NERC studies rapid retirement of coal, nuclear plants

Source: Rod Kuckro, E&E News reporter • Posted: Monday, September 17, 2018

The nation’s grid overseer expects to release an assessment looking at the rapid retirement of baseload electricity generation by the end of this year.

The report by the North American Electric Reliability Corp. (NERC) could inform the Trump administration’s ongoing consideration of a plan to provide financial support for certain coal and nuclear plants.

If the assessment identifies individual plants in areas such as the PJM Interconnection — the nation’s largest power market — it could either bolster the argument for financial support or demonstrate that there is enough excess generation to compensate for the planned retirements.

The conclusions of a draft assessment were the subject of a briefing by senior engineer Mark Olson at a meeting of NERC’s Planning Committee in Minneapolis earlier this week.

The assessment was initiated by NERC in May of 2017 and not the result of an outside request. The topic was chosen to align “with other NERC reliability assessments to understand and address reliability challenges associated with the changing resource mix,” NERC said.

NERC declined to make a copy of the draft available.

The NERC draft found that accelerated generation retirements pose risks to the reliability of the bulk power system (BPS) in two chief ways.

First, the retirements decrease so-called planning reserve margins, which grid operators such as PJM use in long-term planning for power.

“When generation retirements exceed or outpace needed replacement resources, the BPS is less capable of withstanding contingencies, unplanned facility outages, and extreme conditions,” Olson said.

Second, while replacing retiring coal-fired and nuclear generation with natural-gas-fired generation provides essential reliability services, “it can result in near-term stress on the natural gas infrastructure and create challenges to fuel deliverability in extreme winter conditions and major natural gas contingencies,” he said, asking the planning committee members for their recommendations to address the identified risks.

The draft says that managing the reliability risks associated with accelerated generation retirements will require continued “rigorous resource adequacy assessment and transmission planning processes,” Olson said.

The grid system planning studies conducted by NERC identify specific transmission system reinforcements, generation dispatch requirements and operating procedures needed to support generator retirements and replacements while still maintaining reliability criteria.

The retirements could potentially require the increased use of out-of-market solutions such as reliability-must-run contracts for specific coal and nuclear units, Olson said.

The report is being developed for presentation to the NERC board at its November meeting.