Replacement Power for Indian Point – Energy Storage

In two earlier posts I addressed potential replacement of New York’s Indian Point nuclear station power using new projects that are licensed or under construction suggested by the Governor and the alternative use of renewables and energy efficiency as proposed by environmental organizations. The latest proposal, commissioned by the New York Battery and Energy Storage Technology Consortiums, claims that energy storage, along with a portfolio of other clean energy sources, can replace Indian Point. This post examines their proposal.

I have been following New York State (NYS) energy policy for a long time. Before retirement from a Non-Regulated Generating company, I was actively analyzing air quality regulations that could affect company operations and those regulations were often indirectly or directly tied to NYS energy policy. 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. I am motivated to write these posts on energy policy because the majority of what you hear in public is, in my opinion, overly optimistic about the viability of new technologies and rarely portrays costs realistically.

In January 2017 New York’s Governor Andrew Cuomo announced the premature closure of the Indian Point Energy Center located 25 miles north of New York City. Cuomo claims that Indian Point produces 2,000 megawatts of electrical power and that “more than enough replacement power to replace this capacity will be available by 2021”. Previously I showed that while the capacity can be replaced by projects that are either under construction or licensed, that insinuations elsewhere that the replacement will be air pollution free are not correct. Shortly after his announcement environmental organizations proposed using renewables and energy efficiency exclusively but I showed that was technically possible but the realistic costs of replacing all the capabilities of Indian Point with those resources would be too expensive to be a realistic option.

Indian Point Energy Storage Replacement Option

The New York Battery and Energy Storage Technology Consortium hired Strategen Consulting to evaluate the use of energy storage as a potential replacement for Indian Point. The study presentation is a slide show that includes some excellent graphics that show the mix of generation capacity in Downstate New York. In addition to the retirement of Indian Point the study explains that there are a couple of other issues that could exacerbate the capacity problem. They point out that attaining the new ozone ambient air quality standard has triggered a NYS process to address old peaking turbines in New York City and that the City of New York is requiring that all use of #6 fuel oil be phased out. As a result, they claim there could be a capacity shortfall of greater than 1,000 MW by 2023.

The primary goal of this post is to discuss the energy storage proposal but let me quickly address the peakers and #6 fuel oil phase-out problems. The process for determining what to do with the peaking turbines has just begun and while the NYS Department of Environmental Conservation has shown that those peakers contributed to ozone in 2011, there are indications that the relationship is weakening to the point where additional modeling is necessary to determine what is happening today as opposed to five years ago. The phaseout of #6 fuel oil is not a major technological problem so the only reason that capacity would be affected is if the costs for switch over are too high. I have seen no indications that any of the affected facilities will shut down due to this requirement. Both issues are valid problems but the evolving regulatory framework is too early in the process to claim that the 1,000 MW shortfall claimed is anything more than a low probability.

Battery Storage Replacement

Until this issue came up I had not paid much attention to battery storage other than recognizing that in order to make intermittent renewable power dispatchable you have to have storage. In my mind, that simply equated to building enough batteries to store the renewable energy for when it is needed. Not surprisingly, it turns out that it is more complicated than that. Late last year PG&E reported on the results of a battery storage demonstration project that described how the batteries were used on the grid and how they were paid to operate. The project participated in the day ahead energy market which is used to procure the majority of supply to meet that day’s predicted electric load. The California ISO also has a real-time energy market and the battery system provided services for short-term fluctuations from the day ahead forecast. In addition to the energy market batteries can be used for the ancillary services of frequency regulation and spinning reserves and the demonstration project participated in those markets.  Note that the energy storage association has a longer list of battery technology applications.

The rosy projection for the use of energy storage depicted in the Strategen report is at odds with the results of the PG&E 18-month trial of electricity storage on the grid encompassing 6 MW of storage at two sites. For example, the report notes that it takes more energy to charge the batteries than battery discharges. Note that there is a significant discrepancy between the installed costs of the trial and the proposed Indian Point replacement. The trial report states that the “fully installed cost of the 2 MW / 14 MWh Vaca BESS was approximately $11,000,000, which equates to $783/kWh or $5,500/kW”. The assumed installed cost by Strategen is $1600/kW or nearly three times less than the actual trial cost presuming that these numbers are apples to apples.

Todd Kiefer described the results of the CAISO battery storage trial on the T&D World blog.  Mr. Keifer summarizes the report as a cautionary tale. The report shows that batteries are not cost-effective:

“The report included two external studies that found that cost of battery storage must come down to about $800/kW to achieve economic break-even.  However that number has two false assumptions baked in: a 20-year service life and only 15-minutes of storage capacity.  To aggressively dispatch the batteries as was done in the trial to maximize revenue requires at least 30 minutes of storage capacity and would consume the 4,500-cycle service life within 10 years.  With these adjustments, the real break-even cost is approximately $200/kW.  Indeed, $197/kW is the estimate PG&E itself empirically found to be the break-even cost for a typical month in 2015.  This is a factor of 27 cheaper than the Vaca system cost of $5,500/kw.”

Even assuming that the Strategen cost estimate of $1600/kW is possible the breakeven costs are much lower.

The Strategen report indicates that energy storage could be used to replace the peaking turbines at risk because of the ozone attainment requirements. Mr. Keifer explains that shaving peaks through energy arbitrage is an obvious use of batteries but notes:

“This time-shifting of generation to match consumption peaks involves techniques such as peak shaving and load leveling; these are easy to envision and model and optimize when looking at yesterday’s load and price curves, but very difficult to do in real-time when the load and price are varying stochastically and neither the height nor timing of the actual load peak can be known or recognized till well after the fact.  In practice, energy arbitrage only generated enough revenue to barely cover operating expenses.”

The basis of the Strategen report is that energy storage can be used to replace traditional generating units such as Indian Point or the peaking turbines. The emphasis on that claim is capacity but that neglects all the other services those generating units provide to the grid. Mr. Kiefer notes that the most lucrative use of batteries is frequency regulation or the response to fluctuations in the mismatches between load and generation. In the current CAISO market Frequency Regulation is the highest-value product but the project was not cost-effective for that application. Importantly, if the battery owner wants to maximize revenue by optimizing the system for frequency regulation, that precludes using the system to shave the peak because the batteries are maintained close to 50% charge levels and stand ready to charge or discharge rapidly to damp out momentary dips and spikes in grid frequency that mark mismatches between generation and load.

Mr. Kiefer describes a surprising finding that is directly applicable to the Indian Point replacement situation.

“The wholesale electricity price varied so much by geographic location on the California grid that often it was not economical for the two battery arrays to store surplus power being generated by wind or solar farms.  California now has enough “renewable” energy capacity that it can produce negative locational marginal price (LMP) in the vicinity of the wind and solar farms.  However, these low prices do not necessarily propagate as far as the electricity storage sites.  This is often blamed on “grid congestion” as if to say it is a shortcoming of the pre-existing grid, but in reality this bottlenecking is a predictable consequence of adding large capacities of remote, diffuse, and uncontrollably intermittent generators at the fringes of the grid far from the load centers that consume their power.  If batteries are to be used for energy arbitrage, they would be optimally co-located at the fringes with the wind or solar farms.  However, if they are to be used for frequency regulation, they are better located near the loads in cities and industrial centers.  Since the revenue stream of the latter is much more attractive than the former, it is likely that the utilities would prefer downtown rather than desert locations for assets they own.  That leaves solar and wind developers to install storage at their sites.”

In New York State the majority of the renewable sites are far from New York City so this suggests that the batteries for replacing the ancillary services will have to be near the City but in order to use the batteries for peak shaving they will have to be located near the renewable facilities.

The Strategen report claims low costs but only “through long-term contracting arrangements (e.g. 10-20 years)”.  In his cost analysis of the report, Mr. Keifer notes that “To aggressively dispatch the batteries as was done in the trial to maximize revenue requires at least 30 minutes of storage capacity and would consume the 4,500-cycle service life within 10 years.” Obviously a long-term contract greater than the expected service life is not a good deal.

Conclusion

The experience of the California demonstration project suggests that costs are a major concern with respect to this proposal.  Moreover, because wind and solar are diffuse collecting that energy and delivering it where it is needed requires the use of the transmission grid so the role that Indian Point provides for grid support services should not be ignored. Batteries can provide many of those support services and in some cases better than a generating unit but in order to provide all those services with batteries you will need more than the number needed to simply replace the capacity. How many more batteries is unknown, how the batteries will work within the system best needs to be determined, and how long the battery systems will survive providing different services is another key element in a cost comparison. Integrating small amounts is not an issue but there is a point when the incompatible nature of those resources compared to traditional generating plants like Indian Point has to be resolved and that also increases costs significantly.  The failure of the Cuomo Administration to admit much less address the grid issues is disappointing.

Unintended Consequences

I was working on this post at the same time that Planning Engineer posted on Renewable resources and the importance of generation diversity at Climate Etc. There were a couple of related and relevant comments made that brought up some unintended consequences for the widespread use of batteries that I reproduce below.  These comments show that the perception that batteries are unencumbered by additional environmental impacts are incorrect.

Albert Hopfer works in the battery design and manufacture field and notes:

We in this business (the biggest of that business) are struggling with cell suppliers to get the cells and cell types needed for our products. Lithium does not grow on trees they exist and produced as either rock-ore or brine. Brine has become the (only) profitable choice. Brine requires 9-12 months to “sun dry” producing the necessary oxides for Lithium battery grade product.

That being said, you can imagine the scarcity Lithium would become and the change in cost/selling price. Gas auto sales in the US 2016 was at the 14 million level. Electric cars next to zero in comparison. Yet, today, EV’s and other large format battery needs (new) are exhausting supplies of Lithium. Lithium is also use in glass and other product production.

If the US grid and transport systems became dependent on storage using wind and solar the US would immediately be dependent on foreign Lithium since the US reserves are minor compared to places like South America etc. We do not want to go there.

M Anderson has been been “mapping, analyzing, and helping change complex global infrastructure networks, on the ground, in more than 40 nations for decades. (Autos, energy, water, food, mobile communications, waste, etc).” He explained that rooftop solar and local battery storage have several hidden “landmines” that can only be seen by looking at their total life-cycle from mining to recycling and waste.

The first landmine is that the “Lithium batteries in Teslas – and in emerging home batteries – contain 1200-2,000 pounds of traditional, recyclable, materials AND lithium that cannot be easily recycled. At current useful lives, these batteries will be coming into the waste-recycling streams at volume in about 7-12 years.”

The second landmine is the “17-25 year recycling periodicity of the massive “e-waste” in modern solar panels.”

He goes on to explain that one of the unique, negative, environmental effects of the widespread use of lithium batteries is that each new product made requires new mining of lithium and other materials and emphasizes the point that in the case of electric vehicles the difference in recycling potential with respect to existing vehicles means that “EVERY new EV made requires more new mining and material production than any of the existing 1.2 billion petrol-fired vehicles on Earth.”

As a result the environmental effects of mining Lithium will be exacerbated because so much more will be required.

 

Replacement Power for Indian Point – Renewables and Energy Efficiency

In an earlier post I addressed the potential availability of power to replace Indian Point’s capacity. This is an update to that analysis with a discussion of a new report. In January 2017 New York’s Governor Andrew Cuomo announced the closure of the Indian Point Energy Center located 25 miles north of New York City. Cuomo claims that Indian Point produces 2,000 megawatts of electrical power and that “more than enough replacement power to replace this capacity will be available by 2021”. Since then environmental advocates have claimed that the replacement power “can and must be replaced with a portfolio of energy efficiency and clean energy resources: renewable resources such as wind, hydroelectric and solar.”

The basis of this claim is the Synapse Energy Economics report prepared for the Riverkeeper and Natural Resources Defense Council entitled “Replacement Energy and Capacity Resources for the Indian Point Energy Center Under New York Clean Energy Standard (CES)” that claims that replacing Indian Point can be done with a combination of renewables and energy efficiency. This post addresses that report.

I am generally skeptical of the Synapse report for two fundamental reasons. The report is sponsored by organizations that don’t want Indian Point or central power stations in general and also support development of renewable energy. It would not be presented to the public if it did not support their goals and objectives. Secondly, the analysis uses the National Renewable Energy Laboratory (NREL) ReEDS (Regional Energy Deployment System) modeling system. Clearly this organization has specific goals in mind and I doubt that they would have developed a model that did not support their renewable energy goals. These reasons do not necessarily say that the results should be dismissed out of hand but it does suggest that the results have to show no signs of bias towards a pre-determined result to be valid.

In order to determine whether there is bias it is necessary to dig into the approach. ReEDS is a” long‐term capacity expansion and dispatch model of the electric power system in the lower 48 states”.   The report notes that it has a “high level of renewable energy resource detail with many wind and solar resource regions, each with availability by resource class and unique grid connection costs”. Capacity, dispatch and load planning models are complicated and the characterization of the grid is a particular problem for New York. EPA and RGGI have relied on a similar model called the Integrated Planning Model that is notorious for its mis-characterization of the New York grid with the particular problem being transmission constraints to New York City and Long Island. EPA uses a version that has yet to get it right but New York’s influence in RGGI has led to a version that is acceptable in this regard. In the absence of a thorough review of the model I doubt that ReEDShas been tuned to correctly characterize this problem. If not, the fact that there are transmission constraints can lead to poor estimates of future load and capacity development making it easier to claim that renewables can be integrated easily.

The bigger problem is that the modeling approach assumes too much. In particular, they assumed that the levels of energy efficiency necessary to meet the CES will be met. The report itself describes the weakness of that assumption: “The CES order assumes annual incremental savings through energy efficiency of roughly 1.5 percent of overall electric energy demand, resulting in a reduction from ~160k GWh in 2016 to ~146k GWh in 2030. However, the CES order does not include any mechanism to ensure that these levels of energy efficiency are achieved, in contrast to the binding and enforceable 50 percent by 2030 renewable energy target enacted by the CES order. Nor has the Public Service Commission enacted any other policies outside the scope of the CES order to ensure that the state achieves these levels of energy efficiency. Rather, existing policies (which consist primarily of Energy Efficiency Transition Implementation Plan (ETIP) targets and budgets for each of the state’s investor‐owned utilities) guarantee only a small fraction of this 1.5 percent annual incremental savings.”

In other words, the modeling assumes that energy efficiency gains will occur despite the lack of a mechanism for it to occur. Furthermore, the insinuation that the renewable goal will be met because there is a binding order misses the point that the goal may not be achievable.

I am a fan of energy efficiency because it has no regrets. In other words because there is no completely benign way to make electricity reducing the amount you need is a very good thing. Moreover, you can target the energy efficiency and conservation funding so that those least able to pay for their energy get direct benefits. As a result even if it turns out that we don’t need to reduce CO2 emissions because of its impact on climate we still get benefits from this approach. Unfortunately I have qualms about the capability of energy efficiency to provide a significant amount of replacement power for Indian Point.

First and foremost is simply accounting for energy efficiency. The Clean Energy Ministerial discusses the obstacles to assessing energy efficiency gains and notes “Because savings represent the absence of energy use, it is impossible to directly measure energy efficiency impacts”. In the absence of direct measurements it is therefore necessary to estimate energy use in the absence of the energy efficiency savings project. I would hope that the CES order clearly defines the metrics for these estimates so that they are credible, certain and consistent. Frankly, the lack of documentation thus far in the CES does not give me hope in this regard.

One aspect to the continuing aggressive efficiency goals that I have not seen addressed is market saturation. A significant fraction of New York’s RGGI investments have been allocated to energy efficiency and those investments were preceded by years of subsidies for energy efficiency in other programs. An anecdote is just to consider household conservation. Once all the windows and doors have been replaced by more efficient versions, investing in even better ones will not be as cost effective. After you have spent money to do the obvious things any future investments cost more but yield less relative improvement. My point is that the Synapse projections of further efficiency goals do not include assessments of what is available. Instead they simply assume that the CES goals will be met and that even more reductions are possible if we throw even more money into the programs.

Finally there are concerns about the “rebound effect” that suggest that maintaining the proposed level of annual incremental savings is ambitious. The “rebound effect” is when an improvement in energy efficiency triggers an increase in demand for energy. The impact of this effect is controversial and there is much uncertainty regarding the magnitude of rebound effects associated with energy efficiency improvements.

The renewable goals are similarly based on assuming that the CES requirements will be met. The Synapse report states: “We incorporated New York State CES parameters into our projection of load and resource requirements. These parameters include CES‐assumed increased levels of energy efficiency and meeting the 50 by ’30 renewable energy requirement. We reflect New York’s target of obtaining 2,400 MW of offshore wind energy by 2030 in all scenarios, staged to reflect 600/1200/1800/2400 MW attained by, respectively, 2024/2026/2028/2030.” In 2015 3,398 MW of new offshore capacity was added worldwide, bringing the total to over 12,107 MW according to the Global Wind Energy Council. In theory that should mean that New York can install 2,400 by 2030 but it should be noted that New York’s total on-shore wind capacity in 2015 was 1,891 MW.

The biggest failing in this report is the lack of cost data. The report notes that their cost comparison is “not meant to be definitive in the absolute sense; rather we use a consistent framework across the different scenarios in order to ascertain relative cost patterns”. This modeling purports to show that their preferred alternative is cheaper than other choices using their relative costs. What is missing is the overall cost. The fact that the ReEDS model which “builds” off-shore wind capacity based in part on economics had to be adjusted by Synapse to “hard-wire” the capacity built to match the CES requirement suggests that ReEDS is not as optimistic about that resource. Furthermore, it has been noted that “The average household in Germany contributes an estimated 240 euros a year to renewable energy subsidies.” is not reassuring in this regard.

I will conclude this post with some particular issues with the modeling that may indicate problems with the results. The model “incorporates the addition of previously committed gas‐fired generation in the region in 2018” and cites the “CPV Valley unit, at 650 MW; and a generic combustion turbine unit at 90 MW”. The CPV unit is expected to be online in 2018 but instead of 90 MW of new combustion turbine capacity the Cricket Valley station alone is 1,100 MW   This plant is permitted, under construction and expected to be on line in the first quarter of 2020. That means that renewables will not be displacing old inefficient fossil-fired generation but the latest and most efficient fossil technology. Another assumption used in all the modeling scenarios is that there will be a 2.5% decline in the RGGI cap which has been proposed by Governor Cuomo but is not yet RGGI policy.

When I model something the first thing I check is the results relative to recent observations. I have a couple of problems with projections for 2016 compared to actual values. For example, the model’s estimate of 2016 CO2 emissions is 20% higher than actual emissions. When a model over estimates a key parameter by 20% in the first year I don’t put much weight into their projections in 2030. Another issue is the 2016 wind generation estimate of 5 TWh when the 2015 observed wind generation was only 4 TWh.   It is highly unlikely that the wind generation will increase 20% in one year so that is another likely over-estimate.

I have posted three tables with model projections for all six model runs for 2018, 2022 and 2030. Synapse Synapse Energy Generation and Capacity Appendix A Scenarios describes the model runs. Synapse Energy Generation and Capacity Appendix A Comparison of Generation Estimates describes the generation (TWh) estimates and Synapse Energy Generation and Capacity Appendix A Comparison of Capacity (MW) Estimates describes the  (MW) estimates for fourteen different source-type categories. I have issues with some of those category results. The scenarios address the Indian Point retirements so the nuclear estimates show that. Note that those projections assume no changes in the upstate nuclear units. Cuomo’s war on coal is reflected in shutting down the remaining coal plants. One of the unintended consequences of the renewable and energy efficiency is the effect on the profitability of the remaining fossil stations. For example, in the gas category there is a projected reduction in gas capacity of 21% from 2018 to 2030 in Scenario A6 but the generation drops 74%. My concern is that the drop in the generation from those facilities will mean that they cannot remain viable without a capacity payment. For new gas note that the exclusion of Cricket Valley means that their 2022 estimate of just over 5 Twh of generation is less than half of what I expect if Cricket Valley runs as expected. The wind estimates are all at least three times the observed 2015 NYS generation which confirms my expectation that aggressive wind development is necessary in these projections. It is also not clear why the wind generation projections in all four scenarios are less than either reference case. Even more vexing is that solar in the last scenario does not increase from 2018 to 2030. I am guessing that the solar money goes to aggressive energy efficiency. Note that the modeling assumes several fold increases in DG PV capacity. The last category that I want to address is oil-gas-steam. New York is unique in its reliance on this source category as backup for emergencies. Unless a production cost model is specifically tuned to New York then this is an easy category to turn down. However, reducing the generation, much less the capacity, is not as simple as it appears on first glance because of the role these units cover. I do not think those category estimates are realistic.

Ultimately this modeling exercise is a good example of Pragmatic Environmentalist Principle 4: We can do almost anything we want, but we can’t do everything. In the absence of absolute estimates I can only guess what the ultimate costs will be but the German experience of 20 euros per month for renewables is not comforting. I cannot endorse this approach because I fear the additional costs of renewables will divert too much of the state’s resources relative to other needs. New York State has to invest $40 billion in its water infrastructure just to provide clean water and treat wastewater. In my opinion investing in that immediate need and energy efficiency is a more appropriate social policy than subsidizing renewable energy. If, in fact, Indian Point has to close I suggest that accepting that its replacement power will have to include fossil generation is necessary.

Revisions to Replacement Power for Indian Point

Summary

Since the publication of my original post on this topic I realized that there were two natural gas fired combined cycle electric generating units in development and not just the one I thought. This update to the original post addresses the ramifications of that on replacement power and other emissions. Because the additional facility affects the conclusions I revised the entire post.

New York’s Governor Andrew Cuomo has threatened the closure of the Indian Point Energy Center located 25 miles north of New York City since his election and in January 2017 announced its closure by April 2021. Cuomo claims that Indian Point produces 2,000 megawatts of electrical power and that “more than enough replacement power to replace this capacity will be available by 2021”.

However, the problem is what are the characteristics of the replacement power relative to Indian Point? Indian Point’s nameplate capacity is 2,311 MW not 2,000 as described. Nuclear power is characterized by high capacity factors and because Indian Point provides over 20% of New York City’s power the location of the replacement generation matters. There are three projects that can replace that capacity and are at least located near New York City. Champlain Hudson Power Express transmission line has been permitted to bring 1,000 MW of Hydro Quebec hydropower into New York City but construction has not started. The Cricket Valley Energy Center is a 1,000 megawatt combined-cycle, natural gas fired generating plant that has just started construction and is expected to be on-line the first quarter of 2020. I did not include the CPV Valley Energy Center in the first post. It is a 650 MW combined-cycle, electric generating plant that is scheduled to go on line in February 2018.

In the original post I did not include CPV Valley so the claim of 2,000 MW so I disputed the claim that the replacement power was readily available but with adding it that claim is correct. The remaining and more subtle issue is whether these three facilities can replace Indian Point and not jeopardize other environmental goals.

I have been involved in the RGGI program process since its inception. Before retirement from a Non-Regulated Generating company, I was actively analyzing air quality regulations that could affect company operations and was responsible for the emissions data used for compliance. 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.

Cuomo’s Indian Point Closure Plan

As part of his state of the state proposals, Governor Andrew M. Cuomo announced the closure of the Indian Point Energy Center by April 2021. As described in the press release the Governor’s position is:

  • Replacement Power: Indian Point produces 2,000 megawatts of electrical power. Currently, transmission upgrades and efficiency measures totaling over 700 megawatts are already in-service. Several generation resources are also fully permitted and readily available to come online by 2021, after the plant’s closure, including clean, renewable hydropower able to replace up to 1,000 megawatts of power. Together, these sources will be able to generate more than enough electrical power to replace Indian Point’s capacity by 2021.
  • No Net Increase of Emissions Due to Closure: The Governor’s leadership on energy and climate change will ensure that Indian Point’s closure will not have an adverse impact on carbon emissions at the regional level. Through the Regional Greenhouse Gas Initiative, the state will continue to drive reductions in greenhouse gases across the power sector. Further, the Governor’s Clean Energy Standard to get 50 percent of New York’s electricity from renewables by 2030 is the most comprehensive and ambitious mandate in the state’s history to fight climate change, reduce harmful air pollution, and ensure a diverse and reliable energy supply at affordable prices.
  • Early Close Date: Entergy Corp. has agreed to cease all operations at Indian Point and will shut down the Unit 2 reactor in April of 2020. Unit 3 will be shut down in April of 2021. Unit 1 reactor was permanently shut down in October 1974 because the emergency core cooling system did not meet regulatory requirements. In the event of an emergency situation such as a terrorist attack affecting electricity generation, the State may agree to allow Indian Point to continue operating in 2-year increments but no later than April 2024 and April 2025 for Units 2 and 3 respectively.
  • Negligible Bill Impact: The Public Service Commission’s Indian Point Contingency Plan and other planning efforts have ensured that more than adequate power resources are able to come online by 2021 to ensure reliability of the power grid. Given these planning efforts and likely replacement resources, the plant’s closure in 2021 will have little to no effect on New Yorkers’ electricity bills.

Other Side of the Story – Replacement Power

There are two aspects of power generation that have to be considered when discussing replacements. The potential power output or name plate capacity and the actual generation produced. The New York State Independent Operator annual load and capacity report, the “Gold Book” provides that information. The name plate capacity of Indian Point 2 is 1,299 MW and Indian Point 3 is 1,012 MW. The average net generation from 2011 to 2015 from Indian Point 2 was 8,530 GWh and from Indian Point 3 was 8,422 GWh or 16,953 GWh from the facility. My point is that the net generation is the key parameter for replacement not the capacity.

In order to determine whether the Governor’s plan holds water we have to parse the press release. The first suggested component is “transmission upgrades and efficiency measures totaling over 700 MW that are already in-service”. In the original post I noted that I had trouble understanding how these measures will replace observed generation, but have since found a reference with an explanation. The New York Independent System Operator (NYISO) publishes an annual description of power trends. This is an absolute necessity due to the changes in the New York State electric system driven by the Governor’s Clean Energy Standard and Reforming the Energy Vision. The 2016 Power Trends document provided an explanation of the transmission projects. These projects were designed to increase the transfer capability into Southeastern NY so that excess upstate NY capacity could be transmitted to the region served by Indian Point. According to this document the transfer capacity was raised by 450 megawatts.

New York State has always had constraints on the amount of power that could be transmitted from upstate to downstate. These projects should be able to replace Indian Point generation that is used in the New York City area. However, I don’t think it is a like kind replacement of no-pollutant generation. While it can clearly move the upstate wind and solar power downstate, the upstate renewable facilities are not constrained by system needs. If they can generate then they do. The same argument can be made for the upstate nuclear power. If the nukes can run then they do. In other words, their generation is already being used elsewhere and is not going to provide added generation that can be transmitted downstate by these upgrades. Instead, the upstate replacement generation that can be transferred to downstate to make up the 450 MW will either be existing under-utilized fossil generation or new renewables. If it is fossil generation then there will be an increase in CO2 and other pollutants. If it is renewable then it is not new renewable that is going to be used to increase the amount of no-CO2 generation. Instead it is only going to replace the loss of the no-CO2 nuclear generation. In either case because Governor Cuomo has established goals for more renewables the source of the power from these transfer capacity improvements should be addressed.

The aforementioned NYISO 2015 Gold Book also notes that it also included 125 MW of additional demand response and combined heat and power resources to be implemented by Consolidated Edison, some of which is already in effect. The problem is that the 450 MW transmission upgrades these additional resources do not sum up to 700 MW.

The press release notes that “several generation resources are also fully permitted and readily available to come online by 2021, after the plant’s closure, including clean, renewable hydropower able to replace up to 1,000 megawatts of power.”   I assume that the hydropower replacement refers to Champlain Hudson Power Express. According to the Champlain Hudson Power Express web site the project will bring up to 1,000 megawatts (MW) of clean, renewable power to the New York metro area. This is consistent with the press release.

However the question is whether the three projects that are permitted can replace all 16,953 GWh of the generation from Indian Point. For the purposes of this analysis assume that Champlain Hudson Power Express power can be provided 100% of the time. With that assumption, it provides 8,760 GWh of power so we still have to replace 8,193 GWh of Indian Point Generation. According to the Cricket Valley web site this is a proposed 1,000 megawatt (MW) combined-cycle, natural gas-fired generating plant in Dover, NY that is expected to be on line by the first quarter of 2020. I could not find a proposed capacity factor (actual generation divided by the maximum potential generation) so assumed 80% which would produce 7,008 GWh. CPV Valley Energy Center is a 650 MW combined-cycle, natural gas-fired generating plant near Middletown, NY that is much further along and expected to be online in February 2018. Assuming an 80% capacity factor for this plant gives 4,555 GWh so these three facilities can provide over 3,300 GWh more than Indian point generated.

Other Side of the Story – Net Emissions

This revised post also addressed the claim that the plan is supposed to lead to no net increase of emissions due to closure. The emphasis has always been on carbon “pollution” and the press release is careful to claim no adverse impact on carbon emissions at the regional level skirting the question whether NY emissions will increase. Cricket Valley and CPV Valley both will emit carbon. Cricket Valley has an annual limit of 3,630,484 tons of GHG emissions and CPV Valley has an annual limit of 2,164,438 tons of CO2. To some extent in any scenario both facilities will displace Indian Point rather other fossil-fired facilities and those emissions will increase New York’s total emissions.

Of more concern to me are Nitrogen Oxides. The final Cross State Air Pollution Rule allowance budget and the Governor’s policies on allowance distributions could lead to a problem covering emissions with allowances (a topic for a separate post). If the generation gap from the closure of Indian Point is made up by the three projects described above, CPV Valley and Cricket Valley would increase annual NOx emissions by 289 tons. Emissions in the 2016 ozone season were 6,521 and the future allowance budget is only 5,135 tons so any increase in emissions is a further strain on the budget. New York State has aggressively pursued NOx reduction policies and there are not many opportunities left for additional reductions so any increase is problematic.

Other Sides – Timing and Bill Impact and Emissions

These sections from the original post are included for your information. No changes were made to the following paragraphs.

The schedule is for Entergy Corp. to shut down the Unit 2 reactor in April 2020 and Unit 3 in April 2021. The State may agree to allow Indian Point to continue operating in 2-year increments but no later than April 2024 and April 2025 for Units 2 and 3 respectively. Both the Champlain Express and Cricket Valley projects have been permitted but neither has started construction. The expected construction time for Champlain Express is three and a half years which means that it will not be ready by April 2020. Because natural gas combined cycle plants have relatively short construction times it probably will meet the first closure date if construction begins soon. I strongly believe that no new generation facility greater than 25 MW in New York State can be permitted in less than five years because of the extraordinary policies in place so nothing else could be permitted and constructed by the second closure date. So I expect that the extensions will be needed.

The Governor claims there will be negligible bill impact because of planning efforts and likely replacement resources. I am not an economist but the expected costs of Champlain Express is $2.2 billion and Cricket Valley is $1.5 billion have to be paid for somewhere. Surely the costs to continue operating Indian Point are less than that. Why won’t pre-mature retirement of this resource have a bill impact?

Replacement Power for Indian Point

Summary

Since his election New York’s Governor Andrew Cuomo has threatened the closure of the Indian Point Energy Center located 25 miles north of New York City and in January 2017 finally announced its closure by April 2021. Cuomo claims that Indian Point produces 2,000 megawatts of electrical power and that “more than enough replacement power to replace this capacity will be available by 2021”.

However, when you look at what has been permitted to be built within that time frame it is not clear that is as straight forward as suggested. In the first place, Indian Point’s nameplate capacity is 2,150 MW not 2,000 as described. Nuclear power is characterized by high capacity factors and because Indian Point provides over 20% of New York City’s power the location of the replacement generation matters. The Champlain Hudson Power Express transmission line has been permitted to bring 1,000 MW of Hydro Quebec hydropower to New York City. The only other large generation resource that has been permitted close to New York City is the Cricket Valley Energy Center, a proposed 1,000 megawatt combined-cycle, electric generating plant. So nominally these two facilities can replace 2,000 MW of Indian Point but as shown in this post the devil is in the details.

Cuomo’s Indian Point Closure Plan

As part of his state of the state proposals, Governor Andrew M. Cuomo announced the closure of the Indian Point Energy Center by April 2021. As described in the press release the Governor’s position is:

  • Replacement Power: Indian Point produces 2,000 megawatts of electrical power. Currently, transmission upgrades and efficiency measures totaling over 700 megawatts are already in-service. Several generation resources are also fully permitted and readily available to come online by 2021, after the plant’s closure, including clean, renewable hydropower able to replace up to 1,000 megawatts of power. Together, these sources will be able to generate more than enough electrical power to replace Indian Point’s capacity by 2021.
  • Early Close Date: Entergy Corp. has agreed to cease all operations at Indian Point and will shut down the Unit 2 reactor in April of 2020. Unit 3 will be shut down in April of 2021. Unit 1 reactor was permanently shut down in October 1974 because the emergency core cooling system did not meet regulatory requirements. In the event of an emergency situation such as a terrorist attack affecting electricity generation, the State may agree to allow Indian Point to continue operating in 2-year increments but no later than April 2024 and April 2025 for Units 2 and 3 respectively.
  • Negligible Bill Impact: The Public Service Commission’s Indian Point Contingency Plan and other planning efforts have ensured that more than adequate power resources are able to come online by 2021 to ensure reliability of the power grid. Given these planning efforts and likely replacement resources, the plant’s closure in 2021 will have little to no effect on New Yorkers’ electricity bills.
  • No Net Increase of Emissions Due to Closure: The Governor’s leadership on energy and climate change will ensure that Indian Point’s closure will not have an adverse impact on carbon emissions at the regional level. Through the Regional Greenhouse Gas Initiative, the state will continue to drive reductions in greenhouse gases across the power sector. Further, the Governor’s Clean Energy Standard to get 50 percent of New York’s electricity from renewables by 2030 is the most comprehensive and ambitious mandate in the state’s history to fight climate change, reduce harmful air pollution, and ensure a diverse and reliable energy supply at affordable prices.

Other Side of the Story – Replacement Power

There are two aspects of power generation that have to be considered when discussing replacement power: the potential power output or name plate capacity and the actual generation produced. The New York State Independent Operator annual load and capacity report, the “Gold Book” provides that information. The name plate capacity of Indian Point 2 is 1,070 MW and Indian Point 3 is 1,080 MW. The average net generation from 2011 to 2015 from Indian Point 2 was 8,530 GWh and from Indian Point 3 was 8,422 GWh or 16,953 GWh from the facility. My point is that the net generation is the key parameter for replacement not the capacity.

In order to determine whether the Governor’s plan holds water we have to parse the press release. The first suggested component is “transmission upgrades and efficiency measures totaling over 700 MW that are already in-service”. I have trouble understanding how these measures will replace observed generation. The aforementioned NYISO 2016 Gold Book describes distinct transmission projects approved by the PSC as part of the Indian Point Contingency Plan in October 2013 that were projected by the Transmission Owners to be in service by summer 2016 and also notes that it also included 125 MW of additional demand response and combined heat and power resources to be implemented by Consolidated Edison, some of which is already in effect. Presumably these projects are part of the 700 MW mentioned in the press release.

However, the contingency plan was developed to specifically address the problem that New York City is essentially a massive load pocket. Because most of New York City and Long Island are on islands they are a limited number of transmission lines into the City so the location of the generation matters. Moreover, because one of the City blackouts occurred because of a disruption to transmission into the City, reliability planning is a very important. My guess is that these in-service upgrades and measures are critical to that requirement. However because they were in place and Indian Point generation did not go down they do not represent actual displacement of the energy produced. Maybe it won’t be needed in New York City but it was used elsewhere and must be replaced.

The press release notes that “several generation resources are also fully permitted and readily available to come online by 2021, after the plant’s closure, including clean, renewable hydropower able to replace up to 1,000 megawatts of power.”   I assume that the hydropower replacement refers to Champlain Hudson Power Express. As noted previously the only other New York City are large generation resource that I know of is Cricket Valley.

According to the Champlain Hudson Power Express web site the project will bring up to 1,000 megawatts (MW) of clean, renewable power to the New York metro area. For the purposes of this analysis assume that this power can be provided 100% of the time. With that assumption, Champlain Hudson Power Express provides 8,760 GWh of power so we only have to replace 8,193 GWh of Indian Point Generation.

According to the Cricket Valley web site this is a proposed 1,000 megawatt (MW) combined-cycle, electric generating plant in Dover, NY. I could not find a proposed capacity factor (actual generation divided by the maximum potential generation) so assumed 80%. In that case, the net generation 7,008 GWh so the remaining generation needed is 1,185 GWh.

Therefore, in order to displace the actual average generation produced by Indian Point additional generation capacity capable of 1,185 GWh is needed. Implicit in the Governor’s plans is that renewable energy will be part of this replacement. Rather than trying to explain the difficulties of that approach myself, I refer you to the Planning Engineer’s explanation that Not all Megawatts are Equal. If the problems enumerated in this post could be overcome the total generation produced by 21 NYS industrial wind facilities in 2015 was 3,983 GWh so it appears that seven more wind facilities could produce the remaining generation. Note however, that the total wind energy nameplate capacity is 1,892 MW with a capacity factor of 28% in 2015. Because Indian Point generation is dispatchable that means true replacement energy has to produce dispatchable power and that requires storage. Moreover, the timing of when wind is available means that more nameplate capacity would be required than necessary at first glance. There are similar concerns relative to the use of solar renewable energy. So I remain unconvinced that replacement will be as easy as proposed.

Other Sides – Timing, Bill Impact and Emissions

Each of these topics could have their own post but I am only going to address each briefly.

The schedule is for Entergy Corp. to shut down the Unit 2 reactor in April 2020 and Unit 3 in April 2021. The State may agree to allow Indian Point to continue operating in 2-year increments but no later than April 2024 and April 2025 for Units 2 and 3 respectively. Both the Champlain Express and Cricket Valley projects have been permitted but neither has started construction. The expected construction time for Champlain Express is three and a half years which means that it will not be ready by April 2020. Because natural gas combined cycle plants have relatively short construction times that facility probably will meet the first closure date if construction begins soon. I strongly believe that no new generation facility greater than 25 MW in New York State can be permitted in less than five years because of the extraordinary permitting requirements in place so nothing else could be permitted and constructed by the second closure date. So I expect that the extensions will be needed.

The Governor claims there will be negligible bill impact because of planning efforts and likely replacement resources. I am not an economist but the expected costs of Champlain Express $2.2 billion and Cricket Valley $1.5 billion have to be paid for somewhere. Surely the costs to continue operating Indian Point are less than that. Why won’t pre-mature retirement of this resource have a bill impact?

This plan is supposed to lead to no net increase of emissions due to closure. The emphasis has always been on carbon “pollution” and the press release is careful to claim no adverse impact on carbon emissions at the regional level skirting the question whether NY emissions will increase. In fact even if Cricket Valley is the only fossil replacement power for Indian Point there were will be an increase of over 3,630,484 tons of GHG emissions (Table 4-2 in the Cricket Valley DEIS). The missing pollutant is Nitrogen Oxides. The final Cross State Air Pollution Rule allowance budget and the Governor’s policies on allowance distributions could very likely lead to a problem covering emissions with allowances (a topic for a separate post). If the generation gap from the closure of Indian Point is made up of New York’s existing natural gas plants and Cricket Valley then there could over 400 tons of additional NOx emissions. Emissions in the 2016 ozone season were 6,521 and the allowance budget is only 5,135 tons. New York State has aggressively pursued NOx reduction policies and there are not many opportunities left for additional reductions so any increase is problematic.