Energy News Beat
PJM has urged Talen Energy to delay its deactivation of two of four units at the 840-MW coal, oil, and gas–fired Herbert A. Wagner Generating Station in Maryland until transmission upgrades are put into service around 2028.
The nation’s largest regional transmission organization (RTO) on Jan. 10 said it informed Talen that the deactivation of Units 3 and 4—a combined 774 MW located outside Baltimore in Anne Arundel County—“would adversely affect the reliability of the system absent transmission upgrades.”
Wagner 3, completed in 1966, is a 359-MWe coal-fired unit that Talen converted to run on fuel oil at the end of 2023. Wagner 4, built in 1972, is a 415-MWe oil-fired unit. The power plant also comprises Wagner 1, a 133-MWe coal-fired unit built in the 1950s, and it hosts a 13-MW gas-fired combustion turbine, which can serve as a peaking unit. Talen retired Wagner 2, a 136-MW coal-fired unit, in 2020.
The H.A. Wagner Power Plant, located outside Baltimore, MD, is fueled by coal, natural gas, and oil. It includes an approximately 13-megawatt gas turbine unit, which can serve as a peaking unit. Unit 3 will convert to run on oil by the end of 2023. Courtesy: Talen Energy
Retirements Pegged to Economic, Environmental Concerns
Talen in October 2023 notified PJM it intended to deactivate all four existing Wagner units by June 2025, citing environmental and economic reasons. “The Wagner facilities’ Title V air permit limits operation to capacity factors under 15% when operating on oil. The limited run hours on the Wagner Facilities are not sustainable to continue operations, especially in light of the amount of time the Wagner facilities have recently been running in the market,” the company said.
“The combination of low margin energy market economics, low-capacity prices and significant Capacity Performance penalty risk due to run hour limitations results in the economics being outweighed by the risk associated with continued operation.” While the Wagner units have capacity market obligations through May 31, 2025, the plant is not designated a “black start” unit, Talen noted.
But, according to PJM, regional reliability concerns are compounded by Talen’s April 2023 announced closure of another mammoth fossil-fired facility, the two-unit 1.3-GW coal-fired Brandon Shores Generating Station. Talen in the first quarter of last year canceled plans to convert the power plant in Anne Arundel County, Maryland—which is located six miles away from the Wagner plant—to fuel oil combustion. In April 2023, Talen moved to deactivate the plant by June 2025.
In a letter to PJM, Talen cited National Pollution Discharge Elimination System permitting limitations for Brandon Shores, which “precludes operation using coal on or after January 1, 2026.” Talen also said it determined that a conversion to fuel oil combustion is “uneconomic and does not justify operating after June 1, 2025.” The Brandon plant has capacity market obligations through May 31, 2025, it noted.
Following an analysis, however, PJM in June 2023 told Talen it found that the Brandon units were required for reliability. The RTO urged Talen to keep them online under a reliability-must-run (RMR) arrangement.
Talen in financial documents has noted that “it does not agree” to the units’ continued operation under an RMR agreement. However, “Discussions with PJM are ongoing and may result in Brandon Shores continuing to operate for some period of time until transmission constraints hindering reliability are relieved by PJM,” it says.
PJM: Wagner Deactivations Could Prompt Widespread Voltage Deviations
While PJM has no authority to order plants to continue operation, the RTO is compelled to maintain reliability. To mitigate reliability concerns owing to Brandon’s potential deactivation, PJM ordered transmission upgrades (built by the transmission owner) to accommodate the loss of generation.
Earlier this month, PJM told Talen in a letter that after performing a study of the transmission system, it found that while Wagner 1 and the plant’s combustion turbine can retire without reliability implications, the deactivation of Wagner 3 and 4 will cause reliability violations. PJM said it identified voltage and thermal violations that could potentially affect multiple transmission owner areas. “Reliability tests indicate widespread voltage deviation violations upon Wagner deactivations. [The] majority of them are associated with losing Brandon Shore’s Generator(s),” it said.
While the Wagner retirements will not necessitate additional transmission upgrades, upgrades underway to resolve the Brandon Shores violations “will resolve all reliability issues identified attributed to the deactivation of Wagner units 3 and 4” when completed in 2028, it suggested. PJM added that its analysis revealed that to maintain system reliability Wagner 3 and 4 “will be needed to operate under a Reliability-Must-Run (RMR) arrangement”—especially during “the interim time period from the proposed deactivation date of June 1, 2025 to the completion date of all required upgrades.”
PJM urged Talen to notify PJM within 30 days whether it will agree to continue the operation of the two units past their June 2025 deactivation date. “While PJM cannot compel a unit to remain in service, in unique circumstances such as this, PJM can formally request that the unit owner continues operating the unit to support reliability,” the RTO explained. “This process, detailed in Part V of the PJM Open Access Transmission Tariff, offers a deactivating unit the opportunity to remain in service and recover its operating costs until all necessary transmission upgrades are in place.”
Retirements Are a Major Concern at PJM
PJM, which coordinates the movement of wholesale power across 13 states and the District of Columbia, has expressed broad concerns about its supply-demand balance, which has grown more precarious as resource retirements and load growth exceed the pace of new generation entry.
In a much-cited study published in February 2023 exploring “a range of plausible scenarios up to the year 2030,” the RTO suggested that as much as 40 GW of existing generation is at risk of retirement by 2030. “This figure is composed of 6 GW of 2022 deactivations, 6 GW of announced retirements, 25 GW of potential policy-driven retirements, and 3 GW of potential economic retirements. Combined, this represents 21% of PJM’s current installed capacity,” it warned.
“The amount of generation retirements appears to be more certain than the timely arrival of replacement generation resources and demand response, given that the quantity of retirements is codified in various policy objectives, while the impacts to the pace of new entry of the Inflation Reduction Act, post-pandemic supply chain issues, and other externalities are still not fully understood,” PJM said. About 60% of its anticipated retirements will be coal-fired, 30% natural gas, and 10% other sources.
In 2023, according to PJM’s Generator Deactivation records, 6.8 GW of generation capacity within PJM’s footprint was deactivated. About 4.4 GW was coal generation (from nine coal units), while 1.5 GW was gas generation (from five units), and 823 MW was oil and diesel generation (from eight units).
PJM records another 4.2 GW of future deactivations through 2026, including 2.2 GW of coal, 476 MW of gas generation, and 1.5 GW of oil and diesel generation. Along with Wagner and Brandon Shores, some larger units include NRG Energy’s 411-MW Indian River 4 (though that unit is currently running with an RMR agreement) in Delaware, and Constellation Energy’s Eddystone Units 3 and 4 in Pennsylvania, a combined capacity of 760 MW.
Looming regulations that the Environmental Protection Agency (EPA) finalized or proposed in 2023 may also accelerate retirements. In December, the U.S. Supreme Court agreed to hear oral arguments in February 2024 about whether to stay the EPA’s “Good Neighbor Plan,” a rule that could require coal, oil, or gas steam power plants in 22 states to reduce their nitrogen oxide emissions levels by 50% by 2027. PJM noted it worked with the EPA on the rule, which the EPA estimates could result in an additional 14 GW of coal retirements nationwide.
PJM also worked with the EPA to maintain grid reliability on the EPA’s proposed rule on New Source Performance Standards for Greenhouse Gas Emissions. In recent comments, PJM joined with other independent system operators and RTOs (including MISO, ERCOT, and SPP) to suggest that the EPA consider a suite of “reliability safety valves” to address potential immediate needs for unit-specific relief, enabling generators to operate during system emergencies.”
PJM’s long-term load forecast, meanwhile, shows demand growth of about 1.4% per year over its footprint for the next 10 years. A new long-term load forecast the RTO published on Jan. 8 predicts estimated electricity demand growth of 1.7% per year for summer peaks, 2% for winter peaks, and 2.4% for net energy over a 10-year planning horizon starting in 2024. PJM’s 2024 summer forecast peak demand stands at 151,254 MW, with peak load increasing to 178,895 MW in 2034 and 193,123 in 2039—an increase of nearly 42,000 MW. Peak winter loads echo this projection: For the 2024 winter, the forecast is at 134,663 MW for the 2023–2024 winter, surging to 164,824 MW in 2034 and 178,241 in 2039—an increase of more than 43,000 MW.
“This forecast reflects the accelerated growth that we discussed with our stakeholders throughout 2023, driven by the electrification of multiple sectors combined with consumer demands for technology,” Kenneth S. Seiler, senior vice president of PJM Planning, said on Tuesday. “It also underscores the need to maintain and develop enough generation resources to serve that growing demand.”
Finally, PJM’s New Services Queue is composed of 94% renewables assets and 6% gas. “Despite the sizable nameplate capacity of renewables in the interconnection queue (290 GW), the historical rate of completion for renewable projects has been approximately 5%,” it said. At the end of 2023, 40 GW of projects had come through the PJM study process, PJM said, though it noted that capacity had yet to move to construction.
Source: Powermag.com
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The post PJM Urges Delayed Retirement of 840-MW Fossil Fuel Power Plant, Citing Reliability Impacts appeared first on Energy News Beat.
There are four main ways in which the roughly 131 million American homes are heated: electricity, natural gas, propane or fuel oil. The vast majority use electricity or natural gas. While some 20 million homes already have a heat pump, a similar number still rely on inefficient electric resistance heaters which are expensive to use, and predominantly found in low and middle-income households.
Around half of US homes are heated with gas – mostly natural gas, although some 10 million homes use propane or heating oil which is stored in tanks on the property, and powers often aging furnaces. These furnaces heat up air which is then blown round the homes though ducts and vents. The use of hot water pipes and radiators, as normally seen in the UK, is comparatively unusual.
The other big difference from the UK is that around 90 percent of homes use some form of air conditioning. Two-thirds of households use central air conditioning or a central heat pump as their main AC equipment. That means that quite a lot of US homes either don’t have air conditioning, use portable AC or have a system that is powered by gas.
Against this backdrop the US Government plans to install 20 million heat pumps by 2030, with 40 percent of the benefits being directed to disadvantaged communities. Lawmakers hope that as existing heating and air conditioning systems break down with age they will be replaced by modern heat pumps.
Heat pumps run on electricity, and are hailed as key to achieving zero carbon goals by removing the use of fossil fuels for heating. Of course, that assumes that the electricity that powers the heat pumps is generated from something other than fossil fuels – unfortunately, around 60 percent of electricity in the US comes from fossil fuels.
There are other challenges with heat pumps, in particular their performance in cold weather, when their operations become less efficient. This is a fundamental feature of air-source heat pumps since they involve indoor and outdoor components – when it’s cold outside the outdoor component must be heated in order to work properly, and this means less energy is available for heating indoors. The lower temperatures fall, the worse this effect becomes, and the more expensive the system becomes to run.
Heat pump fans often point to the widespread use of the devices in cold nations such as Norway and Sweden as evidence they “work” in cold weather, but they fail to mention that many Scandinavian households have more than one heat pump or use an additional form of heating, typically a wood-burning stove. Gathering wood for heating is common across the Nordic countries. More modern models claim to “work well” at low temperatures, but they will still lose efficiency as it gets colder.
The economics of heat pumps vary greatly across the US, depending on the amount of heat needed and the price of natural gas. The installation of heat pumps is expensive, with air source heat pumps costing between $2,500 and $10,000, with the average homeowner spending $5,500. However these costs can jump to up to $30,000 in homes which don’t have existing ductwork. Ground source (or geothermal) heat pumps work much better in cold weather but they are much more expensive. They also require a lot of land so aren’t suitable for many homes.
There are tax credits in the Inflation Reduction Act that cover 30 percent of the upfront costs of buying and installing a heat pump, up to $2,000. For households with less than 80 percent of the median area income, the subsidy is higher and will cover 100 percent of the upfront costs, up to $8,000. Many states also offer rebates.
According to the International Energy Agency, heat pumps can reduce American heating bills by up to $300 per year. That’s a significant saving for those households whose installation costs are fully covered by the government, but not so great for those left funding thousands of dollars of upfront costs. People using natural gas for heating see smaller benefits since gas is pretty cheap in the US.
So are heat pumps hot or not? The boring answer to that is “it depends”. Low income households with older electrical resistance or propane heaters are likely to benefit the most from getting a heat pump as they will have most if not all of the upfront costs covered and will make significant savings on energy bills. These households are also less likely to have air conditioning, so the installation of a heat pump will give them a new capability for cooling.
Toby Schumacher and the external part of his heat pump CREDIT: Jeff Gilbert
However in colder states heat pumps could need a secondary heating source which might be difficult to afford. For higher income households the economic benefits are less clear. They will have to pay higher upfront costs which will take years to recover through lower bills. If they currently have gas heating the savings will be smaller and the capital costs take longer to repay.
The climate benefits in the short term will be marginal since the US still relies heavily on fossil fuels for electricity generation. Switching from burning gas in the home to burning gas in power stations does reduce emissions since power stations are more efficient. However electricity demand will increase, as people switch from gas to electric heating, and will rise further if the homes which don’t currently have electric air conditioning begin to use their heat pumps for cooling.
Bringing cooling to houses that don’t currently have air conditioning will be an absolute increase in energy demand, rather than a change from one form of energy to another, and it could be big. Air conditioners are the domestic appliances that generally consume the most electricity, accounting for an average of 17 percent of total US household electricity usage (compared with 15 percent for space heaters).
This higher electricity demand will strain America’s creaking power grids, which already struggle with reliability issues, and they will increase the need for more generation and grid infrastructure such as power lines and transformers, adding to the multi-billion dollar bill for electricity system upgrades. To make heat pumps really work we need reliable low carbon electricity and plenty of it otherwise there is a risk the increased demand will cause more blackouts. And if you have electric heating, a blackout means no heating either.
There are a lot of numbers in this article. And they add up to one conclusion: it’s hard to be more than lukewarm on heat pumps. They will be great for people who get them for free to replace old, expensive and inefficient heating systems – these people will also be getting free air conditioners. They will be a lot less great for everyone else, involving high upfront costs, and more grid infrastructure that will be paid for through higher bills and taxes. And as long as the majority of electricity comes from fossil fuels, their climate benefits will be marginal.