1
Introduction

This report presents the work of the National Research Council’s (NRC’s) Committee on Alternatives to Indian Point for Meeting Energy Needs. It reviews the options that are available and assesses the feasibility of installing them on a scale sufficient to replace the 2,000 megawatts (MW) of electricity from the Indian Point Energy Center.

This chapter presents background information necessary to understand how replacements would be implemented. It also reviews how the committee conducted the analysis.

BACKGROUND

Electricity Supply and Demand

Electricity generally cannot be stored and must be generated at virtually the same instant as it is used, which requires continuous control of the system.1 New York State has an integrated bulk power system, the New York Control Area (NYCA). Formerly, the New York Power Pool had coordinated the activities of the utility participants on the transmission system. As competition was introduced into the New York electric system, utilities were required to divest their generating assets.2 The New York Public Service Commission and the Federal Energy Regulatory Commission also required a more independent electric system operator. The New York Independent System Operator (NYISO) was cre ated to operate the high-voltage transmission system and to provide a match of load requirements to generation sources in a manner that (1) ensures the reliability of the state’s power system; (2) facilitates open, fair, and effective competitive markets; (3) improves regional cooperation for operations and planning; and (4) ensures nondiscriminatory access to the electric system.

NYISO uses the locational-based marginal pricing (LBMP) system to accomplish its objectives. LBMP also provides price signals to providers of new generation and transmission. Thus, NYISO has assumed the power-dispatching role that integrated utilities used to carry out within their own jurisdictions, but on a statewide level. NYISO uses auctions to select the lowest-cost suppliers consistent with transmission constraints, among other functions. Box 1-1 lists many of the market products that NYISO must monitor. Further details are provided in Chapter 4. Competitive markets are still evolving, and it is not yet clear exactly how to ensure both reliability and low costs.3

NYISO also plans for future growth and makes recommendations for additional capacity, although it does not pick specific sites or technologies. Additional capacity is mainly built by developers, or merchant generators, which could have contracts for the power from a load serving entity (LSE) or which expect to be able to compete profitably in the auction. Under some conditions, the New York Power Authority (NYPA) can build new capacity. NYISO has issued a request for proposals to deal with concerns over potential capacity shortfalls, but that process has just begun.

1

Pumped storage facilities, currently the only practical form of large-scale power storage, use low-cost off-peak power to pump water uphill to a reservoir. The flow is reversed during peak hours when the power that can be regenerated is much more valuable. However, few sites are appropriate for pumped storage. Consolidated Edison attempted to build pumped storage on Storm King Mountain up the Hudson River near West Point, but the project was stopped for environmental reasons. Other storage technologies, including batteries, compressed air energy storage, and superconducting magnets, are still under development to reduce costs.

2

Competition was introduced in part to avoid cost increases, such as had occurred in the 1970s and 1980s because of overbuilding. Those costs had largely been passed on to customers.

3

Competitive markets, or “restructuring,” encompass (1) allowing generation to be built by nonutilities; (2) breaking up vertically integrated utilities; (3) independently owned and operated transmission, with some degree of open access for all suppliers; (4) spot markets for electricity; (5) retail choice for some customers in some states (including New York); and (6) a substantial shift in regulatory jurisdiction from the states to FERC. They may also include competitive bidding for power supply and the inclusion of energy efficiency in competitive power procurement processes.



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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs 1 Introduction This report presents the work of the National Research Council’s (NRC’s) Committee on Alternatives to Indian Point for Meeting Energy Needs. It reviews the options that are available and assesses the feasibility of installing them on a scale sufficient to replace the 2,000 megawatts (MW) of electricity from the Indian Point Energy Center. This chapter presents background information necessary to understand how replacements would be implemented. It also reviews how the committee conducted the analysis. BACKGROUND Electricity Supply and Demand Electricity generally cannot be stored and must be generated at virtually the same instant as it is used, which requires continuous control of the system.1 New York State has an integrated bulk power system, the New York Control Area (NYCA). Formerly, the New York Power Pool had coordinated the activities of the utility participants on the transmission system. As competition was introduced into the New York electric system, utilities were required to divest their generating assets.2 The New York Public Service Commission and the Federal Energy Regulatory Commission also required a more independent electric system operator. The New York Independent System Operator (NYISO) was cre ated to operate the high-voltage transmission system and to provide a match of load requirements to generation sources in a manner that (1) ensures the reliability of the state’s power system; (2) facilitates open, fair, and effective competitive markets; (3) improves regional cooperation for operations and planning; and (4) ensures nondiscriminatory access to the electric system. NYISO uses the locational-based marginal pricing (LBMP) system to accomplish its objectives. LBMP also provides price signals to providers of new generation and transmission. Thus, NYISO has assumed the power-dispatching role that integrated utilities used to carry out within their own jurisdictions, but on a statewide level. NYISO uses auctions to select the lowest-cost suppliers consistent with transmission constraints, among other functions. Box 1-1 lists many of the market products that NYISO must monitor. Further details are provided in Chapter 4. Competitive markets are still evolving, and it is not yet clear exactly how to ensure both reliability and low costs.3 NYISO also plans for future growth and makes recommendations for additional capacity, although it does not pick specific sites or technologies. Additional capacity is mainly built by developers, or merchant generators, which could have contracts for the power from a load serving entity (LSE) or which expect to be able to compete profitably in the auction. Under some conditions, the New York Power Authority (NYPA) can build new capacity. NYISO has issued a request for proposals to deal with concerns over potential capacity shortfalls, but that process has just begun. 1 Pumped storage facilities, currently the only practical form of large-scale power storage, use low-cost off-peak power to pump water uphill to a reservoir. The flow is reversed during peak hours when the power that can be regenerated is much more valuable. However, few sites are appropriate for pumped storage. Consolidated Edison attempted to build pumped storage on Storm King Mountain up the Hudson River near West Point, but the project was stopped for environmental reasons. Other storage technologies, including batteries, compressed air energy storage, and superconducting magnets, are still under development to reduce costs. 2 Competition was introduced in part to avoid cost increases, such as had occurred in the 1970s and 1980s because of overbuilding. Those costs had largely been passed on to customers. 3 Competitive markets, or “restructuring,” encompass (1) allowing generation to be built by nonutilities; (2) breaking up vertically integrated utilities; (3) independently owned and operated transmission, with some degree of open access for all suppliers; (4) spot markets for electricity; (5) retail choice for some customers in some states (including New York); and (6) a substantial shift in regulatory jurisdiction from the states to FERC. They may also include competitive bidding for power supply and the inclusion of energy efficiency in competitive power procurement processes.

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs BOX 1-1 Keeping Competitive Markets Operating New York’s large and varied power system requires a very complex set of functions for smooth and efficient operation. NYISO conducts energy market auctions in two phases: (1) the Day Ahead Market establishes forward contracts for each hour of the coming day; (2) the Real Time Market is conducted when the load actually occurs to precisely match supply with demand. Most energy transactions in NYISO are conducted in the Day Ahead Markets. NYISO adds up the bids starting with the lowest cost for each time interval until it has sufficient power to meet projected demand. All bidders then receive the price set by the highest accepted bidder. Other important functions include the Installed Capacity (ICAP) Market, which is designed to ensure that load serving entities (LSEs, such as ConEd) have sufficient capacity available to serve their customers. The following are among the NYISO market products, as described in detail on the NYISO website (www.nyiso.com): Energy Markets Day-ahead locational-based marginal pricing (LBMP) energy Real-time LBMP energy Ancillary Services Regulation service (frequency control) Black start capability Voltage support service (reactive power) Installed Capacity (ICAP) Transmission Congestion Contracts Demand Response Programs Emergency Demand Response Program Special Case Resources (SCR) Day Ahead Demand Response Program SOURCE: www.nyiso.com; accessed March 29, 2006. Reliability standards are set by the New York State Reliability Council (NYSRC) in conjunction with the Northeast Power Coordinating Council (NPCC), which operates under the North American Electric Reliability Council (NERC). NPCC standards also apply to New England and eastern Canada, while NYSRC standards are tailored to New York’s particular situation (e.g., requirements for generating capacity in New York City and Long Island). NYSRC also sets the amount of installed generating capacity (ICAP) needed to meet the required reserve margin generating capacity at peak electrical load. Reserve margin criteria are set yearly for 1 year ahead (18 percent for 2006-2007) by NYSRC, which also specifies other allowable resources (e.g., specific loads that can be shut off on NYISO’s order are equivalent to generating capacity for meeting peak demand) to be included in the reserve margin and correspondingly to be used in calculating the reliability. Finally, the Energy Policy Act of 2005 provides that the Federal Energy Regulatory Commission (FERC) will certify a single organization (expected to be NERC) that will propose and enforce mandatory “reliability standards for the bulk-power system in the United States,” subject to FERC approval. A complicated network of high-voltage transmission lines is required to deliver the bulk power to load centers, which may be hundreds of miles from the generating stations.4 The bulk power system must be controlled very precisely to keep voltage and frequency within tight bounds and to operate reliably despite the occasional component failure. It also is important to keep the cost of electricity as low as possible, in part by operating the lowest-cost plants as much as possible. The NYCA has about 38,000 MW of installed capacity within New York State and 4,000 miles of high-voltage transmission lines. Power also can be traded with interconnected control areas in New England, the Mid-Atlantic region, and Canada. The NYCA high-voltage transmission system, including major substations, is shown in Figure 1-1. Power demand fluctuates both during the day and over the year, as shown in Figure 1-2, so a variety of generating plants must be available to follow the load, including: Baseload plants, to meet the steady part of the load. Baseload facilities (such as the Indian Point units) produce power inexpensively. They typically operate all day and most of the year. They are generally nuclear or coal-fired steam generators. The Indian Point units are an important generating resource in the NYCA owing to their low cost and their location near the load centers in New York City and Westchester County. Peaking plants for periods of high demand. Combustion turbines, for example, are often deployed in simple cycle, and are used during periods of peak demand, because they can be quickly turned on or off. The operational flexibility of such “peaking” generators, however, is counterbalanced by their low thermal efficiencies, which makes them expensive to operate. Intermediate units, which also follow demand but are used more than peaking plants. An intermediate generator might use a combustion turbine in combination with a steam turbine to provide a wide range of operating flexibility. Combined-cycle facilities are typically fueled with natural gas and often have the capability of burning oil as an alternative fuel supply when supplies of natural gas are curtailed because of high demand, usually during the winter. Modern 4 Low-voltage distribution lines, which are not part of the bulk power system, carry the power to the end-use customer. Most outages that consumers experience are due to failures in the distribution system (e.g., trees falling on overhead lines), but these usually are repaired quickly and are not part of this study.

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs FIGURE 1-1 The New York Control Area high-voltage transmission network. SOURCE: New York Independent System Operator. gas-fired combined-cycle plants5 are much more efficient than older or simple-cycle gas turbines. NYISO has divided the NYCA into 11 zones, shown in Figure 1-3, to assist in pricing and monitoring load flows on the transmission system. The key zones for this report are these: H, which includes the northern portion of Westchester County, where Indian Point is located; I, the rest of Westchester County; J, New York City; and K, Long Island outside of New York City. In accordance with NYSRC standards, NYISO’s goal is for the bulk power system to have sufficient capacity that outages will be less than 1 day in 10 years. This loss-of-load expectation (LOLE) is determined by using statistical descriptions of the historical availability of each generator and Monte Carlo calculation techniques to compute the expected number of days in a 10-year period when the load could not be supplied. The LOLE is used in determining how much additional generation a given area will require for expected load growth and is likely to continue to be used if Indian Point is closed. In addition to sufficient capacity, diversity of fuels provides another element of system reliability. Excessive dependence on one fuel source threatens system reliability if that fuel supply encounters shortages. Figure 1-4 displays the varied contributions of different fuels to the installed capacity (in megawatts) of the NYCA. Natural gas and oil represent 60 percent of the installed capacity, and coal, nuclear, and hydroelectric power account for 39 percent. New York’s new Renewable Portfolio Standard should improve fuel diversity. This standard requires 25 percent of electricity to be generated from renewable sources by 2013, compared with 19.5 percent now (mainly hydroelectricity, most notably from Niagara Falls).6 The electrical output (actual kilowatt-hours) generated by each fuel is not proportional to the generating capacity that uses that fuel. Gas and oil fuel about 38 percent of the total. Coal, nuclear, and hydro power represents most (61 percent) of the power generated in 2004. Generator owners in the NYCA operate a diverse mix of generation facilities. Figure 1-5 lists the power that can be generated in each NYCA zone, by technology, during the 5 These plants combine a gas turbine (similar to a jet engine) with a steam turbine that uses the waste heat from the gas turbine as its energy source. The latest combined-cycle plants can be up to 60 percent efficient, almost twice as high as most coal or nuclear plants. 6 Renewable resources include solar energy, wind, biofuels, and others. Renewables are appealing for a variety of reasons, especially environmental, but most forms have been expensive relative to fossil and nuclear energy. Some technologies (e.g., wind) are now proving to be competitive, and progress in research and development on others is encouraging, as discussed in Chapters 2 and 3. Hydroelectricity is a form of renewable energy, and New York State already receives an abundant supply from Niagara Falls and other sites, but it is questionable whether hydropower can be expanded significantly.

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs FIGURE 1-2 Average daily load (top) and peak hour load (bottom) in New York City. SOURCE: Personal communication with Timothy Mount, Cornell University, compiled from NYISO data, January 2006.

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs FIGURE 1-3 New York Control Area load zones. SOURCE: New York Independent System Operator. summer-peak demand period.7 The diversity of generator technologies in the NYCA in itself adds to the reliability of the electrical system. Reliability also is a function of the location of the generating facilities relative to the load centers that they serve. Indian Point Units 2 and 3 (total 1,970,700 kW) are listed in the column “Zone H” and row “Steam (PWR [for pressurized water reactor] Nuclear).” The two units represent 12.5 percent of the total summer capability in Zones H, I, J, and K (NYISO, 2005). Indian Point is virtually the only generating facility in Westchester County.8 Even with adequate capacity, an electric grid may fail because of instability. Several types of instability may occur, and they have different timescales and effects on customers. Voltage stability is most important in considering alternatives to Indian Point. The phenomenon of voltage collapse (in which voltage declines to unacceptable levels, as it did in Ohio in August 2003) is associated with insufficient reactive power.9 The existing generators at Indian Point can supply a large amount of reactive power when it is needed. It will be necessary to verify that alternatives to Indian Point would include sufficient reactive power to maintain acceptable voltage levels under all predicted loads. Peak demand generally occurs during hot summer afternoons when air conditioning loads are highest. Demand on July 26, 2005, was 32,075 MW, a record for the NYCA. Reliability is of greatest concern during hours of peak demand because at such times reserve capacity, both generation and transmission, is at its lowest. Any equipment failure then can threaten continued supply if reserve capacity is too low. NYSRC has a general requirement that NYCA capacity must exceed expected peak demand by 18 percent to allow for failures.10 On July 26, the reserve margin was about 19 percent, indicating adequate reserve capacity for the state. Regional distribution within the state, however, is more problematic. Upstate New York has some surplus capacity, but very little if any additional power can be delivered down-state because the transmission system is already congested during peak demand. Furthermore, electricity demand has been growing at over 2 percent per year in southern New York, so more capacity will be required in a few years to meet peak demand in that area. Chapter 2 includes an analysis of demand growth and the options for controlling it. Chapter 3 discusses the possibility of building new power plants upstate and transmission lines to bring the power south. In addition to controlling bulk power flows, NYISO must monitor and control reactive power. Insofar as reactive power cannot be produced by operating generators, it must be supplied by specialized equipment. Several other factors extremely important in planning for the future of the bulk power system noted here are discussed further in Chapter 3. A reliable supply of electricity depends on a reliable supply of fuel to power the generators. New York has a diverse supply of fuels: hydroelectric, nuclear, 7 Many generating plants can produce more power in the winter than in the summer. Cooler air is denser, so combustion turbines can be fed more fuel. Steam turbines also exhaust to a lower temperature and thus lower back pressure, increasing their efficiency. 8 Zone I has about 3 MW of hydroelectric power and municipal waste generation in addition to the 2,000 MW from Indian Point; see Appendix D-2 for details. 9 Reactive power is a complex phenomenon in alternating current power. It is discussed further in Chapter 3 of this report. 10 Reserve margin during off-peak hours is, of course, much higher. It is only high-demand hours that are of concern.

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs FIGURE 1-4 Generating capacity in the NYCA, by fuel type, 2005. SOURCE: New York Independent System Operator, Power Trends, April 2005. coal, natural gas, and oil. Diversity is important because disruptions can occur in fuel deliveries. In recent years, most new generation has been fueled with natural gas, but new supplies of gas are expected to be limited and expensive unless new facilities for importing liquefied natural gas (LNG) are built. Natural gas is generally available during the summer, but it may be curtailed in the winter when demand is high for residential and commercial heating. Oil is frequently used as a backup for natural gas in the winter, but it is expensive, pollutes more, and raises national security issues. Environmental factors may control what types of facilities can be built where. In particular, air pollution regulations can limit the use of coal, the nation’s most abundant fossil fuel. New York has introduced new, lower standards FIGURE 1-5 Capability of generating plants by NYCA zone and generator type. See Figure 1-3 for a map of NYCA zones. SOURCE: New York Independent System Operator, Power Trends, April 2005.

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs for emissions of sulfur dioxide and nitrogen oxides, which would require expensive emissions controls on coal plants. Carbon dioxide emissions are emerging as an issue. Concerns over global climate change are leading to restrictions on emissions of greenhouse gases, though not yet at the national level. New York is part of the recently adopted Regional Greenhouse Gas Initiative, which will begin to limit emissions of carbon dioxide in 2008. The changing institutional structure of the electric power industry in New York will also play an important role in efforts to replace Indian Point, as described in detail in Chapter 4 and in Appendix E. Formerly, under the regulated approach, an integrated utility would determine its generating, transmission, and other needs, and build whatever was required. A reasonable return on its investments was largely guaranteed by the state’s Public Service Commission. The introduction of competition in the industry has also introduced an element of uncertainty that affects the willingness of power companies to invest. The expiration of New York’s siting legislation in 2003 represents another hurdle to building new facilities. Finally, societal impacts play an important role in guiding decision making with respect to the bulk power system. These impacts can be seen in issues such as public opposition to new generating or transmission capacity. Employment issues can also be important for some facilities. The Indian Point Energy Center: Description and Role Three reactors have been built at the 239-acre Indian Point site. Unit 1 was an early, small reactor that has been shut down since 1974. It is still onsite though not operable, because demolition was deemed easier if carried out simultaneously with the later reactors. Indian Point Unit 2 was built by Consolidated Edison (ConEd), the utility that supplies power to Westchester County and New York City. Operating since 1974, Unit 2 is licensed until September 28, 2013. Until recently it produced 970 MW but has now been upgraded to 1,078 MW. Construction of Indian Point Unit 3 was started by ConEd, but financial difficulties forced the utility to sell it to NYPA before completion. It has operated at 980 MW since 1976 and is licensed until December 12, 2015. It has now been upgraded to 1,080 MW. In 2001 and 2002, the units were sold to Entergy Corporation, an integrated energy company that owns and operates power plants. Both sales were accompanied by an agreement to purchase back the power generated by the plant for several years. These agreements are phasing out, and Entergy will soon be able to sell the power at a higher price, as most alternate fuels have risen considerably in cost over the past few years. Entergy Nuclear operates 10 nuclear power plants, including the Indian Point Energy Center and the FitzPatrick plant in upstate New York. Since Entergy took over Indian Point, it has operated the plants extremely well. From 2003 to 2005, Unit 2 operated at a capacity factor of 96.6 percent and Unit 3 at 93.7 percent (NEI, 2006). The industry average is 89.6 percent. The two Indian Point reactors are among the lowest-cost generators in New York, and they operate whenever possible supplying base load power to the system. Together, they account for 5.3 percent of the total installed generating capacity in New York State, but they produce 10.1 percent of the electricity (Levitan and Associates, 2005). Entergy can apply for license extensions for an additional 20 years of operation. The U.S. Nuclear Regulatory Commission would review the applications for confirmation that the reactors could be operated safely and in compliance with environmental regulations. The application process can take about 5 years, suggesting that Entergy would have to submit the applications for Units 2 and 3 in 2008 and 2010, respectively. Both units feed power into the transmission network at the nearby Buchanan substation. The power is delivered to load centers, mainly in New York City. Indian Point is the largest generating station close to the major load centers in New York City, Westchester County, and Long Island and south of congestion points in the NYCA transmission system that prevent more power from being sent south during periods of peak demand. Indian Point also produces the lowest-cost power in the area. Thus, Indian Point is a critical component of both the reliability and economics of power for the New York City area. In addition, it produces much of the reactive power needed for reliable operation of the system. Replacing Indian Point will call for careful analysis of the choices that are made. Community Concerns Community concerns about the Indian Point reactors have a long history (Wald, 1982), but prior to September 11, 2001, they had faded, with only a few people still expressing public concern that the dangerous amounts of radioactivity in the cores of the reactors might be released in an accident (Hu, 2002). Opinions were changed by the 2001 attacks on the World Trade Center (Purdy, 2003; Lombardi, 2002; Hu, 2002). Since the Sept. 11 terrorist attacks, growing anxiety over the safety of nuclear power plants has transformed Indian Point from a fringe issue that only antinuclear crusaders care about to a mainstream concern, and not just for Westchester suburbanites, but for New York City and New Jersey residents, who had, until now, barely registered the plant’s existence 40 miles north of Midtown Manhattan. (Hu, 2002) Scenarios leading to catastrophic releases were no longer easy to dismiss on the basis of fault-tree calculations and experience underlying previous assurances of safety, although the Nuclear Regulatory Commission and Entergy point out that it would be very difficult for an airplane or

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs attackers to cause a major release, and, in any case, security would be upgraded. Such assurances were not sufficient to allay public concern. In addition, concerns about accidents at or attacks on the spent fuel pools at Indian Point have been given new attention since 9/11 (Wald, 2005b). For instance, a National Research Council study (NRC, 2005) concluded that “successful terrorist attacks against spent fuel pools, although difficult, are possible”; the type of spent fuel pool at Indian Point, however, was not among those that the report considered most vulnerable. It should be noted that closing Indian Point would not by itself eliminate risk from the spent fuel, which may remain onsite for many years until a permanent storage disposal facility is ready. In Westchester and surrounding counties, some 12 community groups (Hu, 2002) have called for the plant’s closing (e.g., Riverkeeper, Public Citizen, and Indian Point Safe Energy Council).11 Activities by these groups, including advertising and an HBO television special, have kept the issue of shutting down Indian Point on the political agenda. Riverkeeper claims that “a large radioactive release triggered by a terrorist attack on or accident at the facility could have devastating health and economic consequences....” (Riverkeeper, 2006). Entergy, many safety analysts in the industry, and the Nuclear Regulatory Commission are convinced that a terrorist attack, even if it occurred, would be extremely unlikely to result in a large radioactive release. Riverkeeper also is concerned with environmental damage to the Hudson River, especially to fish, eggs, and larvae (van Suntum, 2005). Here, the policy issue, which is currently in the courts, is whether or not the river cooling system should be replaced by a more expensive system (Hu, 2003). A key community concern has been the perceived inability of emergency plans to work in the aftermath of an accident or successful attack on the facility (Purdy, 2003; Lombardi, 2002). A state-sponsored study (Witt, 2003) found that “the plans do not consider the possible additional ramifications of a terrorist caused release.” Early evacuation is not a requirement of Nuclear Regulatory Commission and state emergency planning because scenarios that would lead to early fatalities are not considered credible, even after 9/11. Yet the public appears to see early evacuation as crucial (Witt, 2003), which produces tension, because evacuation in the crowded New York metropolitan area is perceived by many to be impossible (Risinit, 2005). If many people attempted to evacuate or collect their families upon announcement of a potential release, the result could be gridlock (Witt, 2003; Westchester County, N.D.). Local political leaders, such as Westchester County Executive Andrew Spano, call for an Indian Point shutdown, bringing the resources of the county to bear on the campaign. Rockland County Executive Scott Vanderhoef has also called for closure “before terror attacks” (Purdy, 2003). Congresswoman Nita Lowey, from New York’s 18th District, has expressed concerns about the Indian Point facility and was responsible for commissioning this National Research Council study. She has also introduced a bill to require relicensed facilities to meet the same standards as those for new nuclear plants, which is currently not the requirement of the Nuclear Regulatory Commission. As one indication of concern about reactor accidents, Westchester County, in cooperation with New York State, has developed a program to provide potassium iodide to residents who live, work, or travel within the 10-mile Emergency Planning Zone (Westchester County, N.D.). Such tablets, if taken early enough, significantly reduce radiation doses to the thyroid, the major risk after the Chernobyl accident. In addition, Westchester County has commissioned expert studies on issues surrounding Indian Point (e.g., Levitan and Associates, 2005), as has Riverkeeper (Lyman, 2004; Komanoff, 2002; Schlissel and Biewald, 2002). The study for Westchester County highlighted the expense of an early shutdown of Indian Point, leading County Executive Spano to put his hopes on stopping Entergy in the relicensing process (Wald, 2005a). Local opinion is by no means unanimous against Indian Point. Some political leaders are concerned that the plants have 1,200 employees and pay significant taxes to local schools and governments (Westchester County, 2003). Dan O’Neill, mayor of Buchanan, New York, home of the plant, is supportive of the facility (Purdy, 2003). Others are concerned over the reliability of the New York City power supply and potential increases in the costs of electricity. CRITERIA FOR EVALUATING REPLACEMENT OPTIONS The opportunities or options for replacing the Indian Point power plant are constrained by various technological, regulatory, and socioeconomic elements. These need to be taken into account in developing options for maintaining a reliable electric energy supply for southern New York State, while allowing for growth in the region. Each of the constraints derives from somewhat different technological, regulatory, or cost considerations, many of which are unique to New York State. These constraints will affect both the choice and the timing of change in supply if Indian Point is considered for retirement. For instance, the electricity supply available in New York currently relies heavily on Indian Point as a major baseload contributor to the power supply needed in the New York metropolitan area. Replacement of this capacity would require major efforts in new generation, transmission, and demand management. Reliability of power supply depends on several factors, 11 Information detailing these concerns can be found at the websites for the respective organizations, including www.riverkeeper.org, www.citizen.org, and www.ipsecinfo.org. Accessed March 2006.

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs including fuel availability, generation reserve, peaking load, and the growth rate of demand locally and in the region. Reliable electricity also hinges on the stability of the transmission-distribution system. In general, the NYCA system is carefully balanced to account for the location and operation of baseload plants, as well as intermediate and peaking units. Balancing is complicated by the nature of the generation, which includes not only conventional fossil and nuclear power sources but a variety of other technologies in the system, including hydroelectric units, wind power, and co-generated power at industrial facilities. Safety has motivated this study to a great extent. Concern for public safety associated with a nuclear power plant close to the New York metropolitan area is substantial. However, there are additional considerations related to energy security and public safety. Security of the plant site must be maintained whether or not the plant is retired because it contains radioactive material, including stored spent fuel rods. Another energy security concern is fuel availability. In particular, most new generating units are fueled by natural gas, but gas supplies are limited and becoming increasingly expensive. Lengthy blackouts, whether caused by inadequate fuel supplies or transmission system instability, also threaten public health and safety. Imports of LNG may be required, but LNG also raises safety as well as energy security issues. Adding to the complexity of decisions on closing Indian Point are issues of costs. Electricity costs are likely to rise if the area’s low-cost power generator is retired. In addition, if the plant’s lifetime is shortened, compensation to the owner may be required. Furthermore, the site will continue to require extensive security measures to protect the spent fuel until a more permanent storage facility is available. Costs are discussed in Chapters 4 and 5. A complex web of environmental regulations must be considered with any alternative to the Indian Point plant. Regulations include national and local air and water quality and thermal discharge requirements as well as the possibility of constraints on greenhouse gas emissions associated with carbon fuel combustion. At the present time, air quality constraints are the most stringent for most alternative technologies. These are generally specified in terms of emissions of material regulated as criteria pollutants or hazardous air pollutants under the Clean Air Act (CAA) and its amendments and other requirements for airborne toxic chemical releases. New power plant sources are permitted only under very stringent constraints with regard to the CAA pollutants. Finally, closing Indian Point and building new facilities, presumably at least partly elsewhere, would make significant differences in employment, tax base, and other community impacts. These changes might be positive or negative, but they must be included in the consideration of replacements for Indian Point. Given the constraints corresponding to these criteria for the selection of options, the range of technologies available can be reduced substantially. It is unlikely that a 2,000-MW power plant would be built as an exact replacement for Indian Point, to be available just as Indian Point was closed. A package of demand and supply options, the latter possibly including new transmission lines as well as new generation, seems more plausible. The committee uses the following criteria to judge the proposed replacement packages for Indian Point: Would the combination of demand and supply options provide adequate energy to replace that provided by Indian Point? Would the generation and transmission system be adequate to deliver the energy reliably to end users? How would the new combination of demand and supply options compare with Indian Point in terms of security of fuel supply for new generation? How would economic costs, especially to the consumer, compare with continued operation of Indian Point? How would environmental emissions and other impacts compare with continued operation of Indian Point? What would be the impacts on local communities from closing Indian Point and replacing it with these options? CONDUCT OF THE STUDY This study was initiated by the U.S. Congress in the fiscal year 2004 Appropriations for the U.S. Department of Energy. The Committee on Alternatives to Indian Point for Meeting Energy Needs was formed in accordance with National Research Council procedures. The committee’s statement of task is presented in the Preface. Biographical sketches of the committee members appear in Appendix A. The committee held five full meetings over the course of the study. The first three meetings included open sessions at which many experts made presentations to the committee. The second meeting was held in White Plains, New York, to allow local residents interested in the issue to attend. Committee meetings and participants are listed in Appendix C. The project’s website also invited viewers to submit comments. In addition to the full committee meetings, several committee subgroups also conducted many conference calls and collectively prepared sections of this report. The committee also contracted for two expert analyses. GE Energy built on its work with NYISO to analyze several scenarios for replacing the power from Indian Point. While NYISO generously allowed the committee to use its database, it should be noted that the scenarios were developed by the committee, not NYISO. Several members of the committee met in Schenectady, New York, to discuss scenarios and analytical methodology with NYISO and GE Energy, in preparation for the committee’s analysis. In addition, Optimal Energy of Bristol, Vermont, refined the 2003 analysis of energy efficiency potential that it had done for the New York State Energy Research and Develop-

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Alternatives to the Indian Point Energy Center for Meeting New York Electric Power Needs ment Authority to focus on the regions that would be impacted by the closure of Indian Point. ORGANIZATION OF THE REPORT There are two general options to consider in replacing Indian Point: reducing demand and increasing supply. As noted above, demand is increasing, but the growth rate can be controlled to some extent. Many efforts already are under way to increase the efficiency of use of electricity or to reduce demand during peaks when reliability concerns are highest. Chapter 2 discusses how those efforts could be expanded if it were necessary to compensate for the loss of Indian Point. It also discusses distributed generation and how that could affect load growth and electricity reliability. Supply options, discussed in Chapter 3, include new generating units and transmission lines that can import power from underutilized generating plants in upstate New York and beyond. In recent years, almost all new generating plants have been fueled by natural gas, but those supplies are becoming strained. Modifying the bulk power system can be complicated, and many factors must be considered. In particular, reactive power has a large effect on transmission capability. The reactive power supplied by Indian Point would also have to be replaced if its units are closed. Chapter 4 discusses institutional factors and various impacts that might result from the replacement of Indian Point with the options discussed in Chapters 2 and 3. Most new generating plants and transmission lines would be built by private companies, which could face daunting obstacles of regulation and financing. New facilities also would create a set of environmental impacts different from those created by Indian Point. Chapter 5 analyzes several scenarios to evaluate the impact of closing Indian Point and replacing it with these other options. The scenarios with compensatory actions to replace Indian Point are to be viewed as representative of the actions that could be taken, not as a recommended path. Other combinations of options might prove less expensive or advantageous from other perspectives. Nor do these scenarios include all of the costs that could be involved, such as buying Indian Point in order to close it, or disposing of the spent fuel now being stored onsite. A series of appendixes follow. Appendixes D through G, which give additional details on the options considered and the committee’s analyses, are reproduced on the CD-ROM that contains the full report but are not included in the printed report owing to space limitations. The committee’s findings and conclusions are discussed in the Summary and Findings that precedes this chapter. This report does not include recommendations as to whether Indian Point should be closed. 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The Impact of Retiring Indian Point on Electric System Reliability. Cambridge, Mass.: Synapse Energy Economics. van Suntum, L.R. 2005. “The cost of nuclear power” (Letter to the Editor). New York Times, May 23. Wald, M. 1982. “Protests grow on Indian Point.” New York Times, August 15. —. 2005a. “County seeks deal on Indian Point, perhaps in vain.” New York Times, June 19. —. 2005b. “Study finds vulnerabilities in pools of spent nuclear fuel.” New York Times, April 7. Westchester County. N.D. “Emergency Planning for Indian Point.” Available at http://www.westchestergov.com/indianpoint/. Accessed March 2006. —. 2003. “Spano and Kaplowitz Announce Next Step in Effort to Replace Nuclear Energy at Indian Point.” Available at http://www. westchestergov.com/currentnews/2003pr/IndianPointRFP.htm. Accessed April 2006. Witt, J.L. 2003. “Review of Emergency Preparedness at Indian Point and Millstone” (Draft). Washington, D.C.: James Lee Witt Associates.