Pace of retiring power generation to meet CPP could strain transmission system: PJM

Birmingham, Alabama (Platts)--10 Aug 2015 443 pm EDT/2043 GMT

The pace at which generation retires to meet the Environmental Protection Agency's Clean Power Plan could put greater strain on the PJM Interconnection transmission system, the grid operator said in a white paper issued Friday.

The grid operator studied seven scenarios based on three levels of generation at risk of retirement under CPP -- 6 GW, 16 GW and 32 GW -- to determine the range of possible transmission needs.

"Under certain conditions and implementation scenarios and depending on the time of the many moving parts, new transmission and/or transmission improvements might not be completed in time to maintain reliability," the report said.

Once state compliance plans are submitted, generation owners will make decisions on retirements and replacement generation, reliability violations will be identified and transmission solutions developed. Once transmission upgrades are identified, it can take from five to 16 years to complete a project, PJM said.

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"PJM's Mercury and Air Toxics Standard experience suggests that build rates may not ensure that the necessary transmission will be in service before retirements occur," the report said.

While most MATS upgrades were to existing facilities, more greenfield transmission projects will be needed if replacement generation under CPP is not located near retiring units, it said.

Analysis of the 32-GW scenario shows that generation needs could exceed available resources by 2024 if units retire evenly between 2020 and 2029. If generation retires in the early years, generation needs could exceed available resources in 2021.

Demand could exceed available resources in 2025 in the 16-GW scenario if generation retires between 2020 and 2029, the report said.

If generators deactivate sooner than replacement generation is built, PJM could face capacity shortages and would need to rely on transmission to import power, it said.

"The capacity adequacy analysis bolsters PJM's assertion that timing is everything," the report said.

In areas where power is imported, transmission lines become more heavily loaded to the degree that generation is removed and not replaced with the same quality megawatts at the same location, the report said. If the location or quality differs from what was originally there, transmission flows are altered, PJM said.

Wind generation to replace retiring generation could likely be located in the western region of PJM and additional transmission to reach the eastern load centers likely would be needed, the report said.

The report also noted that EPA's renewable portfolio standard assumptions are different from PJM's historical experience.

"It is likely that all the wind-powered facilities that the EPA anticipates to be available will not make it online. Moreover, historical transmission build-out rates are not likely aggressive enough to meet the EPA's wind penetration rate assumptions," the report said.

The analysis of the scenarios also suggests that overloads on transmission lines that are clustered along specific corridors will require further review to assess the feasibility of upgrades.

"That would impact both the cost of solving identified reliability criteria violations and the ability to complete construction of facilities in time to simultaneously comply with CPP while avoiding those reliability violations," the report said.

--Mary Powers,
--Edited by Jason Lindquist,

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