Study Finds Energy Storage Can Save Long Island Electric Customers $390 million over the Next Decade - Replacing 2,300MW of Fossil-Fueled Peaker Power Plants with Energy Storage by 2030 can save customers money, maintain electric grid reliability and reduce air pollution

A new study released by the New York Battery and Energy Storage Technology Consortium (NY-BEST), in partnership with the consulting firm, Strategen, finds that more than 2,300 MW of fossil fueled “peaking” power plants on Long Island can be cost-effectively replaced with energy storage over the next decade, saving Long Island customers more than $390 million over the next ten years and significantly reducing harmful air pollutants. The study, conducted by Strategen, examined the operations of Long Island’s aging fleet of fossil-fueled “peaker” plants, those power plants that operate primarily only during high demand or “peak” times. The analysis shows that it is technically feasible and cost-effective to replace more than 2,300 MW of Long Island’s 4,300 MW fossil-fueled peaker plants with energy storage over the next decade. It also finds that approximately half of the peaker plants, around 1,100 MW, could be retired and replaced with energy storage by 2023. The remaining 1,200 MW could be replaced by 2030, in conjunction with New York State’s plans to increase solar energy, energy efficiency measures, and offshore wind resources.

“Replacing Long Island’s oldest, least efficient, and most polluting fossil-fueled peaker plants today with lower cost, emission-free energy storage is a no-regrets solution for the Long Island Power Authority (LIPA), PSEG Long Island, Long Island electric customers, the environment, and the State of New York, said Dr. William Acker, Executive Director of NY-BEST. “As we work to achieve New York’s nation-leading and mandated goals for a carbon-free electric grid by 2040, energy storage is an essential proven technology that will enable renewable energy, maintain reliability, reduce emissions and provide a resilient electric grid.”

ATehachapi Energy Storage Project, Tehachapi, California
https://en.wikipedia.org/wiki/Battery_storage_power_station 

As part of New York State’s commitment to halting climate change, the State has mandated a carbon-free grid by 2040. The study released October 28, 2020 examines the cost-effectiveness of retiring Long Island’s aging and inefficient fossil-fueled peaker fleet and replacing it with energy storage, a “low-hanging fruit” in the Island’s energy transition. The analysis shows that replacing the aged, polluting peaker fleet will reduce energy costs, create jobs, build a more resilient power system, and reduce air pollution and greenhouse gas emissions in communities across Long Island, including Potential Environmental Justice Areas.

Long Island is home to 26 fossil-fueled power plants, composed of 74 individual turbine units, that seldom operate yet impose significant costs on Long Island electric customers. Of LIPA’s portfolio of 5,667 MW of fossil-fueled generators, 4,357 MW are “peaker plants” that operate at an annual capacity factor of 15% or less (i.e., roughly 15% of the time).

To maintain these peakers, LIPA customers pay an estimated $473 million annually in capacity costs, almost three times the market rate for capacity resources cleared through NYISO’s competitive markets.

Retiring and replacing these aging assets has the potential to create $10.5 million of annual savings in 2021, growing to $150 million annually in 2030. Over the next decade, fossil peaker replacements could save LIPA customers as much as $393 million, representing savings of approximately $360 per household across LIPA’s 1.1 million customers.

“This important and timely study demonstrates the significant potential and cost savings for energy storage on Long Island as we transition to 100% zero-carbon electricity,” said Gordian Raacke, Executive Director of Renewable Energy Long Island. “The findings make it clear that we can take steps today to replace many of Long Island’s antiquated and polluting fossil-fueled power plants with energy storage while saving consumers money.”

"This groundbreaking study shows that, over the next decade, fossil-fuel peakers on Long Island can reliably be replaced by cleaner and cheaper battery storage, along with renewables and efficiency investments,” said Lewis Milford, president of Clean Energy Group, a national nonprofit that works on peaker replacement issues. “In addition to its importance in this New York region, this study gives other cities and states a good roadmap on how to replace the hundreds of dirty, expensive fossil-fuel peakers that now pollute environmental justice communities in other parts of the country.”

“Fossil-fueled peaker plants are dirty, expensive and disproportionately harm environmental justice communities. This study shows what we’ve long known to be true – New York can replace its pollution emitting peaker plants with emissions-free energy storage while saving consumers money. It’s a win-win. Achieving New York’s nation-leading climate goals requires that we go all-in on clean energy solutions, and fast. Scaling-up energy storage must be part of New York’s climate strategy – not only on Long Island, but all across the state,” said Chris Casey, Senior Attorney at NRDC.

The full Report can be viewed here https://www.strategen.com/reports-1/ny-longisland-peaker.

Key results of this study show: 

• It is feasible and cost-effective to replace 1,116 MW of Long Island’s fossil-fueled peaker plants with energy storage by 2023 and over 2,300 MW by 2030.
• Potential savings of up to $393 million of savings can be achieved for LIPA customers over the next decade by retiring and replacing aging fossil assets.
• Replacing peakers with storage will eliminate 2.65 million metric tons of CO2, 1,910 tons of NOx, and 639 tons of SO2 of emissions annually, resulting in societal benefits of $163 million annually.
• Of the 2,300 MW of fossil peaker plant replacements, 334 MW could be retired and replaced immediately, and another 782 MW could be phased out by 2023, coinciding with the implementation of local emission control regulations and the expiration of existing LIPA long-term contracts.
• In the East End of Long Island there is a near-term opportunity for up to 90 MW of fossil peakers to be displaced with energy storage, and additional opportunities over time as local constraints are addressed.

The New York Battery and Energy Storage Technology (NY-BEST) Consortium www.ny-best.org is a non-profit corporation and industry-led consortium with more than 185 organizational members. NY-BEST’s mission is to catalyze and grow the energy storage industry and establish New York State as a global leader in the energy storage industry. 

Press Release dated October 28, 2020

Lazard Releases Annual Levelized Cost of Energy (LCOE) and Levelized Cost of Storage (LCOS) Analyses

Lazard Ltd has released its annual in-depth studies comparing the costs of energy from various generation technologies and the costs of energy storage technologies for different applications.

Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 14.0) shows that as the cost of renewable energy continues to decline, certain technologies (e.g., onshore wind and utility-scale solar), which became cost-competitive with conventional generation several years ago on a new-build basis, continue to maintain competitiveness with the marginal cost of selected existing conventional generation technologies.

Lazard’s latest annual Levelized Cost of Storage Analysis (LCOS 6.0) shows that storage costs have declined across most use cases and technologies, particularly for shorter-duration applications, in part driven by evolving preferences in the industry regarding battery chemistry.

This year’s LCOE, for the first time, includes a study of hydrogen as a supplemental fuel component for combined cycle gas generation.

“As the costs of utility-scale wind and solar continue to decline and compete with the marginal cost of conventional energy generation, the focus remains on tackling the challenge of intermittency,” said George Bilicic, Vice Chairman and Global Head of Lazard’s Power, Energy & Infrastructure Group. “For the first time, we have integrated green and blue hydrogen into our analyses, which recognizes the energy sector’s increasing appreciation of hydrogen’s potentially disruptive and strategic role in managing the intermittency of renewable power generation.”

LCOE 14.0

• The cost of generating energy from onshore wind and utility-scale solar projects fell by 2% and 9%, respectively, over the past year.

• While the reductions in costs continue, their rate of decline has slowed, especially for onshore wind. Costs for utility-scale solar have been falling more rapidly (about 11% per year) compared to onshore wind (about 5% per year) over the past five years.

• When U.S. government subsidies are included, the cost of onshore wind and utility-scale solar is competitive with the marginal cost of coal, nuclear and combined cycle gas generation. The former values average $31/MWh for utility-scale solar and $26/MWh for utility-scale wind, while the latter values average $41/MWh for coal, $29/MWh for nuclear, and $28/MWh for combined cycle gas generation.

• Regional differences in resource availability and fuel costs can drive meaningful variance in the cost of certain technologies, although some of this variance can be mitigated by adjustments to a project’s capital structure, reflecting the availability, and cost, of debt and equity.

LCOS 6.0

• Sustained cost declines were observed across the use cases analyzed in our LCOS for lithium-ion technologies (on both a $/MWh and $/kW-year basis). The cost declines were more pronounced for storage modules than for balance of system components or ongoing operations and maintenance expenses.

• Project returns analyzed in our “Value Snapshots” continue to evolve as hardware costs decline, and the value of available revenue streams fluctuate with market fundamentals.

• Project economics analyzed for standalone behind-the-meter applications remain relatively expensive without subsidies, while utility-scale solar PV + storage systems are becoming increasingly attractive.

• Long-duration storage is gaining traction as a commercially viable solution to challenges created by intermittent energy resources such as solar or wind.

When U.S. government subsidies are included, the cost of onshore wind and utility-scale solar is competitive with the marginal cost of coal, nuclear and combined cycle gas generation. The former values average $31/MWh for utility-scale solar and $26/MWh for utility-scale wind, while the latter values average $41/MWh for coal, $29/MWh for nuclear, and $28/MWh for combined cycle gas generation.

While the reductions in costs continue, their rate of decline has slowed, especially for onshore wind. Costs for utility-scale solar have been falling more rapidly (about 11% per year) compared to onshore wind (about 5% per year) over the past five years.

Selected regional differences (i.e., resource availability and fuel costs) can drive meaningful variance in the LCOE values of certain technologies, though some of this variance is mitigated by adjustments to a project’s capital structure to reflect market conditions that drive the availability, and cost, of debt and equity capital.

Lazard’s latest annual Levelized Cost of Storage Analysis (LCOS 6.0) shows that storage costs have declined across most use cases and technologies, particularly for shorter-duration applications, in part driven by evolving preferences in the industry regarding battery chemistry.

https://www.lazard.com/media/451456/lcoe-lcos-2020-press-release.pdf
https://www.lazard.com/perspective/levelized-cost-of-energy-and-levelized-cost-of-storage-2020/
Lazard www.lazard.com
Press Release dated October 19, 2020

Health costs of air pollution in European cities and the linkage with transport

Executive Summary

This study investigates the health-related social costs of air pollution in 432 European cities in 30 countries (the EU27 plus the UK, Norway and Switzerland). Social costs are costs affecting welfare and comprise both direct health care expenditures (e.g. for hospital admissions) and indirect health impacts (e.g. diseases such as COPD, or reduced life expectancy due to air pollution). These impacts affect welfare because people have a clear preference for healthy life years in a good and clean environment.

As a clean environment is not something that can be bought in the marketplace, however, a robust methodology is required to monetize them in order to quantify the wider public health impacts.

Environmental economists have performed numerous studies to quantify the impacts of air pollution on health and monetize these as social costs. These studies were used to develop the methodological framework adopted in the present study, which encompasses sixteen health impacts attributable to air pollution by fine particulate matter, ozone and nitrogen oxides (Table 2, Page 15). Using data on reported air quality in the Urban Audit statistics and the EEA Air Quality network, the physical impacts on human health were quantified using concentration-response functions based on the recommendations of the World Health Organization (WHO). The physical impacts were subsequently monetized using a valuation framework developed in the peer-reviewed Handbook of External Costs published by the European Commission’s Directorate General for Mobility and Transport, DG MOVE. The resulting social costs incurred in a specific city were then determined from the air pollution levels reported there and the size, age structure and living standards of the population in that particular city.

For all 432 cities in our sample (total population: 130 million inhabitants), the social costs quantified were over € 166 billion in 2018. In absolute terms, London is the city with the highest social costs. In 2018, the loss in welfare for its 8.8 million inhabitants totalled €11.38 billion. London is followed by Bucharest, with an annual loss in welfare of €6.35 billion and Berlin, with an annual loss of €5.24 billion. City size is a key factor contributing to total social costs: all cities with a population over 1 million feature in the Top 25 cities with the highest social costs due to air pollution (see Table 1).

In 2018, on average every inhabitant of a European city suffered a welfare loss of over €1,250 a year owing to direct and indirect health losses associated with poor air quality. This is equivalent to 3.9% of income earned in cities. It should be noted that there is a substantial spread in these figures among cities: in the Romanian capital Bucharest total welfare loss amounts to over €3,000 per capita/year, while in Santa Cruz de Tenerife in Spain it is under €400/cap/yr. In many cities in Bulgaria, Romania and Poland the health-related social costs are between 8-10% of income earned. Most of these costs relate to premature mortality: for the 432 cities investigated, the average contribution of mortality to total social costs is 76.1%. Conversely, the average contribution of morbidity (diseases) is 23.9%.

City air pollution stems from many sources: transport activities, household heating and a range of other activities including agriculture and industry. Without further analysis, the relative share of each source cannot be assessed with any certainty. In this study we did investigate the role of city transport in explaining these social costs using econometric methods. Although there is a severe lack of data at the level of individual cities, we do find evidence that transport policies impact the social costs of air pollution, using several proxy indicators that are available for many cities, including commuting times and car ownership.

Our results show that a 1% increase in the average journey time to work increases the social costs of PM10 emissions by 0.29% and those of NO2 emissions even by 0.54%. A 1% increase in the number of cars in a city increases overall social costs by almost 0.5%. This confirms that reduced commuting and car ownership has a positive impact on air quality, thus reducing the social costs of poor city air quality.

Comparison of our study’s findings regarding welfare losses with those from other research shows that our results are sometimes higher than previously found. To a large extent this can be explained by the more recent figures used here for valuing the adverse impacts of air pollution. Our findings provide additional evidence that reducing air pollution in European cities should be among the top priorities in any attempt to improve the welfare of city populations in Europe. The present COVID-19 pandemic has only underscored this. Comorbidities feature prominently in the mortality of COVID-19 patients and among the most important of these are those associated with air pollution.

The figures reported here are cited without uncertainty ranges. In this kind of study, uncertainty bounds are typically around 30-40%, implying that the figures reported here could be a factor 1/3 lower or 1/3 higher. Finally, it should be stressed that our study is based on reported levels of air quality, which may diverge from the actual situation, given that air quality is still relatively sparsely monitored across Europe. As a result, the social costs reported are likely to be an underestimate in some cities. If air pollution levels are in fact higher than the figures reported in official statistics, the social costs will increase accordingly.

https://cleanair4health.eu/wp-content/uploads/sites/2/2020/10/final-health-costs-of-air-pollution-in-european-cities-and-the-linkage-with-transport-c.pdf

by: Sander de Bruyn and Joukje de Vries

Delft, CE Delft, October 2020

Publication code: 20.190272.134

Client: A consortium of public interest NGOs in ten European countries ( ES, FR, DE, PL, SI, HU, RO, BG, NL, IT) led by the umbrella organisation European Public Health Alliance (EPHA) commissioned this report

Shift to electric vehicles in emerging markets will ‘end oil era’ - China leads transition that may slash growth in global oil demand by 70% – Nothing to lose but your chains: The emerging market transport leapfrog

China is leading a switch to electric vehicles (EV) in emerging markets which will save governments $250 billion a year in oil imports and cut expected growth in global oil demand by 70%, finds a new report from the financial think tank Carbon Tracker published on Friday.

It’s thought to be the first study to reveal that transport in emerging markets accounts for more than 80% of all expected growth in oil demand up to 2030, based on an analysis of the International Energy Agency’s business as usual scenario. Half of the growth is forecast to come from China and India.

But the report notes that these countries are already reducing their dependence on oil and actively supporting EVs as prices fall close to those of petrol and diesel vehicles. China leads the world in the deployment of EV and India is following the same path.

“This is a simple choice between growing dependency on what has been expensive oil produced by a foreign cartel, or domestic electricity produced by renewable sources whose prices fall over time. Emerging market importers will bring the oil era to an end.” notes Kingsmill Bond, Carbon Tracker energy strategist and report lead author.

Most governments have strong incentives to electrify their transport systems. Emerging markets – India, China, South East Asia and most of Africa – spend huge sums on oil imports every year, and two thirds (68%) is used for transport. Oil imports cost 1.5% of China’s GDP and 2.6% of India’s GDP.

Nothing to lose but your chains: The emerging market transport leapfrog calculates that a switch to EVs could save emerging markets up to $250 billion a year collectively on oil imports by 2030, more than enough to pay for the infrastructure needed to support electrified transport. Annual savings would be over $80 billion in China and over $35 billion in India.

There are also strong public health grounds to cut oil use. Pollution linked to road transport causes 285,000 deaths a year in oil-importing emerging markets, including 114,000 in China and 74,000 in India, reports the International Council on Clean Transportation.

Battery prices have fallen 20% a year since 2010, stimulating huge new markets for EVs. The next few years will see them fall from $135/KWh to below $100/KWh, the point at which EVs become as cheap to buy as conventional vehicles. By 2030 they will be cheaper still – BNEF forecasts a battery price of $61/KWh while carmakers like VW and Tesla expect $50/KWh.

Chinese central planning has supported the country’s EV industry for many years as a means to reduce oil dependency and establish a lead in the emerging technology. China’s BYD is now the world’s fifth biggest carmaker, with a larger market capitalisation than General Motors.

In 2019, EVs accounted for 61% of China’s two-wheeler sales and 59% of bus sales, and the government plans that by 2025 one in five cars sold will be an EV. President Xi Jinping’s recent commitment to achieve net zero emissions by 2060 implies that all car sales in China will need to have an EV drivetrain by 2035.

Other countries are poised to follow. The Indian government plans for EVs to make up 30% of car sales by 2030, but local forecasters believe that by that date 30% of cars and 80% of two-wheeler sales could be electric.[1]

Shift to EVs will pay for itself

Countries can finance the shift to EVs from the huge savings they will make on oil imports. Carbon Tracker calculates that the cost of importing oil for the average car is ten times higher than the cost of the solar equipment needed to power an equivalent EV.[2]  The annual cost per car of imported gasoline is almost the same as the total cost of local charging infrastructure for an EV.[3]

Moreover, switching to EVs brings wider economic benefits by cutting the price of any remaining oil imports. Emerging markets are the single biggest driver of expected growth in demand for oil, so if that trend plays out it could contribute to prices falling by up to a quarter.

Lead in Drinking Water and Birth Outcomes: A Tale of Two Water Treatment Plants

Abstract

The recent drinking water crisis in Newark, New Jersey's largest city, has renewed concerns about the lead-in-water crisis becoming a persistent and widespread problem owing to the nation's aging infrastructure. We exploit a unique natural experiment in Newark, which exogenously exposed some women in the city to higher levels of lead in tap water but not others, to identify a causal effect of prenatal lead exposure on fetal health. Using birth data that contain information on mothers' exact residential addresses, we find robust and consistent evidence that prenatal exposure to lead significantly raises the probability of low birth weight or preterm births by approximately 1.4 to 1.9 percentage points (14-22 percent), and the adverse effects are largely concentrated among mothers of lower socioeconomic status. Our findings have important policy implications in light of the long-term impact of compromised health at birth and the substantial number of lead water pipes that remain in use as part of our aging infrastructure.

...

With infant health being an important predictor of later-life outcomes, these estimates are critical towards evaluating the cost-benefit calculus of infrastructure investments, including replacing all of the nation’s lead service lines, an initiative supported by the EPA as well as many states and communities at a potential cost of between $29 to $47 billion (EPA, 2019)... The EPA (2019) noted 6.1–10 million lead service lines (LSL) nationally, with an average estimated replacement cost of $4,700 per LSL

https://www.nrdc.org/experts/nrdc/groups-plan-lawsuit-response-high-lead-levels-newark-drinking-water

...

In March 2019, Newark commenced a program to remove and replace all of the city’s lead service lines in the water system at no cost to the homeowner, at a projected public cost of $90–$180 million. With the lifetime societal economic burden of a preterm birth estimated to be approximately $66,331 2018 dollars. The Institute of Medicine (2007) estimated the societal burden of a preterm birth to be $51,589 in 2005 dollars. The societal cost of the lead crisis in Newark could amount to $1.99–$2.65 million per year, just from an estimated increase of 30 to 40 preterm births linked to the heightened lead exposure each year. [30 (or 40) preterm births×66,331 per preterm births = $1.99 million (or $2.65 million)],

Assuming a discount rate for public policy of 2 percent based on the social rate of time preference (Council of Economic Advisers, 2017), societal cost savings from averting this adverse fetal health could be between $100 and $133 million, significantly offsetting the cost of public infrastructure investment. [There is ... debate as to the appropriate discount rate to apply for public policy (see for instance, Council of Economic Advisers,2017; Li and Pizer, 2018) depending on the social rate of time preference or the social opportunity cost of capital, and the length of the time horizon under consideration. The U.S. federal guidance requires agencies to use both a 3% and a 7% real discount rate in regulatory cost-benefit analyses. Under this guidance, the societal cost savings of averting the adverse fetal health would be between $66.3 million and $88.3 million (social discount rate of 0.03) and between $28.4 million and $37.9 million (social discount rate of 0.07). Clearly, the cost implications are sensitive to the discount rate employed. With long-term real interest rates decreasing substantially over the past decade, a recent issue brief by the Council of Economic Advisers (2017) recommends lowering the estimate of the social discount rate in applications to public policy cost-benefit calculus.

...

https://www.nber.org/papers/w27996

by Dhaval M. Dave & Muzhe Yang

National Bureau of Economic Research (NBER) www.NBER.org

Working Paper 27996; October 2020

Monetising the savings of remotely sensed data and information in Burn Area Emergency Response (BAER) wildfire assessment

Abstract

We used a value of information approach to demonstrate the cost-effectiveness of using satellite imagery as part of the Burn Area Emergency Response (BAER), a US federal program that identifies imminent post-wildfire threats to human life and safety, property and critical natural or cultural resources. We compared the costs associated with producing a Burn Area Reflectance Classification map and implementing a BAER when imagery from satellites (either Landsat or a commercial satellite) was available to when the response team relied on information collected solely by aerial reconnaissance. The case study included two evaluations with and without Burn Area Reflectance Classification products: (a) savings of up to US$51 000 for the Elk Complex wildfire incident request and (b) savings of a multi-incident map production program. Landsat is the most cost-effective way to input burn severity information into the BAER program, with savings of up to US$35 million over a 5-year period.

https://en.wikipedia.org/wiki/Wildfire#/media/File:The_Rim_Fire_in_the_Stanislaus_National_Forest_near_in_California_began_on_Aug._17,_2013-0004.jpg

https://www.publish.csiro.au/wf/WF19209  https://doi.org/10.1071/WF19209

by Richard Bernknopf, Yusuke Kuwayama, Reily Gibson, Jessica Blakely, Bethany Mabee, T.J. Clifford, Brad Quayle, Justin Epting, Terry Hardy, and David Goodrich

International Journal of Wildland Fire - https://www.publish.csiro.au/wf

Published online: 22 October 2020 

via/hat tip Resources For the Futre www.RFF.org https://www.rff.org/publications/journal-articles/monetising-savings-remotely-sensed-data-and-information-burn-area-emergency-response-baer-wildfire-assessment/