Power Plant Retirements · contributing to retirement decisions. This basic data synthesis cannot...
Transcript of Power Plant Retirements · contributing to retirement decisions. This basic data synthesis cannot...
PowerPlantRetirements:TrendsandPossibleDrivers
Authors:
AndrewMills,RyanWiser,JoachimSeel
EnergyAnalysisandEnvironmentalImpactsDivisionLawrenceBerkeleyNationalLaboratory
November2017
This work was supported by the Transmission Permitting & Technical Assistance Division of the U.S.Department of Energy’s Office of Electricity Delivery and Energy Reliability under Lawrence BerkeleyNationalLaboratoryContractNo.DE-AC02-05CH11231.
Disclaimer
ThisdocumentwaspreparedasanaccountofworksponsoredbytheUnitedStatesGovernment.Whilethisdocumentisbelievedtocontaincorrectinformation,neithertheUnitedStatesGovernmentnoranyagencythereof, nor TheRegents of theUniversity of California, nor anyof their employees,makes anywarranty,expressorimplied,orassumesanylegalresponsibilityfortheaccuracy,completeness,orusefulnessofanyinformation,apparatus,product,orprocessdisclosed,orrepresentsthatitsusewouldnotinfringeprivatelyowned rights. Referenceherein to any specific commercial product, process, or serviceby its tradename,trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement,recommendation,orfavoringbytheUnitedStatesGovernmentoranyagencythereof,orTheRegentsoftheUniversity of California. The views and opinions of authors expressed herein do not necessarily state orreflect thoseof theUnited StatesGovernmentor any agency thereof, or TheRegentsof theUniversityofCalifornia.
Ernest Orlando Lawrence Berkeley National Laboratory is an equal opportunity employer.
Acknowledgements ThisworkwassupportedbytheTransmissionPermitting&TechnicalAssistanceDivisionoftheU.S.DepartmentofEnergy’sOfficeofElectricityDeliveryandEnergyReliabilityunderLawrenceBerkeleyNationalLaboratoryContractNo.DE-AC02-05CH11231.Wethankoursponsorsforsupportingthisresearch:CaitlinCallaghan,MatthewRosenbaum,LawrenceMansueti,WilliamParks,DavidMeyer,andTravisFisher.Wealsoappreciatethereviewerswhothoughtfullycommentedonearlierdraftsofthemanuscript:WilliamBooth(EIA),PeterBalash(NETL),TrieuMai(NREL),StephenCapanna(DOE),andCharlesGoldman(LBNL).Ofcourse,anyomissionsorerrorsthatremainaresolelytheresponsibilityoftheauthors.
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Abstract Thispapersynthesizesavailabledataonhistoricalandplannedpowerplantretirements.Specifically,wepresentdataonhistoricalgenerationcapacityadditionsandretirementsovertime,andthetypesofplantsrecentlyretiredandplannedforretirement.Wethenpresentdataontheageofplantsthathaverecentlyretiredorthathaveplanstoretire.Wealsoreviewthecharacteristicsofplantsthatrecentlyretiredorplantoretirevs.thosethatcontinuetooperate,focusingonplantsize,age,heatrate,andSO2emissions.Finally,weshowthelevelofrecentthermalplantretirementsonaregionalbasisandcorrelatethosedatawithasubsetofpossiblefactorsthatmaybecontributingtoretirementdecisions.
Thisbasicdatasynthesiscannotbeusedtopreciselyestimatetherelativemagnitudeofretirementdrivers.Nordoweexploreeverypossibledriverforretirementdecisions.Moreover,futureretirementdecisionsmaybeinfluencedbydifferentfactorsthanthosethathaveaffectedpastdecisions.Nonetheless,itisclearthatrecentlyretiredplantsarerelativelyold,andthatplantswithstatedplannedretirementdatesare—onaverage—noyounger.Weobservethatretiredplantsaresmaller,older,lessefficient,andmorepollutingthanoperatingplants.Basedonsimplecorrelationgraphics,thestrongestpredictorsofregionalretirementdifferencesappeartoincludeSO2emissionsrates(forcoal),planningreservemargins(forallthermalunits),variationsinloadgrowthorcontraction(forallthermalunits),andtheageofolderthermalplans(forallthermalunits).Additionalapparentpredictorsofregionalretirementsincludetheratioofcoaltogaspricesanddeliverednaturalgasprices.Otherfactorsappeartohaveplayedlesserroles,includingthepenetrationvariablerenewableenergy(VRE),recentnon-VREcapacityadditions,andwhethertheregionhostsanISO/RTO.
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Introduction 1
Therehasbeenasignificantamountofretirementsofthermalgenerationassetsinrecentyears,drivenbyavarietyofmarket,policy,andplant-specificfactors.Thereisuncertainty,however,onwhichfactorshaveplayedthelargestcontributingroles.
• Averagewholesaleelectricitypriceshavedeclinedwhich,allelsebeingequal,willerodetherevenuepossibilitiesofinflexiblegenerationunits(more-flexibleunitsareinasomewhatbetterpositiontowithstandaveragepricedeclines,astheyareabletodispatcharoundhigh-andlow-pricedperiods).1
• Wholesalepricereductionsmaybeimpactedbydecliningnaturalgasprices,growthinvariablerenewableenergy(VRE),lowloadgrowthandhighreservemargins,aswellasotherfactors.
• Newpowerplantsmayofferadvancedtechnologiesthatenableimprovedheatrates,loweroperatingcosts,loweremissions,and/orincreasedflexibilityinoperations,puttingpressureontheeconomicpositionofolderplantsthatuseless-advancedtechnology.
• Theoperatingcostsofmanyexistingplantsarealsorisingovertime,asthoseplantsageandreachtheendoftheirplannedlifetimesand/orfaceincreasedregulatorypressuresduetoenvironmentalregulations(e.g.,coalandgasplants)orrelicensingneeds(nuclearandhydropower).
• Awidearrayoflocal,state,ISO/RTO,andfederalrequirementsandincentivesdirectedatpowerplantsofalltypesandgeographiclocationsalsomaybeinfluencingretirementdecisions.
• Finally,whileretirementshaveincreasedrecently,theyhavenotdonesoinavacuum,asgenerationcapacityadditionshavealsooccurred,especiallyofnaturalgas,wind,andsolar.
Thispapersynthesizesavailabledataonhistoricalandplannedretirements.Afterdescribingourdatasources,wepresentdataonhistoricalgenerationcapacityadditionsandretirementsovertime,andthetypesofplantsrecentlyretiredandplannedforretirement.Wethenpresentdataontheageofplantsthathaverecentlyretiredorthathaveplanstoretire.Wealsoreviewthecharacteristicsofplantsthatrecentlyretiredorplantoretirevs.thosethatcontinuetooperate,focusingonplantsize,age,heatrate,andSO2emissions.Finally,wepresentvariouschartsthatdepictthelevelofrecentthermalplantretirementsonaregionalbasisandcorrelatethosedatawithasubsetofpossiblefactorsthatmaybecontributingtoretirementdecisions.
Thisbasicdatasynthesiscannotbeusedtopreciselyestimatetherelativemagnitudeofretirementdrivers.Nordoweexploreeverypossibledriverforretirementdecisions.Moreover,futureretirementdecisionsmaybeinfluencedbydifferentfactorsthanthosethathaveaffectedpastdecisions.Nonetheless,itisclearthatrecentlyretiredplantsarerelativelyold,andthatplantswithstatedplannedretirementdatesare—onaverage—noyounger.Weobservethatretiredplantsaresmaller,older,lessefficient,andmorepollutingthanoperatingplants.Basedonsimplecorrelationgraphics,thestrongestpredictorsofregionalretirementdifferencesappeartoincludeSO2emissionsrates(forcoal),planningreservemargins(forallthermalunits),variationsinloadgrowthorcontraction(forallthermalunits),andtheageofolderthermalplans(forallthermalunits).Additionalapparentpredictorsofregionalretirementsincludetheratioofcoaltogaspricesanddeliverednaturalgasprices.Otherfactorsappeartohaveplayedlesserrolessofar,includingVREpenetration,recentnon-VREcapacityadditions,andwhethertheregionhostsanISO/RTOorremainstraditionallyregulated.
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Data and Methods 2
Thedatausedinthispapercomefromseveralsources,summarizedbelow:
• HistoricalandplannedretirementsandhistoricaladditionsdataprimarilycomefromABB’sVelocitySuitedataset2(which,inturn,sourcesmuchofitsdatafromEIA-Form860M3).Historicaldistributedandutility-scalesolaradditions,however,comefromGTM/SEIAandIREC.4
• Summernon-coincidentpeakloadisestimatedbysimplysummingthepeakloadofeachregion,asreportedinABB’sVentyxVelocitySuite.
• SummerplanningreservemarginscomefromEIA-Form411,updatedasofMarch2017.5• PowerplantagescomefromABB’sVelocitySuitedataset.• VREregionalpenetrationestimatescome,inpart,fromannualwindgenerationreportedinABB’s
VelocitySuitedividedbytotalgenerationintheregion.Forgeneratorsthathadnotyetreported2016data,weassumed2015-leveloutputafteraccountingforretiredunits.SinceABBdoesnotincludegeneration<1MWandsincelarge-scalesolargenerationdataweresubstantiallyincompletefortheyear2016,weestimatesolargenerationbasedonstate-levelcapacity,andregionalcapacityfactorsfromNREL.6DistributedsolargenerationalsoaddedtototalgenerationwhencalculatingVREpenetrations.
• RegionaldemandgrowthcomesfromEIA’sdatasetofretailsalesofelectricitybystate,witheachstateassignedtooneoftheISOornon-ISOregions.7
• RegionalsulfurcontentofcoalcomesfromEIA’sdatasetonthequalityoffossilfuelsinelectricitygeneration:sulfurcontentofcoalbystate.8
• Regionalandplant-levelSO2emissionsratescomefromABB’sVelocitySuitedataset.• PlantsizeandheatratebothcomefromABB’sVelocitySuitedataset.• Deliveredgasandcoalprices,byregion,comefromgeneration-weightedregionalaveragesofthe
monthlypowerplantfuelcostsbetween2010-2016reportedinABB’sVelocitySuitedataset.
Retirements and Additions over Time 3
Figure1presentsdataonpowerplantretirementsandadditionsovertime,comparedtonationalnon-coincidentpeakload.Figure2segmentsrecentretirements(2010-2016)andplannedretirements(2017-2023)bygenerationtype:coalplants,natural-gassteam(NGST)plants,combustionturbine(CT)plants,combined-cyclegasturbine(CCGT)plants,nuclearplants,hydropowerplants,andother.TheNGSTcategoryisbroadlydefinedtoincludebothnaturalgasandoilfiredsteamplants.Similarly,whilemostCTsarenaturalgasfired,someareprimarilyoilfired.
Severalobservationsareapparentfromthesecharts:
• Retirementsofthermalplantshaveoccurredthroughouthistory,buthaveincreasedsince2010• Coal&NGSTunitsaretheprimaryrecentcontributors,withCTs&nuclearadistantthirdandfourth• Asforplannedretirements,coal,NGST,andnuclearplantsaredominant• DisregardingVRE,therehasbeenanetlossofgenerationcapacitynationallysince2012• IfVREisincluded,however,netnameplatecapacityadditionshavecontinuedsincethattime9• HistoricallysignificantlevelsofCCGTandCTadditionsareapparentfrom2000-2005• Historicallysignificantlevelsofwindandthensolaradditionsareapparentsince2007
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• Non-coincidentpeakloadwashighestin2006andhasnotrecoveredtothatpeakasof2016• Anetincreaseinthermalcapacityexistssince2006notwithstandingthelackofgrowthinpeakload
Asaresultofallofthesetrends,excessgenerationcapacityexistsnationallyandregionally.10
Somecautionshouldbeappliedtoanyinterpretationoftheplannedretirementdata,asactualretirementsmaydiffersubstantiallyfromwhatispresentlyplannedandreportedassuchtoEIAandothersources.
Source:LBNLanalysisofABBVelocitySuiteData,withsolarestimatesfromIRECandGTM/SEIA
Figure 1. Retirements and Additions to the U.S. Generation Fleet over Time
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Source:LBNLanalysisofABBVelocitySuiteData
Figure 2. Plant Type Distribution for Recent and Planned Retirements
Project Age of Recent and Planned Retirements 4
Figure3presentshistogramsofprojectageofrecent&plannedretirementsforcoalplants,natural-gassteam(NGST)plants,combustionturbine(CT)plants,nuclearplants,andcombined-cyclegasturbine(CCGT)plants.11Notetheverydifferentscaleineachchart,withfarlargeramountsofretirementsforsometypesofplantsthanothers.Figure4,meanwhile,presentstrendlinesfortheageofretiringplantsovertime,whilealsoextendingthetrendlinetoconsiderplannedretirements.
Severalobservationsareapparentfromthesecharts:
• Recentlyretiredplantshavebeenrelativelyold,acrossallgenerationtypeso Themostcommonageofrecentlyretiredcoalunitsis50-60yearso ThemostcommonageofrecentlyretiredNGSTunitsis40-50yearso ThemostcommonageofrecentlyretiredCTunitsis40-50yearso Themostcommonageofrecentlyretirednuclearunitsis30-40years
• Plantswithannouncedretirementdatesarealsorelativelyold,basedonexpectedageatretiremento Nuclear&NGSTplantsplannedforretirementwillbeolderthanrecentlyretiredplantso Coal,CT&CCGTplantsplannedforretirementwillbeslightlyyoungerthanrecentlyretiredplants
• Thereisnoobservablebroadhistoricaltrendtowardsretiringyoungerplants
Coal53%
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Source:LBNLanalysisofABBVelocitySuiteData
Figure 3. Histograms of Project Age for Recent and Planned Retirements
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Source:LBNLanalysisofABBVelocitySuiteData
Figure 4. Trend in Project Age of Past and Planned Power Plant Retirements
Asnotedearlier,cautionshouldbeappliedtoanyinterpretationoftheplannedretirementdata,asactualretirementsmaydiffersubstantiallyfromwhatispresentlyplannedandreported.
Comparison of Recently Retired Plants to Operating Plants 5
Figure5showsthatthecharacteristicsofplantsthatrecentlyretiredorthatplantoretirearedifferentthanforplantsthatcontinuetooperatewithnoimmediatereportedretirementplans.Inparticular,weobservethatretiredplantstendtobesmaller,older12,lessefficient,andmorepollutingthanoperatingplants.Thefiguresdemonstratethefollowing:
• Retiredplantsaresmaller:Recentlyretiredcoalplantshadanaveragecapacityof122MW,whereasplantsnotscheduledforretirementarelargerat239MWonaverage.Recentlyretirednuclearandgas-firedplantsaresimilarlysmallerthanoperatingplants.Plantswithplannedretirementdatesover2017-2023arelarger,onaverage,thanrecentlyretiredplants—morecomparabletothoseplantsthathavenotreportedplanstoretireinthenearfuture.
• Retiredplantsareolder:Coalplantsthatretiredbetween2010-2016hadanaverageageof52yearswhilecoalplantsthatdidnotretireandarenotscheduledforretirementhadanaverageageof37yearsin2016.Therecentlyretiredgasplantsaresimilarlyolderthanoperatingplants.Recentlyretirednuclearplants,ontheotherhand,wereonlyslightlyolderthantheageoftheoperatingplants.Plantswithneartermplansforretirementarealsoconsiderablyolderonaveragethanplantswithnosuchreportedplans.
• Retiredcoalandgasplantsarelessefficient:Theaverageheatrateofrecentlyretiredcoalplants(10,386Btu/kWh)wasslightlyhigherthanplantsnotscheduledforretirement(10,046Btu/kWh),indicatingthattheplantsthatretiredwerealsosomewhatlessefficient.Theheatrateofrecently
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retiredCCGTandCTplants,meanwhile,wasconsiderablyhigheronaveragethanplantsnotscheduledforretirement.Plantswithneartermplansforretirementarealsolessefficientthanthoseplantswithnoimmediatereportedretirementplans.
• Retiredcoalplantsaremorepolluting:Theaverageemissionsrateofcoalplantsthatretiredbetween2010-2016was1.2lbsSO2/MMBtu,whiletheaverageemissionsrateoftheplantsnotscheduledforretirementwas0.2lbsSO2/MMBtu.Plantswithannouncedretirementsfrom2017-2023haveemissionsratesmoreconsistentwiththoseplantsnotreportedlyplanningtoretire.
Source:LBNLanalysisofABBVelocitySuiteData
Figure 5. Comparison of Recently Retired or Planned Retirements to Operating Plants
Possible Drivers for Varying Levels of Regional Retirement 6
Figure6summarizestheregionaldistributionofrecentretirementsbothforallthermalunitsand,ofthattotal,thesubsetthatincludesonlycoalandnuclearunits.ThetotalthermalunitscategoryincludestheNGST,CCGT,CT,Coal,andNuclearcategoriesusedpreviously,whileexcludingtheVRE,Hydro,andOthercategories.Thefigurealsonormalizestheseabsolutesumsbypresentingthemasapercentageofnon-VREcapacityasof2016ineachregion.
Inabsolutemagnitude,thelargestamountofrecenttotalthermal-plantretirementsandcoal&nuclearretirementshaveoccurredinPJM,MISO,andthenon-ISOportionofSERC.Thesesameregions,alongwithCAISO,alsohavethelargestamountofretirementsonapercentage-of-non-VREcapacitybasis.
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Notably,naturalgasplantsdominatetherecentretirementsinERCOT,CAISO,FRCC,andNYISO;coalandnuclearmakesmallercontributions.
Source:LBNLanalysisofABBVelocitySuiteData
Figure 6. Recent Thermal Plant Retirements, by Region
ThefinalsetofchartsshowninFigure7correlateregionalretirementpercentageswithasubsetoffactorsthatmaybecontributingtothestrikinglydifferentlevelsofrecentretirementexperiencedinvariousregions.Mostchartsprovidedatapointsforbothtotalthermalplantretirementsand,separately,onlycoalandnuclearretirements.Insomecases,however,theinvestigatedfactorsaremostlikelytoaffectonlycoaland/orgasplants;wefocusinthoseinstancessolelyonthoseplanttypes.
Ninespecificpossibleexplanatoryfactorsareexplored:
• VREpenetrationinpercentageterms,consideringutility-scalewindandPVanddistributedPV• Regionalgrowth(orcontraction)inelectricalloadfrom2010to2016• Averageplanningreservemargin(basedonsummercapacityandpeakloads)from2010to2016• AverageSO2emissionsratesofthe25%ofcoalplantsineachregionwiththehighestemissions• Averagepercentsulfurcontentofcoaldeliveredtotheregionfrom2010to2015• Ratioofdeliveredcoalpricestodeliveredgaspricesintheregionfrom2010to2016• Averageregionaldeliverednaturalgaspricefrom2010to2016• Averageageoftheoldest25%ofthermalpowerplantsintheregionin2010• Newnon-VREcapacityadditionssince2010asapercentageoftotalnon-VREcapacity
Visualinspectionofthesefiguresdoesnotofferperfectclarityonthecoredriversforregionalretirementtrends.Nordohistoricaltrendsnecessarilytelluswhatmightdriveretirementdecisionsonagoing-forwardbasis.However,weobservethefollowingbasedonthesegraphics:
• VREPenetration:TheredoesnotappeartobeanyobviouswidespreadrelationshipbetweenVREpenetrationandrecenthistoricalregionalretirementdecisions.PJMandSERC,bothwithverylow
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VREpenetrations,haveamongthelargestamountofrecenttotalthermalplantandcoal&nuclearplantretirement.ERCOT,SPP,andthenon-ISOportionofWECC,ontheotherhand,allhavesizableVREpenetrationsbutlowretirementpercentages.CAISOhasexperiencedstronggrowthinVREandhasthehighestleveloftotalthermalplantretirementsonapercentagebasis,mostofwhichareolderNGSTplants;manyofthoseplantshaveretiredasacompliancemechanismwithCalifornia’spolicytophaseoutonce-throughcooling.13
• LoadGrowth:Thereappearstobearelativelystronginverserelationshipbetweenloadgrowthandretirementpercentages.Regionsthathaveexperiencedloadcontractionfrom2010to2016tendtohavelargeramountsofretirementthanthoseregionsthathaveexperiencedgrowth.
• ReserveMargins:Thereappearstobearelativelystrongrelationshipbetweensummerplanningreservemarginsandretirementpercentages.Regionswithhigherreservemarginsfrom2010to2016tendtohavelargeramountsofretirementthanthoseregionswithlowerreservemargins,perhapssuggestinganongoing‘marketcorrection’toexistinglevelsofexcesscapacity.
• SO2EmissionsRateofCoal:OnemightanticipatethatcoalplantswithhighSO2emissionsratesmaybesubjecttomorestringentenvironmentalupgradeandretrofitneeds,whichmaythendriveretirementdecisions.Thisrelationshipisclearlyapparentinthegraphic,suggestingthatenvironmentalcompliancehasbeenakeydriverofcoalretirementsespeciallyinPJMandSERC.
• SulfurContentofCoal:TherelationshipbetweentheaveragesulfurcontentofcoalintheregionandcoalretirementsisnotasrobustasfortheSO2emissionsrate,presumablyreflectingadoptionofcontrolequipmentinareaswithhighsulfurcoalbutloweremissionsrates.
• Coal-to-GasPriceRatio:Gasandcoalcompeteinthedispatchstack,andthereappearstobeaweakrelationshipbetweentheratioofdeliveredcoal-to-gaspricesandthelevelofregionalcoalretirement.Someregionsthathaverelativelylowercostcoaland/orrelativelyhighercostnaturalgashavetendedtoexperienceasomewhatlowerlevelofcoalretirement.Someregionswithinexpensivegasand/orhighcostcoal,ontheotherhand,havetendedtoseemorecoalretirement.
• GasPrice:Itiswidelyrecognizedthatreductionsinnaturalgaspriceshavebeenacoredriverforlowerwholesaleprices,andresultingthermalplantretirements.Onemightalsoexpectthatregionswithrelativelylowerdeliveredgaspricesmighthaveexperiencedgreaterlevelsofretirement.Aweakrelationshipofthisnatureappearstoexist.
• PowerPlantAge:Onewouldexpectthatregionswitholderpowerplantsmightwitnessagreateramountofretirement.Thegraphicsuggeststhatthisrelationshipmayexist,especiallyforcoal&nuclearplants,withthenotableexceptionofCAISOhavingsignificantretirementswithrelativelyyoungerplants.
• Non-VREPowerPlantAdditions:Theredoesnotappeartobeaclearrelationshipbetweengrowthinnon-VREcapacityadditionssince2000andthelevelofrecentretirements.
• ISOvs.Non-ISORegions:ItisnotobviousthattherecentgrowthinthermalplantretirementsisaffectedbywhethertheregionhasawholesalemarketoverseenbyanISO.SERCistraditionallyregulatedandhasamongthehighestamountofretirementofallregions.TheWECC(notincludingCalifornia)andFRCCalsoremainundertraditionalregulation,buthaveexperiencedrelativelylowerlevelsofretirementsofar.AmongthemanyregionswithISOs,retirementpercentagesvarywidely.
Again,visualinspectionofthesechartsisnotdispositiveinestablishingcausalrelationships.Nordothesechartsexploreeverypossibledriverforregionalretirementvariations.Moreover,futureretirementdecisionsmaybeinfluencedbydifferentfactorsthanthosethathaveaffectedpast
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decisions.Nonetheless,basedonthesesimplecorrelationgraphics,thestrongestpredictorsofregionalretirementdifferencesappeartoincludeSO2emissionsrates(forcoal),planningreservemargins(forallthermalunits),variationsinloadgrowthorcontraction(forallthermalunits),andtheageofolderthermalplans(forallthermalunits).Additionalapparentpredictorsofregionalretirementsincludetheratioofcoaltogaspricesanddeliverednaturalgasprices.Otherfactorsappear,basedonthissimpleanalysis,toplaylesserroles;theseincludeVREpenetration,recentnon-VREcapacityadditions,andwhethertheregionhostsanISOorremainstraditionallyregulated.
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Source:LBNLanalysisofABBVelocitySuiteData,alongwithsupplementalsourcesasdescribedearlier
Figure 7. Possible Drivers for Regional Retirement Trends
Future Research 7
Thispaperprovidesacursorylookatretirementtrendsanddrivers,butbynomeansisthefinalwordonthesubject.Tounderstandthesetrendsanddriversinmoredetailwouldrequireanunderstandingofhoweachpossibledriveraffectsplantprofitability,anexplorationofadditionaldrivers,andabetterunderstandingofinteractionsamongthepossibledrivers.Suchanalysismightusefullyfocusonspecificresourcetypesseparately(e.g.,coal,nuclear,orCCGTs),beconductedonaregionalasopposedtosolelyanationalbasis,andconsiderplannedaswellasrecentretirements.Itmaybeusefultoconsider,forawidervarietyofpossibledrivers,notonlyregionalaveragesbutthedistributionofplantswithinthoseaverages.Assessingretirementdriversovertime,notonlyacrossregions,maybeinformative.
Inconductingfurtheranalysis,additionaldriverstoconsiderinclude:(1)additionalexistingandprospectivestate,regional,andfederalpoliciesandregulations(e.g.,carbon,NOx,mercury,water,plant
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Avg.Ageof25%ofOldestThermalUnitsin2010
AllThermalReBrements Coal&NuclearReBrements
15
relicensing,RPS,etc.);(2)thespecificimpactsofwear-and-tear,cycling,andotherfactorsonoperationalcosts;(3)regionaltrendsinwholesaleenergyandcapacityprices;(4)thepossibledifferentialimpactsofwindandPV,asopposedtothecombinedimpactofVRE;and(5)thermalplantheatratesandcapacityfactors.Regressionanalysisandreviewsofregulatoryandfinancialfilingsofferusefultoolstohelpbetteridentifytheunderlyingcausesofinvestordecisions.
Endnotes and References
1Whereactivewholesalemarketsdonotexist,thesamebasicdynamicshold:thedecliningcostofnaturalgas,forexample,putseconomicpressureoninflexibleunitseveninmarketsthatdonotfeatureanISO/RTO.Generationthat is locked into longer termphysicalor financial contractsmaybe temporarily isolated fromsomeof theseforces,butwillstillbeaffectedby,e.g.,naturalgasandwholesalepricechangesatleastoverthelongerterm.
2ABBVelocitySuitedataset.AccessedMay2017.3https://www.eia.gov/electricity/data/eia860m/4Specifically,GTM/SEIAdatawereusedtoestimatestate-levelsolarcapacityadditionsfortheyears2010-2016(GTMResearch,SolarEnergyIndustriesAssociation(GTM/SEIA).2017.“U.S.SolarMarketInsight,2016YearinReview”,pp.51-57).State-leveldatafromIRECwereusedtosupplementcapacitydataforstatesthatwerenotcoveredbyGTM/SEIAintheyears2010-2013andforsolarcapacitydatafortheyears1996-2009(personalcommunicationwithLarrySherwood,dataareassociatedwiththe “U.S. Solar Market Trends” report series, 2006-2013, by the Interstate Renewable Energy Council (IREC)).http://www.irecusa.org/wp-content/uploads/2014/07/Final-Solar-Report-7-3-14-W-21.pdf.
5https://www.eia.gov/electricity/data/eia411/6Specifically,weusedthesolarcapacitydatafromGTM/SEIAandIRECtodevelopstate-levelsolargenerationdatabasedonsector-specific capacity factor estimates reportedbyNREL (National Renewable Energy Laboratory. 2012. “U.S. RenewableEnergyTechnicalPotentials:AGIS-BasedAnalysis”.http://www.nrel.gov/gis/re_potential.html). State-level solargenerationdatawerethenaggregatedtoISOregions(futureworkcouldrefinethestate-levelassignmenttoregions).California'ssolargeneration isapportionedamongCAISOandnon-CAISOWECCbasedonEIA861NEMratiosfordistributedsolarandABB'sregionalgenerationratiosforlarge-scalesolar.WeusedABBdataforwindgenerationandtotalISOgenerationdataacrossallfueltypestocalculateISO-levelVREpenetrationlevels.
7 https://www.eia.gov/electricity/data/browser/. Future work could refine the state-level assignment to regions, or insteadutilizedifferentdatasources.
8https://www.eia.gov/electricity/data/browser/.Futureworkcouldrefinethestate-levelassignmenttoregions.9Futureworkcouldlookatnetadditionsbasedontheestimatedcapacitycreditofeachresourcetype.10SeevariousNERCreportsfocusedonexisting,nearterm,andlongertermreservemargins.11Wedonotanalyzehydropowerretirementsinmoredetailassomeofthecapacitycategorizedasretiredisinsteadpartofanupratingofahydropowerfacilitythatcontinuesoperations.Overall,hydropowerisaverysmallshareofbothhistoricalandplannedretirements.
12Theageofplantsisbasedontheageatretirementforplantsthatretiredbetween2010-2016,theageintheyearthattheyplantoretireforplantsslatedtoretirebetween2017-2023,ortheagein2016foroperatingplantsthathavenotreportedplanstoretireoverthetimeframeconsideredhere(2017-2023).
13CaliforniaEnergyCommission(CEC).2017.“Once-ThroughCoolingPhase-Out.”CaliforniaEnergyCommission.http://www.energy.ca.gov/renewables/tracking_progress/documents/once_through_cooling.pdf.