NERC Circulating Study on ‘Accelerated’ Retirements

By Rory D. Sweeney

VALLEY FORGE, Pa. — Generation reserve margins might drop and fuel-assurance risks could increase if coal and nuclear units retire sooner than anticipated, according to the preliminary findings of a NERC study focused on PJM and ERCOT.

PJM staff confirmed at the RTO’s Planning Committee meeting on Thursday that NERC had discussed the study at its own Planning Committee meeting earlier last week. The draft report has been sent out to members of NERC’s PC for comment, with the reliability overseer planning to present the final version to its Board of Trustees at its meeting on Nov. 6-7.

NERC spokesperson Kimberly Mielcarek said the target for public release is “before the end of the year.”

She declined to provide details before the study is final but pointed to the PC agenda, which outlines the study’s history.

NERC began soliciting policy input in May 2017 from stakeholders, proposing to conduct “an assessment of the potential impacts on Bulk Power System (BPS) reliability that could be caused by accelerated retirements of traditional baseload generator resources … to understand and address reliability challenges associated with the changing resource mix.”

NERC staff analyzed aggregated supply and demand projections for the study, along with engineering studies on specific retirement scenarios. They also reviewed regional processes for managing plant deactivations.

According to the agenda’s description, the study found that “when generation retirements exceed or outpace needed replacement resources, the BPS is less capable of withstanding contingencies, unplanned facility outages and extreme conditions.”

It added that “replacing retiring coal-fired and nuclear generation with natural gas-fired generation provides essential reliability services but can result in near-term stress on the natural gas infrastructure and create challenges to fuel deliverability in extreme winter conditions and major natural gas contingencies.”

Managing those issues will require “continued adherence to rigorous resource adequacy assessment and transmission planning processes” as “large amounts of generator retirements can result in extensive network upgrade requirements” and “potentially the increased use of out-of-market solutions such as reliability-must-run (RMR) designation to address resource adequacy issues,” NERC said.