Topic:"Resource Costs" in M08059

ization and Utilization study is to determine the extent to which it is cost‐effective to ratepayers to retain Nova Scotia Power Inc.’s (NSPI) thermal (steam) fleet through, and possibly beyond, 2030. The thermal fleet consists of the Tuft...

AI summary The study evaluates the cost-effectiveness of retaining Nova Scotia Power Inc.'s thermal fleet through 2030, considering its oil, gas, and coal units. It uses Plexos modeling for capacity expansion and production cost analysis, factoring in emissions targets and grid constraints. Lingan 2's retirement depends on the Nova Scotia Block's service via Maritime Link, expected mid-2020.

e Province’s declining power sector emissions schedule and underlying power system technical constraints (primarily, transmission and operating reserves criteria). Modeling Plan and Input Assumptions Synapse developed a modeling plan and a...

AI summary Synapse developed a modeling plan for NSPI’s thermal resource utilization, considering parameters like peak load, wind capacity credit, transmission expansion, and coal plant retirements. The analysis evaluates technical and economic factors impacting thermal fleet optimization and resource transformation scenarios.

Plexos selects more wind than this in all scenarios). However, as noted, all other scenarios demonstrate lower NPVRR costs than this reference case, illustrating the critical 1 In this context, “wholesale” implies supply and energy‐efficie...

AI summary The analysis highlights that alternative resources like energy efficiency and wind generation can reduce NPVRR costs and influence coal unit retirement timelines. It emphasizes the importance of considering peak load reduction strategies over reliance on wind alone, with implications for resource planning and cost management in Nova Scotia's energy sector.

nd scenario 16). This reflects the effect of either high sustaining capital costs or increased wind installations and wind capacity crediting in the Plexos retirement decision.  The presence of fossil‐fleet emission constraints drives dow...

AI summary The text examines energy utilization under fossil-fleet emission constraints, highlighting reduced coal fleet capacity factors, increased reliance on gas/oil, and the impact of wind energy and DSM scenarios. It emphasizes the need for alternative resource planning to achieve lower costs through higher peak load reduction or wind energy integration.

napse Energy Economics, Inc. NSPI Thermal Generation Utilization and Optimization M08059 3 Final Report enhancing investment. As seen in Table 9a, that range of costs is $90 million to $570 million (NPV).4 The illustrative comparisons are...

AI summary The report analyzes NSPI's thermal generation optimization, highlighting that battery cost sensitivity significantly impacts coal unit retirement timelines and battery build decisions. Lower battery costs accelerate coal unit retirements (e.g., 2019 vs. 2027) and increase battery installations, emphasizing the critical role of battery cost analysis in resource optimization.

nd performance, since battery energy storage systems can replace the increasingly peaking nature of the energy provided by the least cost‐effective of the coal fleet resources.  The bookend scenarios (25, 26) with accelerated coal plant r...

AI summary The text compares NPVRR across scenarios with accelerated coal plant retirements and gas price sensitivity. Accelerated retirements show lower NPVRR, while gas price changes don't significantly alter outcomes. Energy efficiency and wind integration (Scenario 13) are noted as cost-effective alternatives. The Plexos optimization model's results suggest soft-constraint violations in some scenarios.

the low gas price sensitivity, Scenario 13 (high wind, but with reference level capacity crediting) is more expensive (+ 2.3 percent NPVRR) under the low gas scenario 1. For base level 4 $90 million is the difference between the NPVRR for...

AI summary The text compares NPVRR differences across scenarios (13, 2, 4LG) under varying gas prices and DSM load levels. Scenario 13 shows higher costs under low gas prices but lower costs under high gas prices. Scenario 2 involves different timelines for retiring coal units and building new resources. A correction is noted for a double-counting error in the Draft Report's NPVRR analysis.

lexos does not retire a second unit and build a new battery and CT resource early in the period (as in Scenario 4), but instead builds a CC resource and retains the second coal unit. These sensitivities illustrate the marginal nature of th...

AI summary The study evaluates the cost-effectiveness of retaining NSPI's thermal fleet through 2030, analyzing scenarios involving coal, combined cycle (CC), and battery resources. Sensitivities highlight the marginal nature of resource decisions in Plexos modeling, emphasizing input assumption uncertainties.

ia the Maritime Link, is in service. This is currently estimated to occur midway through 2020.11 1.2. Terms of Reference The Terms of Reference for the Study included the following objective: The main objective of the analysis will be to d...

AI summary The study evaluates the cost-effectiveness of retaining NSPI's thermal fleet through 2030, comparing retention costs to alternatives like retirement, capacity utilization, and replacement resources. The analysis includes sensitivity testing and stakeholder feedback rounds, with finalized terms of reference dated August 1, 2017.

on stakeholder comments was to include additional rounds for stakeholder responses to the input assumptions and to the initial modeling results. Appendix 5.1 contains the final Terms of Reference. 10 Lingan 1, 3 and 4; Point Aconi; Point T...

AI summary The Generation Optimization and Utilization study by Synapse Energy Economics for NSPI examines the economic implications of relying on aging thermal generation assets amid provincial emission regulations. The study was commissioned by the Nova Scotia Utility and Review Board to assess resource utilization strategies.

ission constraints for selected changes to CT and CC costs and availability. They also enabled us to test the effect of selected forced retirements of one Tufts Cove unit and one of the Trenton units. Scenarios An initial set of 30 scenari...

AI summary The analysis explores modeling scenarios for NSPI's thermal generation, including forced retirements of units, sensitivity to battery costs, gas prices, and updated technology costs. It evaluates impacts of relaxing Plexos steam and transmission constraints on build, retirement, and dispatch responses.

to ref case build until mid‐ 1CTavail Ref CT Availability in Plexos Ref Ref Ref No 2030s. Minimal 1Combo Ref Changed Costs and CT Avail Ref Ref Ref No NPVRR change. Other Relax steam and transmission constraints in Plexos – various scenari...

AI summary The document outlines modeling scenarios in Plexos for NSPI's thermal generation utilization, including relaxed steam and transmission constraints. Input assumptions were finalized in 2017 memos, with appendices provided. The case references NPVRR changes and exploratory model runs.

Appendix 5.1 Terms of Reference Response to Stakeholder Comments on Proposed Terms of Reference Plexos Optimization Analysis / NSPI Thermal Fleet Retention August 1, 2017 Synapse has reviewed comments received in response to the June 29, 2...

AI summary Synapse Energy Economics adjusted the Terms of Reference for a Plexos Optimization Analysis to assess the cost-effectiveness of retaining NSPI’s thermal fleet through 2030. Key changes include extended stakeholder input periods, scenario analysis with varied assumptions, and clarification that the study is a planning exercise, not an operational assessment. The analysis will compare thermal fleet retention against alternatives like retirement and renewable integration.

Appendix 5.6 REDACTED CONFIDENTIAL Memorandum TO: M08059 GENERATION UTILIZATION AND OPTIMIZATION STAKEHOLDERS FROM: BOB FAGAN, RACHEL WILSON, DAVID WHITE – SYNAPSE ENERGY ECONOMICS DATE: OCTOBER 16, 2017 RE: KEY INPUT ASSUMPTIONS AND MODEL...

AI summary This memo outlines Synapse Energy Economics' modeling plan for the Generation Utilization and Optimization study, seeking stakeholder input on assumptions related to energy storage, wind/solar costs, and demand-side management (DSM) scenarios. The analysis compares long-term costs of retaining NSPI’s thermal fleet versus alternative resource mixes, though it explicitly states it is not an integrated resource plan (IRP).

$ 505,625 $ 8,912,500 TUC3 $ 824,375 $ 793,125 $ 3,280,625 $ 868,125 $ 1,255,625 $ 524,375 $ 768,125 $ 543,125 $ 868,125 $ 505,625 $ 10,231,250 TUC6 $ 1,822,500 $ 1,997,500 $ 4,847,500 $ 2,297,500 $ 4,747,500 $ 1,822,500 $ 2,197,500 $ 1,89...

AI summary The 2014 Integrated Resource Plan (IRP) Action Plan's eight action items influence NSPI's thermal fleet economics by affecting peak demand and capacity contributions, directly impacting resource adequacy requirements and alternative capacity resource availability.

Probabilistic Assessment Overview  General Overview – The Maritimes Area is a winter peaking area with separate jurisdictions and regulators in New Brunswick, Nova Scotia, Prince Edward Island (PEI), and Northern Maine. The GE MARS model...

AI summary The Maritimes Area probabilistic assessment uses the NPCC's GE MARS model to evaluate resource adequacy, showing minimal changes in LOLH and EUE despite increased demand from electric heating. Capacity resources and operating procedures mitigate reliability risks, aligning with a 20% reserve margin criterion.

e system to accommodate these changes in load. This is called operating reserve. 4 NSPI October 19, 2016 responses to Board information requests, 3090853 v1 Doreen Friis April 27, 2017 Page 3 inform future COS decisions. In the interim, no...

AI summary The Industrial Group recommends reviewing the cost classification of thermal plants and providing capacity factor forecasts for 2022-2026. They also urge NSPI to report on the capacity value and cost allocation of ERIS-connected wind. The IRP was criticized for not addressing cost allocation, and the Board agreed that revising classifications was premature.

echnical Conference, NS Power discussed its intention to improve its engagement process. 1 NSUARB Letter, 10‐Year System Outlook Report, February 9, 2017, M07540. April 27, 2017 D. Friis Stakeholders brought to the Company’s attention more...

AI summary NS Power aims to improve stakeholder engagement following feedback on its thermal unit utilization and investment strategy. Key discussion topics include reserve margin requirements, federal coal legislation impacts, gas consumption outlook, and regional transmission interconnections. Stakeholders emphasized the need for transparency on resource adequacy planning and potential alternatives to NS Power's existing investment strategy for fossil fuel units.

s modeling system to assess optimal use of NSPI’s thermal fleet, with data files and technical information concerning system stability and operating constraints provided to Synapse by NSPI. Objective The main objective of the analysis will...

AI summary The analysis aims to evaluate the cost-effectiveness of retaining NSPI’s thermal fleet through 2030, comparing retention costs with alternatives like retirement, capacity utilization, and replacement resources. Synapse will use the Plexos modeling framework to assess optimal resource paths, considering transmission system needs and sensitivity to input assumptions.

1 capacity and energy to reliably meet Nova Scotia electricity load in all years of the analysis. It will include a time frame of at least 20-25 years (through 2038-2043). Our initial use of the modeling framework will entail determining a...

AI summary The text outlines a modeling framework to determine optimal resource paths for Nova Scotia's electricity load over 20-25 years (through 2038-2043). It emphasizes analyzing different assumption sets to evaluate how resource plans might vary, resulting in a 'candidate resource plan' using Plexos simulations.

Discussion of Critical Steps – Modeling Plan and Resource Cost and Quantity Assumptions Three critical steps include establishing a modeling plan using the Plexos tools, determining the resource cost assumptions to use as inputs to the Ple...

AI summary The document outlines three critical steps in modeling: using Plexos tools for unit commitment/dispatch and capacity expansion, incorporating load forecasts, and specifying resource costs. Resource categories include existing thermal, hydro, and wind resources, with NSPI expected to provide detailed input files. The capacity expansion module optimizes long-term resources, while unit commitment ensures cost-effective annual operations.

resources, including fixed and variable O&M and any required sustaining capital, and the costs of fuel. If applicable, emission costs. 3 • Existing hydro and wind resource output profiles and operating costs, including fixed and variable O...

AI summary The text outlines the evaluation of resource costs for existing and new generation sources (hydro, wind, biomass, fossil, renewables), transmission reinforcement, and demand-side management, emphasizing data from NSPI and external sources like NREL and US EIA. Emission costs and storage resource costs are also considered.

5 Appendix – Synapse Comments After April 2017 Technical Conference Introduction These comments are provided in response to the technical conference held at NSPI on April 13, 2017. They address a number of issues concerning the future plan...

AI summary NSPI plans to operate all thermal steam units except Lingan 2 through 2025/26, expecting continued operation through 2030. This contrasts with the 2014 IRP Action Plan, as Tufts Cove 1 (TUC1) will remain operational past 2025 due to 2016 load forecasts requiring resource adequacy. Sustaining capital expenditures for TUC1 are only planned through 2024, raising concerns about future costs.

and Analysis The SBA does not fully understand the methodology that this study is following well enough to endorse that the results will be informative. The SBA has identified the following concerns: 1. It is unclear whether this is going...

AI summary The SBA raises seven methodological concerns about a study, including uncertainty around analysis type (probabilistic vs. scenario), treatment of carrying costs, thermal generation modeling, resource adequacy determination, Behind the Meter Resources, and Renewables to Retail impacts. The SBA also questions assumptions linking high carbon costs to high fuel prices.

ge capital injection levels (e.g., $10 million, Lingan 3, 2020; $10 million, Lingan 4, 2024; $13 million, Point Aconi, 2021; $9 million, Trenton 5, 2020; $15 million, Trenton 6, 2025). NS Power notes that the larger-than average capital in...

AI summary NS Power explains that higher capital injections for specific power plants (e.g., Lingan 3, Trenton 6) reflect major outage intervals tied to unit utilization. Synapse critiques the 2014 IRP for using a levelized approach to sustaining capital costs, ignoring year-to-year variations, and for failing to adjust surplus capacity assumptions in different plans, leading to significant disparities in outcomes.

the proposed Terms of Reference in response to those comments, and we include herein an amended Proposed Terms of Reference. In summary, to address the thrust of all comments received, Synapse will: 1) Adjust the timeline to allow addition...

AI summary Synapse revises the Terms of Reference to include additional stakeholder input, extended timelines, detailed modeling analysis plans, and scenario-based resource planning in response to feedback.

roach and input assumption sets after review of comments by stakeholders and discussion with NS UARB staff. 5) Allow for another round of modeling after the technical conference, if needed. The overall timeframe for the analysis and the in...

AI summary Synapse Energy Economics outlines a planning exercise to assess the cost-effectiveness of retaining NSPI's thermal resources through 2030, acknowledging limitations in modeling due to timeframe constraints and the need for stakeholder input. The analysis prioritizes major power system constraints like reserve margins and transmission limits.

s modeling system to assess optimal use of NSPI’s thermal fleet, with data files and technical information concerning system stability and operating constraints provided to Synapse by NSPI. Objective The main objective of the analysis will...

AI summary The analysis evaluates the cost-effectiveness of retaining NSPI’s thermal fleet through 2030, comparing retention costs to alternatives like retirement, capacity utilization, and replacement resources. Synapse will use Plexos modeling to assess optimal resource paths over 20-25 years, considering transmission reinforcement and input assumption sensitivities.

needed, and developing a final report. We also understand that the outcome of the modeling process might be subject to a hearing in the early part of 2018. The steps below further itemize this scope. a. Refine modeling plan – create scenar...

AI summary The document outlines steps to refine an integrated resource plan (IRP) modeling process, including scenario development, load forecasting, resource cost assumptions, thermal fleet cost specifications, and balancing area constructs. The process involves using Plexos optimization tools and considering demand-side management interdependencies.

uct additional modeling if necessary to refine results and address stakeholder feedback. d.e. Prepare final report post technical conference, addressing feedback. e.f. Attend hearing on final report. Discussion of Critical Steps – Modeling...

AI summary The document outlines steps for developing an integrated resource plan (IRP) using Plexos modeling tools, emphasizing unit commitment, dispatch, and capacity expansion modules. Key focus areas include refining resource cost assumptions, incorporating load forecasts, and addressing stakeholder feedback through technical conferences and hearings.

g resource adequacy requirements), or they affect the capacity contributions available from existing and potentially new alternative capacity resources. The eight action items are characterized below: 1. Optimize the level of sustaining ca...

AI summary The document outlines eight action items addressing resource adequacy, including optimizing capital expenditures, studying wind penetration impacts, regional coordination, evaluating wind resources, monitoring market opportunities, assessing demand response, securing DSM commitments, and evaluating Mersey Development. These steps aim to ensure system reliability and capacity contributions.

. An additional benefit of this approach is that it will also allow the model to optimize the in-service year of new DSM and transmission resources. ii) The “WindCapCredit” scenarios may be redundant, as they effectively represent the capa...

AI summary The text discusses optimizing DSM and transmission resource in-service years, questions the redundancy of WindCapCredit scenarios due to fixed wind capacity contributions, and notes the need to run the Short Term (ST) module annually for production cost modeling in retirement path scenarios.

forecasted PHP load is based on historical requirements of the mill and would not be included in any correlating demand reduction associated with this DSM amount. iv) NS Power notes there is an inconsistency with the cumulative peak DSM to...

AI summary NSP highlights inconsistencies in DSM plan totals, advocates for load forecasts considering electrification, and provides updated fuel price data. It emphasizes the need for accurate resource cost assumptions and updated information for modeling.

h 28, 2018, page 1‐2. Page 4 of 9 REDACTED (CONFIDENTIAL INFORMATION REMOVED) April 18, 2018 Appendix B - NSPI Response to Synapse GU&O Technical Conference Page 5 of 9 D. Friis remain so, for the next decade and beyond. The “planning wind...

AI summary NSPI emphasizes the need for updated resource planning assumptions for the next IRP, including renewable/non-renewable generation costs, battery technologies, and DSM potential studies. It challenges Synapse's recommendation to retire a second unit, noting minimal NPV impact from forced retirements.

this area. Failure to do so could result in customers, such as small businesses, paying more for their electricity than is necessary and NSPI have a significant amount of ultimately stranded assets. 1 T: 902-835-8544 F: 902-835-4310 E: inf...

AI summary The SBA acknowledges Synapse's report on thermal fleet economic benefits through 2030 but warns against misinterpreting its findings as directives for resource planning. The report's focus was limited to fossil-fueled thermal fleet retention, not broader energy/resource evaluations, which should be addressed in the next IRP. Concerns include potential stranded assets and affordability impacts on small businesses.

te that our analysis was not an IRP, it is impossible to untangle the assessment of thermal fleet economics from resource planning assumptions, the Small Business Advocate’s comments notwithstanding.4 The SBA notes concern over our analysi...

AI summary The analysis, not an IRP, integrates thermal fleet economics with resource planning. The SBA criticizes reliance on long-term metrics and common costs, while the response emphasizes long-term capital recovery and revenue requirements across scenarios, noting that excluding common costs would exaggerate cost savings for low-cost scenarios.

2 relative-to-reference-case cost savings (i.e., in percentage terms) for the three lowest-cost scenarios shown – scenarios 8, 14 and 17.6 PHP notes its concern with our late-in-coming reporting of a post-processing error that altered the...

AI summary The text discusses cost savings from three low-cost scenarios (8, 14, 17) and addresses a post-processing error in NPV cost reporting. PHP criticizes the delayed error disclosure, while EfficiencyOne emphasizes continued DSM cost-effectiveness despite higher per-unit costs due to carbon cap constraints. The analysis concludes that a second thermal unit retirement before 2030 is indicated under low-cost scenarios, with anticipation of NS Power’s 2019 IRP process.