Tuesday, January 13, 2015

Ohio renewable energy policies spurred growth, now driving away business, report says

Utilities are working to meet new standards on renewables
A new study says Ohio was a leader in encouraging renewable energy growth but is sliding backward due to uncertainty from state lawmakers. New capacity and investment in wind energy went from No. 13 in the country to none, according to The Pew Charitable Trusts report. (LM Otero/AP)
VIA Cleveland.com
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By Jackie Borchardt, Northeast Ohio Media Group   
Email the author | Follow on Twitter  
on January 13, 2015 at 2:55 PM, updated January 13, 2015 at 3:34 PM
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COLUMBUS, Ohio -- Ohio's renewable energy policies sparked tremendous investment in the industry, but recent moves by state lawmakers have slowed that growth and threaten its future, according to a report released Tuesday.
Ohio was No. 13 in the country for new capacity and private investment in wind at the end of 2012, according to the Pew report. However, new investment halted in 2013 because of "uncertainty" created by legislative debate over Ohio's renewable energy standards and the expiration of a federal production tax credit, according to the report.
The report from The Pew Charitable Trusts  examined the industry's growth following 2008 state incentives for utilities to seek renewable sources and after state lawmakers began talking about eliminating the renewable energy standards in 2013.Read the report below.
In June 2014, Gov. John Kasich signed into law legislation freezing a requirement that utility companies sell more electricity from renewable sources of energy and making it easier for companies to opt out of energy efficiency programs. The renewable energy standard required utilities to get 12.5 percent of their energy from renewable sources by 2025.
Lynn Abramson, senior associate at Pew, said investment is expected to drop off further in the next two years, while lawmakers examine the benefits and costs of the renewable energy standards, and might not recover if businesses don't return to the state. Abramson said the study did not take into account another 2014 legislative change increasing the distance new wind turbines must be constructed from a neighboring property line.
In 2012, about $750 million was invested in wind and solar projects, according to the report. In 2013, none was invested in wind and investment in solar and other projects totaled less than $100 million. Assuming the energy standards are restored for 2016, the Pew study estimates investment will climb to nearly $400 million annually.
Pew presented its study Tuesday morning in Columbus with a panel of Ohio renewable energy businessmen. Alan Frasz, president of Dovetail Solar and Wind, said the standards freeze and wind turbine restrictions have killed the wind industry in Ohio.
Frasz said he used to get calls every few months from state officials in the development department about how they could help him grow his Ohio-founded business. Frasz said he's received zero phone calls in the last two years.
"I felt like we were led down a path and then our legs were chopped out from under us," Frasz said.
Christopher Nelson, CEO of WHE Generation, which harnesses wasted heat and energy byproducts into usable power, said Ohio lacks predictability in its policies, which is driving down investment.
"We're not looking necessarily for handouts from the government to run our company. What we do want is stability, predictability for the future so we can know and we can judge moving forward where we can best grow our business and put our money to work," Nelson said.
Nelson and the other panelists said their companies are looking to states with more consistent energy policies to grow their businesses.
Ohio was the first state to roll back renewable energy and energy efficiency standards. Supporters of the freeze said the standards have increased consumers' utility bills and discouraged job growth. A panel of lawmakers is further studying the standards during the freeze.



Rooftop solar already cheaper than utility rates in most major cities

John Downey
Senior Staff Writer-VIA Charlotte Business JournalNamaste Solar panel rooftop
Rapidly declining cost for solar panels and other hardware have made solar installations a competitive option for many homeowners, the new report says.
Kathleen Lavine | Denver Business Journal
Customers in 42 of the nation's 50 largest cities — including Charlotte and Raleigh — would save money by installing rooftop solar instead of buying all their power from local utilities, says the N.C. Clean Energy Technology Center.
Going Solar in America, a 27-page report by the center based at N.C. State University, argues the perception that solar is too expensive for most homeowners is false.
Residential solar has prospered largely in states with high electricity rates — such as New York and California. But report authors Jim Kennerly and Autumn Proudlove say the data show consumers nationwide can benefit from solar — even in relatively low-utility-rate states such as North Carolina.

Monthly bills

New York City and Boston unsurprisingly rank as the cities with the largest savings from a solar investment. But Raleigh ranked 30th on the list and Charlotte 34th.
In both N.C. cities, Kennerly and Proudlove say, the costs of a solar project will be more than offset by the savings on utility bills over time.
The report calculates that typical Charlotte customers would save about $57 per month on their electric bills in the first year after installing a solar system. Raleigh customers would save about $49 per month that first year.
Customers in San Francisco, by contrast, would save $187 per month in the first year.

Costs and incentives

But Kennerly and Proudlove's calculations are not based just on gross savings. The costs of the system and the relative difference in rates across the country also enter into the calculations. So do incentives offered in various states and cities.
So, for instance, Charlotte and Raleigh benefit from relatively low costs for solar installations. The Southeast and the mid-Atlantic states have the lowest installation costs in the nation, according to the data the report cites.
So a 5-kilowatt system, the standard used in the report, would likely cost about $18,500 in North Carolina. In the Northeast, a similar system would cost more than $21,000, on average. Thus, a homeowner in North Carolina pays less for the system and so does not have to save as much to come out ahead.
And Raleigh edges ahead of Charlotte in the rankings because Duke EnergyProgress offers a solar incentive that's unavailable from Duke Energy Carolinas.

Better than stocks?

The eastern N.C. utility has its SunSense program, under which it offers customers with small solar systems a larger credit for power sold to the utility.
The report compares the 25-year cost of buying utility electricity to replacing a portion of those purchases with a 5-kilowatt rooftop installation.
It also calculates the value of investing in a solar system versus investing the same amount in a fund indexed to the value of the S&P 500 Index. According to the center's report, residents in 46 of the 50 largest cities would make more money from putting their money in solar.
"We wanted to compare the investment that a lot of ordinary customers might consider making," Kennerly says.

Financing key

An important caveat is that the advantage in utility savings disappears in most cities if the customer has to pay for the solar installation upfront. Customers in only about 14 of the major cities benefit under those conditions.
But if customers can finance the purchase over time, almost all consumers in the study can benefit from a solar installation. The financing assumption, however, was a loan at 5% interest over 25 years (the nominal life of a solar installation). That is not a standard loan that would be available to all customers.
The financing is important because the study calculated the levelized cost of power from a solar installation. That reduces the cost of the project to a per-kilowatt-hour number that can be compared with electric rates.
If the cash has to be paid upfront for the system, that drives up the levelized cost by front-loading the expenses.

Local involvement

That is why the report recommends that local governments and municipal utilities take steps such as engaging local lenders to provide low-interest loans or allowing customers to buy into community solar projects financed by municipal utilities.
The report makes no recommendations for steps that could be taken by investor-owned utilities such as Duke Energy.
Proudlove explained that is because the report was funded by the U.S. Department of Energy's SunShot program with the aim of developing solar strategies for municipalities and local governments.
Many of the recommendations made in the report could be adapted by investor-owned utilities as well, she and Kennerly say.

Great Video About The Secret Dirty War on Solar

Thom Hartmann exposes the secret dirty war to stop solar power on his Screwed News last week. Brendan Fisher, general counsel for Center for Media and Democracy, joins Hartmann to discuss the war waged by ALEC, the Koch brothers and Walmart’s Walton family trying to prevent Americans from going solar.
Watch here as Hartmann and Fisher answer why this war is being waged and can anything be done to stop them:

A Solar System Is Installed in America Every 2.5 Minutes

 VIA GreenTech

By: Stephen Lacey 
January 12, 2015
The high volume of installations in 2014 was the result of $15 billion of investment.
A Solar System Is Installed in America Every 2.5 Minutes
Army Corps of Engineers, via Flickr
In 2013, we reported that a solar installation was being completed every four minutes in America. Installation volumes have increased considerably since then.
According to new data from GTM Research, the U.S. solar industry completed a project every two and a half minutes in 2014. Those installations were a result of $15 billion in investment.
The growth was led by the residential sector, where 200,000 systems were affixed to rooftops around the country. That's up from 50,000 residential systems in 2011 -- fourfold growth in the span of three years.
"Residential solar is the fastest-growing -- and potentially the most transformative -- sector of the solar market," said Shayle Kann, senior VP of GTM Research.
President Obama mentioned GTM Research's statistic in his State of the Union address last year. 
"It's not just oil and natural gas production that's booming; we're becoming a global leader in solar, too. Every four minutes, another American home or business goes solar; every panel [is] pounded into place by a worker whose job can't be outsourced," said the president.
By the time President Obama mentioned the number, it had already fallen to a system being installed every three and a half minutes. 
At the current pace, the U.S. will likely hit 900,000 cumulative installations across all sectors this year, and well over 1 million in 2016.
Ten years ago, a system was going up every two hours on average. By next year, the American solar industry could be completing an installation nearly every minute.
Stephen Lacey
Stephen Lacey is a Senior Editor at Greentech Media, where he reports on energy efficiency, solar and grid modernization. He is also host of the Energy Gang podcast, a weekly audio digest of cleantech news.

The amazing endless uses of graphene

COSMOS VIA cosmosmagazine.com
Since its discovery graphene has been hailed as a wonder-material. Now add two new properties to the list – the strength to  stop a bullet and the finesse to  let a proton through. But when will we see some real-life applications? Cathal O’Connell investigates.

A graphene membrane is twice as good at stopping a projectile as Kevlar, but when it does rupture, it does so in a predictable petal pattern along weak points in its structure.CREDIT: CREDIT: PHOTO ILLUSTRATION BY JAE-HWANG LEE/RICE UNIVERSITY

What’s stronger than steel, tougher than a diamond and more conductive than copper? It’s graphene. 
This one atom thick tissue of carbon has been hailed as a wonder-material since being discovered in 2004. But wait, there’s more. A recent paper in Science has revealed graphene is twice as bullet-proof as Kevlar. And a few days earlier, a paper in Nature showed graphene allows protons – and only protons – through its mesh. This ability might be used to draw hydrogen, a potential fuel, right out of the air, say the Nobel prize winning scientists who discovered it.
Graphene is the crowning achievement of modern day alchemists who’ve spent decades bending and twisting carbon to create weird and wonderful new forms. This most commonplace of elements is a key player in the chemistry of life, and is also proving to be a highly versatile performer in other arenas.
Thirty years ago textbooks listed four varieties of carbon: diamond (the hardest material then known), graphite (better known as pencil lead), amorphous carbon (or soot), and carbon fibre (hard rods of pure carbon that can be used as fillers to increase the strength of plastics).
Then in 1985, English chemist Harry Kroto was inspired by the stars. Examining their spectral signatures, he noticed some carried an unusual form of carbon which he guessed might have the structure of long rods. To test the idea he collaborated with American researchers who reproduced stellar conditions on Earth using a furnace that created a gas of pure carbon at high temperatures. As the carbon cloud cooled it condensed to form a variety of molecules. One of them, made of exactly 60 carbon atoms, turned out to be a sphere of pentagonal and hexagonal panels, like a soccer ball. It also proved to be extremely stable. Kroto and his colleagues named the molecule buckminsterfullerene, in honour of Buckminster ("Bucky") Fuller , the American architect and engineer who used a similar highly stable structure in his visionary designs. Explorations of the new “buckyball” and related structures (known collectively as fullerenes) became the newest buzz in materials chemistry.
By the early 1990s Japanese scientist Sumio Iijima had hopped on the bandwagon. In 1991 he was synthesising fullerenes by sparking an electric current across two carbon electrodes, and found a hard deposit growing on their sides. Investigating further he found long, thin tubes of carbon. Carbon nanotubes turned out to be the strongest materials then known. Calculations showed that, if they could be scaled up and bundled together, they would be strong enough to fulfil futurist author Arthur C. Clark’s dream of a “space-elevator”– a cord thousands of kilometres long that could tether an orbiting satellite to the Earth.
It was later discovered that carbon nanotubes had already earned a place in history. A 2006 paper in Nature reported that carbon nanotubes had been found in the steel of a Damascan sword forged in 17th century Syria, which may explain the legendary reputation these blades attained during the Crusades.
Graphene’s super-strength comes from the chicken-wired carbon atoms in two dimensions – they are bonded even more strongly than in a diamond.
But why are nanotubes so strong?
Scientists guessed the secret lay in the way the carbon atoms bond to each other in a hexagonal chickenwire-like structure. The same structure exists in graphite, which led scientists to ramp up their efforts to isolate the thinnest possible layers of graphite and study its properties. While they wondered how thin they could go, nobody believed it would be possible to achieve a single atomic layer.
Except for Andre Geim, a Russian émigré physicist at the University of Manchester. Geim had a reputation for thinking outside the box. He had won an igNobel Prize  in physics for levitating a frog in a magnetic field, and had also once co-authored a paper with his pet hamster. Geim describes his research strategy as the “Lego doctrine” – do something new using whatever equipment is at hand. In 2004 Geim and fellow émigré Kostya Novoselov came up with a new way to shave layers off a block of graphite using sticky tape. After repeatedly shaving the layer using strips of fresh tape, the pair were astonished to find their tape collected a single layer – graphene. For that discovery, they were awarded a Nobel in physics in 2010.
Graphene’s super-strength comes from the chicken-wired carbon atoms in two dimensions – they are bonded even more strongly than in a diamond. Previous strength tests, performed by poking it with a sharp diamond tip, showed graphene to be the strongest material on the planet. It’s so strong that a one square metre hammock (if you could make a graphene sheet that big) would weigh less than a cat’s whisker, but would hold the weight of the cat.
Jae-Hwang Lee at Rice University in Texas decided to test graphene’s mettle against a speeding bullet. Lee and his colleagues fixed multi-layer graphene sheets 10 to 100 nanometers thick across a tiny metal frame to make a membrane, a bit like a micro-scale drum-skin, then fired micro-scale silica bullets into it. The team used high speed cameras to measure the bullets’ speed before and after hitting the graphene, allowing them to calculate how much speed (and energy) was lost in the process – a lot, it turns out.
When struck by a projectile travelling at 600 metres per second, Kevlar – which is the gold standard for ballistic armour – can absorb 0.4 megajoules of energy per kilgram of material. Graphene could absorb 0.92 megajoules per kilogram.
To stop the projectile completely, Lee calculated, you’d need a thickness of only 500 nanometres – that’s one hundred times thinner than a human hair.
Graphene does the trick because a bullet’s force rapidly dissipates, rippling through the membrane at speeds of 22 kilometres per second. It’s like dropping a bowling ball on a trampoline that stretches and absorbs the impact, rather than dropping it on concrete that cracks.
Graphene stretches and absorbs the energy of silica micro-bullets fired at supersonic speeds.CREDIT: CREDIT: JAE-HWANG LEE/RICE UNIVERSITY
And when graphene does eventually crack, the fault lines are predictable. Lee expects that by reinforcing these lines with a polymer layer he could make a composite armour even better than graphene. “I am expecting that commercial graphene armour vests will be possible within a decade,” says Lee.
Scientists also believed graphene would present a barrier to sub-atomic particles. Despite its gaping chicken wire structure, the electron cloud between the carbon atoms was deemed impenetrable. But a team led by Geim has shown that protons can squeeze through.
The team placed a single sheet of graphene between two proton-conducting materials. In theory when they turned up the voltage, no current should have flowed. But current did flow.
The explanation? Despite the electron cloud barrier, “there are, however, areas where [it] is very, very thin”, says Marcelo Lozada-Hidalgo, first author of the paper. Those thinned areas allow protons to squeeze through like minnows through a fishing net but only as long as the graphene net is only one atom thick. Adding even one extra layer of graphene stops the protons squeezing through completely.
Fuel cells unlock the chemical energy in a hydrogen atom by splitting it into electrons and protons.
It’s a “surprising and interesting result”, says Zhe Liu, a materials scientist at Monash University. “In the past, it was believed that graphene was completely impermeable.” For this reason graphene was seen as a good building block for filtration membranes – researchers could drill holes in a single sheet to fit particular atoms or molecules, and be confident nothing else would cross. Finding that intrinsic gaps in graphene will allow protons through, but not hydrogen atoms, could be useful for hydrogen fuel cells, says Liu.
Contrary to long-held belief, protons have now been shown to squeeze between the carbon atoms in graphene, opening up new ways of sifting protons for fuel cells.CREDIT: DANIEL.COCHLIN@MANCHESTER.AC.UK
Fuel cells are being developed to power hydrogen cars or life support systems for space travel. They unlock the energy in hydrogen without burning it, by splitting the hydrogen atom into electrons and protons. But in order to produce useful electricity before the particles recombine, the particles must be well segregated: electrons have to go one way round a circuit, and the protons another. One of the leading designs relies on a  membrane at the gateway into the circuit – a material that acts like  a nightclub bouncer, only letting the VIPs (Very Important Protons) through.
The problem is that the best membrane in commercial use today, DuPont's Nafion polymer, sometimes allows hydrogen molecules through, which wastes fuel. And at tens of microns thick it’s also so bulky that it slows down the flow of protons, reducing power. Employing a single graphene sheet as asleek, highly discerning new “bouncer” could solve both problems at once.
Geim goes a step further suggesting graphene could be used to generate hydrogen fuel directly from the air. Currently hydrogen has to be generated from methane l  or splitting water with electricity.  Neither are ideal. The first releases carbon dioxide; the seconduses significantly more energy than it produces in the form of hydrogen fuel.
Graphene might provide an alternative, because free hydrogen is floating all around us  at about 0.5 parts per million in air. That may seem low, but it still adds up to more than 2 trillion tonnes of free fuel around the globe.
Geim proposes using a catalyst to split the hydrogen into protons and electrons. The protons could then be filtered through the graphene membrane and recombined with electrons on the other side – thereby creating a stream of ultra-pure hydrogen from the air. “It’s speculation,” Geim admitted to Nature, “but before this paper, it would be science fiction.” His team has already used a similar approach to sift hydrogen from water.
Graphene has been wowing us with its marvels for over a decade, and some are slowly trickling in to high-end sports equipment such as skis, bike helmets and  tennis rackets.  Novak Djokovic and Maria Sharapova,  for instance, use  HEAD graphene rackets.
While graphene’s not yet used in consumer electronics there have already been more than 7,000 graphene patents filed worldwide, including hundreds by technology giants such as Samsung, Apple and Sony.  And where patents lie, products will no doubt soon follow. Liu for one has no doubt, “Graphene will have significant impacts on our daily life in the near future.” 

Institutional investors making renewables key future trend

VIA http://www.ipe.com 12 JANUARY 2015BY 

Wind farm

Institutional investors are increasingly aligning their investments with energy technologies of the future, a new report claims.
According to the 2015 ESG Trends to Watch, from MSCI’s global head of ESG research Linda-Eling Lee, investors have begun to scrutinise the carbon-related risks embedded in their portfolios, using a sophisticated range of tools.
In addition to the measurement of companies’ current carbon emissions, investors can now adopt a total portfolio accounting of current and future emissions, measured against market benchmarks.
They can also access portfolio construction techniques ranging from selective exclusions to tilts of portfolio weights based on current and future carbon characteristics of individual securities.
But the report warns: “Investors can be highly exposed – both positively and negatively – to fundamental shifts in energy technology in the broad, diversified equity and fixed income holdings that can make up the vast majority of a portfolio.”
For example, the diversity among utility companies in the MSCI ACWI Index, a global equity index consisting of developed and emerging market countries, means that while more than one-third of the companies by market capitalisation currently derive less than 10% of their generation capacity from renewables, 11% of companies get more than 50% generation capacity from renewables.
The report says: “Without deliberately tilting more aggressively towards the companies with large and growing renewable capacity, investors potentially risk being under-exposed to significant growth in future fuel technology.”
Another theme highlighted is corporate governance.
While a plethora of company scandals have highlighted the more sensational details of directors’ behaviour, the report says institutional investors are making more systematic efforts to assess the effect of two types of factors on company performance – the industry expertise of individual board members, and the diversity of perspectives across the full board.
A governance analysis by MSCI ESG Research showed that, within the MSCI ACWI, those financial institutions with boards composed mainly of industry experts generated a larger return on equity (ROE).
The analysis also found that ROE for the one-third of MSCI ACWI constituents with no women on the board averaged 13.15, compared with 20.21 for the benchmark.
Lee said: “As the availability of analytical tools improves, we anticipate institutional investors will shift beyond targeted scrutiny of corporate ‘blow ups’ and towards systematic integration of these types of factors that are less about meeting best practices and more about capturing material impact.”
The report also highlights the increasing interest of large institutional investors in linking investing to positive social impact.
So far, they have been hampered by the lack of comparable outcome measures across projects, the small scale of projects and illiquidity.
To discover the feasibility of using public equities as an investment route, a sample portfolio of companies was created from the MSCI ACWI.
Companies were screened for characteristics including products having an impact (such as a high percentage of loans to small and medium-sized enterprises) and strong innovation capacity for addressing social needs (such as telecommunications companies targeting lower-income groups).
The resulting sample of 100 companies demonstrated some promising upside, including increased exposure to markets with social needs, and risk-adjusted returns during the sample period that are comparable with the benchmark.
Lee said: “Social impact investing does not necessarily improve returns by itself, but, by opening access to markets that have been underserved, as these markets get bigger, these companies will be in a better position for growth.”
She added that the ability to overlay exposure to social impact opportunities across broad, diversified public equity portfolios was expected to attract new investor segments with the potential to shift significant capital towards social needs.
Institutional investors are also looking to invest in infrastructure where it is most needed and least politically risky.
The key financial characteristics of infrastructure investments – higher income yield, stable quality cash flows and lower market volatility that is less correlated with equities exposure – are gaining appeal in the shift towards alternative investments in the asset allocation process.
And the report says the sector represents an even more attractive investment proposition than might first be thought.
It said: “While public attention to potential losses has often focused on the threat to poor island nations, of the 20 countries projected to have the largest number of people living in areas at risk of flooding, six are developed markets including Germany, Japan and the US. Others include some of the fastest-growing economies of the past decade, such as Brazil and China.”
The report analyses countries in the MSCI ACWI Index, finding that the top five European Union economies (excluding Spain) all face potential vulnerabilities to flood risk that require attention to climate adaptation investments.
It concludes: “We anticipate that, as institutional investors increase allocations to this asset class, they will rely on an ESG lens to help target growth opportunities in building climate resilience and to minimise governance-related risks that currently present barriers, especially for non-domestic infrastructure investments.” 
Meanwhile, a study from the UCL Institute for Sustainable Resources has found that one-third of oil reserves, half of gas reserves and more than 80% of current coal reserves globally should remain in the ground and not be used before 2050, if global warming is to stay below the 2°C target agreed by policymakers.
The study, funded by the UK Energy Research Centre, also identifies the geographic location of existing reserves that should remain unused, setting out the regions that stand to lose most from achieving the 2°C goal.

Circumventing Carbon Rule Using Renewables To Save U.S. Coal Plants

Very interesting read. These clever guys keep trying to find ways to burn coal.
RTO Insider
VIA RTO Insider
By Rich Heidorn Jr. and Suzanne Herel

Some coal-fired power plants at risk of retirement under the Environmental Protection Agency’s proposed carbon emission rule could survive thanks to unlikely saviors: energy efficiency and renewable energy.
That is a surprising conclusion of a PJM economic and reliability analysis of the EPA’s Clean Power Plan, which PJM officials outlined last week for the Transmission Expansion Advisory Committee.
PJM had presented preliminary results on the study, which was requested by the Organization of PJM States Inc. (OPSI), in November. (See PJM: Regional Approach the Cheapest Way to Comply with EPA Carbon Rule.)
The analysis included eight compliance scenarios requested by OPSI and seven proposed by PJM. Among the issues it examined was the impact of the carbon rule on generation retirements.
The study forecast 20,000 MW of steam generation retirement by 2029 under the four high renewable/energy efficiency scenarios, doubling to about 40,000 for the four low renewable/energy efficiency scenarios.

Counter-Intuitive Result

“Although this seems counter-intuitive, under the proposed Clean Power Plan, more energy efficiency and renewable energy means lower CO2 prices, which implies that the financial stress on higher emitting resources is reduced,” PJM said. “In the extreme … it is possible to add enough energy efficiency and renewable energy so that re-dispatch is not needed since there will be sufficient zero-emitting resources to avoid re-dispatch.”
The EPA said last week that it will finalize the carbon rule for existing generators, along with companion rules for new and modified power plants, by mid-summer. (See related story,EPA Delays Power Plant Carbon Rules.)
The EPA’s proposal for existing generators would set interim carbon emission goals beginning in 2020, with emissions rate targets declining over the following decade. During the 2020 and 2029 “glide path” to full compliance, states would be permitted to average emissions, allowing them to “bank” earlier emissions reductions to be used in later years or “borrow” reductions that must be repaid in later years.
Retirements of less efficient, high-emitting generators early in the transition would provide an immediate cut in CO2 emissions, reducing the need for re-dispatch of more efficient, lower emitting sources. More efficient sources will face increasing pressure to retire as the emission limits decline and CO2 prices increase.

Identifying At-Risk Units

PJM’s study set a benchmark for retirement based on the net cost of new entry (net CONE) for a combustion turbine or natural gas combined-cycle plant, depending on which was cheaper under the scenario. (Due to the stricter emissions targets under the proposed EPA rule, PJM said combined-cycle plants are the cheapest supply source for meeting reliability targets in many of the simulations.)
Generators were considered at-risk for retirement if their annual revenue requirements exceeded the net-CONE benchmark (either 0.5 or 0.6 of net CONE).
The study found that although increased use of energy efficiency, renewables and nuclear power reduce energy market prices, they also reduce CO2 prices, which means less need for re-dispatching from coal to natural gas generators.

Increased Operations Trumps Lower Prices

“Being able to operate economically for more hours is more beneficial to coal unit revenues than the reduction in energy market prices,” PJM said.
Retirements of steam turbines — gas-, oil- and coal-fired resources whose prime mover is a steam turbine — would rise from less than 4,000 MW in 2020 to more than 20,000 in 2029 under the high renewable/energy efficiency scenarios.
Under the low renewable/energy efficiency scenario, retirements would rise from about 6,100 MW in 2020 to almost 40,000 in 2029.
The high renewable/energy efficiency scenarios assume achievement of at least 50% of the EPA’s 23.3-GWh energy efficiency goal. The low renewable/energy efficiency scenarios project wind and solar power and energy efficiency based on historic growth rates, with energy efficiency of 9.2 GWh.
PJM transmission planners will conduct reliability analyses on generators identified as “at-risk” in at least 50% of the scenarios evaluated to determine whether their closure would necessitate transmission upgrades or other actions. About 8,000 MW fell into that category in 2020, increasing to almost 40,000 in 2029.
“Through the course of January and early February we’ll be trying to get a handle on what kinds of upgrades might be required,” Paul McGlynn, general manager of system planning, told the TEAC.

Regional vs. State Compliance

PJM cautioned that the quantitative results of the study reflect many scenario assumptions, including fuel prices, electricity demand, retention of nuclear resources and whether compliance is done regionally or state by state.
“Given the uncertainty about future market conditions, the form of the final rule, and the form of state compliance plans, it is best to focus on the qualitative results, which show the direction of wholesale power prices, units ‘at risk’ for retirement, CO2 prices and similar metrics,” PJM said.
In 2020, for example, PJM projects state-by-state compliance would result in twice as many retirements as regional compliance under the high renewable/energy efficiency scenario and 3.5 times as many under the low renewable/energy efficiency scenario.
The study also found that state-by-state compliance would be almost 30% more expensive than a regional approach. A regional compliance plan would allow states to trade reductions among each other, giving PJM access to lower cost units for re-dispatch.

“Not only is it more cost effective to do regional compliance, but there’s now fewer units at risk for retirement,” PJM Chief Economist Paul Sotkiewicz explained. “There’s a reliability message here.”

NOW! SOLAR Interview.