New Wave of Coal Retirements Coming, ERCOT Warns
The Clean Power Plan could force the retirement of up to 4 GW of coal-fired capacity in the region served by the Electric Reliability Council of Texas (ERCOT) starting as soon as 2022, an updated analysis suggests.
The independent system operator that manages about 90% of Texas’ electric load acknowledged that fewer coal units are at risk for retirement by 2030 under the Environmental Protection Agency’s (EPA’s) August-released final plan, compared to its June 2014–issued proposal. However, retirements could increase to about 4.7 GW when federal regional haze requirements are taken into consideration, it said in an Oct. 16-released study, “ERCOT Analysis of the Impacts of the Clean Power Plan: Final Rule Update.”
“This amount of unit retirements could pose challenges for maintaining grid reliability, and these impacts are likely to intensify and occur earlier when the effects of the [Clean Power Plan] are combined with other environmental regulations, particularly EPA’s proposed Regional Haze Federal Implementation Plan (FIP) for Texas,” it said.
“If ERCOT does not receive adequate notification of these retirements, and if multiple unit retirements occur within a short timeframe, there could be periods of reduced system-wide resource adequacy and localized transmission reliability issues,” it warned.
While “there is uncertainty regarding the implementation of the Clean Power Plan in Texas,” the plan could result in increased wholesale and retail energy costs in the ERCOT region, the study says. It says costs could surge 16% by 2030, without accounting for associated costs of transmission upgrades, higher natural gas prices caused by increased gas demand, new ancillary services, and other retirement or balancing costs.