Editor’s Note: The Power Plant Performance Report is based on data and analysis provided by Energy Ventures Analysis. The data is collected from Form EIA 923 “Power Plant Report” and EPA’s Continuous Emissions Monitoring System (CEMS). What follows is a summary and analysis of the that information. Enjoy!
It was another year of growth in 2017 for renewable power in the U.S. Renewable generation increased more than 13 percent over 2016, with generation from solar growing more than 47 percent and wind more than 12 percent over 2016’s record-setting year. Meanwhile, generation from fossil fuels declined by more than 5 percent over 2016, as total electricity demand dropped 2 percent year-over-year.
“With flat or even declining electricity demand, fossil fuel-fired power plants continue to lose market share to new renewable generation, which is essentially zero cost generation once it is built,” said Phillip Graeter, a senior consultant at Energy Ventures Analysis (EVA), an energy consulting firm based in Arlington, Virginia. This report highlights the top performing natural gas, coal, and nuclear plants, as well as the top states for wind and solar in 2017, according to preliminary data from the Energy Information Administration (EIA).
Combined Cycle Generation Declines due to Rising Gas Prices and Increased Renewable Generation
In 2016, U.S. electric power generation from natural gas-fired power plants surpassed coal-fired generation as the leading fuel for the first time in history, due to low natural gas prices and a significant increase in generating capacity. In 2017, however, coal (narrowly) reclaimed its seat at the top, as natural gas declined by more than 8 percent from historic 2016 levels.
“The primary drivers behind the large drop in generation from natural gas are increases in natural gas prices and renewable energy generation,” Graeter said.
The 2017 top 20 ranking of generation from natural gas combined cycle power plants continues to be dominated by large, multi-unit power plants, located primarily in regulated power markets. Just two companies, NextEra and Southern Company, own more than half of the plants in this year’s Top 20. 16 of the Top 20 CCGTs are in regulated power markets, while the other four plants are located in states with access to cheap and abundant natural gas resources. Newcomers to the list in 2017 include Dominion Energy’s Brunswick County and Panda’s Patriot plants, both of which came online in the middle of 2016.
Although the capacity factor for the entire combined cycle fleet dropped to 47 percent from 52 percent last year, a large number of plants continue to be heavily utilized. Panda’s two 2016 commissioned Pennsylvania power plants, Patriot and Liberty, claimed the top two spots after their first full year of operation. “Easy access to cheap natural gas from the Marcellus shale combined with latest state-of-the-art equipment make these plants two of the cheapest and most reliable resources in the PJM power market,” said Graeter.
The Top 20 most efficient combined cycle plants continue to be dominated by plants that have just recently come online. All plants in the top 10 of this list have come online within the last six years. High capacity factors combined with the newest technology allows for more efficient operation of the plants.
Decline in U.S. Coal Generation Slows as Natural Gas Also Loses Market Share to Renewables
Surprisingly, U.S. coal generation did not record the biggest losses among the major fuel types in 2017. According to data from the EIA, coal generation declined only by about 3 percent from last year, a significant slow down from 2015 and 2016, when coal declined 15 percent and 8 percent over the previous year, respectively. The primary reason for this slow down is the smaller amount of coal retirements in 2017 compared to past years. Approximately 9 GW of coal capacity retired in 2017, compared to 15 GW and 11 GW in 2015 and 2016, respectively. “Keep in mind that we have likely not seen the end of the decline in coal generation, as more than 16 GW of coal capacity is announced to retire in 2018 alone.”, Graeter said. The most notable 2018 retirements are 4 GW of Texas coal capacity (Luminant’s Monticello, Big Brown, and Sandow power plants), and Wisconsin Electric Power’s 1,200 MW Pleasant Prairie Power Plant.
Despite the continuing threat from low natural gas prices and increased renewable energy generation, the top 20 highest generating coal plants remain mostly unchanged from 2016. Southern Company’s Miller power plant successfully defended its title as largest coal generator in the U.S., generating almost 19 TWh of electricity, an increase of 5 percent over 2016. Overall, the top 20 coal generators accounted for more than 23 percent of the total 2017 coal generation. With more coal retirements, this share will only grow in the future, as Navajo (No. 10) is currently the only plant on this list slated for retirement in the near future.
With the retirement of less efficient coal plants in 2016, the overall capacity factor for the U.S. coal fleet also (if minimally) recovered in 2017. 2017 capacity factors increased to about 52 percent in 2017, up from 51 percent in 2016. The top coal plants with the highest capacity factors in 2017 continue to be dominated by plants in at least one of four categories: (1) mine-mouth coal plants, (2) cogeneration facilities, (3) qualifying facilities with long-term power purchase agreements (PPAs), or (4) coal plants burning Powder River Basin coal located in nearby states.
Longview Power’s Longview plant in Morgantown, West Virginia is once again the most efficient coal plant in the country, with a heat rate of 8,800 Btu per kWh. The 700 MW power plant came online in 2010 and features an Amec Foster Wheeler advanced supercritical boiler. Only four plants in the top 20 do not feature at least one unit with supercritical (or better) boiler technology. Intermountain, Plum Point, New Madrid, and Bonanza all feature subcritical boilers. “AEP’s Turk plant is the only plant in the U.S. with an ultra-supercritical boiler. But since the plant is burning 100 percent PRB coal, which has a lower heat content than most eastern coals, Turk is unlikely to top this list in the near future.”, Graeter said.
Recent Market Changes Push More Nuclear Power Plants to the Brink of Retirement
Nuclear power plants continue to struggle in today’s energy markets. The challenges are especially acute for single-reactor nuclear power plants in deregulated power markets such as PJM, NYISO, and ISO-NE, which are feeling the pressure of power prices that have declined more than 50 percent since 2014. Although the variable operating costs for nuclear plants on a $ per MWh basis are very low, the high fixed costs to maintain the high safety and security standards laid out by the Nuclear Regulatory Commission (NRC) at the plant site have put pressure on nuclear plant operators. It is almost impossible for nuclear plant operators to react to short-term market changes, such as negative overnight pricing, leaving them entirely at the mercy of the markets. Since 2013, almost 4 GW of nuclear capacity has retired, with another 5 GW announced to retire within the next five years. Since the stay of Obama’s Clean Power Plan – which was once touted as a regulation that finally values the zero-emission nature of nuclear power – multiple states have passed or are trying to pass nuclear subsidies to support their struggling nuclear fleet. Without federal CO2 emission regulations or a significant increase in power prices, these potential subsidies are the only option for a significant portion of nuclear power plants to avoid retirement in the near-term.
The Top 20 nuclear generators see minimal turnover from year to year. Since most nuclear generators operate with capacity factors in the low- to mid-90s, the sheer size of the nuclear power station dictates the overall ranking. Palo Verde, currently the largest nuclear power plant in the U.S. with three 1,400 MW reactors, is once again the largest nuclear generator in 2017, generating more than 32 TWh of electricity. However, this list is likely to see some significant changes in the next few years. Diablo Canyon, number 16 on this year’s list and the last remaining nuclear plant in California, is slated for retirement in 2025. Operators of the Peach Bottom (No. 4), Salem (No. 15), Cook (No. 17), and Millstone (No. 19) nuclear power plants have asked for subsidies from their respective state legislators and regulators with uncertain results. Exelon’s Byron plant (No. 10) did not clear the latest PJM capacity auction. Without the capacity revenue, this plant is likely to close. “On the other hand, Southern Company’s Vogtle nuclear plant (No. 9) in Georgia will likely top this list once the two reactors currently under construction come online. However, due to construction delays and the recent bankruptcy of Westinghouse Electric, they are not expected to come online until the end of 2021 at the earliest,” said Graeter.
Unlike the Top 20 list of nuclear generators, the list of nuclear power plants with the highest operating capacity factors has a high turnover each year due to the difference in refueling schedules. Most nuclear reactors are on an 18 or 24-month refueling cycle, with normal refueling outages lasting 30 days or more. Due to their inflexibility regarding ramping capabilities, once online, nuclear power plants typically operate at full operating capacity around the clock and regularly achieve capacity factors in the high 90s. In 2017, No. 20 Vogtle nuclear plant achieved a capacity factor of 95 percent. Just for comparison, its 95 percent capacity factor would have put it in third place on both the CCGT and Coal Top 20 rankings for capacity factors in 2017.
Renewable Generators continue to claim Larger Market Share in a Declining Energy Market
Among the major fuel types in the U.S., wind, solar, and hydro generation are the only ones that saw a considerable increase in 2017 over 2016 levels. Hydro’s 2017 generation increase over 2016 can mostly be explained by recovering snowpacks in the Pacific Northwest. Wind and solar continue to grow steadily year-over-year thanks to continued public and private investments in new wind and solar power plants. As total U.S. electricity generation keeps declining, renewable generation’s market share keeps increasing.
Renewable generation accounted for 16 percent of total U.S. electricity generation in 2017, with 6.6 percent coming from wind and 1.4 percent coming from utility-scale solar. This trend will continue for the foreseeable future as more retiring fossil fuel and nuclear plants are being replaced by new wind and solar generating facilities. In 2018, EVA expects 7 GW and 5.5 GW of wind and solar capacity to come online, respectively, offsetting the 16+ GW of announced coal retirements.
U.S. Wind development continues to be concentrated in Midwestern and Great Plains states mainly located in the so-called “Wind Belt.” Texas, already the largest wind generator in the country, added almost 10 TWh of additional wind generation in 2017, an increase of 17 percent over 2016. Oklahoma, Kansas, and North Dakota also added significant amounts of wind generation in 2017, with increases of 22 percent, 31 percent, and 34 percent over 2016 generation levels, respectively. Texas will continue to extend its lead, as the state is home to 42 percent of the expected 7 GW of new wind capacity to come online in 2018.
In 2017, U.S. solar developers added another 5.3 GW of utility-scale solar generating facilities to the grid. California continues to be the front-runner, with 43 percent of total U.S. utility-scale solar generation located in the Golden State. However, California is not the main story for 2017, which saw significant additions of solar capacity and generation in states previously with little to no significant installed capacity. Georgia, Texas, Florida, Minnesota, Idaho, and Virginia are only a few of many states who have more than doubled their 2016 solar generation totals. According to EIA data, the only remaining states without utility-scale solar generation are Alaska, Louisiana, North Dakota, New Hampshire, West Virginia, and Wyoming. The strong growth in solar capacity and generation will continue in 2018, as another 5.5 GW of capacity is projected to come online, and unlike wind, these capacity additions are more evenly spread among states, with eleven states likely to add more than 100 MW of new capacity.
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