U.S. coal plants pinched between economic pressures and inefficient cycling of the units

Energize Weekly, February 5, 2020

U.S. coal-fired power plants – facing economic and operational pressures – are running with more shutdowns and startups, which are less economical and more wearing on equipment, according to a study by the National Association of Regulatory Utility Commissioners (NARUC).

The study said increases in “cycling” of coal plants as well as faster changes in unit output – known as ramping – can have a “considerable impact on reliability and cost.”

The challenge is that as more flexible forms of generation, such as natural gas, and cheap but variable renewable generation, primarily wind and solar, are added to the power grid, coal-fired plants have taken a secondary role as backup units.

The plants, however, were designed as baseload, continuous generation to be run 70 percent of the time or more, but these so-called capacity factors have been dropping.

Overall the NARUC study found that coal-fired plant capacity factors had dropped to 54 percent in 2018 from 74 percent in 2007. During the same period coal-generated electricity dropped to 28 percent of the total U.S. output from 50 percent.

The study looked at 8.1 million observations for 927 coal-fired units across 43 states in 2008 and 4.7 million observations for 531 unit in 42 states in 2018.

Between 2008 and 2018, the share of electricity generation from natural gas grew to 35 percent from 21 percent and non-hydropower renewables increased five-fold to 10 percent.

In 2018, NARUC found that coal plant operators were keeping their units offline until there were favorable market conditions, such as high wholesale energy prices, for an extended period. Coal-fired units were offline 14 percent more in 2018 than they were in 2008.

The problem is particular acute in states like Oklahoma, Kansas, Iowa and Texas which have significant wind generation that demand cycling and ramping from the states’ coal plants.

In Texas, for example, Xcel Energy’s Harrington 1 coal-fired unit went from a capacity factor of 94.7 percent and zero shutdowns, and 1.15 percent ramp rate in December 2008 to a capacity factor of 57.1 percent, five different startups and a ramp rate of 4.7 percent.

In Kansas the number of times an average coal unit ramped up or down at rates greater than 2.5 percent increased to 36 percent in 2018 from 21 percent in 2008.

“More frequent cycling increases wear-and-tear of plant equipment and can lead to shorter equipment lifespan due to thermal fatigue, thermal expansion, increased corrosion, and increased cost of startup fuel,” the NARUC study said. “Without proper maintenance of the plant during these operations, unexpected plant outages become more frequent.”

Operating below the optimal boiler design utilization rate also has a negative effect on efficiency. At lower capacity factors coal units use more fuel to produce the same amount of electricity, leading to higher fuel costs and more emissions of sulfur dioxide, nitrogen oxides and carbon dioxide.

There are system modifications that could be made to recovery some of the efficiencies that are lost with shutdown and ramping but they would require new investments in the coal-fired fleet, the report said.

“Without any additional source of revenue for coal plants,” the report said, “more coal retirements due to poor economics are likely, increasing the potential risk of power outages in states like Texas.”

The cost of cycling a coal-fired unit depends on how long the unit has been offline and how cold it is, according to the study.

For a medium-size unit that has been offline for less than a day – a hot stat – the expected cost is $225 for each megawatt (MW). For a warm start – offline one to five days – the cost is $277 a MW and for a cold start it is $417 a MW.

A hot start for a 500-MW plant can range from $89,000 to $145,500.

Between 2008 and 2018 the average number of cold starts for coal-fired units nearly doubled to four per year and the average length of plants being offline increased to 14 days from six days.

The economic impact of cycling and ramping can be seen in Xcel Energy’s Harrington 1 unit in Texas. In December of 2008 it operated a full capacity for most of the month and generated $10 million in revenue.

In December 2018, power prices collapsed leading Harrington 1 to run at much lower utilization rates and its revenues fell to $4.5 million.

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