The Poseidon Project Long Island’S Energy Future Begins with Transmission
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THE POSEIDON PROJECT LONG ISLAND’S ENERGY FUTURE BEGINS WITH TRANSMISSION. THE POSEIDON PROJECT LONG ISLAND’S ENERGY FUTURE BEGINS WITH TRANSMISSION. Poseidon Transmission LLC's Response to New York Energy Highway's Request For Information May 30, 2012 2 THE POSEIDON PROJECT LONG ISLAND’S ENERGY FUTURE BEGINS WITH TRANSMISSION. THE POSEIDON PROJECT EXECUTIVE SUMMARY THE POSEIDON PROJECT LONG ISLAND’S ENERGY FUTURE BEGINS WITH TRANSMISSION. The Poseidon Project is a 500MW submarine HVDC The Project also provides ratepayers with great value: interconnection from the heart of PJM’s bulk power grid to substantial benefits at a highly competitive cost, i.e. capacity the heart of Long Island’s T&D network. This 200 kV system- and energy prices well below new-build costs on Long Island. to-system link withdraws power from the Dean’s substation, The Project’s state-of-the art cable and converter stations offer one of PJM’s strongest interconnection points, and injects availability factors upward of 97% and virtually unsurpassed it into the Ruland Road substation, one of Long Island’s reliability. Cost, availability, and reliability combine with electric strongest interconnection points. For decades to come, this and environmental attributes to make this off-island cable grid-to-grid connection – at the heart of each system – will link a compelling part of a long-term economic development reduce congestion within Nassau and Suffolk counties and strategy. the downstate region, and enhance the diversity of generation sources supplying Long Island. Poseidon’s development team includes many of those who brought the Neptune Regional Transmission System (RTS) This controllable tie between the PJM and NYISO regions to Long Island five years ago, joined by Exelon Corporation. fortifies the reliability of Long Island’s – and all of downstate’s Many of the concerns that led to development of Neptune – – transmission grid. Long Island faces many electrical easing constraints, diversifying generation sources, enhancing challenges: it sits at the end of natural gas and oil delivery reliability, protecting the environment, controlling costs – have systems and has little ability to cope with fuel supply only gained importance since then. Like Neptune, the Poseidon interruptions; surrounded by congested lines and water, line brings these many benefits. the Island’s ability to obtain additional capacity is limited. Planned retirements of local generation only increase the The Poseidon Project’s major impact on downstate New York urgency of accessing new sources of power. On the other – eased electricity constraints, increased diversity of power hand, new generation is costly, difficult to permit, and brings generation, lower cost, reliable power supporting economic environmental challenges. The Poseidon Project addresses development, and substantial positive net environmental and each of these challenges. It increases the long-term reliability job creation benefits – make this a valuable infrastructure of the Long Island grid by securing diverse generation sources. investment for Long Islanders and all New Yorkers now and Capacity on this line can be made available at substantial long into the 21st Century. discounts to new or re-powered on-Island generation, bypasses existing constraints on capacity, and allows aging, high-emission power plants to close. It enables Long Island customers to access PJM’s ample, affordable and growing renewable resources, thereby positioning the region to meet the State’s ambitious RPS targets of 30% by 2015. The Poseidon line itself creates no air emissions or water discharges, preserves landscapes and vistas, and reduces net emissions and discharges on Long Island, protecting the Island’s ecosystem as well as its aquifer. 3 4 THE POSEIDON PROJECT LONG ISLAND’S ENERGY FUTURE BEGINS WITH TRANSMISSION. THE POSEIDON PROJECT CONTENTS LONG ISLAND’S ENERGY FUTURE BEGINS WITH TRANSMISSION. Project Justification and Overview 6-9 Respondent Information 11 Project Description 12-17 Financial Information - Capacity and Performance 18 Permit and Approval Process with Development Schedule 19-21 Conclusion 23 5 PROJECT JUSTIFICATION AND OVERVIEW Poseidon Transmission LLC is delighted to provide the following EASED POWER FLOWS TO AND WITHIN THE DOWNSTATE REGION information about its proposed Poseidon Project to the The Poseidon Project's core-to-core grid interconnection offers members of the New York Energy Highway Taskforce. the ideal points for power to flow from the PJM bulk grid into Long Island’s transmission and distribution network. There The New York Energy Highway’s Request For Information will be no congestion on the new line and by adding 500 recognized that Long Island experiences high demand for MW of supply to Zone K, it will relieve bottlenecks within the electric power but that most of the low-cost electricity that downstate grid. From an electrical power flow viewpoint, this it needs is not produced on the Island and is subject to interconnection to the PJM bulk grid anchors Long Island to LONG ISLAND’S ENERGY FUTURE BEGINS WITH TRANSMISSION. transmission constraints. the core of the PJM grid and offers its ratepayers unequalled security and reliability of electricity supply. The interconnection The Poseidon Project targets this need. point at Ruland Road, in the heart of the Long Island Power Authority (“LIPA”) service territory, optimizes deliverability, It provides Long Island with 500 MWs of capacity, energy, and helps meet Long Island’s formidable locational reserve as well as black start and other ancillary services from a requirements. Finally, with the Poseidon Project’s expected substation at the core of PJM’s 500 kV bulk power grid THE POSEIDON PROJECT 97.5% operational availability, the power supply is secure. through a controllable, high voltage, direct current (HVDC) At the request of New York State decision-makers, this undersea and underground transmission cable. The Project, interconnection can be configured to offer bi-directional flow of now under development, is led by a nationally-recognized energy, which could realize further efficiencies and economies independent transmission company, which has already in the operation of the downstate grid. participated in two similar transmission projects in the New York/New Jersey area, now joined by one of the country’s GREATER DIVERSITY OF POWER GENERATION RESOURCES largest energy companies with an extraordinary reputation The link with PJM provides Long Island with the substantial and an unrivalled balance sheet. New York State decision- diversity of power generation resources that only a system-to- makers and Long Island ratepayers can be confident that the system interconnection can offer. Comparably sized on-Island project will provide the benefits described below and can be generation or even off-Island generation with a generator completed on time, on budget, and with minimal risk to the lead line would tether the region to a single plant and its fuel public. source for decades. A system-to-system interconnection, on the other hand, offers Long Island the full range of resources The members of Poseidon Transmission LLC, Anbaric Poseidon found in PJM, the world’s largest and most diverse wholesale Holding LLC (“Anbaric”) and Exelon Transmission Company power market. With PJM’s diverse generation base, the ability LLC, (“Exelon Transmission”), describe below the compelling to hedge risk, contract with a range of suppliers, and access benefits of the Poseidon Project, in response to the “Request traditional and renewable sources of power is unequaled. For Information” issued by the New York Energy Highway on April 11, 2012. 6 THE POSEIDON PROJECT LONG ISLAND’S ENERGY FUTURE BEGINS WITH TRANSMISSION. ENHANCED RELIABILITY FOR DECADES take steps to close old, high-emitting power plants in Long The benefits of transmission infrastructure are realized over Island. The line will reduce local air and water emissions on an unusually long time horizon. Transmission assets like Long Island and provide residents with substantial net positive a buried HVDC cable have useful lives of fifty years and environmental benefits at a highly attractive pricing. The beyond. Because of the unsurpassed interconnection points, converter station near Ruland Road offers attractive capital eased power flows, and step-up in diversity of generation, assets that will be part of the tax base for local authorities for the Poseidon Project offers Long Island ratepayers increased years to come. reliability long into the future. The HVDC voltage source converter (VSC) black start and reactive power capability FLEXIBILITY TO MEET FUTURE ENERGY NEEDS AND GOALS further strengthen the backbone of Long Island’s bulk power By adding 500 MW of supply to the heart of Long Island, grid. Finally, the capacity of the cable and its interconnection Poseidon gives New York’s energy planners the ability to point at Ruland Road have been chosen to optimize the meet many of the State’s energy and economic goals. First benefits that introduction of a large transmission resource and foremost, by providing a cost-effective, reliable source might have on operating reserve requirements, locational of capacity and energy, Poseidon will relieve congestion capacity requirements, thermal and short circuit compliance, into Zone K from upstate New York. Secondly, Long Island’s and existing transmission transfer capability. It is difficult to power demands are met in part by aging and inefficient units. imagine