SPP says additional 13,900 MW of coal power imperiled by EPA CO2 plan

Southwest Power Pool (SPP) has released a second analysis of the Environmental Protection Agency (EPA)’s proposed Clean Power Plan (CPP) that indicates a regional compliance approach would meet the plan’s 2030 deadline at an estimated cost of $2.9bn per year in generation-resource capital investment and energy production costs.

SPP’s analysis also indicates up to 13,900 MW of coal-fired generation beyond current transmission-planning assumptions could be at risk of retirement.

The regional transmission organization applied a carbon-cost adder (as a tax on each fossil unit’s CO2 emissions) and added it to existing resource plans. SPP’s assessment found an adder between $30-and-$45 per ton would be the most cost-effective in a regional approach.

“Regional compliance with the CPP by 2030 is possible, and is likely to be less costly than state-by-state compliance,” said Lanny Nickell, vice president of Engineering for SPP. “Our evaluation of a regional approach showed applying a carbon-cost adder is effective, but would still require incremental changes to current resource plans. That will increase the amount of necessary capital investment and lead to higher energy production costs.

“This second analysis does not alter our earlier conclusion that additional infrastructure – and time – is needed to meet the CPP’s proposed CO2 emission goals,” Nickell said. “It takes time to develop a stable, secure, efficient and effective bulk electric power system necessary to support changes of the magnitude being proposed by the CPP.”

The regional compliance assessment was SPP’s second study of the CPP and its impacts on SPP’s region. The study evaluated the CPP’s impact on existing generation resources and publically available resource plans. In the process, SPP developed a regional goal based on estimated share of the EPA’s proposed CO2 goals for states with generation in SPP’s region. A third study currently underway will analyze state-by-state compliance.

The assessment did not evaluate infrastructure needed to support regional compliance with the CPP. According to its latest report, SPP will require a much more intensive planning effort with its stakeholders to ensure regional compliance, along with new tools and metrics to fully identify the appropriate generation and transmission infrastructure.

SPP’s first CPP reliability impact assessment revealed the plan’s implementation timeline does not allow enough time to build appropriate generation and transmission infrastructure. Without needed infrastructure, SPP’s transmission system could face severe overloads, increasing the potential for cascading outages.

SPP published its assessment and submitted comments based on that assessment to the EPA on Oct. 9, 2014.

SPP is a regional transmission organization with 84 members in Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming that serve more than 15 million customers. SPP’s footprint includes 48,537 miles of transmission lines and 370,000 square miles of service territory.

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.