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Energy Guide:

2017 Long Island


Integrated Resource Plan
and Repowering Studies
Table of Contents
Sources of Electricity 4 The electric utility industry is evolving with changing
Peak Load Forecast 5
customer expectations, advances in technology,
Expanding Clean Energy 6
NYs Off-Shore Wind Goals 7 lower natural gas prices, and New Yorks own goals
Generation Outlook 8
for a cleaner and more efficient energy future.
Cables to Regional Power Markets 9
Impact of Renewables on Generation 10
Forecast Steam Plant Use 11
The following pages demonstrate this evolution in
Natural Gas Prices 12
Economics of Steam Plant Modernization 13 several ways, including the effect of more efficient
Cost Comparisons 14
appliances and technology on future electric demand
Condition of PSA Steam Units 15
Alternatives to Modernize Generation 16
and the impact of a growing base of renewables
Independent Second Opinion 17 on the amount and types of resources needed to
LIPA Staff Recommendation 18
balance Long Islands electric grid.
Supporting Documents 19

The Energy Guide reflects the preliminary findings


Acknowledgements
Valuable contributions were provided by: of a comprehensive study to identify the needs for
PSEG Long Island Long Islands future energy grid.
Long Island Power Authority
The Brattle Group
RCM Techonologies
National Grid
Department Of Public Service
NYSERDA

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Key Findings Key Findings

Sources Of Electricity Peak Load Forecast


Three large legacy generation plants (PSA steam units) Recent peak load forecasts show dramatic reductions driven by
represent 40% of LIPAs maximum electric production capability greater adoption of energy efficiency and rooftop solar. The
while only generating 21% of its energy decline is consistent with state and national trends

An independent third party, called the NYISO, determines which The forecasted need for power plants in 2030 on Long Island has
generation units run to provide the lowest cost to consumers declined by ~1,700 megawatts (MW) since 2013, the equivalent of
3-5 large baseload central station power plants

Peak load is the highest demand for electricity in a year

2016 2016
Maximum Capability by Generation Type Actual Energy Production by Resource
5,864 MW 20,964 MW-hours
Long Islands Peak Load Forecast has Declined Since 2010

11% 8000 2010


Purchased Power | 660
7500 2013
12% 40% 21% 2014
Renewables | 112 PSA Steam | 2,339 PSA Steam | 4,332 7000
4% 2015
Nuclear | 224 6500
MW 1,699 MWs -- 2016
4% 6000
Refuse/Cogen
225 36% 1% 2017
PSA Combustion 5500
Purchased Power
Turbine | 230
9% 7,465
Non PSA 5000
Combustion
Turbine | 537 14% 4500
Non-PSA
Combined Cycle
7% 2,964 4000
Non-PSA 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036
Combined Cycle
418 5% 3%
Non PSA
Renewables Combustion Turbine The Zone K peak load forecast for 2030 has declined by over 24% (i.e.,
1,045 5% 726 1,699 MWs) when comparing the 2013 forecast to the 2017 forecast.
23% 15% Refuse/Cogen
PSA Combustion Nuclear 1,113
Turbine 3,089
1,349

LONG LONG
ISLAND ISLAND

PSA refers to National Grid Power Supply Agreement

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Key Findings Key Findings

Expanding Clean Energy NYs Off-Shore Wind Goals


NYs 50 percent renewable by 2030 (50x30) Clean Energy NY set a 2,400MW Off-Shore Wind (OSW) goal for 2030. There
Standard requires LIPA to add 800MW of new renewable are a large number of potential OSW sites off of Long Islands
generation, enough to power 350,000 more homes coast

Load is expected to be reduced by 950MW through 2030 as a A significant portion of the States offshore wind goal may
result of energy efficiency, rooftop solar, and other behind the connect to Long Islands electric grid, potentially in excess of the
meter initiatives amount needed to meet LIPAs own CES needs

NYSERDA will issue an Off-Shore Wind Master Plan for the State
by the end of 2017

LIPAs New Renewable Energy Generation to Meet 50x30 Clean Energy Standard Long Islands OSW Development Areas

4000
Offshore Wind Projections
3500
3000
2500
State-identified CES target
GWh

NOT TO SCALE
2000
1500
Solar
1000
500
0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Year Wind Sites*

Landfall Location

Note: The proportion of OSW and solar reflected in the graphic represents a planning Converter/Substation
assumption. Actual project selection will be based on competitive solicitations
* Deepwater Wind Lease Area; Bureau of Ocean and Energy
Statoil recently won Management (BOEM) Wind Energy Areas; and Area of
development rights to 79,350 Potential Development (AOPD)
acres in the BOEM lease area.

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Key Findings Key Findings

Generation Outlook Cables to Regional Power Markets


With flat load growth and the addition of renewable generation to LIPAs annual purchases of approximately 10,500 GWh of
meet CES, LIPA has excess generation capacity through 2035 energy across five transmission cables to the New York, New
England, and PJM power markets provides diverse and robust
Ninety nine percent (99%) of LIPAs generation contracts are
supply, redundancy, and lower cost. LIPAs purchases are a fraction
up for renewal by 2030 providing flexibility to reposition LIPAs
of the energy produced in those markets
generation fleet in response to changing conditions
Excess generation provides reliability, redundancy and resiliency
to meet the needs of the electric grid and our customers

Dra$

Transmission: Cables to Regional Electric Grids

Transmission:
LIPAs annual purchases of approximately 10,500Cables to Regional
GWh of energy across fivePower Markets
transmission cables to the New York, New
LIPA Has Surplus Generation Through 2035 England, and PJM power markets provides diverse and robust supply, redundancy, lower cost, and represents a tiny fraction of
generation in those markets.
The current peak load forecase shows a
capacity need date of 2035 or later. ISO-NE Total Energy Produc8on: 107,916 GWh
NYISO Total Energy Produc8on: 142,346 GWh
6400 LIPA Purchases from ISO-NE: 1,908 GWh (2%)
LIPA Purchases from NYISO: 4,334 GWh (3%) ISO-NE
Long Island Peak Load (MW)

6200
NYISO Cross Sound Cable
6000 (330 MW)
NNC Cable
Y-49/50 (200 MW)
(935 MW, net)
5800

5600

5400

5200

5000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Year
Available Capacity Cumulative Capacity Contract Expired, Remains In-Service Neptune Cable
(660 MW)
Additional Renewables to meet 50x30 Capacity Requirement
2015 PJM Total Energy Produc8on: 786,698 GWh
PJM
2015 LIPA Purchases from PJM: 4,265 GWh (1%)

LONG
ISLAND 15
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Key Findings Key Findings

Impact Of Renewables On Generation Forecast Steam Plant Use


The addition of OSW and other renewable resources into LIPAs The capacity factor of the PSA steam units has declined
system significantly reduces the run time of the PSA steam plants significantly since the 1990s
and increases the need for peaking units, batteries, demand
Renewables and other forecast changes to the electric grid
response and other more flexible resources
dramatically reduce usage and emissions of the PSA steam
Three scenarios for OSW on Long Island are shown below. The plants by 2030
first is meeting LIPAs CES goals while the second and third meets
LIPAs CES goals plus additional megawatts of OSW procured by
other New York utilities to meet the States 2,400MW OSW goal The capacity factor is the amount a power plant is used during a year
relative to its maximum potential output

Additional Renewables Decrease the Run Time of Steam Plants Run time of PSA Steam Plants Forecast to Decline

60%
4500 54% 53%
4000 48%
50%
AMOUNT OF ELECTRICITY STEAM POWER 44%
3500 PLANTS ARE CAPABLE OF PRODUCING ACTUAL CUSTOMER ENERGY USE

Capacity Factor
(Plus Must Run / Highly Efficient Generation) NET OF RENEWABLES
(Daily Electricity Consumption based on 40%
3000 77% Emission
Various Renewable Energy Scenarios)
Reduction
by 2030
2500 30%
MW

STEAM PLANT
2000 PRODUCTION 20%
18%
20%
1500 13%
10% 11% 11%
1000 9% 6% 6%
10% 6% 5%
POWER RESOURCES LIPA RUNS FIRST
500 (Highly Efficient Energy Resources Run
First for Economic & Emission Benefits)
0%
0
Barrett Steam Port Jefferson Steam Northport Steam
1AM 2AM 3AM 4AM 5AM 6AM 7AM 8AM 9AM 10AM 11AM NOON 1PM 2PM 3PM 4PM 5PM 6PM 7PM 8PM 9PM 10PM 11PM 12PM
-500

1999 2016 2030 1999 2016 2030 1999 2016 2030


CES Compliance Additional 1200 MW OSW Additional 1900 MW OSW

CES Compliance Additional 1200 MW OSW Additional 1900 MW OSW

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Key Findings Key Findings

Natural Gas Prices Economics of Steam Plant Modernization


Natural gas prices have declined 72% since 2008 and are back to The construction of proposed combined cycle plants to replace
late 1990 levels existing steam plants is technically feasible, but not required for
reliability and will raise the net cost to customers by up to
Lower natural gas prices reduces the value of the fuel savings
$5 billion or $2,210 for the average residential customer through
from newer plants
2030

The capacity factors of the proposed plants are lower than typical
for new plants mainly due to the addition of renewable energy to
the electric grid

Proposed Combined Cycle Plants Have a Net Cost of Up To $5 Billion through 2030
Natural Gas Prices are Back to 1990 Levels

10.00 $6

$5 Combined Projects
Combined Projects w/ additional 1900 MW Typical capacity factor of new
8.00 $4 OSW above CES Compliance Case combined cycle plant (80%)

$ Billion
$3 Caithness II
$ Dthm

$2
6.00 Barrett Repowering

$1 Port Jefferson Repowering

$0
4.00 40% 50% 60% 70% 80% 90% 100%
Capacity Factor

2.00
Barrett Port Jefferson Caithness II All Three

Net Cost Through 2030


0.00 $1.2 billion $0.9 billion $2.9 billion $5 billion
2000

2004

2006

2009
2008
2003

2005
2002

2007

2010
2001

2014

2016
1999

2013

2015
1998

2012
1997

Increase in Average
2011

Residential Customer $536 $378 $1,297 $2,210


Bill Through 2030

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Key Findings Key Findings

Cost Comparisons Condition of PSA Steam Units


Due to lower than typical run time (capacity factor), the cost The PSA steam units operate reliably with equivalent availability
per kWh of the new repowered steam plants would be similar to (summer) averaging well above 90%, in line with contractual
todays costs for renewable energy guarantees for new combined cycle facilities

Advancing technology and economies of scale are expected to An independent condition assessment by RCM Technologies
result in a decline in renewable energy costs concluded that with reasonable capital and O&M expenditures the
steam units should operate reliably through the study period

Cost of Proposed Combined Cycle Plants Per Kilowatt-hour

$0.18

Steam Plants 2016


$0.16

$0.18
$0.14
Plant Equivalent Availability: Summer (%)
cents per kwh (2025)

$0.16
cents per kwh (2025)

$0.12
$0.14
Barrett Steam Units 92
$0.10 $0.12

$0.08
$0.10 Northport Steam Units 94
All three projects w/
Any one project
additional 1900 MW OSW
$0.08 And CES compliance
above CES Compliance Case
$0.06
Port Jefferson Steam Units 98
All three projects
And CES compliance
$0.04 Barrett Caithness II New Combined Cycle Plant
Contractual Guarantee 95 - 97
$0.02 (typical)
$0.00
50% 60% 70% 80%
Capacity Factor
Range of costs for
Barrett Port Jefferson Caithness II
Renewables

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Key Findings Key Findings

Alternatives to Modernize Generation Independent Second Opinion


The proposed combined cycle plants are more fuel efficient and LIPA retained the Brattle Group to provide an independent
have operating characteristics that are more flexible than the PSA second opinion on PSEG Long Islands reliability planning criteria
steam units but less flexible than peaking units and analyses of proposals for Caithness II and the repowered
steam plants.


New peaking units, batteries, demand response, or other
distributed energy resources may better support renewable We do not find a compelling reason for LIPA to proceed with
resources than existing steam units or new combined cycle plants Caithness II or the repowering projects. None of the plants are
needed for reliability or economic purposes. For all the options
the plant costs exceed their benefits for at least the next decade.

The Brattle Group


The Brattle Group is an independent economic and financial consulting firm that
provides evaluations and researched-based answers to complex challenges facing the
energy, financial and government sectors around the world.

The Department of Public Service staff also participated in the


Brattle Groups review.
Steam Plant Modernization: Operating Characteristics


Existing PSA Units New Units
Characteristic Peaking Units (Simple Cycle)
The DPS reviewed the Brattle Report and concludes that adoption
Combined
Steam Units Combustion
Turbines Cycle Large
Frame
Small
Frame Areo
of NYSRC/NYISO planning criteria in 2014 and the analysis with
respect to the need for Caithness II are reasonable.
Cold Start Time 26 30 hours 10-30 minutes 3 4 hours 10 min 10 min 10 min
Department of Public Service
16 1 4 No technical minimum limit The mission of the New York State Department of Public Service is to ensure affordable,
Time (hours) safe, secure and reliable access to electric and gas service for New York States
residential and business consumers
Ramp Rate
2-4 NA 15 - 40 50 100+ 25 25
(MWs/min)

Heat rate (Btu/


10,000 11,300 13,000-16,500 6,600 6,800 8,000 8,200 9,700 8,900 9,500
kWh)

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LIPA Staff Recommendation Supporting Documents
Monitor * 2017 Integrated Resource Plan:
Long Island energy and peak demand growth each year PSEG Long Island Summary Analysis
The operating performance and budgets of generation plants relative to
expectations
* LIPA Generation Planning Review of
Evaluate Caithness Long Island II, and E.F. Barrett and
Opportunities for economies of scale in offshore wind by Port Jefferson Repowering by the Brattle Group
partnering with NYSERDA and other local utilities in procurement
and interconnection to the electric grid
* Letter from New York State Department
Maintain of Public Service regarding Brattle Group review
Energy efficiency programs to reduce load by 950 megawatts through
2030
* Repowering Feasibility Study of
Efforts for fair property tax reductions on existing plants that reflect
their past and forecasted decline in use Port Jefferson Power Station

Study
* Repowering Feasibility Study of
The peaking generation fleet and its ability to accommodate the flexible E.F. Barrett Power Station
operating profile required by greater amounts of renewable generation
Selected retirements and modernization of peaking units
* Condition Assessment of National Grid Electric
Cancel Generation Assets by RCM Technologies
The 2010 Generation RFP with no award
Further study of the combined cycle repowering proposals for the
Barrett and Port Jefferson steam plants For more information, visit PSEGLINY.com or LIPOWER.org

Conduct
Technology neutral competitive procurements (e.g. peaking plants,
batteries, demand response, etc.) to meet future identified needs,
including utilizing rights to the National Grid brownfield power plant
sites to obtain bids by multiple developers
A repowering study of the Northport steam plant commencing October
2018, as required by law

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