If you’ve been paying attention to the power markets in recent years, you know that merchant coal and nuclear power plants are struggling to compete against natural gas-fired generation and renewable resources. For example, PJM Interconnection—the world’s largest competitive power market—in late May announced results for its annual capacity auction. It procured more than 165 GW for the June 1, 2020, to May 31, 2021, period with natural gas fueling the largest share of the cleared capacity (more than 75 GW).
Coal and Nuclear Stumble
It wasn’t that long ago that coal-fired generation dominated the PJM auctions. In the 2013/2014 capacity auction, for example, coal cleared more than 60 GW while gas was less than 50 GW. Since then, the trend has been nearly straight down, with only slightly more than 40 GW of coal capacity clearing the auction in 2020/2021.
The PJM auctions haven’t been particularly kind to nuclear generators either. Exelon’s Three Mile Island (TMI) and Quad Cities nuclear plants failed to clear the auction this year. The news had near-immediate consequences for TMI. The week after the auction results were released, Exelon announced it would retire the plant in September 2019, unless Pennsylvania enacts policy reforms.
Exelon has had some success getting states to provide support for struggling nuclear plants. The New York State Public Service Commission approved a “Clean Energy Standard” in August 2016, which provides subsidies for upstate nuclear plants. In Illinois, the legislature last December passed the “Future Energy Jobs Bill,” which will feed millions of dollars to Exelon each year to keep the Quad Cities and Clinton nuclear facilities open. The measures are being challenged in court, however, and unfavorable rulings could jeopardize the future of several nuclear plants.
While nukes often receive backing from clean energy advocates for their lack of carbon emissions, coal generators are not as fortunate. Rather, environmentalists are generally the most outspoken critics of coal, often suggesting its use be discontinued altogether.
Effects on Reliability
Understanding that coal and nuclear generation face serious retirement threats, PJM stakeholders raised the question: Is the grid becoming so dependent on natural gas and renewable resources that operational reliability could be adversely affected? Speaking at the American Society of Mechanical Engineers (ASME) Power and Energy Conference in Charlotte, N.C., on June 27, Michael Bryson, PJM’s vice president of operations, said, “The unspoken question of this is ‘Is there such a thing as too much natural gas?’ ”
To answer the question, PJM conducted a study designed to evaluate fuel diversity through the lens of reliability and to identify a range of resource mixes that could effectively manage reliability risk.
“One of the things we started out assuming was that more diversity means more reliability,” Bryson said. “What we found out as we looked through our results was that’s not necessarily true.”
In the end, reliability did not depend so much on a diverse resource mix; it depended on generator reliability attributes.
PJM’s team identified 13 essential reliability attributes. The attributes were frequency response, including synchronous inertia, primary, and secondary frequency response; voltage control; ramping ability for regulating margin; ramping ability for contingency reserve; ramping ability for load following; fuel assurance as determined by the ability to maintain economic maximum energy output for at least 72 hours; fuel assurance through the ability to store fuel on-site; flexibility to start and stop more than once in 24 hours; flexibility to start within 30 minutes following notification; flexibility to run 2 hours or less per start; black start capability; lack of environmental restrictions limiting hours of operation; and high equivalent availability factor.
PJM then created a matrix and evaluated each resource type’s ability to exhibit each of the attributes. Hydropower was judged to be the most reliable resource. However, natural gas combustion turbines (CTs) were a close second. In fact, the only attribute that CTs weren’t judged to at least partly exhibit was on-site fuel inventory.
Natural Gas Is Highly Reliable
The results from the analysis suggest that the answer to the initial question of whether or not the system can be too dependent on natural gas is “no.” Bryson said that even as the research team cranked up coal and nuclear retirements, and added in more renewables, portfolios composed of up to 86% natural gas showed no decrease in reliability.
However, the same can’t be said for wind and solar, which fell to the bottom of the reliability matrix. “A marked decrease in operational reliability was observed for portfolios with significantly increased amounts of wind and solar capacity,” the report says. Moreover, most portfolios with solar unforced capacity of 20% or greater were considered infeasible because loss of load expectation criteria were violated at night.
“Just looking at reliability may not be enough,” Bryson said. “It may be more important to take that and look at reliability as kind of a base level and continue to look at resilience and develop resilience.”
PJM defines resilience as “the capability of an energy system to tolerate disturbance and to continue to deliver energy services to consumers.” The report suggests that relying too heavily on any one fuel type may negatively impact resilience because resources do not provide generator reliability attributes equally. It sounds to me like it’s time for a resiliency study. ■
—Aaron Larson is POWER’s executive editor.