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Preliminary Economic Analysis of Railbelt RPS, Scenario 3
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By: Alan Mitchell, Analysis North, alan@analysisnorth.com, 907-310-9124
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This model calculates very preliminary Costs and Benefits of Implementing Scenario 3 relative to the Base Case
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Scenario described in the Renewable Portfolio Standard Assessment for Alaska's Railbelt, authored by the National
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Renewable Energy Laboratory (NREL).
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This is a back-of-the-envelope analysis; a thorough estimate of costs and benefits is needed.
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The model simplistically assumes that all of the investments to implment Scenario 3 are made in 2035,
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and fuel savings are calculated and accrued from that point forward. All dollars are 2020 inflation-adjusted dollars.
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** If you make a Copy and Edit this Model, please indicate who you are and what changes were made.
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Summary Slides are available Here
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Blue values are inputs,
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Purple values are inputs to this model but come unaltered from the NREL Study.
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Black values are calculated by this model.
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Changes in Generation Capacity between Base Case and Scenario 3
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From Table 4 of the NREL RPS Study
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Final Portfolio Capacity (MW)
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TechnologyBase CaseScenario 3Change
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Wind45847802
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Solar1456455
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Hydro (Storage)18624862
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Hydro (run-of-river)25250
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Geothermal0.40.40
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Biomass05050
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Landfill Gas770
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Tidal000
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Battery Storage1631630
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Fossil thermal2,0481,911-137
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Total2,4753,7071,232MW
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Estimate Capital Costs for Changes in Generation Capacity to Implement Scenario 3
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Use the change in generation capacity from above along with per unit capital cost estimates to estimate
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total capital cost required to implement Scenario 3.
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TechnologyGeneration Change, MWUnit Generation Capital Cost
$ / kW (2020 $)		Additional Generation Capital Cost
$ million (2020 $)		Notes on Unit Generation Cost Estimates
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Wind802$2,912$2,3351.94 times the US Average for 100-200 MW plants built in 2019-2020 (from the 2021 Land-based Wind Market Report). 1.94 is the ratio of the Eva Creek cost / kW to the national average at the time it was built. Conservative because larger RPS Project should be less. Also, coastal projects should be less.
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Solar455$1,750$796Upper range of the cost estimate for a proposed HEA 20 MW project, as stated in this article: https://www.kbbi.org/2021-10-21/proposed-solar-farm-ippsolar
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Hydro (Storage)62$1,484$92This is the cost of just adding another 63 MW Turbine to the Bradley Powerhouse. Rough estimate from Bryan Carey, AEA.
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Hydro (run-of-river)0
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Geothermal0
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Biomass50$4,462$2231.94 (use Wind Capital Adjustment) times the EPA Average estimate here: https://www.epa.gov/sites/default/files/2015-07/documents/biomass_combined_heat_and_power_catalog_of_technologies_7._representative_biomass_chp_system_cost_and_performance_profiles.pdf
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Landfill Gas0
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Tidal0
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Battery Storage0
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Fossil thermal-137$1,510-$207From Railbelt IRP Study, Black and Veatch, Table 10-13, GE LM6000 Turbine: http://www.susitna-watanahydro.org/wp-content/uploads/2012/05/Black_Veatch_2010_AlaskaRIRPFinalReport.pdf, adjusted to 2020 $.
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Total$3,240million
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Conclusion:
Incremental capital costs to implement Scenario 3 are approximately $ 3.2 billion (2020 $)
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Estimate Change in Annual Fuel and Operating Costs of Scenario 3 vs. the Base Case
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Positive values in this Section are Cost Savings, negative value are cost increases.
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Fuel Savings
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Fuel Savings shown in the NREL RPS Report are for the year 2040. This model assumes a one-time investment in the year 2035, so adjust
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first year fuel savings back to that year.
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Low Fuel Savings Estimate in 2040:
$426million / year
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High Fuel Savings Estimate in 2040:
$506million / year
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Average:$466million / year
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Scale this back to 2035 using ratio of blended fuel prices from those two years
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2040 Blended Fuel Price:$16.6/ MMBTUfrom RPS Report
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2035 Blended Fuel Price:$14.7/ MMBTUfrom RPS Report
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Ratio of 2035 to 2040:0.886
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2035 Fuel Savings:$413million / year
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Operating & Maintenance Cost Impacts
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Positive values are O&M Savings, negative are O&M Cost Increases
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The per kW operating costs inputed below are applied to the additional capacity requirements calculated in the first section above.
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CategoryOperating Cost
$ / kW / year		Savings
$ million / year
(2020 $)		Notes
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Wind Operating Cost$49 $ (39)1.94 times average O&M for US plants with 2020 data. From Land-Based Wind Market Report, 2021 Edition, US DOE.
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Solar Operating Cost$23 $ (11)1.46 times the value in this document, Slide 21: https://eta-publications.lbl.gov/sites/default/files/utility_scale_solar_2021_edition_slides.pdf . The 1.46 multiplier is consistent with Capital Cost estimate for solar.
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Hydro (Storage) Operating Cost
$30 $ (2)Estimated as 2% of capital cost / year.
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Biomass Operating Cost$245 $ (12)1.94 times the value in this table: https://www.eia.gov/outlooks/aeo/assumptions/pdf/table_8.2.pdf
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Reduced Fossil Fixed Operating Cost
$78 $ 11 From Railbelt IRP Study, Black and Veatch, Table 10-13, GE LM6000 Turbine: http://www.susitna-watanahydro.org/wp-content/uploads/2012/05/Black_Veatch_2010_AlaskaRIRPFinalReport.pdf, adjusted to 2020 $.
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Reduced Fossil Variable Operating Cost
 $ 15 From Railbelt IRP Study, Black and Veatch, Table 10-13, GE LM6000 Turbine: http://www.susitna-watanahydro.org/wp-content/uploads/2012/05/Black_Veatch_2010_AlaskaRIRPFinalReport.pdf, adjusted to 2020 $.
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Total $ (38)million per year
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Summary of Benefits and Costs
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Upfront Capital Cost
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Additional Capital Cost for Scenario 3 beyond Base Case:
$3,240million
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Annual Fuel and O&M Impacts
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Inputs for Converting Annual Impacts to a Present Value
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Real Discount Rate:3%per year. AEA value for Renerwable Energy Fund analysis, also is rate used in DOE Life-Cycle Cost Analysis