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DOE To Fund New Coal-Fired Generation Research

The Department of Energy’s Office of Fossil Energy is funding research and development into small, modular coal-fired power plants in 2019 in an effort to revive the coal-fired power generation sector and diversify the power generation industry. The potential for higher natural gas prices in the future and an over-reliance on natural-gas fired electricity generation are causes for concern for grid reliability and national security. The research will focus on developing small coal-fired units capable of flexible operations with little to no emissions to meet the needs of the modern electrical grid and increasing environmental concerns that have troubled the coal industry over the last decade.

 

Read More:

https://www.energy.gov/fe/articles/energy-department-announces-intent-fund-research-advances-coal-plants-future

https://www.utilitydive.com/news/doe-to-fund-coal-first-initiative-critics-say-its-political-not-practic/542149/

https://www.greentechmedia.com/articles/read/trump-doe-small-modular-coal-plants-what-does-that-mean#gs.oIVAGlY

Fourth Major U.S. Coal Company Files for Bankruptcy Amidst Continuing Industry Decline

Westmoreland Coal Co., one of the oldest coal mining companies in the U.S. has filed for bankruptcy. The filing represents the fourth major U.S. coal company to file for Chapter 11 bankruptcy in three years due to continual decline in demand for coal throughout the U.S. as well as overseas.  Despite efforts by government agencies and President Trump’s more favorable outlook towards the coal industry, demand has continued to decline as more coal-fired electricity generating plants retire and as two of the biggest U.S. coal consumers, China and India, import less coal in efforts to reduce air pollution. The latest government forecasts expect coal-fired power plants to continue to retire and coal production, consumption, and exports to continue to decline.

 

Read more:

https://www.washingtonpost.com/business/one-of-oldest-us-coal-companies-files-for-bankruptcy/2018/10/09/ec8d00e6-cbf2-11e8-ad0a-0e01efba3cc1_story.html?noredirect=on&utm_term=.c476f5e5d82f

https://www.bloomberg.com/news/articles/2018-08-21/trump-promised-to-bring-back-coal-it-s-declining-again

https://thinkprogress.org/latest-government-statistics-show-coal-industry-on-steady-decline-under-trumps-leadership-188e724520e6/

http://theweek.com/articles/795716/withering-american-coal-industry

New Wind and Solar Power Generation Installations Beating Natural Gas Despite Its Low Cost

Per the EIA, in the US in 2016 wind and solar energy generation accounted for nearly 9,000 MW and 8,000 MW, respectively, of capacity additions while natural gas-fired generation added approximately 7,900 MW.  The cost of natural gas-fired generation is still considerably cheaper, averaging $895/kW versus wind and solar with an average installed cost (nominal dollars) of $1,630/kW and $2,434/kW, respectively. However,  demand for renewable energy has surged from businesses seeking to fill their energy needs from clean energy sources rather than fossil fueled generation.  Additionally, the cost of solar and wind power generation keeps declining year over year making it increasingly more viable for utilities to invest, further driving their growth.

Read more:

https://www.power-eng.com/articles/2018/08/eia-solar-wind-investment-flourishes-but-gas-fired-biggest-bargain.html

https://www.power-eng.com/articles/2018/08/demand-for-clean-energy-coming-from-businesses-not-advocates.html

https://www.utilitydive.com/news/an-offer-utilities-cant-refuse-the-low-cost-of-utility-scale-solar/529373/

https://www.windpowerengineering.com/business-news-projects/eia-wind-costs-decline-thanks-to-improved-technology-siting-decisions/

Natural Gas-Fired Electricity Generation Surging This Summer

The EIA’s Short-Term Energy Outlook released in July has natural gas-fired generation supplying approximately 37% of total electricity in the U.S. this summer, with coal-fired generation falling to approximately 30% of total supply.  Low natural gas prices along with over 5 gigawatts of additional natural gas-fired capacity that has come online this year are the significant drivers in the continual growth of natural gas-fired electricity generation.

 

Read more and the full EIA report here:

https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf

http://www.naturalgasintel.com/articles/115020-eia-expects-natural-gas-fired-power-generation-to-near-record-highs-this-summer

https://www.power-eng.com/articles/2018/07/gas-fired-power-edging-closer-to-40-percent-of-u-s-generation-mix-eia-says.html

Increasing Renewable Generation Capacity Posing More Challenges for Grid Operators

The significant growth of renewable energy generation has made it a challenge to effectively integrate into markets across the US.  The inherent variability of wind and solar generation has led to wide, and fast swings in wholesale electricity prices due to supply and demand imbalances.  According to a report by the Lawrence Berkeley National Laboratory (LBNL), these imbalances could become much more frequent as renewable generation penetration continues to grow.  Grid operators will need to find adequate ways to respond and neutralize this volatility.

 

Read more and the full LBNL report here:

 

https://www.utilitydive.com/news/devil-or-angel-will-the-renewables-boom-lead-to-power-price-volatility-or/525353/

https://www.utilitydive.com/news/prognosis-negative-how-california-is-dealing-with-below-zero-power-market/442130/

http://eta-publications.lbl.gov/sites/default/files/report_pdf_0.pdf

Legislation Leads to Uncertainty in the Renewable Energy Sector

New legislation along with the expiration and phase-down of the Renewable Energy Production Tax Credits (“PTC”) have lead to uncertainty in the renewable energy sector. PTCs play a significant role in a project’s viability. The value of the PTC was $24/MWh for projects that commenced construction in 2016 or earlier, however, for projects commenced in 2017 and each year after the PTC is reduced by 20% each year until it is phased out. The phase-down may deter developers from beginning new projects; however, it is not certain as many companies and industries have initiatives and incentives in place to promote clean energy. Additionally, the Base Erosion Anti-abuse Tax (“BEAT”) introduced by the Tax Cuts and Jobs Act (“TCJA”) could affect investors’ willingness to participate in renewable projects. So far, the impact of BEAT has been minimal; however, the overall impact will be determined over time. Specifically, for solar projects, the Section 201 Solar Tariff will have a large impact on the development of solar projects in the U.S. The Section 201 Solar Tariff is a 30% tariff on imported solar panels in year one and is eventually phased down to 15% by year 4. Surrounding the announcement of the tariff, several U.S. manufacturers have announced expansions to operations. However, the ramped-up production could come at a premium. Overall, continuing improvements in efficiencies, reduced capital costs, and initiatives and incentives in other industries could prove to offset the challenges that face the renewable energy sector and keep renewable technologies competitive with fossil fuel generation technologies. The near future will tell whether renewable technologies can remain competitive, or if the challenges facing the industry make development of fossil generation a more attractive option.

Further Reading:

Gretz, Daren. (2018, April). Financial Challenges Impacting the Renewable Energy Industry. Power Engineering. pp. 12

Life in the Wind Industry as the PTC Phases Out and New Markets Phase in – https://www.windpowerengineering.com/dw-sync/life-wind-industry-ptc-phases-new-markets-phase/

Trump Levies Graduated Tariffs Starting at 30%, Exempts 2.5 GW in Cells – https://www.pv-magazine.com/2018/01/23/trump-levies-graduated-tariffs-starting-at-30-exempts-2-5-gw-in-cells/

The New Base Erosion Minimum Tax – https://www.mwe.com/en/thought-leadership/publications/2018/01/the-new-base-erosion-minimum-tax

Renewable Electricity Production Tax Credit (PTC) – https://www.energy.gov/savings/renewable-electricity-production-tax-credit-ptc

 

Rise of Renewable Energy Generation Expected to Continue

Between declining costs of renewable energy technology and continually increasing stigma associated with fossil fuel electricity generation, the forward outlook for renewable generation is very positive.  Additionally, the Tax Cuts and Jobs Act signed into law by President Trump at the end of 2017 maintained the tax credits associated with renewable energy generation, furthering the push towards increased renewable capacity in the United States.  According to a study by the National Renewable Energy Laboratory, renewable energy generation is capable of supplying up to 80% of the nation’s total electricity generation by 2050.

Read more about the growth of renewable electricity generation here:

 

https://www.nrel.gov/analysis/re-futures.html

https://www.ucsusa.org/clean_energy/smart-energy-solutions/increase-renewables/renewable-energy-80-percent-us-electricity.html#.WtC-I0xFzng

https://www2.deloitte.com/us/en/pages/energy-and-resources/articles/renewable-energy-outlook.html

https://www.natlawreview.com/article/impact-final-tax-reform-legislation-historic-tax-credit-new-markets-tax-credit-low

V.C. Summer Nuclear Plant Abandonment Spells Trouble for Future of Nuclear Power

The V.C. Summer Nuclear Plant in South Carolina, one of the first new Nuclear Power Plant projects in nearly 2 decades, has been abandoned partway through construction. Santee Cooper and SCE&G, partners on the project, decided to cancel the project due to significant budget overruns, the bankruptcy filing of Westinghouse (reactor manufacturer), and the significant change in economics of the power generation industry since the project’s inception.  After receiving bailouts from federal and state governments only a year ago, the nuclear power generation in the United States is stalled and unprofitable.

The Executive Director of the Nuclear Information and Resource Service was quoted saying:

“Nuclear power is failing despite the fact that it is already heavily subsidized. Canceling the Summer reactors proves that the industry has no future, but it only tells half the story. Nuclear generators are pushing for billions of dollars in subsidies and bailouts for their aging reactors, and those efforts are mostly failing, as well. Hoped-for momentum from 2016 bailouts in New York and Illinois did not materialize, as state legislatures rejected nuclear subsidy bills this year. With renewable energy now surpassing nuclear by widening margins, it’s clear that subsidizing nuclear is an expensive way to slow down the growth of clean, safe, affordable, job-creating energy sources.”

 

Read More:

https://www.bizjournals.com/prnewswire/press_releases/2017/08/03/DC57950

http://www.free-times.com/news/local-and-state-news/nuclear-meltdown-utilities-pull-plug-on-vc-summer/article_418ab16a-7622-11e7-bc5a-dbf812292cb0.html

http://nuclear.energy-business-review.com/news/sceg-santee-cooper-to-abandon-new-nuclear-units-for-vc-summer-010817-5887642

Emergence of Reciprocating Gas Engines

Recent developments in the power generation industry have seen gas reciprocating engines being installed in increasing numbers on new projects as opposed to gas turbines. Improvements in technology have resulted in reciprocating engines that can rival the capacity of gas turbines and the ability to be brought to full capacity in as little as five minutes. There are many examples of new projects incorporating gas reciprocating engine technologies including Fairmont Energy Station in Minnesota, Sky Global One near Houston, and Rubart Station in Kansas. All of these facilities are located in regions where there is a large amount of installed or planned wind capacity where there is a need for dependable and dynamic support generation capacity that can quickly come online when wind generation fluctuates. The overall trend of increasing renewable resource capacity has created a shift in the industry and the development of modern gas reciprocating engines. It is anticipated that modern gas reciprocating engines will continue to gain popularity for the foreseeable future.

 

READ MORE:

http://www.power-eng.com/articles/print/volume-120/issue-11/features/turbines-vs-reciprocating-engines.html

http://www.power-eng.com/articles/print/volume-120/issue-8/features/the-evolution-of-reciprocating-engines.html

https://www.clarke-energy.com/gas-engines/

New York Regulators Approve Clean Energy Standard, Saving Nuclear Power Plants, to Achieve 50% Renewables by 2030

In a 4-0 vote, the New York Public Service Commission (“PSC”) approved the Clean Energy Standard to help keep nuclear power online. This decision will provide $965 million in additional revenue for the next 12 years to three nuclear power plants in upstate New York. The three plants eligible for the program are: Exelon Corp’s Ginna and Nine Mile Point Units 1 and 2, and Entergy Corp’s FitzPatrick. FitzPatrick is scheduled to close in 2017 but Entergy Corp. is in talks with Exelon about a potential sale.

This comes at a time where cheap natural gas has flooded the market, forcing nuclear plants to shut down—a risk PSC Chair Audrey Zibelman does not want to take saying, “We could not possibly replace those nuclear units if they were to shut.” Those units would most likely be replaced by carbon producing plants.

This alternative thinking to reduce carbon emissions and help the struggling nuclear industry could provide a model for the rest of the country.

Read more:

http://www.reuters.com/article/us-new-york-nuclear-idUSKCN10C2Z6

http://www.powermag.com/n-y-approves-nuclear-subsidies-and-mandates-50-renewables-by-2030/

http://www.utilitydive.com/news/updated-new-york-psc-approves-50-clean-energy-standard-nuclear-subsidies/423635/