Texas traces low March coal burn to longer outages

OREANDA-NEWS. April 20, 2015. Texas' primary grid operator said more than one-third of the region's coal-fired generation was off line for extended periods in March, depressing monthly coal plant output to the lowest level in more than a decade.

The Electric Reliability Council of Texas (ERCOT) said about 7,000MW of coal-fired resources shut for maintenance during "most of March." By contrast, shorter-term outages did not exceed 5,000MW in 2014.

As many as 16 of ERCOT's 32 coal and lignite units did not operate "during a good portion of the month due to planned outages or forced outages, or presumably economics," ERCOT's independent market monitor Beth Garza of Potomac Economics said.

In 2014, only seven coal units were shut for a similar duration, Garza said.

Coal plants across the US perform maintenance during the spring and fall months when mild weather reduces electric demand. Falling prices for natural gas have also allowed generators to switch to gas plants when the economics favor gas. Gas prices last month averaged about \\$2.80/mmBtu at the Houston Ship Channel, down by 44pc from March 2014.

Gas prices below \\$3/mmBtu generally lead to lower coal-fired generation and increased reliance on gas plants, Garza said.

In ERCOT, maintenance activity began in February, when coal generation fell to a three-year low, then accelerated dramatically in March.

Coal-plant output slid to 5.6GWh in March, nearly 40pc below the year-earlier figure of 9.3GWh, falling to the lowest monthly output since 2002 when ERCOT began compiling monthly data. February coal generation was 6.7GWh.

Coal's share of ERCOT's fuel mix dropped to 22pc in March from 38pc in March 2014, also the lowest percentage since before 2002.

ERCOT does not disclose specific plant operating information, but said coal-fired resources have provided about 26pc of the energy this year, compared with 39pc in 2014.

NRG Energy said work to complete environmental upgrades at six Texas coal units, totaling 4,200MW, over the spring maintenance season to comply with the mercury and air toxics standards did not extend its outage schedules.

"We constructed outside of outages and made any necessary tie-ins during already scheduled outages," NRG's David Knox said.

In recent years, Luminant has mothballed three coal units in north Texas, totaling 1,880MW, over the winter and spring months due to weak demand and low power prices. This year, it returned the 750MW Martin Lake unit to service in early January.

CPS Energy, San Antonio's municipal utility, said planned and unplanned maintenance affected its coal plants.

ERCOT began monitoring coal deliveries after US utilities complained about poor railroad delays last year, but has reported few problems.

The ERCOT market monitor said last year that rail delays may have prompted Texas generators to conserve coal so that they would have adequate supplies in late summer when power demand peaks.

CPS officials said there are no delivery delays currently.

Despite milder weather, power production to meet demand in Texas is running 2.1pc ahead of 2014's record production.