Natural Gas Generation at Altitudewyia.org/wp-content/uploads/2017/06/ty.pdf · Natural Gas...

Imagination at work

Natural Gas Generation at Altitude Understanding the impacts of siting plants in WY February 4, 2015 Ty Remington- Account Manager, Mountain West Region Gerard Louiselle- Field Application Engineer

General Electric Company ©�2015

Background and purpose of the study

The team was assembled to answer the following:

•  What are the pros and cons of generating in WY vs at the load center?

•  What are the underlying economics of a plant located in WY vs at the load center?

•  What is the best configuration of plant?

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… For the purpose of promoting the WY economy and bringing it’s wealth of natural resources for the betterment of all.

3 General Electric Company ©�2014

3 industry trends driving this analysis

#1: The age of gas ...

Source: GE Global Strategy and Analytics, Fuel COE March 2014, Rystad, IHS-CERA, Hart’s, SLB, PE Unconventional, BP

Unconventional gas global production outlook BCM per year

N America gas revolution •  Uncv. Gas from 15% to >60% (’00-’20)

•  Gas prices $4-$6/Mbtu thru ‘20

Growing global LNG investment •  ~$200B spend next 4 yrs …! 150%

•  30% ! in global capacity by ’18

Global gas prices flat thru ‘20 •  Asia & Europe prices ~$10-$15/Mbtu

*Includes Shale, Coal seam gas, & Tight Sands **Total energy content

Natural gas poised to take on a larger role in the energy mix

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Unconventionals* = ~20% of global

supply by ‘20

Latin America Africa Middle East Other Asia Pacific China Eurasia OECD Asia Pacific Europe North America

~490

TW

h /

yr**


#2: Renewables Challenge Example: Germany Oct. 3rd 2013

• Two thirds of load at 14:00 generated by renewables

• Solar contribution coincident with peak demand

The good news …

The challenge … • Doubling of volatility in net

load (contribution from thermal generation)

• More time spent at part loads and ramping

More good news … • Gas generation today can

provide required flexibility without sacrificing efficiency


Chronological Load, Wind, and Solar

Wind and Solar Variation Over Month of April (30% Wind Energy in Footprint)

-5000

0

5000

10000

15000

20000

25000

30000

35000

1-Apr 8-Apr 15-Apr 22-Apr 29-AprDay

MW

Ld(Base)

Wd(30%)

PV(30%)

CSP(30%)

-5000

0

5000

10000

15000

20000

25000

30000

35000

1-Apr 8-Apr 15-Apr 22-Apr 29-AprDay

MW

Ld(Base)

Wd(30%)

PV(30%)

CSP(30%)


3

5 6

12

14 15 15 15

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'12 '14 '16 '18 '20

•  EPA Carbon Limits… −  New coal … 1,100 lbs CO2 −  New Gas … 1,000 lbs CO2

• No new coal w/o carbon capture

• Ruling on Existing plants … June ‘14

#3: Coal Retirement & EPA EPA Implications Forecasted US Retirements

Carbon rules impact technology choices

Source: CERA; Based on 307 GW coal fleet on Jan ‘13

49

9

"  % of US Coal Fleet in ’13 Cumulative GW Retired



Gas turbines … efficient, fast, dispatchable power Sources: GE Product Management & Marketing * 1000MW plant, 7000 h/y, $8 gas,

Advantages of gas power …

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Efficient use of land

80 MW/acre highest in industry

Efficient use of capital Efficient use of fuel

Fast power Cleaner There when you need it

1 pt of efficiency = $50MM of fuel savings over 10 years *

Lowest $/kW lowest in industry… size economies

Online as fast as 6 months simple cycle gas fastest in industry

Dispatchable, flexible power fastest ramp rates in industry

Half the CO2 of coal lower environmental impact

Main reason that we can even ask the question

Big Wind

Big Loads

WY wind driving potential large transmission projects (Gateway West, Zepher, Transwest)


Gas project siting makes a difference Advantages to each:

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1) Siting at the load near CA

•  Close to load center minimizes transmission constraints – SCE example

•  Fewer line losses - ~5% for plant sited in WY

•  Less overall transmission cost

•  Lower elevation minimizes output loss (higher air density)

2) Siting in WY w/wind project

•  Lower average temps minimize output loss (higher air density)

•  Lower labor and overall installation costs

•  Lower gas prices (“well mouth”) and potential for even lower cost ethane as a fuel source

•  Promotes wind based transmission projects by increasing line use and tariff collection

So, what’s the right answer? Let’s start with the fundamental economics

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Levelized Cost of Electricity (LCOE) Model

The price at which electricity needs to be sold in order to cover all fixed and variable expenses

Cost consists of three components •  Capital costs (~30%) including return on investment •  Operation and maintenance costs (~10%) •  Fuel costs (~60%)

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LCOE = Capital Cost + Operational Cost + Fuel Cost (Cents)

Expected Generation (kWh)

Assumptions for this analysis Looked at various WY, CO, and NV sites •  Each sites unique characteristics accounted for in the model

–  Key variables included: •  CAPEX: higher in NV, lower in WY/CO

•  Fuel: higher in NV, lower in WY/CO

•  Site temp: higher in NV, lower in WY/CO

•  Site elevation: higher in WY/CO, lower in NV

•  Line loss (5%): higher in WY/CO, lower in NV

•  Same financial assumptions for all sites

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Location and conditions Configurations

Platte County WY, 4751 ft, 81 deg f SC HDGT (7F.05)

Laramie County WY, 6062 ft, 81 deg f SC Aero GT (LMS 100)

Morgan County CO, 4229 ft, 86 deg f Recip Engine (Jenbacher)

Carbon County WY, 6775 ft, 85 deg f CC HDGT (1x1 7F.05)

Southern NV, 2697 ft, 94 deg f CC HDGT (1x1 7HA.01)


Results summary: location and configuration

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Location SC HDGT

SC Aero GT

Recip Engine

CC 7F

CC 7HA

Platte County WY 9.05 10.08 12.95 8.05 8.01

Morgan County CO 9.10 10.11 12.68 8.08 8.08

Laramie County WY 9.24 10.37 13.73 8.27 8.25

Carbon County WY 9.43 10.63 14.21 8.50 8.51

Southern NV 9.66 10.28 13.87 8.89 8.85

SC HDGT SC Aero GT Recip Engine 1x1 7F CC 1x1 7HA CC SC HDGT SC Aero GT Recip Engine 1x1 7F CC 1x1 7HA CC SC HDGT SC Aero GT Recip Engine 1x1 7F CC 1x1 7HA CC SC HDGT SC Aero GT Recip Engine 1x1 7F CC 1x1 7HA CC SC HDGT SC Aero GT Recip Engine 1x1 7F CC 1x1 7HA CCOutput (MW) 180,026 173,901 99,756 267,777 302,633 196,629 190,217 112,860 294,078 334,029 171,306 164,684 91,392 254,733 287,846 180,383 175,450 103,086 267,044 300,164 164,650 158,426 86,844 243,824 274,324

Heat Rate (Mmbtu/kwhr, LHV) 8,869 8,269 7,328 5,982 5,790 8,809 8,183 7,328 5,964 5,752 8,872 8,286 7,328 5,987 5,795 8,956 8,366 7,328 6,013 5,841 8,936 8,368 7,328 6,014 5,839

Takeout: CAPEX ($M) $108 $160 $130 $306 $366 $126 $166 $172 $396 $474 $108 $160 $130 $306 $366 $108 $161 $130 $306 $366 $108 $160 $130 $306 $366Turnkey: CAPEX ($/kw) $500 $768 $1,085 $952 $1,008 $535 $729 $1,269 $1,122 $1,183 $525 $810 $1,184 $1,001 $1,060 $499 $763 $1,050 $955 $1,016 $547 $843 $1,246 $1,046 $1,112

Fixed O&M ($M/yr) $4.50 $4.50 $4.50 $9.00 $9.00 $4.50 $4.50 $4.50 $9.00 $9.00 $4.50 $4.50 $4.50 $9.00 $9.00 $4.50 $4.50 $4.50 $9.00 $9.00 $4.50 $4.50 $4.50 $9.00 $9.00Variable O&M ($/MWhr) 25.14 37.38 135.33 16.90 18.70 23.02 34.17 119.62 15.39 16.94 26.42 39.47 147.71 17.77 19.66 25.09 37.05 130.96 16.95 18.85 27.49 41.03 155.45 18.56 20.63

Fuel Price ($/Mmbtu) $4.50 $4.50 $4.50 $4.50 $4.50 $5.00 $5.00 $5.00 $5.00 $5.00 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50 $4.50Hours op/yr 2920 2920 2920 4000 4000 2920 2920 2920 4000 4000 2920 2920 2920 4000 4000 2920 2920 2920 4000 4000 2920 2920 2920 4000 4000

LCOE (20-yr, cents/KWhr) 9.05 10.08 12.95 8.05 8.01 9.66 10.28 13.87 8.89 8.85 9.24 10.37 13.73 8.27 8.25 9.10 10.11 12.68 8.08 8.08 9.43 10.63 14.21 8.50 8.51

Platte County, WY- 4751 ft, 81 deg f, 58%RH Southern Nevada- 2697 ft, 94 deg f, 30%RH Carbon County, WY- 6775 ft, 85 deg f, 64%RHLaramie County, WY- 6062 ft, 81deg f, 58%RH Morgan County, CO- 4229 ft, 86 deg f, 68%RH

Detailed Cost and LCOE results:

Summary LCOE (¢/kwh)

Lowest LCOE: Platte County, WY site and Advanced CC configuration


Note: this LCOE model assumes industry standard costs that can vary greatly from site to site and GE makes no claim or guarantee on these assumptions and is willing to work with stakeholders to refine as required.

Operational Flexibility Attributes Comparison

Flexibility is important when: •  Developer or IPP is paid for the service (ie: Capacity in 10 minutes, or Reg

up/down, spinning reserve)

•  Utilities need some level of flexibility to balance the grid (voltage or MW)

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7F.05 LMS100 J920 1x1 7F.05 1x1 7HA.01SC HDGT SC Aero GT Recip Engine CC HDGT CC HDGT

Start time (minutes, hot start) 10 10 5 38 30Ramp rate (MW/min) 35 50 3 35 40

Minimum Turndown (MW) 45% load 25% load 25% load 48% load 33% loadEmissions (ppm NOx/CO) 9ppm 25ppm 25ppm 2ppm 2ppm


Conclusion and next steps:

•  Gas Fired Generation at Elevation in WY is an economically viable option … but we must understand the transmission landscape and ability to get to the load

•  May have advantages to promote large transmission infrastructure projects

•  For a plant running >50% capacity factor, a CC configuration is the lowest LCOE due to efficiency advantage

•  Seek feedback from stakeholders and run sensitivities

•  Incorporate a more holistic grid view to understand the ideal sizing of a gas plant to firm renewables

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Acknowledgement of contributors

Loyd Drain – WIA, executive Director

Dr. Robert Godby- Director, Center of Energy Economics and Public Policy, University of Wyoming

Frank Barnes- Distinguished Professor, Electrical, Computer and Energy Engineering, University of Colorado

Bruce Morley- CEO, Morley Companies

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Thank you

GE contacts : Ty Remington Account Manager [email protected] 518-334-0601

Gerard Loiselle Field Application Engineer [email protected] 518-698-1935

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