US central grid to delve into CO2 rule impact

OREANDA-NEWS. The Southwest Power Pool (SPP) is working to further evaluate the impact of the proposed federal carbon rule on the coal-dependent region that will cover parts of 12 states from the Gulf of Mexico to the upper Great Plains by year-end.

The US Environmental Protection Agency (EPA) proposal, expected to be finalized this summer, calls for state-specific targets to pare CO2 emissions from existing power plants by 30pc by 2030 from 2005 levels. Under the Clean Power Plan, states can use a range of measures and market-based mechanisms to meet the target, including emissions trading, more use of natural gas-fired generation and energy efficiency.

An initial study, based on EPA assumptions, showed a loss of nearly 9GW of coal and gas-fired generation in the region, three times the amount the southwest pool said it expects to close by 2020 under compliance deadlines for existing EPA rules. The loss of 9GW will severely stress the SPP transmission network and result in large reactive deficiencies that indicate blackout conditions, the grid operator said.

The grid's staff will work with public integrated resource plans and utilities directly to develop its own list of at-risk generation using load forecasts and a carbon-cost adder, SPP's vice president of engineering Lanny Nickell told a gathering of SPP state regulators meeting in Dallas yesterday.

Nickell said the group hopes to compile a regional assessment by 1 March to be followed by a timeline detailing transmission and generation additions needed to replace lost coal-fired generation to meet the EPA goal.

The staff plans to prepare this information ahead of a 31 March technical conference hosted by the Federal Energy Regulatory Commission in St. Louis, to discuss the coal plan's impact on central US states.

The agency also hopes to apply its regional assessment to each state in SPP's footprint, but that work will take several more months, Nickell said.

Federal energy regulators plan four carbon-rule conferences with one focusing on national issues in Washington, DC, on 19 February. Regional conferences are planned in Denver on 25 February to discuss western states and in Washington, DC, on 11 March to discuss eastern US states.

The southwest pool relies on coal for more than 60pc of its generation. Coal also is the most common marginal fuel in large parts of that grid.