Final CPP impact on ERCOT reliability, power prices less than initial version: report
The final Clean Power Plan may have a lighter impact on Texas than the initial rule, but it could still impair reliability and hike retail prices over the next few years, according to an Electric Reliability Council of Texas report.
On Friday, ERCOT released its analysis of the impact of the final CPP, which shows that in one set of scenarios, an additional 4,000 MW to 4,700 MW of coal-fired generation would retire by 2030 because of the new rules, and energy costs for consumers may increase by as much as 16% by 2030 due to the CPP on its own.
In contrast, a November 17, 2014, ERCOT report about the impact of the preliminary rule indicated the proposed carbon-dioxide limits would result in the retirement of an additional 3,300 MW to 5,700 MW of coal-fired generation more than would otherwise have retired. Also, the 2014 analysis indicated that the preliminary CPP would result in “increased energy costs for consumers in the ERCOT region by up to 20% in 2020.”
“We continue to have concerns about the potential impacts on planning and operation of the ERCOT power grid,” said ERCOT CEO Trip Doggett. “Based on our analysis, we are especially concerned about reliability risks associated with multiple unit retirements within a short time frame.”
ERCOT is designed to “encourage new, more efficient technologies, but that change needs to occur at a pace that supports continued reliability,” Doggett said in a prepared statement.
But John Hall, state director for Environmental Defense Fund’s clean energy program, said reliability should not be a concern because the final CPP included a “safety valve” to allow plants that are needed for reliability to operate in conflict with a state’s carbon reduction plan for a limited period.
And T.J. Ermoian, president of Texas Energy Aggregation, said: “I believe that the rapid advances in solar and energy storage, their speed in getting permitted, and accelerated development brought on by expiration of the alternative energy investment tax credit will fill most any void created by the inevitable retirement of coal plants.”
Under the business-as-usual scenario, absent the CPP, 1,100 MW of natural gas-fired generation would be added by 2030, but with the CPP, an additional 300 MW to 1,800 MW of gas-fired generation would likely be added by 2030, the latest report shows.