Thursday, March 20, 2008

NYRI's New Economic Impact Analysis

NYRI's new economic impact analysis relies on 2 models--GE MAPS and NEEM.
http://www3.dps.state.ny.us/PSCWeb/PIOWeb.nsf/a89c0117705349e7852573e0007a0a57/6d78e12c2735cdd7852573f8006effd5/$FILE/Appendix%20U_FINAL_02-07-08.pdf

The NEEM model actually acts like a crystal ball and magically adds generation when needed. The "surprising" result is that if you run an HVDC line from upstate to downstate with NYRI's project, more generation is added upstate since construction costs are cheaper to build upstate.

If the NYRI project is built, the NEEM model puts coal plants in Regions A-E instead of in Region F (Capital District)---see Tables 4,5, & 6. So not only does Region A-E get the negative impact of the NYRI project, we also get to apparently host new coal-generating plants. And you'll note that we do not get the more expensive, "clean" coal plants, we just get the cheapy "conventional" coal plants. I suspect this whole "crystal-balling of new coal plants" wouldn't mesh with the Regional Greenhouse Gas Initiative (RGGI).

From page 13:
Close examination of this table shows that chief among these differences is that IGCC and conventional coal capacity added in the Capital and Downstate bubbles under the Base Case scenario shifts to the Upstate bubble (zones A-E) under NYRI. The reason for this is that NYRI’s impact on transmission flows, the locational supply/demand balance, and locational prices alters the economics of investments in new generating capacity in some locations relative to others. The NEEM analysis showed that, in general, the Project improves the economics of investments in upstate zones relative to those in downstate zones. As we will discuss below, the resulting shift in capacity investments has significant implications for the impact of the Project on electricity costs.

I believe there is an error in this paragraph because I see no shift of IGCC (integrated gasification combined cycle).

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