Offshore Wind Transmission Study Comparison of Options
Total Page:16
File Type:pdf, Size:1020Kb
Offshore Wind Transmission Study Comparison of Options prepared for New Jersey Board of Public Utilities December 29, 2020 Page 1 Table of Contents I. Executive Summary ....................................................................................................................1 Recommendation ................................................................................................................................. 4 II. Background ................................................................................................................................5 Radial Export Cables ............................................................................................................................. 5 Ocean Grid ............................................................................................................................................ 6 Hybrid System ....................................................................................................................................... 8 Power Corridor ..................................................................................................................................... 8 III. Information Gathering Process ................................................................................................. 10 July-August 2020 OSW Transmission Stakeholder Meetings ............................................................. 12 IV. European Lessons Learned ........................................................................................................ 16 Study 1: Offshore Wind - A European Perspective, New York Power Authority ................................ 18 Study 2: Market Design for an Efficient Transmission of Offshore Wind Energy, DIW ECON ............ 21 Study 3: Connecting Offshore Wind Farms – A Comparison of Offshore Electricity Grid Development Models in Northwest Europe, Navigant Netherlands B.V. ................................................................. 24 Study 4: Transmission Policy Lessons from Europe’s Offshore Wind Experience, Dr. Deniz Ozkan .. 28 Lessons Learned Findings ................................................................................................................... 29 V. Offshore Transmission for New Jersey ...................................................................................... 33 Early OSW Development ..................................................................................................................... 33 Current OSW Development ................................................................................................................ 34 New Jersey OSW Potential ................................................................................................................. 35 VI. Capital Costs of Offshore Transmission Designs ......................................................................... 38 Stakeholder Positions on Capital Cost ................................................................................................ 38 Competitive Pressures to Minimize Capital Costs .............................................................................. 40 PJM Studies for New Jersey’s State Agreement Approach................................................................. 42 Onshore Capital Costs ......................................................................................................................... 43 VII. Project-on-Project Coordination and Risk .................................................................................. 44 Coordination Challenges ..................................................................................................................... 44 Regulatory Risks .................................................................................................................................. 46 OSW Project Delays ............................................................................................................................ 47 German Project-on-Project Risk Example ........................................................................................... 49 U.S. Examples ...................................................................................................................................... 51 Project-on-Project Risk Impacts on Ratepayers ................................................................................. 52 VIII. Environmental Impacts ............................................................................................................. 53 NY/NJ Ocean Grid ............................................................................................................................... 54 Construction Method.......................................................................................................................... 54 BOEM Environmental Studies ............................................................................................................. 56 Environmental Impacts During Construction ..................................................................................... 57 Environmental Impacts During Operation .......................................................................................... 58 Future Proofing ................................................................................................................................... 61 - i - IX. Technology, Redundancy, Reliability, and Losses ....................................................................... 63 Overview ............................................................................................................................................. 63 HVAC and HVDC Technology .............................................................................................................. 64 HVAC and HVDC Common and Differentiating Factors ...................................................................... 65 Cable and Converter Reliability .......................................................................................................... 66 Redundancy ........................................................................................................................................ 67 Performance ....................................................................................................................................... 67 Engineering, Procurement, and Construction .................................................................................... 68 Losses .................................................................................................................................................. 69 Operating and Maintenance Costs ..................................................................................................... 69 Ocean Grid Energy Transfers .............................................................................................................. 70 HVAC and HVDC Applications to Date ................................................................................................ 71 X. Long-Term Planning versus Flexibility ........................................................................................ 74 Long-Term Planning Considerations ................................................................................................... 74 Headroom at Points of Interconnection ............................................................................................. 75 Extrinsic Benefits................................................................................................................................. 76 XI. Business Structure, Financing, and Ratepayer Risk ..................................................................... 77 Offshore Transmission Business Structures........................................................................................ 77 Onshore Transmission Examples ........................................................................................................ 79 Financing ............................................................................................................................................. 79 Cost Recovery and Ratepayer Risk ..................................................................................................... 81 XII. State Benefits and Procurement Process ................................................................................... 83 State Benefits ...................................................................................................................................... 83 Procurement Process .......................................................................................................................... 84 State Agreement Approach ................................................................................................................ 86 Common Concerns.............................................................................................................................. 86 Appendix 1 – Radial Export Cable, Ocean Grid, and Power Corridor Comparison Table ................... A1-1 - ii - I. Executive Summary Levitan & Associates, Inc. (LAI) prepared this Transmission Study for the New Jersey Board of Public Utilities (Board) to evaluate the range of commercial, technical, environmental, and operational advantages / disadvantages of offshore wind (OSW) transmission options. LAI’s scope of work was centered on the evaluation of radial export cable and ocean