March 5, 2021

New Rules and Old Plants May Strain Summer Energy Supplies

But that may not be the case in the future as stricter air quality rules are put in place. Eastern utilities satisfied demand that day — July 21 — with hefty output from dozens of 1950s and 1960s coal-burning power plants that dump prodigious amounts of acid gases, soot, mercury and arsenic into the air. Because of new Environmental Protection Agency rules, and some yet to be written, many of those plants are expected to close in coming years.

No one is sure yet how many or which ones will be shuttered or what the total lost output would be. And there is little agreement over how peak demand will be met in future summers.

The E.P.A. estimates that a rule on air toxins and mercury that it expects to complete in November will result in a loss of 10,000 megawatts — or almost 1 percent of the generating capacity in the United States. Electricity experts, however, say that rule, combined with forthcoming ones on coal ash and cooling water, will have a much greater effect — from 48,000 megawatts to 80,000 megawatts, or 3.5 to 7 percent.

The Southern Company, which like most coal-burning power companies opposes the new standards, said on Aug. 4 that it would retire 4,000 megawatts of coal-fired generation under the proposed rules. It warned that the closings would “significantly impact customers and the overall U.S. economy as a result of higher costs for electricity and reduced reliability.”

American Electric Power, a multistate utility based in Columbus, Ohio, is saying it will retire 6,000 megawatts. Much of that was scheduled to retire anyway, but the rules have stepped up those retirement dates.

Robert W. Perciasepe, the deputy administrator of the E.P.A., said his agency had not estimated all the retirements that would be set off by rules it was still preparing. His agency, he said, was trying to move promptly through rulemaking and “provide the rational basis for utility planning, instead of this continually rolling ball of uncertainty, which allows people to speculate, and creates a situation where it’s very difficult for competent utility planners to do the work they need to do.”

He said the E.P.A. had been regulating power plant emissions for 40 years, and where necessary to keep the grid stable, had granted delays and exemptions.

The industry is concerned. PJM Interconnection, the regional unit that set the demand record on July 21, has suggested that the E.P.A. rules would put the grid’s reliability at risk. “E.P.A.’s analysis of the impact of the proposed rule may understate the level of expected generation of plant retirements and does not provide sufficient flexibility or time to address potential localized reliability concerns,” it wrote in a statement filed with the agency.

The most likely replacement for the coal plants is new natural gas-powered generators. But PJM and others are complaining that if the E.P.A. follows its intended schedule, utilities will not have much time to decide whether to close or upgrade their old plants, and no one will have time to build new ones.

Marc de Croisset, an analyst for the investment bank FBR, said the uncertainties arose from the scale of the plant closings. “It’s a major transformation,” he said — the biggest since the electric companies shifted away from oil in the 1970s, possibly larger.

On July 20, a record was also set farther to the west, reported by the Midwest Independent System Operator, a parallel organization that stretches from Michigan to Montana and Manitoba.

On Aug. 1 and 2, the Southwest Power Pool, which covers an area from Kansas to New Mexico, set a record. Texas, which is an electrical island in its grid operation, also set new records. And New York State, which forms its own electrical jurisdiction, has come within a whisker of doing so.

Most of the old records had been set in a heat wave at the end of July 2006. Peak electricity use in the intervening years has been stunted by the natural variability of weather and a recession.

The new peaks will shape the planning of the grid. In the eastern United States, electricity is mostly generated near where it is consumed, and if some producers disappear, someone will have to build new generation or new transmission to supply the area from a distant source.

“You always manage toward the peak, and have a reserve margin based on your latest peak,” said Tom Williams, a spokesman for Duke Energy, which does business in areas that experienced a new peak.

Article source: http://feeds.nytimes.com/click.phdo?i=b3a6a8cce52f55a54c7512be94cc9995

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