By Editors of Power Engineering
A new report by Moody’s indicates wind generation has become so cheap that even pro-coal political shifts won’t prevent coal-fired plants from feeling pressure.
The report, Rate-Basing Wind Generation Adds Momentum to Renewables, examined 87 GW of existing coal-fired capacity in 15 states in the Midwest and Great Plains, Greentech Media reported. Of those, 56 GW are facing tough competition from wind generation.
The average wind PPA prices in these areas now stands at $20 per MW/h, compared to $30 per MW/h for coal.
Moody’s indicated these trends might cause utilities to retire coal plants early and add significant amounts of wind generation.
Not only has Xcel Energy announced plans to build 11 new wind farms totaling 3,380 MW in the Midwest and Texas, one of these, the 600-MW Rush Creek, will be the utility’s first rate-based wind farm.
Additionally, utilities have improved their wind forecasting and have better managed intermittency issues, lessening the risk of large amounts of wind in their portfolios. Though additional gas generation and battery storage will be needed to accommodate more wind generation.
Jairo Chung, co-author of the report, said the surveyed coal plans might not close in the near future, wind could replace coal in dispatch priority.
The current federal Production Tax Credit is scheduled to phase out in 2020, without which wind production prices would rise to $40 per MW/h. However, the report indicated wind will continue to experience cost reductions, while coal production costs could rise.