Remaining coal plants could run less frequently under CO2 plan, NERC says

The North American Electric Reliability Corp. (NERC) is the latest organization to weigh in on the impact of the Clean Power Plan proposed by the Environmental Protection Agency (EPA) and NERC said the regulatory package would speed the transition from coal to natural gas.

Even much of the coal-fired capacity that remains online beyond 2030 could still be used a lot less, NERC predicted in its April 21 analysis.

Between 14 GW and 22 GW of coal generation remaining online through 2030, however, are considered at risk of retiring due to plant economics associated with running the units infrequently.

NERC’s assessment modeled scenarios focused on evaluating generation and transmission adequacy and potential reliability impacts.

The 69-page document is titled Potential Reliability Impacts of EPA’s Proposed Clean Power Plan: Phase I.

In June of 2014, EPA issued its proposal to have states draft implementation plans designed to curb CO2 emissions 30% by 2030.

In August 2014, NERC’s board directed NERC staff to develop a series of special reliability assessments to examine the potential risks to reliability that may arise from the implementation of the CPP rule

NERC’s reliability-centered assessment consists of a three-part scenario analysis focused on resource and transmission adequacy and a review of existing studies by key reliability authorities. These key scenarios serve as a snapshot-in-time and were designed to provide benchmarks and guidance about the potential reliability aspects of implementation.

“Our assessment of the draft CPP affirms an accelerating transformation of the bulk power system toward increased dependency on natural gas, wind and solar resources,” said Thomas Burgess, vice president and director of Reliability Assessment and Performance Analysis. “While NERC recognizes that parameters of the final rule remain uncertain and could affect the results of our analysis, this study provides important insights of potential resource adequacy needs for stakeholders and policymakers to consider.”

NERC said the proposal will require greater understanding by policymakers of essential reliability services (frequency response, voltage support and ramping capability).

NERC also said that industry needs more time to develop coordinated plans to address shifts in generation and transmission reinforcements to address the emission targets.

“The transformative shift in resource use leads to the need for more transmission and gas infrastructure reinforcements, which will require additional time beyond currently proposed interim targets,” said John Moura, director Reliability Assessments. “The potential reliability risks resulting from the Clean Power Plan make it critical for states and regions to develop plans in consultation with transmission planners and planning coordinators.”

Natural gas plants, pipelines and other infrastructure will require time for everything from surveying and acquiring property to gaining necessary licenses and construction. Long lead times are also associated for planning, licensing, and constructing electric transmission lines and substations, NERC said.

The interim target date within the proposed CPP requires significant reductions (approximately 80% of the total CO2 reductions) by 2020. Fundamental changes in both the generation mix and transmission and gas pipeline infrastructure were identified that would require implementation time beyond these interim target dates, NERC said.

“Multi-regional entity coordination will be needed to accommodate long lead times and ensure reliability during the implementation period,” NERC said in the report.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.