The Effects of Greenhouse Gas Limits on Electric Power System Dispatch and Operations

1. 1 The Effects of Greenhouse Gas Limits on Electric Power System Dispatch and Operations Miaolei Shao (mxshao@wichita.edu) Ward Jewell (ward.jewell@wichita.edu) Department of Electrical and Computer Engineering Wichita State University PSERC Tele-Seminar September 2nd, 2008

2. 2 Greenhouse Gas (GHG) Emissions & Electric Power Industry • United States is the source of 1/4 of the world’s GHG emissions. • Electric power industry accounts for 38 percent of the nation’s overall carbon dioxide (CO2) emissions and one-third of the overall U.S. GHG emissions. • 39 states have or are developing State Action Plans specially targeting GHG emission reductions. -- Regional Greenhouse Gas Initiative (RGGI) -- California Assembly Bill 32 (AB 32)

3. 3 Electric Power System Features That Impact CO2 Emissions • CO2 emission factors by type of fuel • Unit thermal efficiency • Regional generation mix • Electricity demand • Transmission constraints

4. 4 CO2 Emission Factors (EF) by Type of Fuel (lb CO2/MBtu) Source: S. Goodman, M. Walker, “Benchmarking air emissions of the 100 largest electric power producers in the united states – 2004”, Apr. 2006

5. 5 CO2 Emission Factors (EF) by Type of Fuel (Cont.) Bus 1 Bus 2 P1 = 400 MW 800 MW Load G1 (400 MW coal-fired generation unit) 400 MW P2 = 400 MW Two-bus, two-generator power system G2 (400 MW gas-fired generation unit) CO2 emission factor is 215 lbs/Mbtu for coal and 117 lbs/Mbtu for gas. Heat rate data of 400 MW fossil fired generation units came from “A. J. Wood, B. F. Wollenberg, Power Generation, Operation, and Control, John Wiley & Sons, 1996.”

6. 6 Unit thermal Efficiency and CO2 Emissions One kilowatt hour (kWh) has a thermal equivalent of approximately 3412 Btu.

7. 7 Regional Generation Mix & CO2 Emissions Bus 1 Bus 2 P1 = 400 MW 600 MW Load G1 (400 MW coal-fired generation unit) 400 MW P2 = 200 MW Two-bus, two-generator power system G2 (400 MW gas-fired generation unit) Bus 1 Bus 2 P1 = 400 MW 600 MW Load G1 (400 MW coal-fired generation unit) 600 MW P2 = 0 MW P3 = 200 MW Two-bus, three-generatorpower system G2 (400 MW gas-fired generation unit) G3 (400 MW coal-fired generation unit)

8. 8 Regional Generation Mix & CO2 Emissions (Cont.) 527 450 (G3) (G2) (G1) (G1)

9. 9 Electricity Demand & CO2 Emissions Load L (MW) 800 Load-duration curve 600 400 Hours load equals or exceeds L MW Bus 2 400 MW Load 600 MW Load Bus 1 P1 = 400 MW 800 MW Load G1 (400 MW coal-fired generation unit) 400 MW P2 = 0 MW P2 = 200 MW P2 = 400 MW Two-bus, two-generator power system G2 (400 MW gas-fired generation unit)

10. 10 Electricity Demand & CO2 Emissions (Cont.) CO2 emission amounts (tons/h) CO2 emission rates (tons/MWh)

11. 11 Transmission Constraints& CO2 Emissions Bus 1 Bus 2 P1 = 400 MW 600 MW Load G1 (400 MW coal-fired generation unit) 400 MW P2 = 200 MW 400 MW maximum transmission capability between bus 1 and bus 2 G2 (400 MW gas-fired generation unit) Bus 1 Bus 2 P1 = 300 MW 600 MW Load G1 (400 MW coal-fired generation unit) 300 MW P2 = 300 MW 300 MW maximum transmission capability between bus 1 and bus 2 G2 (400 MW gas-fired generation unit)

12. 12 Transmission Constraints & CO2 Emissions (Cont.) Transmission congestion help reduce system CO2 emissions? 450 412 (G2) (G2) (G1) (G1)

13. 13 CO2 Emission-incorporated Cost Model Input-output function Fuel cost function CO2 emission cost function Fuel-emission cost function

14. 14 Fossil-fired Generation Units’ Cost Variation Due to CO2 Emissions • Coal price is 1.90 $/MBtu • CO2 emission factor of coal is 215 lb/MBtu • Gas price is 3.80 $/MBtu • CO2 emission factor of gas is 117 lb/MBtu • CO2 price is 30 $/ton Fuel costs CO2 emission costs Fuel-emission costs G2 (400 MW gas-fired generation unit) G1 (400 MW coal-fired generation unit)

15. 15 Breakeven Price of CO2 Coal price is 1.90 $/MBtu Coal CO2 emission factor is 215 lb/MBtu Gas CO2 emission factor is 117 lb/MBtu • Gas price is 3.8 $/MBtu • Breakeven price of CO2 is around 50 $/ton • Gas price is 5.7 $/MBtu • Breakeven price of CO2 is around 100 $/ton

16. 16 CO2 Emission-constrained ac Optimal Power Flow (OPF) Objective function Equality constraints Inequality constraints Linear Programming Software used in this research: PowerWorld Simulator

17. IEEE Reliability Test System (RTS) 17 • 24 buses • 38 transmission lines and transformers. • a total load of 2850 MW • a total generation capacity of 3405 MW

18. 18 Simulation Cases and Description

19. Simulation Results of Case 1 19 70 $/ton 180 $/ton 280 $/ton • At CO2 price of 70 $/ton, coal and gas power generation start to shift. • At CO2 price of 180 $/ton, gas power generation almost equals coal power generation. • At CO2 price of 280 $/ton, major shifting process is finished. • CO2 emissions decrease from 928 tons/h at CO2 price of 0 $/ton to 514 tons/h at CO2 price of 280 $/ton, a 44.6% reduction. • The system fuel costs increase from 18595 $/h at CO2 price of 0 $/ton to 79255 $/h at CO2 price of 280 $/ton, a 326% increase.

20. Simulation Results of Case # 1 (Cont.) 20 70 $/ton 180 $/ton 280 $/ton

21. Simulation Results 21 70 $/ton 180 $/ton 280 $/ton 130 $/ton 270 $/ton 410 $/ton Case # 2 Case # 1

22. Simulation Results (Cont.) 22 80 $/ton 180 $/ton 130 $/ton 260 $/ton Case # 4 Case # 3

23. Conclusions 23 • CO2 emissions from electricpower industry are impacted by several power system features; ignoring any of them will incur errors in analysis. • CO2 emission-constrained ac OPFis a powerful tool that considers all the features that impact CO2 emissions from electricpower generation. • CO2 emission-constrained ac OPF, which can be realized in commercial and educational power system software or developed as stand-alone software, has potential to be utilized for investigating and assessing the effects, including costs and reliability, of GHG limits on electric power industry. • Simulation results indicate that the effects of GHG limits on electric power system dispatch and operations are sensitive to several factors such as system load levels, fuel prices etc. • In current high gas price situation, it is quite expensive to reduce CO2 emissions by switching from coal power generation to gas power generation.

24. 24 Future Research PSERC Project M21: “Technical and Economic Implications of Greenhouse Gas Regulation in a Transmission Constrained Restructured Electricity Market” Academic Team Members: Ward Jewell (lead), Wichita Shmuel Oren, UC Berkeley Chen-Ching Liu, University College Dublin Yishu Chen, UC Merced Industry Team Members: Jim Price, CAISO Mariann Quinn, Duke Energy Floyd Galvan, Entergy Mark Sanford, GE Jay Giri, AREVA Tongxin Zheng, ISO-NE Ralph Boroughs, TVA Robert Wilson, WAPA Avnaesh Jayantilal, AREVA Jerry Pell, DOE Sundar Venkataraman, GE Energy

25. 25 Thank You