Under what possible scenario could low-cost wind energy become coal’s new best friend? Here’s how. The proposed new Clean Power Plan from the US Environmental Protection Agency was supposed to sound the death knell for coal power in the US, resulting in higher costs for consumers and businesses as power companies scramble to replace coal. However, a new report suggests that integrating more wind energy could result in lower overall costs and emissions, while enabling more coal power plants to remain in operation.
The new report was released last week by PJM, which happens to be the largest regional transmission operator in the US. The grid operators that network into PJM straddle coal and natural gas regions in Appalachia as well as the wind-rich Great Lakes states and solar-friendly New Jersey, giving it a front-row seat to the cost interplay between fossil fuels and renewables under the propose Clean Power Plan.
When Is More Coal A Good Thing?
For those of you new to the topic, coal still accounts for a large chunk of the US energy supply, and our aging fleet of coal power plants still accounts for an outsized part of our carbon footprint.
Coal got into its dominant position because it is cheap and abundant. However, when you factor in the cost of carbon emissions from burning coal as well as related economic, environmental, and public health costs, the “cheap” thing falls apart. (A study led by the former director of the Harvard Medical School Center for Health and the Global Environment found the extra cost to the US to be $500 billion… per year.)
As for so-called “clean coal,” last month, the US Energy Department pulled the plug on federal support for the $1 billion showcase FutureGen “clean coal” carbon capture project, effectively making the point that there are more cost-effective ways to manage our national carbon footprint.
Under the proposed Clean Power Plan, many coal power plants would be out of compliance, which in grid operator parlance means they are “at risk of retirement.”
Until the renewable energy supply chain ramps up to speed, the conventional replacement scenario has been based on natural gas. However, the devil is in the details, especially if you consider that “cheap” natural gas is just as much as chimera as cheap coal.
Natural gas does result in lower emissions at the burn point. However, there are hidden costs all along the natural gas supply chain, including toxic waste, “fugitive” methane emissions from drilling sites and pipelines, and earthquakes.
Given all these factors, under the right scenario, you could come out with an energy landscape that balances high-emission coal with near-zero-emission wind, resulting in overall lower emissions and lower costs than you would get from integrating more natural gas into the grid.
Low Cost Wind To Replace Natural Gas
The idea of using low-cost wind energy to replace natural gas might seem counter-intuitive, but take a look at the report and see what you think. You can find a link on PJM’s home page under the title “PJM Economic Analysis of the EPA Clean Power Plan Proposal.”
For those of you on the go, the American Wind Energy Association blog Into the Wind has a detailed summary, and for those of you really on the go, we gleaned a few snippets from PJM’s fact sheet.
Buried near the end of the fact sheet is the observation that a fair number of coal-fired power plants in PJM’s territory have been slated for near-term retirement even without Clean Power Plan implementation. That’s a good reminder that, like every other major industrial facility, coal power plants have a “natural” lifespan. Sooner or later, they will have to be replaced or upgraded.
Another thing to keep in mind is that the report is necessarily based on a lot of factors that are subject to change. The wind-to-replace-gas scenario is just one of 17 under consideration, and PJM analyzed each of them at three different points in a 10-year Clean Power Plan compliance schedule.
For example, there is also a worst-case scenario in which the supply of renewable energy falls far short of expectations, while natural gas prices rise and PJM’s grid operators lose half of their nuclear capability. Ouch!
On a brighter note, take a look at proposed renewable energy projects within PJM’s territory in the map below, and you can see cause for optimism. Note the east-west breakdown between wind (pink dots) and solar (yellow dots) — that’s not even taking into account the full force of offshore wind energy resources on the Atlantic coast:
It’s also important to note that the report is the result of a request from the states in PJM’s territory, in which they asked that it find an integrated regional solution rather than taking a state-by-state approach. That helps even out some of the bumps from an overall sustainability angle, and more to the point, it is expected to lead to lower wholesale prices.
However, the regional scenario also means that some local communities could get left holding the short end of the stick, by continuing to host coal power plant facilities that otherwise might have been retired.
PJM would also like to remind you that this is an economic analysis, not a reliability analysis. PJM expects to have lots more to say about reliability later this spring, and in that context you can expect a continued discussion of how gains in energy efficiency will factor in.
You can also expect to factor in the transition to a demand-response model, in which utilities communicate with customers in real time to ease grid bottlenecks and ensure reliability. PJM is active in this area and if you want to know more, look up its “Evolution Of Demand Response” white paper.
Image Credits (screenshots): Courtesy of PJM.
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