ScottMadden Partner Todd Williams says coal-fired electricity will survive as an important part of the domestic electric market, albeit on a smaller scale.
“What we are seeing is a shift in the generation stack, while we are decreasing the use of coal to produce electricity,” Williams said during a recent presentation to an Infocast transmission conference in Washington, D.C.
“We are increasing the use of renewables and natural gas. Barring additional regulatory limitations, we will continue to have coal as an option, just not at historical levels,” Williams said.
Federal government numbers indicate that between 40 GW and 90 GW of coal-fired capacity is being retired between 2014 and 2040, according to the slides that Williams presented at the conference.
Coal power plants are being affected by not only the Environmental Protection Agency (EPA) Clean Power Plan but a number of other federal rules on everything from coal ash to mercury and cooling water intake structures, Williams said.
Meanwhile regional power reserve margins continue to trend downward despite a decline in electricity. Eight of the 21 North American Reliability Council (NERC) assessment areas are at risk of falling below reference margin levels by 2025.
In particular, parts of the West will require significant on-peak available resources by 2025 to maintain the reference margin level, Williams indicated in the presentation.
Coal is being replaced for baseload power generation largely by natural gas. This shift could be complicated by issues surrounding development of natural gas pipelines and related infrastructure as well as coordination with the electric power business.
In December 2015 the U.S. Congress extended the 2.3% Production Tax Credit (PTC) for wind through 2019. But the renewable boom could be tempered by challenges to various state renewable portfolio standards (RPS) challenges – and transmission infrastructure needs, the consultant noted.