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When Coal Plants Are Shut, the Lights Will Stay on for Texas Consumers

Feb. 7, 2017

When Coal Plants Are Shut, the Lights Will Stay on for Texas Consumers

Renewable Energy Investments and Natural Gas Plants Position Texas to Retire Aging Fleet of Coal-Fired Power Plants

AUSTIN, Texas – The rise of affordable renewable energy and lower natural gas prices means that Texas consumers will have no problem keeping the lights on when Texas’ aging coal-fired power plants are closed, a new study from Public Citizen shows.

The study, “Monticello and Big Brown Retirement High-Level Impact Study,” determined that by 2021, any reduction in power generation due to the retirement of these two coal plants can be offset through renewable energy, lower cost natural gas and the redistribution of other power generation on the grid. According to public reports, 2017 could signal important announcements for coal plant closures by their parent companies.

“Public pressure, cheap renewable energy and cheap natural gas prices will inevitably move many energy companies to mothball or shut coal plants, including Big Brown and Monticello, two of Texas’ most polluting plants,” said Tom ‘Smitty’ Smith, director of Public Citizen’s Texas office. “Many Texas coal-fired power plants are too old, inefficient and dirty to generate a profit and can no longer operate without losing money in the current energy market.”

The study was commissioned by Public Citizen and performed by Electric Power Engineers Inc., a Texas-based lead engineering consulting and management service firm for electric utilities, municipalities, cooperatives and energy resource developers.

However concerns have been raised about whether Texas’ transmission grid could face reliability issues if many coal plants were to retire. “We took a look at the two most unprofitable of these coal plants, Monticello and Big Brown, as reported by reputable financial institutions, and found that their retirements are not expected to impact the steady state reliability of the Electric Reliability Council Region of Texas’ (ERCOT) grid,” said Hala N. Ballouz, president of Electric Power Engineers, which performs engineering studies on transmission grids around the world with emphasis on grid integration analysis for electric power generators. “This study determined that, by 2021, all steady state power-flow constraints that the retirement of Monticello and/or Big Brown coal plants may trigger, will be mitigated through reasonable upgrades that are already planned along with a modest amount of redispatch of other generation on the grid.”

Local advocacy and public collaboration has made Texas a pioneer in renewable energy production as it has one of the strongest foundations in the growing renewables sector. Texas consistently ranks at or near the top of national renewable energy rankings in wind energy capacity and generation, solar potential, wind and solar energy manufacturing, and green jobs.

In 2016, the ERCOT released a long-range plan anticipating that by 2031, 14 gigawatts (GW) of power plants in Texas will retire, nine GW of which is currently generated by coal, and much more than that could be generated under environmental mandate scenarios.

“Additionally, the report shows that the retirement of both the Monticello and Big Brown power plants, located in northeast Texas, will reduce the total conventional power generation for homes and businesses by only about four percent, and renewables and gas plants can fill this need,” Ballouz said. “This small percentage reduction in conventional generation does not present a concern to power system stability if these two plants retire; however, this should be studied further as more inefficient coal plants retire and/or large imports of solar and wind energy continue to come across the electric grid.”

“This study comes at a critical time as ERCOT is taking comments on how to reform the Reliability Must Run (RMR) process that pays old uneconomical generating plants to continue to operate if needed to keep the grid stable,” Smith said. “What this study shows is that grid analysis takes time but can offer stakeholders a road map on which grid upgrades and operational modifications can be made to keep the grid stable. But we need more than 90 days to carry out this process.”

“People’s lights will stay on even with the retirement of coal-fired power plants in Texas,” Smith said. “We can move forward knowing power reliability in the absence of coal plants was not only anticipated but welcomed.”

View the report here.