Utilities' study offers electric generation options
(August 20, 2008) A series of medium-sized generating stations, rather than one large one, could provide Vermont substantial benefits as it plans its energy future.
That was among the key findings of a new study on in-state generation, produced by The Essex Partnership on behalf of Vermont's four largest utilities.
With roughly 80 percent of Vermont's electrical energy supply contracts scheduled to end in the next eight years, utilities sought the study as part of their integrated resource planning. Each utility is ultimately responsible for its power supply, so the study provides data that could be used individually or collectively by Central Vermont Public Service, Green Mountain Power, Washington Electric Cooperative and Vermont Electric Cooperative, the study sponsors.
"Results of the study indicate that renewable resources could play an important role in addressing Vermont's potential supply gap, but a larger baseload plant, or several medium-sized baseload plants, may warrant consideration given costs, transmission constraints and energy needs," the report, the second part of a two-part study, concluded. "Addressing the supply gap with one large plant could achieve some economies of scale with respect to capital costs and operating costs, but could also increase the risk of the state's portfolio by relying heavily on one resource. Building a series of smaller technologies, although potentially more costly under normal operating conditions, may be preferred since this strategy may enhance the diversity of Vermont's generation portfolio."
The two-part study examined availability of various fuels, transportation issues, general site requirements of each technology, reliability, geographic flexibility or constraints, costs of installation and operation, potential development time requirements, planning and design, and environmental and regulatory issues and costs. It also included analysis of financing, credit, contracting and accounting issues that might be involved under various ownership or power-purchase arrangements.
The second phase of the study, released today, said infrastructure requirements severely limit the siting of the largest technologies, such as coal or nuclear, which were all but ruled out by the first phase of the study.
"The largest technologies also require capital investments larger than the likely feasible scale for financing by entities within Vermont alone," the report said. "This suggests there would be a need for partnering with external parties in order to pursue such alternatives. This could bring additional risks and challenges in addition to possible benefits in today's competitive wholesale power business." In addition, the study noted that these large scale technologies would be the most difficult to permit due to environmental concerns and potential public opposition.
"Development of renewable technologies such as solar, wind, and wood would contribute to the state's energy goals and involve fewer environmental costs. However, these technologies can be considerably more expensive to develop on a per megawatt basis," the report said. "These technologies also tend to produce fewer MWs per development (thus requiring more individual facilities) and can be difficult and time consuming to permit on a scale sufficient to meet a substantial portion of Vermont's needs."
Study findings about various technologies considered and associated challenges are summarized below.
* Methane, combined heat and power and wood represent relatively low to moderate development costs and permitting risks. These technologies all have the potential to contribute to the state's renewable energy goals and are reflective of general public interest in development of smaller-scale distributed generation that utilizes indigenous resources. These sources are also typically baseload resources.
* Utility-scale solar and fuel cell technologies would be relatively easy to permit and would contribute to the state's renewable energy goals, but would be very expensive to develop and could be cost prohibitive on a large scale, based on current costs.
* Wind and small hydro technologies both represent renewable generation, but face potentially difficult siting challenges in Vermont that increase permitting time and risk compared to some neighboring states. Both technologies have very specific siting requirements (i.e. must be located on ridgelines and in rivers) that typically involve sensitive resources and potential opposition. Suitable wind sites are also not always associated with existing transmission infrastructure.
* Smaller-capacity combustion turbines that could be sited at existing facilities and could burn liquid fuels, gas, and/or biofuels to meet peak loads would involve moderate costs and moderate regulatory risks.
* Larger-capacity combined cycle combustion turbine technology represents a low-cost option for meeting intermediate and baseload needs, but would involve relatively large regulatory costs and risks, due in part to the likely need for new electrical transmission. Strategic siting of smaller combined cycle combustion turbines (on the magnitude of 100 to 200 MW as opposed to the 560 MW capacity plant evaluated in the Phase 1 Report) could significantly reduce regulatory costs and risks by avoiding major transmission investments.
* Nuclear and coal technologies represent least-cost options from a pure development cost perspective, but have the highest risk in terms of environmental impacts, potential public opposition and permitting. Obtaining approvals for these technologies could increase the ultimate cost per/MWh and could involve expenditures for a project that may never be approved, or may not be economical once the permit conditions are considered.
* The development of new nuclear and coal-based generation in Vermont would be extremely difficult due to a combination of the relatively large footprints required; fuel transport and storage; the potential for numerous adverse environmental and social impacts; the likely need for new transmission facilities; existing public policies that specifically discourage fossil fuel technologies; and public opinion that generally opposes such technologies. Given these factors, it is unlikely that a new nuclear or coal plant would actually be proposed in Vermont.
"Along with the results of the state's public outreach effort last fall and winter, state law and regulatory policy, the report gives us a lot of food for thought," the study sponsors said in a joint statement. "The report will be a valuable tool as we consider the social, economic and environmental implications as we develop plans for future energy supplies for consideration by policymakers and the public."