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Dual Fuel Initiative

Dual Fuel Initiative. NEPOOL TC & RC Summer Meeting July 30, 2004 – Newport, RI Mark Babula ISO New England Inc. Background.

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Dual Fuel Initiative

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  1. Dual Fuel Initiative NEPOOL TC & RC Summer Meeting July 30, 2004 – Newport, RI Mark Babula ISO New England Inc.

  2. Background • The ISO’s review of system operations during the January 2004 Cold Snap, identified the need for understanding the “true” operational capability of dual fuel generators & promote expansion of dual fuel capability • ISO has contracted with the ESS Group to: • Assess current dual fuel capability • Perform a constraints analysis • Develop expansion strategies & feasibility analysis ISO New England Inc.

  3. Scope of Work • Assessment of Current Capability • Determine dual fuel generating capacities and limitations • Consider geographic locations, seasonal limitations, and oil storage capacities • Constraints Analysis • Determine regulatory, design, and operating constraints on dual fuel operation • Assess primary drivers leading to current conditions • Expansion Strategies & Feasibility Analysis • Identify strategies that may increase dual fuel capabilities • Assess feasibility of technical, regulatory and policy alternatives • Collaborative process with State Environmental Agencies ISO New England Inc.

  4. Capability Assessment • Start with initial categorization of units using ISO-NE CELT Report • Initial classification by state and claimed fuel type • Gas Only, Oil/Gas, Oil Only, Other (coal, nuclear, renewables..) • Obtain information regarding air permits for to identify limitations • Summarize all units by state, fuel type, and permit limits • Gas Only (no oil firing allowed by permit) • Gas w/oil back-up (limited oil firing allowed by permit) • Oil only limited (annual operating limits in permit) • All other (oil w/o limits, coal, nuclear, renewables, etc.) • Initial summary of on-site oil storage capacity • Determine generating capacity with quantity stored on site ISO New England Inc.

  5. Capability Assessment – Preliminary Findings • Winter Capacity by Fuel Type: (Note: All values represent permitted capacity) • Total Capacity ~32,900 MW • Gas Only = 19% (6,300 MW) • Gas w/ oil back up = 22% (7,150 MW) • Oil only limited = 2% (550 MW) • Oil w/ Gas = 11% (3,600 MW) • Oil unlimited = 11% (3,600 MW) • All other = 35% (11,700 MW) ISO New England Inc.

  6. Capability Assessment – Preliminary Findings • Permitted Capacity - Regional Considerations (Note: All values are percent (%) and MW) STATETOTALGAS ONLYGAS W/ OIL MA 42% (13,800) 24% (3,300) 20% (2,800) CT 25% (8,200) 3% (250) 24% (2,000) NH 12% (4,150) 13% (535) 19% (800) ME 11% (3,650) 38% (1,400) 10% (350) RI 6% (2,050) 41% (850) 58% (1,200) VT 3% (1,050) 0% (0) 0% (0) ISO New England Inc.

  7. Capability Assessment – Preliminary Findings • Dual Fuel Units – Oil Firing Limitations • 4% (270MW) allowed 2,300-3,800 hours • ½ in MA, ½ in RI • 20% (1,400MW) allowed up to ~ 2mos • 80% in RI – allowed only when gas “not available” • 70% (4,800MW) allowed 30 days or less • Mostly CT and MA units • Oil use is predominantly discretionary • On-Site Oil Storage Capacity • 46% (3,016MW) have less than or about 2 days of full load oil storage on site ISO New England Inc.

  8. Capability Assessment – Next Steps • Determine actual dual fuel capacity and capability • Note difference between reported and permitted dual fuel capacity • Reported 3,000 MW Permitted 7,000 MW • What’s been installed and is operative? • What are the facility specific issues and constraints? • How much oil have dual fuel facilities historically used? ISO New England Inc.

  9. Constraints of Dual Fuel Capability • On-Site Technical Issues - Impacts on equipment - Staffing & Lead time • Delivery Dual Fuel Availability - Interruptible Supply - Low/Very Low Sulfur Distillate - Off-site Storage Capacity - Infrastructure/Transportation Economics - Heat rates & spark spread - Maintenance - Plant Modifications Air Permitting (State, Federal PSD/NSR) - Ambient Impacts - BACT/LAER Water Use - Withdrawal & Discharge Siting Boards/Councils - Resource protection issues - Transportation impacts Local Approvals & Hearings ISO New England Inc.

  10. Expansion Strategies & Feasibility Analysis • Short-Term: Increase fuel switching flexibility • Special Operating Procedure • Regional MOU under severe weather & strained capacity • Mid-Term: Increase permit limits for discretionary oil use • Long-Term: • Generation use and concerns • Engagement & Analysis of oil suppliers • Storage capacity, contracts, fleet & staff • Development of Regional Generation Rule • Banking programs, permit modification process • Diversification of Supply and Demand • Distributed generation, demand response, alternative energy sources ISO New England Inc.

  11. Expansion Strategies & Feasibility Analysis • Next Steps • Development of Policy & Implementation tools with state air regulators for Winter 2004/2005 • Assessment of generators’ use and concerns • Assessment of oil infrastructure and supply • Develop collaborative agenda and schedule ISO New England Inc.

  12. Discussion/Questions ISO New England Inc.

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