The Midcontinent Independent System Operator (MISO) in its latest analysis projects roughly 16 GW of coal-fired generating capacity on its system could be retired by 2030 under the Environmental Protection Agency’s (EPA) final Clean Power Plan (CPP), giving way to natural gas and renewables.
In a presentation during a committee meeting this week, the Carmel, IN-based regional transmission organization outlined various scenarios of carbon emissions reductions out to 2050 and how its system would be impacted, saying the “loss of coal capacity/energy production” would be offset by some combination of an “increase in gas dispatch” and a buildout of renewables.
MISO said the 16 GW of coal retirements by 2030 would occur under a compliance scenario that sees MISO cut carbon emissions by 34%.
Under an “accelerated” compliance scenario modeling a 43% reduction in carbon emissions, MISO projects 24 GW of coal capacity to go offline. A partial compliance scenario with a 17% emissions reduction would see 8 GW of coal retirements.
The CPP, the cornerstone of the Obama administration’s efforts to address climate change, is a landmark rule to reduce carbon emissions from U.S. power plants by 32% by 2030 based on 2005 levels. Analysts have pointed to additional natural gas-fired generation as a key component of complying with the emissions reductions mandated in the CPP (see Daily GPI, Dec. 2, 2015).
The final rule was announced in August (see Daily GPI, Aug. 3, 2015), but in a surprise move, the U.S. Supreme Court ruled in February to stay its implementation pending the outcome of legal challenges from numerous stakeholders opposed to the controversial regulation (see Daily GPI, Feb. 10). MISO said in its presentation that “in light of the stay, the timeline for [implementation of] the CPP is currently unclear.”
Thanks to low prices, natural gas made significant gains in share of domestic power generation in 2015, beating out coal month-to-month for the first time ever last April (see Daily GPI, Dec. 28, 2015; Dec. 2, 2015; Oct. 28, 2015). The Energy Information Administration (EIA) said this week it expects natural gas to surpass coal as the leading fuel source for electric generation for full-year 2016 (see Daily GPI, March 16), though FERC has not embraced that conclusion (see Daily GPI, March 17).
According to EIA, coal accounted for 80% of the 18 GW of U.S. generating capacity retired in 2015, with most of the retired coal units having been built between 1950 and 1970 (see Daily GPI, March 8).
MISO oversees the reliability and transmission of electricity across parts of 15 U.S. states and the Canadian province of Manitoba.
In January comments submitted to EPA Administrator Gina McCarthy, MISO CEO John Bear touched on the organization’s concerns with the “tight timelines” in the CPP and the potential impact to reliability.
“While not every state may require a major infrastructure build out, for those that do, it will take time to plan, approve, construct and place into service the new generation, electric transmission facilities and natural gas infrastructure necessary to support electric system reliability,” Bear wrote.
In earlier comments to EPA on the draft version of the CPP, MISO had pointed to “new combined cycle natural gas generation” as “the most probable option to replace retiring coal-fired plants and comply with the proposed rule.”