US Electricity Markets May Have Trouble Keeping the Power On

"MISO, PJM, and ERCOT Concerned about Resource Adequacy"
That was the heading on the e-mail sent out by POWER news magazine today.

The title refers to 3 separate system operators.

The reports are important to Ontario for a number of reasons.

• Both MISO and ERCOT are wind/coal regions, where investments have been made in wind instead of cleaner baseload and intermediate power plants.  The problems should be noted.
• The is a dearth of personnel, and perhaps engineering competence, to complete generation projects
• The most complex of the upgrades required to get coal plants to meet new EPA regulations were made, long ago, at Lambton on the currently operating units 3 and 4.
• Ontario's government has failed to complete the transmission line to increase capacity to the border in the Niagara region.  While the speech is that it is not required, there appears to be a good deal of exporting destined for New York headed through the Michigan interties
• The fifth is because the big drivers of price inflation, to date, have been low capacity factors at new CCGT plants, and cheap exports.  There seems to be an opening for the second of these issues to lessen the damage of the first - but it requires emissions, including some pollutants, here in order to replace very dirty coal elsewhere.
• A coherent trade strategy is needed.  Dumping, and protectionist legislation to discourage trade, are harming the ability to alleviate costs in Ontario, and to lessen emissions beyond Ontario.

The Midwest system operator (MISO): Power's article suggests this operator will struggle with the sheer scope of retrofits necessary to it's coal-fired generation fleet in order to meet new EPA reguations:

Compliance with the Environmental Protection Agency’s (EPA’s) Mercury and Air Toxics Standard (MATS) by April 2015 will require coal generators in the Midwest to install retrofits at a pace and scale that exceeds “historical demonstrated capability,” and it will impose taxing bottlenecks on the nation’s power sector labor, equipment, and supply chain, a new study suggests.

Read the entire article to see the scope of the predicted challenges in this region that has seen rapid wind capacity growth - and little else. The major labour challenge is stated to be boilermakers.

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ERCOT (Texas):  ERCOT's prices soared during last August's heat (and earlier in 2011 during winter cold), and POWER is now reporting things aren't looking up.

According to ERCOT’s newly revised Capacity, Demand and Reserves (CDR) report , the grid operator that serves about 85% of Texas will struggle to maintain its 2010-set 13.75% reserve margin through 2013, requiring nearly 2 GW of mothballed capacity returned to service before this summer to remain in operation. It also requires that LS Power's 900-MW pulverized Sandy Creek coal unit in Riesel, Texas, become operational as scheduled. That plant sustained severe damage to its boiler during commissioning testing last October and is expected to reopen in early 2013.

 The full ERCOT article provides a more in-depth reporting on ERCOT's challenges in 2011 (including bringing plants back to regular service from mothballed status), and going forward.

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PJM (13 Midwestern and Mid-Atlantic States):  In the large PJM market, POWER is reporting that 14 GW of generation are planned to be retired by the end of 2015, with a $2 billion expenditure on transmission upgrades to allow better maneuverability with distant sources to replace generation.

More than half of the improvements are in Ohio, particularly around Cleveland, stemming from a flurry of proposed retirement announcements of generators along Lake Erie.
“Even with the retirement of older coal-fired generators, we will have enough existing and new resources in the region to keep the lights on,” said Terry Boston, PJM president and chief executive officer. “The transmission upgrades the board has approved ensure we will continue to deliver power to wherever people need it.