NYSERDA / NYISO Gas and Electricity Study: Overview New York Gas Group Open Session March 19, 2002
NYSERDA / NYISO Gas and Electricity Study: Overview
New York Gas GroupOpen Session
March 19, 2002
CHARLES RIVER ASSOCIATES
2
Topics
Study Overview
Key Findings to Date
Reliability/Contingency Considerations
Summary
CHARLES RIVER ASSOCIATES
3
Key Questions/Issues
Analyze the interaction of the gas and electric system:• Will there be a potential mismatch between total gas demand (for
electric generation and all other uses) and delivered gas supplies at the market price of gas?
• Can the gas and/or electric system respond to the loss of “key” gas facilities?
• Will the gas delivery system be able to respond to the dynamic changes in demand created by the start-up, ramping or shut down of gas-fired generation?
– “Normal” requirements to supply gas to units responding to meet operating reserve requirements.
– “Abnormal” requirements that could be created by restarts after a major system outage.
CHARLES RIVER ASSOCIATES
4
Task Status/Schedule
• Task 1 – Characterize alternative levels of gas use for power generation. (Complete)
• Task 2 -- Develop integrated gas/electric system modeling process, along with those activities required to determine the likely future operations of the gas and electric systems in the Northeast. (Analysis Complete, Report in Preparation)
• Task 3 – Conduct detailed modeling of gas system contingencies and the corresponding impacts on the electric system. (April)
CHARLES RIVER ASSOCIATES
5
Analytical Construct
Potential issues can be grouped into two categories:• Those that deal with the fundamental demand/supply balance of the gas
and electric systems:– Has gas-fired generation caused gas demand to exceed reliable gas
transmission capacity? When? Duration?– Can oil effectively substitute for gas?
• Oil delivery • Emissions limits
• Those that deal with the dynamic response capabilities/requirements of the electric and gas systems
– Gas system dynamic response capability– Electric system reserves/redispatch– “On-the-fly” fuel switching (to be examined)
CHARLES RIVER ASSOCIATES
6
Project Approach
Our approach incorporates detailed modeling of both the electric and gas sectors.
Key Assumptions• Electric loads, unit characteristics• Transmission system and
constraints• New units
Electric ModelHourly operations at individual
generator nodes
Gas Dispatch Model
Unit Operating StatisticsGeneration, hours of operation,
fuel consumed, emissions
Gas Supplies/ ShortfallsAt individual pipeline nodes
Key Assumptions• Pipeline characteristics• Compressor characteristics• Profiles for non-generation
demands
Revised relative gas/oil prices if appropriate
Are operating/ emission limits
met?
Hourly gas demands
Key Assumptions• Electric loads, unit characteristics• Transmission system and
constraints• New units
Electric ModelHourly operations at individual
generator nodes
Gas Dispatch Model
Unit Operating StatisticsGeneration, hours of operation,
fuel consumed, emissions
Gas Supplies/ ShortfallsAt individual pipeline nodes
Key Assumptions• Pipeline characteristics• Compressor characteristics• Profiles for non-generation
demands
Revised relative gas/oil prices if appropriate
Are operating/ emission limits
met?
Hourly gas demands
CHARLES RIVER ASSOCIATES
7
Impact of New Gas-Fired Capacity
Impact of capacity additions on gas demand depends on:• Load Growth• Net imports/exports• Relative Efficiency of New/Existing Gas-Fired Units and Current Fuel
Mix– If less efficient gas units are replaced, gas demand may actually decrease.– If generation from oil or other fuels is pushed out in favor of gas, gas
demand will rise.
• The extent that existing capacity is retired/repowered
Even if gas demands do not increase, the electric system must necessarily become more dependent on gas, since new capacity will be able to generate ~50% more electricity for a given amount of gas.
CHARLES RIVER ASSOCIATES
8
New York Electricity Demand
If those projects with Article X approval are constructed as scheduled, along with announced CTs, capacity additions will outpace forecasted demand growth by 2005:
• Peak summer electricity demand for NYCA is forecasted to grow at an annual rate of 1.3% from 30,620 MW in 2001 to 32,220 MW in 2005 – approximately 400 MW per year.
• Winter peak loads are only forecast to grow at approximately 200 MW per year over the same period – from 24,760 MW for 2001-2002 to 25,560 MW for 2005-2006.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2015 2020Normal Weather
Load 30,620 31,240 31,620 31,910 32,220 32,500 32,780 33,070 33,350 33,670 35,240 36,770 Extreme
Weather Load 31,540 32,180 32,570 32,870 33,190 33,480 33,760 34,060 34,350 34,680 36,300 37,870
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2015-16 2020-21Load 24,760 25,000 25,180 25,380 25,560 25,760 25,940 26,150 26,390 26,630 27,700 28,800
Source: 2001 Gold Book
Forecasted New York Peak Loads
Winter Peak Load (MW)
Summer Peak Load (MW)
CHARLES RIVER ASSOCIATES
9
Generation Mix: 2002 and 2005
Although winter peak load can be met without the new combined-cycles, these units are highly utilized in both summer and winter (in unconstrained gas case) and play a key role in meeting 2005 electricity summer demand.1
• New CCs run at near full capacity under peak conditions.• In the summer, when 3,840 MW of new capacity is added, imports and
steam-oil generation are displaced by the new units.• If 7,701 MW are added, summertime generation from existing steam-gas
units is also displaced by the new plants.• During winter peak, new CCs displace mostly steam-oil generation.
1. To date, our analyses have assumed existing local reliability rules regarding co-firing of oil in specified dual-fuel units.
CHARLES RIVER ASSOCIATES
10
Unrestricted Gas Demands: Summer
With unrestricted gas supply to electric generators, summer power plant gas demand will increase substantially by 2005.
• New gas-fired generating capacity is needed to meet increased electricity demand.
• New combined-cycle generation in excess of load growth displaces the more costly generation first. Hence, steam oil units are replaced first, limiting the effect of increased efficiency on gas demand.
• If a substantial amount of new capacity is added, generation from steam gas units is also displaced. As a result, if enough capacity is added, power plant gas demand begins to decrease.
• In the 3,840 MW case, the largest increase in gas demand occurs in Niagara Mohawk’s territory, reflecting the location of the Heritage and Albany projects, and in Central Hudson, with the Athens project. With the 7,701 MW case the pattern changes – increasing gas requirements in NY City and on Long Island.
Proposed pipeline additions will provide sufficient deliverability to meet unrestricted gas demands.
CHARLES RIVER ASSOCIATES
11
Unrestricted Gas Demands: Winter
Assuming that gas supplies are not restricted, the change in gas demand between 2002 and 2005 is directly related to the amount of new capacity that is added.
• Currently, few units burn gas throughout the winter – only cogen and NUG units.
• If no new units are available, gas demand is almost unchanged from historical levels – increased electricity demand is met by excess steam oil capacity.
• Generation from new combined-cycle units replaces generation from steam oil units on nearly a MW for MW basis. Hence, unrestricted gas demands always increase as more capacity is added.
Proposed pipeline additions are sufficient to meet core LDC gas demands and the demands by new CCs. However, existing dual-fuel steam generating units operate on oil – at or below historical rates.
CHARLES RIVER ASSOCIATES
12
Summer Generation with Restricted Gas Supply: 2005
When the gas supply is restricted to all gas-fired units, summer load can be met.
• If high gas prices are used to ration gas supplies -- combined cycle and cogen plants burn gas and steam units switch to oil.
• The ability of steam units to burn oil is key to meeting peak load when gas supply is restricted. If oil-capable steam units are retired or their operation is restricted for environmental reasons, the ability to meet peak electric load could be compromised.
If fuel (gas or distillate) is assumed to be unavailable to new combined-cycle plants, electric load can be met under some conditions.
• Almost all available capacity is needed to meet peak demand if combined cycles are unable to get gas supply.
• Our model results show that with 1,200 MW on forced outage and full hydro utilization, load can be met without the combined-cycles, but operating reserves are short by 600-800 MW.
CHARLES RIVER ASSOCIATES
13
Winter Generation with Restricted Gas Supply: 2005
Winter peak electricity loads can be met even when gas supplies for electricity generation are severely restricted (except for deliveries to Cogen and NUG units).
• If fuel (gas or distillate) is assumed to be unavailable to new combined-cycle plants, oil-fired steam units and dual-fuel steam units running on oil are able to meet winter peak loads.
• If high gas prices are used to ration gas supplies, the new combined cycle plants run at near-full capacity, replacing generation from oil-steam units. Some of the least efficient gas-fired cogen units, however, lose their marginal cost advantage over steam oil units and are thus pushed out of merit.
With winter peak loads 6,000 to 7,000 MW below summer peaks, surplus electric generation capacity exists on winter peak days.
CHARLES RIVER ASSOCIATES
14
What did we do with your data
Annual load forecasts were converted to daily demands.
Pipeline firm supplies were converted to daily supplies.
Storage supplies were modeled as daily supplies within contract limits.
Spot gas supplies were added up to the daily pipeline supply capacities (net of storage and firm gas).
Data was utilized in a daily dispatch model.
CHARLES RIVER ASSOCIATES
15
What does our analysis show?
Gas supplies in the state are adequate for demand with some limited spot shortages to the power sector.
The”shortages” are for electric peaks, during both summer and winter, are short term, do not cause difficulties for the area’s electricity (as oil backup exists) and are consistent with the short term pipeline scarcity typical of a properly designed pipeline system.
The downstate area is the area where supply / demand balances are the greatest issue
CHARLES RIVER ASSOCIATES
16
2002 Base CaseDownstate Winter Load Duration Curve
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,0001 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
121
126
131
136
141
146
151
Mdt
h/da
y
Unserved DemandPower Related Gas ReceiptsNon-Power Gas Receipts
CHARLES RIVER ASSOCIATES
17
2002 Base CaseDownstate Winter Gas-Power Load Duration Curve
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,6001 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
121
126
131
136
141
146
151
Mdt
h/da
y
Unserved DemandPower Related Gas Receipts
CHARLES RIVER ASSOCIATES
18
2002 Base CaseDownstate Summer Gas-Power Load Duration Curve
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,6001 7 13 19 25 31 37 43 49 55 61 67 73 79 85 91 97 103
109
115
121
127
133
139
145
151
157
163
169
175
181
187
193
199
205
211
Mdt
h/da
y
Unserved DemandPower Related Gas Receipts
CHARLES RIVER ASSOCIATES
19
2005 No Pipeline ExpansionsDownstate Winter Load Duration Curve
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,0001 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
121
126
131
136
141
146
151
Mdt
h/da
y
Unserved DemandPower Related Gas ReceiptsNon-Power Gas Receipts
CHARLES RIVER ASSOCIATES
20
2005 No Pipeline ExpansionsDownstate Winter Gas-Power Load Duration Curve
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,6001 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
121
126
131
136
141
146
151
Mdt
h/da
y
Unserved DemandPower Related Gas Receipts
CHARLES RIVER ASSOCIATES
21
2005 No Pipeline ExpansionsDownstate Summer Gas-Power Load Duration Curve
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,6001 7 13 19 25 31 37 43 49 55 61 67 73 79 85 91 97 103
109
115
121
127
133
139
145
151
157
163
169
175
181
187
193
199
205
211
Mdt
h/da
y
Unserved DemandPower Related Gas Receipts
CHARLES RIVER ASSOCIATES
22
2005 Base CaseDownstate Winter Load Duration Curve
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,0001 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
121
126
131
136
141
146
151
Mdt
h/da
y
Unserved DemandPower Related Gas ReceiptsNon-Power Gas Receipts
CHARLES RIVER ASSOCIATES
23
2005 300/day ExpansionDownstate Winter Load Duration Curve
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,0001 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
121
126
131
136
141
146
151
Mdt
h/da
y
Unserved DemandPower Related Gas ReceiptsNon-Power Gas Receipts
CHARLES RIVER ASSOCIATES
24
2005 400/day ExpansionDownstate Winter Load Duration Curve
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,0001 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
121
126
131
136
141
146
151
Mdt
h/da
y
Unserved DemandPower Related Gas ReceiptsNon-Power Gas Receipts
CHARLES RIVER ASSOCIATES
25
2005 500/day ExpansionDownstate Winter Load Duration Curve
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,0001 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
106
111
116
121
126
131
136
141
146
151
Mdt
h/da
y
Unserved DemandPower Related Gas ReceiptsNon-Power Gas Receipts
CHARLES RIVER ASSOCIATES
26
Summary
New York's electric system can meet electric peak load under limited gas supplies in both the summer and winter peak period through 2005.
• Annual load and energy growth are modest – Summer ~400 MW; Winter ~200 MW
• Projected capacity additions significantly outstrip load growth• The amount of new capacity, and its heat rate advantage, result in
modest growth in summer gas demands• Continued availability of existing dual-fuel and oil-fired steam units
is absolutely necessary to meet future electricity demand if gas deliveries for electric generation are assumed to be restricted (either contractually or physically)
• Limited pipeline capacity (300-400/d) is required to serve a balanced load. More than that is economically impaired.
While electricity loads can be met with relative ease under the scenarios we have evaluated to date, electric system reliability becomes increasingly dependent on individual gas facilities.
CHARLES RIVER ASSOCIATES
27
Fuel Prices in NYC
0
1
2
3
4
5
6
7
8
9
10
Jan-01 Jan-02
Nom
inal
$/M
MBt
u
FO2FO6NYCG NG
CHARLES RIVER ASSOCIATES
28
Contingencies
Contingencies are categorized by initial source:• By the gas system which decreases or increases pressure:
– Compressor problem.– Pipeline rupture/gas system collapse
• By the oil system– Short term storage/re-supply limitations – Long term delivery problems/sustained cold weather
• By environmental regulations – which limit the substitution of oil for gas either directly at affected gas-fired units or at oil-fired steam units.
• By the electric system:– “Normal” responses to generator outage or transmission outage – dealt with
by operating reserves– “Abnormal” electricity system responses – e.g. re-starts after a wide spread
outage.
CHARLES RIVER ASSOCIATES
29
Electric System Considerations
The electric system can address short-term contingency problems created by the loss of a “key” gas facility:
• At the generating unit level -- with gas-fired generating units having the instantaneous ability to switch to an alternative fuel.
– Co-firing oil and gas in dual-fuel steam units– “Switch-on-the-fly” capability for turbines (to be examined)
• At the electric system level – by carrying sufficient “electrically equivalent” operating reserves fired by an alternative fuel or independent gas source.
– Non-gas-fired reserves– Gas-fired reserves un-affected by the same “key” facility
CHARLES RIVER ASSOCIATES
30
Available Substitutable Oil-Fired CapacityIncludes both on-line and off-line units
New York City Gas-Fired Generation and Available Substitutable Oil-Fired Capacity(Summer 2005)
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
5/1/20
05
5/8/20
05
5/15/2
005
5/22/2
005
5/29/2
005
6/5/20
05
6/12/2
005
6/19/2
005
6/26/2
005
7/3/20
05
7/10/2
005
7/17/2
005
7/24/2
005
7/31/2
005
8/7/20
05
8/14/2
005
8/21/2
005
8/28/2
005
9/4/20
05
9/11/2
005
9/18/2
005
9/25/2
005
Day
Oil-
Fire
d Ca
paci
ty (M
W)/G
as-F
ired
Gen
erat
ion
(Pea
k M
Wh)
Peak Hour Gas-Fired Generation
Total Substitutable Oil Capacity
CHARLES RIVER ASSOCIATES
31
CON ED Demand Shortfall
0
100
200
300
400
500
600
700
800
900
11/1/
2001
11/15
/2001
11/29
/2001
12/13
/2001
12/27
/2001
1/10/2
002
1/24/2
002
2/7/20
02
2/21/2
002
3/7/20
02
3/21/2
002
4/4/20
02
4/18/2
002
5/2/20
02
5/16/2
002
5/30/2
002
6/13/2
002
6/27/2
002
7/11/2
002
7/25/2
002
8/8/20
02
8/22/2
002
9/5/20
02
9/19/2
002
10/3/
2002
10/17
/2002
10/31
/2002
Mdt
/day
HP GasCONED--LP GasCONED--Oil
CONED--Total Shortfall