Decarbonization, Decentralization Driving Power Industry
Technological innovation has forever been part of the power generation sector, as electricity producers strive for more efficient and more economic ways to deliver power.
The POWER magazine editorial staff, in a “State of the Industry” presentation on Sept. 28 to open the virtual 2020 Experience POWER conference, identified four trends in power generation that are shaping the sector. Each trend has advanced technology at its core.
The POWER team of Aaron Larson, executive editor; Sonal Patel, senior associate editor; and Darrell Proctor, associate editor, discussed how flexibility, digitalization, decarbonization, and decentralization are transforming the power sector.
“Flexibility is vitally important to power plants these days. Most power generators are searching for ways to shorten startup times, increase ramp rates, reduce minimum load capability, and shorten minimum uptime and runtimes to accommodate for variable renewable energy resources,” Larson said.
Patel noted the power industry has embarked on multiple transitions, but that the current transition is unique because it is based on the elimination of carbon. Driven by a global imperative to limit warming to 1.5 degrees Celsius above preindustrial levels, nearly 60 parent investor owned utilities in the U.S. had emission reduction targets. More than 20 companies have said they will seek to achieve net-zero carbon emissions by 2050, she said.
“So what’s driving this? Sustainability—how do power companies survive as the world changes. Also, investor interest, and shareholder pressure, as well as customer and employee preferences,” Patel said.
Proctor said that with decentralization, “energy consumers can have more control of their electricity supply and power costs, whether their system is grid-connected or off-grid.” Flexibility in other areas is also part of the picture, as in a decentralized system, “demand response is used to manage distribution and grid stability, which can call for a management system that enables energy consumers, equipment, and demand patterns to be orchestrated.”
Coal in Decline; Gas Still Dominant; Renewables on the Rise
The POWER editors discussed in detail how the use of coal for power generation continues to decline globally, though new coal-fired plants are being built in areas such as China and Southeast Asia.
“The question is: How long will these new coal plants last. Chinese President Xi Jinping said last week he wants his country to achieve carbon neutrality before 2060. Although there are ways to achieve that without closing coal plants, it’s possible that a new plant built today could have a useful life of less than 40 years,” Larson said.
Proctor noted how coal-fired power generation in the U.S. dropped to a 42-year low in 2019, according to the U.S. Energy Information Administration (EIA), “and continued to fall this year as power demand fell due to the coronavirus pandemic.” He continued: “According to EIA, every U.S. region saw a decline in coal” over the past two years.
Patel, though, outlined a set of technologies several entities around the world are exploring that could transform coal’s future. The U.S. National Coal Council, for example, has called for lowering the cost of carbon capture, utilization and storage (CCUS) and high efficiency-low emissions (HELE) coal generation technologies through large-scale demonstration and commercial projects. The council in July said these and other advanced coal generation technologies could help states and utilities meet mid-century objectives.
“So in a nutshell, the plan is to use 45Q tax credits to help deploy CCUS infrastructure by 2035 and then have commercially available, cost-competitive, near-zero coal plants operating by 2040,” she said.
Natural Gas Tops U.S. Generation
The editors agreed that natural gas will continue to have the largest share of power generation in the U.S., while taking a lead role elsewhere due to continued low prices for the fuel and as many countries—including Germany and Canada, among others—phase out coal-fired generation.
A POWER analysis of EIA data shows that from 2008 to 2019, the U.S. added about 121,000 MW of natural gas-fired capacity to the country’s generation fleet, including almost 26,000 MW in 2018 and 2019. As of the beginning of 2020, at least 200 new gas plants are planned or in development across the U.S., representing a total of more than 70,000 MW of new capacity.
“All indications suggest natural gas will remain inexpensive in the U.S. for many years to come, and economics is what’s driving many plant decisions, so I expect gas to remain a major part of the U.S. power mix for the next 20 years or more,” said Larson.
Said Proctor: “The EIA has said natural gas will remain the dominant fuel for U.S. power generation for the foreseeable future, accounting for 40% of the electricity supply in 2050—even as the penetration of renewables increases.”
But according to Patel, major gas turbine original equipment manufacturers (OEMs) are also heavily invested in ensuring they retain a role and a viable market in the future, within the decarbonization movement. “Right now, that’s to provide flexibility and efficiency,” she said. “But at this point, every major OEM is also developing gas turbines that can operate on a high-hydrogen-volume fuel.”
Advanced Nuclear Projects Moving Forward
Technology could transform nuclear’s future, too. Patel noted that along with safety and security, the world’s nuclear power producers have made better economics a priority, and some generators have achieved notable results.
Responding to the a string of premature nuclear reactor retirements, the U.S. nuclear industry, for example, set out in 2013 to boost performance. “They did it and it’s really remarkable what they achieved,” she said. “This April, the Nuclear Energy Institute reported that in 2019, the U.S. fleet achieved its lowest recorded average total generating costs in two decades—$30.42/MWh—though it ran at a record-high 93.4% average capacity factor. Total generating costs were 7.6% lower last year compared to the prior year, and have fallen nearly 32% since 2012.”
The future of nuclear rests on advanced nuclear technologies. Research and development of small modular reactors and microreactors are strongly backed by the U.S. government, which wants to regain leadership in the global nuclear industry, she said. Both SMRs and microreactors will be part of POWER’s virtual Distributed Energy Experience Oct. 19-22.
Earlier this year, the DOE announced funding for the Advanced Reactor Demonstration Program, which essentially seeks to build two reactors that can be operational within the next five to seven years. And to support advanced reactor development, the DOE has also ramped up efforts to establish commercial high essay low-enriched uranium (HALEU) production, “which is needed by many advanced reactor concepts, as well as by existing reactors,” Patel explained.
“I’m excited by the prospects of microreactors,” Larson said. “If developers can gain approval and begin deploying these small 1 MW to 20 MW reactors, it could be game-changing for the nuclear industry.”
Proctor said the Vogtle project in Georgia, the only major U.S. nuclear power plant under construction, is on track for the first unit of a two-unit expansion to come online in November 2021. “Georgia Power in early September said the overall project was 87% complete,” he said.
Energy Storage Will Have Major Role
Proctor said energy storage will become even more of a player in power generation. Pumped-hydro storage remains the largest supplier of energy storage, but ever-larger battery installations—including LS Power and Pacific Gas & Electric’s Gateway project in California—will help supplement the larger grid, adding reliability and resiliency.
“Among the next things to watch is residential behind-the-meter (BTM) batteries,” said Proctor. “In Germany, 40% of recent rooftop solar photovoltaic applications have been installed with BTM batteries. Australia aims to reach one million BTM batteries installations by 2025. This will enable homeowners to power their home, their electric vehicle, and even send power back to the grid.”
—POWER editorial staff (@POWERmagazine).