to Existing Steam BASELINE 34

35 MtCO2 CO2 Emissions-Economy wide, CPP and tax scenarios Total CO2 Emissions: Historical and EMF32 Projections CO2 Reduction Goal COP21: 26%-28% below 2005 by % growth Base cases Tax based on 80% reduction CPP cases $20/mt cases Tax based on 26% reduction R R R R R R R R R R R R R R R R R R R R R R R

36 Quantity (PJ) CO2 tax beginning in 2020 at $25 and increase 5% annually until 2050 R Industrial CHP Distributed Solar PV 30,000 25,000 Central Solar Thermal Wind Power Hydropower Geothermal Power 20,000 15,000 10,000 5,000 Biomass to IGCC-CCS Biomass to IGCC Conventional Nuclear Power NGA to Combined-Cycle-CCS NGA to Combined-Cycle-CCS Retro NGA to Combined-Cycle NGA to Combustion Turbine Coal to IGCC-CCS Coal to IGCC-CCS Retro Coal to IGCC Coal to Existing Steam-CCS Retro - Coal to Existing Steam BASELINE Limited CCS retrofits, mostly uncontrolled NGCC 36

37 Quantity (PJ) CO2 tax ($25, 5% growth) with R&D R _CCS Industrial CHP Distributed Solar PV 30,000 25,000 Central Solar Thermal Wind Power Hydropower Geothermal Power 20,000 15,000 10,000 5,000 Biomass to IGCC-CCS Biomass to IGCC Conventional Nuclear Power NGA to Combined-Cycle-CCS NGA to Combined-Cycle-CCS Retro NGA to Combined-Cycle NGA to Combustion Turbine Coal to IGCC-CCS Coal to IGCC-CCS Retro Coal to IGCC Coal to Existing Steam-CCS Retro - Coal to Existing Steam BASELINE Substantial CCS Deployments on both Coal and Gas 37

38 Quantity (PJ) 80% CO2 emissions reduction by 2050, no R&D R ,000 Industrial CHP Distributed Solar PV Central Solar Thermal Wind Power 25,000 Hydropower Geothermal Power 20,000 15,000 10,000 5,000 Biomass to IGCC-CCS Biomass to IGCC Conventional Nuclear Power NGA to Combined-Cycle-CCS NGA to Combined-Cycle-CCS Retro NGA to Combined-Cycle NGA to Combustion Turbine Coal to IGCC-CCS Coal to IGCC-CCS Retro Coal to IGCC Coal to Existing Steam-CCS Retro Coal to Existing Steam BASELINE System Swings to Renewables and Biomass CCS 38

39 Quantity (PJ) 80% CO2 emissions reduction by 2050, with R&D Industrial CHP R _CCS Distributed Solar PV 30,000 25,000 Central Solar Thermal Wind Power Hydropower Geothermal Power 20,000 15,000 10,000 5,000 Biomass to IGCC-CCS Biomass to IGCC Conventional Nuclear Power NGA to Combined-Cycle-CCS NGA to Combined-Cycle-CCS Retro NGA to Combined-Cycle NGA to Combustion Turbine Coal to IGCC-CCS Coal to IGCC-CCS Retro Coal to IGCC Coal to Existing Steam-CCS Retro - Coal to Existing Steam BASELINE With R&D, Fossil CCS Dominates in Deep Decarb Scenario 39

40 MARKAL takeaways CCS technologies do not significantly deploy in most Clean Power Plan scenarios without R&D Even with R&D, some additional stress to the system is required Large fleet of NGCCs usually built with post-2030 CO2 implications CO2 taxes at $25 or $50 per tonne provide impetus to the system to radically reduce emissions R&D prompts major shift to CCS technologies to meet these targets 40

41 Outline Introduction to the Systems Engineering and Analysis Directorate at NETL Overview of energy market modeling Promod Economic Dispatch NEMS/CTUS results with EOR, tax credits, and R&D MARKAL Energy Modeling Forum Results Conclusions 41

42 Conclusions With regulatory relief, higher economic growth, higher load growth, and increased use of competing fuels, coal-fired power plants can compete New capacity can be built and existing coal units remain operational Efficiency gains are meaningful CCS may deploy as oil prices rises, with tax incentives and EOR. CO2 from power plants and industrial sources can contribute to energy security Under deep CO2 reduction scenarios, with R&D, Fossil CCS dominates. 42

43 Acknowledgements Material created by Chuck Zelek, John Brewer and Nadejda Victor (NETL), Frances Wood (On Location, Inc), and Randall Jackson (WVU). 43

44 For more information Chris Nichols Solutions for Today Options for Tomorrow I have seen the future and it is very much like the present, only longer. --Kehlog Albran

45 Additional Material 45

46 Staff Electricity Subcommittee