THE LUYSTER CREEK ENERGY PROJECT ... - Energy Highway

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A S T O R I A G E N E R A T I N G One of the benefits of the LCEP is that it will provide new, high efficiency, clean electric generation, while reducing emissions. The potential emissions resulting from the additional generating capacity will be offset by implementing the strategies described below. These actions will fully address community concerns and ensure that total air emissions will be reduced by a combination of methods, including: 1. Use of a high efficiency, low emissions combustion turbine technology. 2. Establishment of enforceable emissions limits on existing Astoria Facility Units. 3. Shutdown/retirement of existing Astoria Facility Unit 20. 4. A permit cap on the sulfur content of the fuel oil. 5. The LCEP equipment will employ air cooling. There will be no air emissions from the cooling system; the use of wet cooling would result in additional particulate emissions. Project Justification The LCEP responds to the objectives outlined in the RFI. More specifically it will; Reduce constraints on the flow of electricity to and within the downstate area; Assure long term reliability of the electric system; and Increase efficiency of power generation, particularly in densely populated urban areas. The New York State Reliability Council requires that 83% of the electrical power in New York City (City) or Zone J be supplied by units dedicated to supplying Zone J for system reliability. The Existing Astoria Facility Units are older, less efficient units that are generally used for reliability and high electric load days. Because the Siemens turbine is the most efficient unit commercially available, it will displace the operation of other generating units in the system, including both the older units in the City (including the existing Astoria Facility Units) and also existing combined cycle units which, even though more efficient than older steam generating units, are not as efficient as the LCEP. This displacement will provide a tremendous environmental benefit in reduced air emissions resulting from the generation of electricity. In addition to the environmental benefit, the cost of production of electricity would be reduced due to the higher efficiency of the LCEP equipment. Load profiles and existing capacity resources in the City require that the City have quick start and intermediate load generation capability to meet demand. The LCEP equipment will be designed to start up and shut down quickly, and will have greater operational flexibility than the standard combined cycle facilities currently operating in the City. This flexibility will reduce emissions during start up and shut down periods, and allow the LCEP equipment to be shut down if there are more economical sources available to operate during uneconomic periods. Additionally, the LCEP is consistent with New York City’s PlaNYC, and the New York State Energy Planning process, providing cleaner, more reliable power and upgrading the energy infrastructure. AGC is increasing efficiency (replacing older less efficient generating capacity at the Astoria Facility with a new highly efficient Siemens H-class combustion turbine) operating in a combined cycle configuration. The H class combustion turbine is the most efficient machine available in THE LUYSTER CREEK ENERGY PROJECT MAY 30, 2012 5
A S T O R I A G E N E R A T I N G today’s market. Because NYISO uses economic dispatch to schedule generation resources for operation and LCEP will be one of the most efficient and lowest cost unit in New York City, the LCEP will be one of the first units to be called to operate. Financial The likely financial plan and potential funding sources that would be needed for project success, including long-term contracts, structure and duration required. The project will utilize a traditional project finance structure. Equity will be funded from the balance sheets of AGC and USPowerGen, potentially in partnership with outside investors. Debt financing will be funded through the project finance bank market.. A standard project finance would include a tenor of 5 – 8 years with an initial equity commitment of between 40% - 50% of the total project funding. A long-term contract of at least 5 years would be important to secure attractive financing terms. Name of potential Project Sponsor(s), if applicable, and Sponsor(s) financial commitment to the project AGC will be the main Project Sponsor, potentially in partnership with additional investors. Projected amounts of energy and capacity to be produced or delivered; identification of potential ancillary services and environmental attributes that may be available for sale of delivery. The project has a nameplate rating of 410 MW. It is anticipated that the project will be capable of providing 350 MW UCAP in the summer and 404 MW of UCAP in the winter. In addition, the project is capable of providing quick start, black start, voltage support and reserves. Potential sources of project revenue – As examples, whether the project is currently or expected to be in a New York State Public Service Commission (PSC) proceeding, or whether it would require a power purchase agreement with a creditworthy counterparty, or would rely on power merchant sales It is expected that the project will require some portion of the output to be secured with a power purchase agreement. Projected range of pricing for project products (i.e., energy, capacity, ancillary services and environmental attributes, if applicable). The project economics will benefit from the existing Astoria site infrastructure, including the point of interconnection, deliverability rights, land, gas pipeline, fuel oil storage, as well as shared personnel. These competitive cost advantages - in combination with the state-of-the-art, high efficiency generation technology - will enable the project to be very price competitive relative to all other units in New York City. Risk of price changes due to changes in prices for commodities, manufacturer quotations and other materials and services. The project will be constructed through an engineering, procurement, and construction (EPC) contract which will limit the risk from commodity, manufacturer quotation, and other material and service price changes. In addition, the existing infrastructure from AGC’s adjacent facilities, including a natural gas pipeline, 138 kilovolt (kV) electric transmission line, utility switchyard, water THE LUYSTER CREEK ENERGY PROJECT MAY 30, 2012 6
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THE LUYSTER CREEK ENERGY PROJECT ... - Energy Highway

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