Draft Scoping Plan Electric Generating Retirement Assumptions

The Climate Leadership and Community Protection Act (Climate Act) has a legal mandate for New York State greenhouse gas emission reductions to do “something” about climate change.  I have been submitting comments as I complete them on the Draft Scoping Plan that outlines strategies for the energy transition.  This article describes a comment on the Plan I submitted describing my problem with the assumptions used for retiring renewable energy generating assets.

Everyone wants to do right by the environment to the extent that they can afford to and not be unduly burdened by the effects of environmental policies.  I have written extensively on implementation of New York’s response to climate change risk because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that it will adversely affect reliability, impact affordability, risk safety, affect lifestyles, and will have worse impacts on the environment than the purported effects of climate change in New York.  New York’s Greenhouse Gas (GHG) emissions are less than one half one percent of global emissions and since 1990 global GHG emissions have increased by more than one half a percent per year.  Moreover, the reductions cannot measurably affect global warming when implemented.   The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Climate Act Background

The Climate Act establishes a “Net Zero” target (85% reduction and 15% offset of emissions) by 2050. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”.  They were assisted by Advisory Panels who developed and presented strategies to the meet the goals to the Council.  Those strategies were used to develop the integration analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that quantified the impact of the strategies.  That material was used to write Draft Scoping Plan that was released for public comment at the end of 2021. The Climate Action Council will revise the Draft Scoping Plan based on comments and other expert input in 2022 with the goal to finalize the Scoping Plan by the end of the year.

Integration Analysis Lifetime Assumptions

I prepared an annotated version of the Draft Scoping Plan description of the “Carbon-Free Electric Supply” in Appendix G Section.  This section describes the Integration Analysis projected future electric supply system. More detail is provided in the spreadsheet IA-Tech-Supplement-Annex-1-Input-Assumptions tab named “Retirement” that “contains expected lifetime assumptions by resource category”.  The table listing the lifetimes is shown below.

Table Notes:

* Resources with “indefinite” lifetimes are assumed to remain online throughout the study period.

** The license expiration of upstate nuclear units is determined as part of scenario definitions.

***Select units in NYISO zones J and K that are expected to retire as a result of the DEC NOx emissions rule are assumed offline by the start of  2025, based on the 2021 Gold Book.

Units that hit their 60 year lifetime threshold by 2025 but that have not yet announced retirement plans are kept online through model year 2025, due to the time it takes to complete retirement studies.

The 60-year retirement threshold is not enforced in downstate NY until 2035, to ensure local reliability is maintained in the near term. This analysis enforced LCRs in each capacity zone but did not study more detailed local reliability issues.

The reason I prepared a comment is that the lifetime assumptions for hydro, wind, solar, and storage are listed as indefinite.  While that may be true for hydro it is an inappropriate assumption for wind, solar and energy storage.  As far as I can tell that assumption was used to project future costs.

Other Wind, Solar, and Energy Storage Expected Lifetimes

My comments included the results of a quick literature search  for wind, solar, and energy storage technologies expected operating lifetimes.

According to TWI: A good quality, modern wind turbine will generally last for 20 years, although this can be extended to 25 years or longer depending on environmental factors and the correct maintenance procedures being followed. However, the maintenance costs will increase as the structure ages.  The Electricity Markets & Policy group at Berkeley Lab claims: “Our interest was in better understanding how expectations for useful life have changed over time, as the wind industry has matured. We find that most wind project developers, sponsors and long-term owners have increased project-life assumptions, from a typical term of ~20 years in the early 2000s to ~25 years by the mid-2010s and ~30 years more recently. Current assumptions range from 25 to 40 years, with most respondents citing 30 years”.  However, there is a difference between design life and actual lifetimes.  Energy Follower explains that “There is very little data on modern turbines reaching their life expectancy so it is largely unknown how long they will be operable. Modern wind turbines have over 8,000 parts (broken down into three major components) and blades as long as 262 feet, the same length as the wingspan of an Airbus. With higher efficiency modern turbines due to additional electronic components and a more powerful and massive design, there is a higher chance of something going wrong with more potential points of failure and overall added stress and load on the structure.”

There is less information available for utility-scale photovoltaic systems. The Electricity Markets & Policy group at Berkeley Lab claims: “Solar project developers, sponsors, long-term owners, and consultants have increased project-life assumptions over time, from an average of ~21.5 years in 2007 to ~32.5 years in 2019. Current assumptions range from 25 years to more than 35 years depending on the organization; 17 out of 19 organizations from which data were obtained use 30 years or more.”  It is not clear to me why these expectations are so high when it known that photovoltaic cells degrade over time.  The National Renewable Energy Lab concluded:

A history of degradation rates using field tests reported in the literature during the last 40 years has been summarized. Nearly 2000 degradation rates, measured on individual modules or entire systems, have been assembled from the literature and show a mean degradation rate of 0·8%/year and a median value of 0·5%/year. The majority, 78% of all data, reported a degradation rate of <1% per year.

There is even less information available for utility-scale energy storage systems.  Another National Renewable Energy Lab analysis did an example scenario:

An example scenario was simulated wherein an integrated battery-PV system was controlled in self-consumption mode, attempting to minimize energy exchanged with the grid. For this application, battery lifetimes ranging from 7-10 years may be expected. Without active thermal management, 7 years lifetime is possible provided the battery is cycled within a restricted 47% DOD operating range. With active thermal management, 10 years lifetime is possible provided the battery is cycled within a restricted 54% operating range.

I found one other reference that claimed that listed different types of chemical battery lifetimes between 5 and 15 years.

Integration Analysis Implications

I searched the Draft Scoping Plan for the term “retirement” and could not find any documentation for the rationale used to assume that wind, solar, and energy storage have indefinite lifetimes.  My comments recommended that the Final Scoping Plan incorporate documentation explain the retirement rationale because as I show below there are implications for the cost projections.

My annotated version of the Draft Scoping Plan section “Carbon-Free Electric Supply” in Appendix G Section I that starts at page 42.  The only annotation addition is an extracted copy of the actual data in the figures that list capacity (MW) and generation (GWh) in that section that are based on data in the IA-Tech Supplement Annex 2 Emissions Key Drivers spreadsheet.

The following tables list the capacities for the Integration Analysis fuel mix categories for the Reference Case (Table 1), Scenario 2: Strategic Use of Low-Carbon Fuels (Table 2), Scenario 3: Accelerated Transition Away from Combustion (Table 3), and Scenario 4: Beyond 85% Reduction.

Table 1: Reference Case Summary Fuel Mix Capacity (MW)

Table 2: Scenario 2 Summary Fuel Mix Capacity (MW)

Table 3: Scenario 3 Summary Fuel Mix Capacity (MW)

Table 4: Scenario 4: Summary Fuel Mix Capacity (MW)

The Integration Analysis spreadsheet states that “Resources with ‘indefinite’ lifetimes are assumed to remain online throughout the study period.”  I assume that means that the 2020 wind capacity of 1.917 MW in 2020 is not replaced in the total capacity in 2040, 20 years later.  Table 5 shows that assumption under-estimates the resource builds in the wind, solar, and energy storage resource categories significantly.  If those resource builds are not included then the costs are underestimated too. 

Table 5: Additional Capacity Installed for replacement at expected lifetime

Using an indefinite retirement date for these resources underestimates the total builds needed for 2050.  For land-based wind between 3,814 MW and 4,600 MW are not included and for offshore wind between 6,200 and 6,600 MW are not included.  The amount of solar not included ranges between 22,639 MW and 19,983 MW.  Finally, for battery storage between 10,713 MW and 12,207 MW of additional resources will be need to be developed to meet the 2050 projected value. 

Another way to look at the exclusion of these resources is that land-based wind development costs could be up to 45% higher than the projections that don’t include reasonable retirement dates because that much more of the resource needs to be developed.  Off-shore wind costs could be up to 38% higher, solar costs could be up to 35% higher, and battery storage could be up to 64% higher than projections that exclude reasonable retirement dates. 

My comments included questions for the Climate Action Council.  Why shouldn’t reasonable retirement dates be included in the Final Scoping Plan.  What would the revised costs be if retirements were included?  The operational characteristics of battery storage affect expected lifetimes.  What did the Integration Analysis assume for thermal management and discharge characteristics?  Were those factors included in the estimates of the projected capacity resources?

Conclusion

I prepared this comment because I could not believe that the Integration Analysis authors would apparently ignore all the information that indicates that the lifetimes of wind, solar and battery storage are much less than other generating resources.  It appears to me that not including reasonable retirement dates is an egregious attempt to reduce the published costs of wind, solar, and battery storage.  The result is that units are assumed to remain online throughout the study period and no costs for replacements between now and 2050 are included.  However. that is a poor assumption because it is totally unreasonable to expect that, for example, the existing land-based resources will still be in operation in 2050.

The simplest way to look at the effective result of excluding these resources is that much more of the resource needs to be developed so costs are necessarily higher.    For land-based wind development costs could be up to 45% higher than the projections because that much more of the resource needs to be developed.  Off-shore wind costs could be up to 38% higher, solar costs could be up to 35% higher, and battery storage could be up to 64% higher than projections that exclude reasonable retirement dates.