Do coal plant clo­sures spell dis­as­ter for the power grid?

Houston Chronicle Sunday - - BUSI­NESS - By James Os­borne james.os­ twit­ter@os­borneja

A re­searcher at UT looks at the ef­fect of wind and nat­u­ral gas on Texas power.

For those look­ing for ev­i­dence of coal’s demise, look no fur­ther than East Texas, where Vis­tra En­ergy is shut­ting down its more than 40-year-old Mon­ti­cello coal plant. At 1,800 megawatts, it is one the state’s largest power plants, and with other util­i­ties eye­ing their own coal op­er­a­tions, many more megawatts could be com­ing off­line in the years ahead. Just a few years ago such de­vel­op­ments might have set off fears of rolling black­outs in the sum­mers ahead, when power de­mand sky­rock­ets. But not this time around, ex­plains Josh Rhodes, a re­search fel­low at the En­ergy In­sti­tute at the Univer­sity of Texas at Austin.

Q: You write about coal gen­er­a­tion fall­ing off in the years ahead. Is that set­ting the state up for power short­ages and price spikes?

A: It’s hard for coal plants right now. Look­ing at the oper­at­ing costs of most coal plants in Texas, they’re higher than the whole­sale price, and it’s hard to see how they’re in the money. With all the gas we’ve un­leashed through frack­ing and all of wind and so­lar be­ing added, there’s a lot of pres­sure in the mar­ket to keep prices down. I don’t know if re­tir­ing th­ese coal plants will do much to change that.

Q: En­ergy Sec­re­tary Rick Perry is one of a num­ber of voices ques­tion­ing whether coal plant clo­sures could lead to a desta­bi­liza­tion of the grid, with rolling black­outs like Cal­i­for­nia felt in the early 2000s. Is that a pos­si­bil­ity?

A: The­o­ret­i­cally, you could de­velop a prob­lem if you don’t have enough re­sources to pro­vide grid sta­bi­liza­tion. But you have a sys­tem in place with gen­er­a­tors stand­ing by to come on­line quickly just in case an­other gen­er­a­tor trips off­line. There’s a mar­ket for those re­serves, so as there are fewer gen­er­a­tors that are able to sup­ply those mar­kets, prices will go up, and there will be more in­vest­ment.

Q: You ex­pect power gen­er­a­tion from wind tur­bines to ex­ceed that of coal plants by 2019. I know wind is grow­ing, but that fast?

A: Wind has ex­ceeded most peo­ple’s ex­pec­ta­tions. It’s been grow­ing ex­ceed­ingly strong for the past decade. Things like the (fed­eral pro­duc­tion tax credit) helped that. But we’ve also seen big firms are want­ing it. With so­lar and wind, 99 per­cent of your cost is get­ting car­bon and steel and sil­i­con in the ground, and then you ba­si­cally know how much th­ese things are go­ing to pro­duce, so you can lock in your price for decades, and that’s re­ally at­trac­tive to firms look­ing to buy en­ergy. With gas or any­thing with a large fuel cost, you might only get a cou­ple years’ guar­an­tee.

Q: Can the grid han­dle that much wind and so­lar power, con­sid­er­ing it’s de­pen­dent on the weather, which as we all know can be fickle?

A: Back in the early days, we thought wind and so­lar couldn’t be more than a cou­ple per­cent of the power load, but now we have some days where it’s close to 50 per­cent. Dur­ing the po­lar vor­tex, wind helped keep the grid go­ing. That said, with­out mas­sive en­ergy stor­age, we couldn’t run the en­tire grid off wind and so­lar. But given how flex­i­ble nat­u­ral gas is (com­ing on­line when wind and so­lar en­ergy drops), the bar seems to keep grow­ing.

Q: So is the day com­ing when there will be no more coal plants in Texas?

A: There’s no coal in the in­ter­con­nec­tion queue to be built. And all power plants have a shelf life, so if we don’t build any, even­tu­ally all of what we have will re­tire. One of the in­ter­est­ing things we’re see­ing, if you look at the power plants we’re build­ing th­ese days, we’re not build­ing big things any­more, we’re build­ing smaller scale. En­ergy de­mand in­crease has been rel­a­tively flat lately, so it’s harder to jus­tify a big project.


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