Slide 1: 2020 Tolk Analysis: Session 3 of the 1st Technical Conference
2020 Tolk Analysis: Session 3 of the 1st Technical Conference 10/23/2020 © 2020 Xcel Energy 1
Slide 2: Today's Meeting Agenda
Today’s Meeting Agenda 1. Modeling parameters for Harrington Station A. Background & NAAQS compliance B. Harrington operating on gas C. Economic Analysis 2
Slide 3: Agenda for Future Technical Conferences
Agenda for Future Technical Conferences 1. Tolk Analysis – Retirement dates and operating scenarios 2. Value of Tolk water rights 3. Modeling Parameters 3
Slide 4: Background & NAAQS Compliance
BACKGROUND & NAAQS COMPLIANCE
Slide 5: Background
Background • NM Rate Case Stipulation states “SPS also commits to running at least one scenario in which all of SPS’s coal-burning units are retired or replaced before 2030” • Harrington Station: Three coal-fired units: each ~340MW Located North of Amarillo, Texas Units 1 – 3 are scheduled to
Slide 6: NAAQS
NAAQS • The Clean Air Act requires the EPA to set National Ambient Air Quality Standards (including SO2) • The TCEQ classified the area as Attainment/Unclassifiable due to a lack of monitoring data in the area • In December 2016, TCEQ installed an SO2 monitor in the vicinity of Harrington Station to
Slide 7: Compliance Solutions
Compliance Solutions • Installation of environmental controls on three units* • Early retirement of all three units (EOY 2024) • Conversion of all three units to natural gas • Combination of the above *Installation of environmental controls is cost prohibitive. Based on feedback from previous techni
Slide 8: Harrington Operating on Gas
(2) Xcel Energy’ HARRINGTON OPERATING ON GAS
Slide 9: Harrington on Gas
Harrington on Gas • Fuel change only • Low cost solution to: – Meet NAAQs compliance – Continue to provide over 1,000MW of year-round capacity • System reliability benefits • After the conversion to gas, the Harrington units act as “peaking” generation – Low capacity factors – Provide energy during
Slide 10: Low Annual Capacity Factors
Low Annual Capacity Factors • The Harrington Units will provide “peaking generation” with projected capacity factors <10 - 15% depending on load forecast 10
Slide 11: Capacity Factors by Month
Capacity Factors by Month • In the near term, Harrington will provide generation during the peak Summer months • Harrington will support the integration of new renewables by providing energy during hours of low renewable generation 11
Slide 12: Harrington Annual CO2 Emissions
Harrington Annual CO2 Emissions • Converting Harrington to gas lowers CO2 emissions by ~95% over a 10-year period • Reduction is the result of lower CO2 intensity and a low capacity factor 12
Slide 13: Summer Capacity Position
Summer Capacity Position • Including Tolk & Harrington, SPS has sufficient capacity until between 2027 & 2031 depending on load forecast • Retiring Harrington EOY 2024 will create an immediate capacity need of between ~500MW and 800MW, rising to between ~1,000MW and 1,400MW by 2030 • Retiring both T
Slide 14: Retiring Gas Generation
Retiring Gas Generation • SPS’s entire fleet of gas steam generation (1,624MW) is scheduled to retire by EOY 2034 • 1,138MW is scheduled to retire by EOY 2030 • Harrington Station provides 1,021MW of capacity • Tolk Station provides 1,069MW of capacity • Potentially 3,228MW of thermal generation cou
Slide 15: Economic Analysis
(2) Xcel Energy’ Economic Analysis
Slide 16: DRAFT Economic Analysis
DRAFT DRAFT Economic Analysis • Converting the units to gas saves between $76M - $116M (PVRR) when compared to an early retirement • The Encompass model: Added more new renewable generation by 2031 when converting the units to gas Added an additional combined cycle unit when retiring Harrington
Slide 17: Expansion Plans – Planning Forecast
DRAFT DRAFT Expansion Plans – Planning Forecast • When converting to gas (left graph), the Encompass model added 3,050MW of new solar and a combined cycle by EOY 2031 • When retiring the Harrington Units (right graph), the Encompass model added 2,050MW of solar, 50MW of wind and two combined cycles
Slide 18: Expansion Plans – COVID Forecast
DRAFT DRAFT Expansion Plans – COVID Forecast • When converting to gas (left graph), the Encompass model added 2,700MW of solar by EOY 2031 • When retiring the Harrington Units (right graph), the Encompass model added 2,100MW of solar, 50MW of wind and a combined cycle by EOY 2031 18
Slide 19: DRAFT Economic Analysis (w/o CC)
DRAFT DRAFT Economic Analysis (w/o CC) • The economic analysis was recalculated restricting encompass from adding a combined cycle before EOY 2030 • Converting the units to gas saves between $206M - $364M (PVRR) when compared to an early retirement 19
Slide 20: Expansion Plan w/o CC before 2030
DRAFT DRAFT Expansion Plan w/o CC before 2030 • Depending on the load forecast, when retiring Harrington and restricting the model from adding a CC before EOY 2030, it added between: • 2,900MW of solar, 4 CTs and 1 combined cycle, and • 2,950MW of solar and 3 CTs 20
Slide 21: DRAFT Economic Analysis (w/o CC/CT)
DRAFT DRAFT Economic Analysis (w/o CC/CT) • The economic analysis was once again re-run restricting encompass from selecting a combined cycle or combustion turbines before EOY 2030 • Converting the units to gas saves between $397M - $1,345M (PVRR) when compared to an early retirement 21
Slide 22: Expansion Plan w/o CC/CT before 2030
DRAFT DRAFT Expansion Plan w/o CC/CT before 2030 • Depending on the load forecast, when retiring Harrington and restricting the model from adding a CC or CTs before EOY 2030, it added between: • 800MW of storage, 550MW of wind, 2,850MW of solar, and a CC in 2031 • 350MW of storage, 200MW of wind, 2,
Slide 23: Summary
Summary • Converting the Harrington Units to operate on natural gas: Is a low cost and low risk solution for NAAQs compliance Is the lowest cost alternative compared to other compliance strategies Provides year-round capacity and generation, benefitting the integration of additional renewables
Slide 24: © 2020 Xcel Energy
© 2020 Xcel Energy 24