Balanced Portfolio of Generation, Here is an Example

Santee-Cooper is a state owned Utility in the Great State of South Carolina. The Total Generation Capacity is about 6,000 MW, though a small Utility it is, I think, a great example of one which currently has a well balanced generation portfolio and it should stay that way.

Introduction

Myself and others have commented on the importance of a Balanced Energy Portfolio on LinkedIn, other Social Media, in technical presentations, papers and short courses that we have presented. The Wall Street Journal, NERC, MISO, Utility Dive, Power Magazine, Forbes and other respected Technical Journals and magazines have reported that America may in fact, experience Blackouts during the summer of 2022(1,2,3,4,5) This is serious and it shows the poor planning or absence of any planning at all for the future sustainable energy needs of America.

So, If I am so Critical, Shouldn’t I provide My Suggestions? Here they are.

I thought it would be appropriate to take a 6,000 MW Electric Utility as an example and show in detail what I recommend for a Balanced Generation Portfolio should look like for the next 10-20 years. I selected Santee-Cooper as the example because I am very familiar with their coal plants having worked as a field service engineer, a contractor, course instructor and consultant since 1970. I have personally worked at all of the coal plants that they have owned and operated, including two that have been since shut down. Also, Santee-Cooper asked for public involvement in updating their IRP (Integrated Resources Plan), which I volunteered to participate in and was accepted as a member of their SC citizen/customer Stakeholder participants. So, what follows are my suggestions of what a Balanced Generation Portfolio could look like to keep the fine record of reasonable cost & reliable electricity for the territory served by Santee-Cooper and the Co-operatives that are major customers.

Santee-Cooper also known as South Carolina Public Service Authority

The Figure below lists the generating assets that Santee-Cooper currently owns and are operable. The generation assets total are 5,801 MW. Coal plants are 3,530 or 61% of the total generation capacity. Natural gas fueled units at Rainey are the next largest at 1,150 MW and Nuclear capacity of Summer is 322 MW.  Solar as of winter 2021-2022 is planned to be 82 MW. Therefore, of the 5,801 total generation capacity over 86% is Dispatchable and of proven reasonable cost and reliable generation.

From Presentation to IRP Stakeholders by Santee-Cooper Management
From Santee-Cooper Engineering Report

Load Growth Projections by Santee-Cooper, Supply/Demand Balance 2022-2040

Supply/Demand Projections, 2022-2040 by Santee-Cooper in IRP Presentation to Stakeholders

Electricity demand expectations are by 2040 to grow above 6,000 MW. Currently there are plans to shut down the 1,150 MW Winyah coal fueled power station. This, I believe, if carried out will be a mistake. The world situation with energy and power should show us the importance of Domestic energy supply and Santee-Cooper has, up to this point, had a balanced energy portfolio to meet the Demand of the customers with affordable, reliable electricity supply. I have included references below of reasons why coal power is important.

The table below (labeled 2-2) is another listing of Santee-Cooper generating assets. This one is from a publicly available Black and Veatch report dated 2019.

From Black & Veatch Engineering Report on Santee-Cooper, 2019

South Carolina is #3 in Nuclear Generation in the U.S.A.

Nuclear Power is Most Dominant in South Carolina but, Many Nuclear Plants are Old and Some Could Shut Down by 2040? Licenses Need to Be Renewed by the NRC to Depend on these for backup.

From EIA website

In my view, Santee-Cooper is a state treasure and that the low cost, reliable generation capacity should be planned to maintain that excellent record using the proven fuels that have served our state so well (My adopted state since moving here full time). Much of the benefits of low cost electricity have come from being interconnected on the Grid with Duke and Dominion Power. They are great neighbors and also have excellent records. However, in my view and based on my experience, I think Santee-Cooper should plan future generation with a balanced portfolio with at least a 15% margin of reserve capacity for winter and summer peak loads. The current stated license expirations for the neighboring utilities and including the Summer Unit #1 which Santee-Cooper owns a portion are:

From Nuclear Energy Institute web site(15)

Duke and Dominion are likely to and in fact, I think they have already proceeded to extend the operating licenses of these nuclear plants. However, the reality is that several sister nuclear units of Duke’s nuclear fleet have already been shut down. The Crystal River nuclear unit and one of the Three Mile Island nuclear units designed and built by Babcock & Wilcox and very similar. ( I know that to be a fact, because I worked at B&W in the 1960’s) These two units performed well for many years, but are now shut down. The age of these wonderful assets must be taken into consideration when depending on the stability and reasonable cost of being dependent on the Grid connection. I feel strongly that the state power generation capacity should be capable of complete independence from neighboring Utility reserve capacity.

The Myth of Green Power

I became interested in participating as a stakeholder in the IRP process as a result of receiving the flier copied below which came with my electric bill from Palmetto Electric. It inferred that the electricity supplied to Hilton Head Island during the Heritage Golf Tournament in April was being provided by “Green Power”. Most of the power that Palmetto Electric distributes to members is provided by Santee-Cooper or from the Grid. It is my understanding that Hilton Head Island uses over 180 MW on a hot summer day. The renewable power generation assets are listed above. The renewables assets are far from adequate to meet the demand of Hilton Head Island during a normal summer day. I have shown above the facts on generating assets and electric power generation statistics for previous years. The load growth projections to 2040 were provided in the Santee-Cooper IRP Presentation. Santee-Cooper and Palmetto Electric have done a wonderful job in providing reliable, affordable electricity to Hilton Head Island. Green power if expanded at the extreme risk and expense of decommissioning Winyah and even one or more of the Cross Units will cause economic harm to our citizens and to this up to now, great state with reliable and reasonable cost power, in my opinion.

Conclusions

Coal and nuclear power have served the great state of South Carolina very well for many years. Coal, Gas and Nuclear power generation are all Dispatchable and with a balanced portfolio economic dispatch can continue to sustain reasonable cost Bulk Power delivery.

Fuel prices fluctuate widely due to world supply and Demand events. Before I retired in 2012, I participated in delivering courses on power generation and power generation economics. My specialty was coal firing and heat rate improvements. The graph below was prepared to present to the O & M Team of a Florida Utility to show the importance of efficient coal plant operation to compete with the then low cost natural gas fuel. In 2012 the Shale Gas Revolution was going strong and over-supply of natural gas drove natural gas prices down to levels below coal fuel cost for equivalent energy. Of course now (June 2022) natural gas prices at the Henry Hub exceed $9.00/million Btu. Thus, coal fuel, if it can be delivered, is much lower in cost. This is my basis for stating that a Balanced Portfolio of generation assets is important.

2012 Short Course Presentation by Dick Storm and Shawn Cochran to a Florida Utility

The majority of generation must be Dispatchable for voltage and frequency stability. Here below is a chart of real time power generation for a typical week in 2021. This is from the EIA website. Note that the majority (80%) of the power generation is from coal, nuclear and gas fuels. All dispatchable forms of electricity generation.

From EIA website

The above is real time generation. Below is the installed capacity by fuel type. Conventional generation is the majority and if this reliable generation is compromised then the entire US and the state of SC capability to deliver reasonable cost, reliable power will be harmed.

EIA data on the Canary Media website

Solar power is useful for shaving day time peak load and I support the use of solar for purposes of taking advantage of daytime solar power. In fact, I was part of a team at a College in Pennsylvania where I agreed with the use of roof solar panels on the sports center for purposes of reducing August peak load demand from the local Utility. So, I agree that sometimes solar is practical, but not to replace reliable Base load Bulk Power Capacity such as the Winyah Coal plant generating capacity.

Solar and Wind power is more expensive than coal, nuclear and gas power generation. The chart below is one reference to show that. Below I will offer the example of Hawaii. Texas also should be considered from recent experiences of over building non-Dispatchable renewables.(2,11)

The chart below is Retail Electricity Costs as published on the EIA website(16) . Note the cost of Hawaii Electric which is about three times the cost of South Carolina. Hawaii of course, is an island and therefore they have no interconnections with neighboring Utilities such as Santee-Cooper does with Dominion and Duke. Therefore, the Bulk Power production costs are higher because when wind and solar is not available, Diesel Fuel is used for power generation. In large steam plants the fuel cost component of electricity generation is between 75 and 95% of the production cost at the Bus Bars. Check the Island Pulse website to see real time power generation by fuel.(14)

Recommendations

The continued good economic prosperity of South Carolina depends on a future of reasonable cost electric power. That future, in my strong opinion, should be provided by keeping the existing coal plants and including the coal transportation and supply chain infrastructure. Further, the existing coal plants should be operated, periodically tested and maintained. They should be protected from deterioration from corrosion and other forms of deterioration by operating them at a significant load factor and keeping them in top condition.

Respectfully submitted,

Dick Storm, June 8, 2022

References for further research and reading:

  1. NERC (North American Reliability Council) Warns of Blackouts this summer: https://en.as.com/latest_news/energy-crisis-blackouts-expected-this-summer-across-the-us-due-to-extreme-temperatures-and-drought-n/
  2. Wall Street Journal, “Summer of Rolling Blackouts” May 27, 2022: https://www.wsj.com/articles/americas-summer-of-rolling-blackouts-green-energy-grid-north-american-electric-reliability-corporation-11653683348
  3. American Public Power, MISO warns of Summer Blackouts (Midcontinent Independent System Operator) May 10, 2022: https://www.publicpower.org/periodical/article/miso-warns-it-could-face-supply-shortfalls-summerb
  4. Power Magazine warns of summer 2022 power shortfalls, May 2022: https://www.powermag.com/nerc-warns-energy-shortfalls-almost-inevitable-this-summer/
  5. FEE Story, May 10, 2022, Limits of Green Energy: https://fee.org/articles/us-faces-electricity-shortages-heading-into-summer-as-grid-operators-warn-of-limits-of-green-energy/
  6. Real Time US Power Grid link to EIA: https://www.eia.gov/electricity/gridmonitor/dashboard/electric_overview/US48/US48
  7. CA Grid Real Time Demand: https://www.caiso.com/TodaysOutlook/Pages/default.aspx
  8. PJM Operations: https://www.pjm.com
  9. MISO Operations: https://www.misoenergy.org/markets-and-operations/real-time–market-data/real-time-displays/
  10. SPP (SW Power Pool) Market Generation by Fuel: https://marketplace.spp.org/pages/generation-mix
  11. ERCOT Grid: https://mis.ercot.com/public/dashboards
  12. Science and Environment Policy Project  Website: http://www.sepp.org
  13. Judith Curry, 15 slides to summarize Climate Change website: https://judithcurry.com/2021/09/03/15-minutes/#more-27827
  14.  Hawaii Power, Island Pulse, Real Time Dashboard of Power Generation, Hawaii Electric has embraced renewable power generation. Check real time fuel sources: https://www.islandpulse.org
  15. Nuclear Energy Institute Nuclear Plant Operating License Renewals & Expirations: https://www.nei.org/resources/statistics/us-nuclear-license-renewal-filings
  16. EIA (U.S. Department of Energy) Listing of Electricity Costs in 50 States: https://www.eia.gov/electricity/state/
  17. Why your Electric Costs are Surging and likely to go higher, WSJ, March 15, 2022: https://www.wsj.com/articles/why-your-electric-bill-is-soaringand-likely-to-go-higher-11647250380?mod=hp_featst_pos4
  18. Germany is trying to be less Dependent on Russian Energy, WSJ May 18, 2022: https://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fhow-germany-is-curing-its-dependence-on-russian-energy-11652801958
  19. WSJ VIDEO of summer Blackouts likely June 5, 2022:https://m.wsj.net/video/20220528/adc6b4aa-84cd-4086-ad24-4cfee6df1a9c/1/hls/manifest-hd-wifi.m3u8#t=0
  20. What is Behind the Energy Crisis, WSJ: https://www.wsj.com/articles/energy-crisis-fossil-fuel-investment-renewables-gas-oil-prices-coal-wind-solar-hydro-power-grid-11634497531?mod=series_climatefinancemarkets
  21. Santee-Cooper Flip Facts Sept 2021: https://www.flipsnack.com/santeecooper/2020-santee-cooper-fingertip-facts/full-view.html
  22. Santee-Cooper IRP, Dec 2020: https://www.santeecooper.com/About/Increasing-Value/ORS-Reports/_pdfs/Dec-23-Signed-Filed-IRP.pdf
  23. SC Dept of Energy :  http://www.energy.sc.gov/irp
  24. Dominion Energy SC IRP update, Feb 2021: https://dms.psc.sc.gov/Attachments/Matter/531e91d9-05ff-48e2-938f-adccf3548768
  25. Central Co-Op of SC IRP: https://www.cepci.org/sites/cepci/files/Documents/Central%202020%20IRP.pdf
  26. FERC Website References: https://elibrary.ferc.gov/eLibrary/search
  27. WSJ article on CA Blackouts, Aug 2020: https://www.wsj.com/articles/why-california-keeps-having-blackouts-11598198401?mod=article_inline
  28. Texas Power Failure, Feb 17, 2021, wsj: https://www.wsj.com/articles/dont-blame-wind-for-texas-electricity-woes-11613500788?cx_testId=3&cx_testVariant=cx_2&cx_artPos=3#cxrecs_s
  29. POWER Magazine article on Feb. 15, 2021 Texas Winter Storm Blackouts: https://www.powermag.com/ercot-sheds-load-as-extreme-cold-forces-generators-offline-miso-spp-brace-for-worsening-system-conditions/
  30.  Oklaunion Coal Plant Closure: https://thehill.com/policy/energy-environment/408369-texas-based-coal-fired-plant-announces-retirement
  31.  Luminent Coal Plant Closures: https://www.dallasnews.com/business/energy/2017/10/13/texas-largest-power-generator-speeds-up-coal-s-decline-with-closure-of-two-more-plants/
  32. Dick Storm, Texas Power Plant Experiences and thoughts on loss of reliable coal plant generation: https://dickstormprobizblog.wordpress.com/2021/02/19/texas-and-coal-power-6000-mws-of-coal-plant-capacity-is-missed/
  33. POWER Mag. Commentary March 17, 2021: https://www.powermag.com/blog/all-fuels-are-important-but-thermal-power-generation-is-still-number-1/
  34. Donn Dears Book, “Net-Zero Carbon, The Climate Policy Destroying America” An excellent reference for planners and policy makers.
  35. Donn Dears website with much information on Power for the U.S.A. https://ddears.com/donns-articles/
  36. German failure of Renewables, der Spiegel, May 2019: https://www.spiegel.de/international/germany/german-failure-on-the-road-to-a-renewable-future-a-1266586.html
  37. Dr. George Holliday and Bill Holliday Environmental Newsletters: Some selected links from recent publications follow: :  https://thestarnewsnetwork.com/2022/05/23/over-half-the-country-at-risk-of-energy-emergencies-this-summer-electric-grid-analysis-shows/
  38. Science and Environmental Policy Project, edited by Ken Haapala and passed on to me by the Holliday Environmental Newsletters: https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_TS.pdf

http://www.sepp.org/science_papers/Climate%20Physics%202.pdf

One thought on “Balanced Portfolio of Generation, Here is an Example”

  1. Pop – thank you for sharing . As always , you amaze me with your knowledge. I always pass these on to my conservative friends and they always respond with ,”It’s not too late for Mr. Storm to run for President !” Love to you and Grandmom!

    Sent from my iPhone

    >

    Like

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