The North American Electric Reliability Corp. (NERC) says that the ongoing boom in renewable energy projects will be even more profound if the Environmental Protection Agency (EPA) Clean Power Plan is upheld by the courts.
Combined wind and solar capacity will rise by 10- 20 GW over the next 15 years, while coal capacity will decline by up to 27 GW as a result of the EPA’s plan to have states cut power sector CO2 by 32% by 2030, NERC said May 19.
State Renewable Portfolio Standards (RPS) and extensions of production and investment tax credits for renewable energy, along with the Clean Power Plan, are expected to add about 120 GW of wind and solar resources to the bulk power system between now and 2030., NERC concluded in “Potential Reliability Implications of EPA’s Clean Power Plan – Phase II.”
Without the Clean Power Plan, the state standards and federal tax credits would add 100-110 GW of renewable capacity between now and 2030, according to the NERC analysis.
The U.S. Supreme Court has put implementation of the rule on hold until legal challenges are litigated. The full U.S. Circuit Court of Appeals for the D.C. Circuit is scheduled to hear oral arguments on the matter Sept. 27.
The accelerated transition in the mix of generation resources means a greater emphasis on how renewables and other resources provide essential reliability services – voltage control, load ramping and frequency response.
“NERC’s assessment shows that significant changes to the resource mix are occurring regardless of the CPP, but that the CPP accelerates some of these changes, underscoring a potential reliability challenge,” said Thomas Coleman, director of Reliability Assessment. “Generation and transmission planners are encouraged to use this report and its findings to develop more localized studies for both generation and transmission adequacy.”
The Clean Power Plan also will contribute to the trend of lower annual electricity demand growth. Present data shows average growth of 0.61% annually, NERC’s analysis shows this growth rate declining to 0.31% annually.
The CO2 plan expedites this decline by providing direct and indirect incentives for increases in efficiency and other demand-side activities that reduce load.
This 70-page NERC report says there is still plenty that cannot be known about the CPP at this point – from whether it will be overturned by the courts to whether (if upheld) what approach many states might take toward compliance.
CO2 trading might ease the damage for coal power
A mass-based cap and trade program structure is already in place in California and the Northeast, NERC notes.
The grid is already moving away from reliance on coal-fired power plants toward more use of natural gas and renewables. This trend would only accelerate with enactment of the CPP, NERC says.
In what might come as a surprise, the NERC analysis indicates that trading of CO2 allowances under a national trading program could result in more coal use and less natural gas use.
“Depending on the natural gas prices and the availability and liquidity of allowance trading markets or arrangements, coal use could increase given the availability of underused coal resources,” according to NERC. “Increased emissions from coal would be offset by renewables and natural-gas-fired generation.”
If a number of nuclear plants retire prior to their license expiration, it would increase the power grid’s reliance on natural gas and renewables.
“Potential acceleration of nuclear retirements would shift the resource mix and increase renewables and natural-gas-fired generation,” according to the NERC report. “Up to 18 GW of additional renewables and up to 21 GW of additional natural gas generation would be required by 2030 to fill the void from an accelerated level of nuclear retirements versus the CPP Base Case.”
The changes will make it vitally important for planners to ensure an increased amount of electric transmission and natural gas pipeline infrastructure. In addition, planners must be acutely aware of keeping reserve margins at prudent levels, according to NERC.
NERC is a not-for-profit international regulatory authority whose mission is to assure the reliability of the bulk power system (BPS) in North America.