By Tom Kleckner

ERCOT last week released an updated analysis of the Clean Power Plan’s impacts on the Texas grid’s reliability, saying the Environmental Protection Agency’s final rule could result in the retirement of at least 4,000 MW of coal-fired generation, beginning as soon as 2022.

Warren Lasher, ERCOT’s director of system planning, said while the 4,000 MW represents only 6 to 7% of the grid’s total generation reserves, losing that capacity in too short of a timeframe would threaten the target reserve margin (13.75%).

“Coal retirements may happen sooner if owners have to make capital investments to comply with other plans,” Lasher said, noting the current reserve margin is 16%. “One of our concerns is the potential for all the units to retire in too short period of time.”

ERCOT said the changes could also increase retail power prices by up to 16% by 2030, based on an increase in the marginal price indicator. That doesn’t include the costs of new transmission projects or other investments that could be needed to support compliance.

“Unit retirements may lead to reduced reliability of the system in localized areas, as new transmission lines will be needed to connect customers to new generating,” Lasher said, noting it takes about five years to build transmission lines in Texas.

ERCOT’s analysis considers the CPP’s effects based on mass-based approaches to achieve the region’s emissions targets by modeling four scenarios:

• Baseline: reflects current trends in the ERCOT region and market while considering announced retirements and current regulatory requirements;
• CO₂ limit: considers a system limit on emissions that allows the model to select the lowest-cost resource option without regard to market design or other considerations associated with implementation;
• CO₂ price: estimates a price for CO₂ emissions that would cause the ERCOT region to achieve the compliance targets; and
• CO₂ price/regional haze: also estimates a CO₂ price, but models the combined impacts of the CPP and the proposed Regional Haze Federal Implementation Plan within the ERCOT region as well.

ERCOT’s 4,000 MW of coal retirements would increase to about 4,700 when regional-haze requirements are taken into consideration.

“ERCOT focused on high-level reliability concerns, consistent with our reliability role in Texas,” Lasher said.

The scenarios that take into consideration a CO₂ price indicate more than 14,000 MW of utility-scale solar, 9,000 MW of wind capacity and nearly 3,000 MW of new gas-fired combustion turbines would have to be added to achieve compliance.

“Integrating intermittent renewables can be a challenge,” Lasher said. “Increased storage capabilities on the system would increase its ability to integrate renewables … that would be an additional tool.”

The ERCOT study only looks at the 85% of the state it is responsible for, leaving out East Texas, the Panhandle and El Paso areas.