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How Important is Baseload Generation Capacity to U.S. Power Grids' Reliability?

Recently a number of Politicians and Special Interests have advocated that the U.S. Power Sector’s ‘Baseload’ power generation capacity is outdated and rapidly becoming less important to maintaining Power Grids’ reliabilities and efficiencies.  This position appears to be based on a number of recent years’ power systems’ performance factors, including significant power generation-mix changes, technology developments, and continuously sustaining major U.S. Power Grids’ reliabilities.  Major power generation mix changes have included the recent large growth in Wind & Solar ‘Variable Renewable Power’ (VRP) generation, decline of Baseload Coal Power generation to a 34-year low, and very large increases of Natural Gas Power.  Yes, these factors are accurate, but how important has total Baseload Power net generation actually been in supporting past-current Power Grids’ reliabilities and sustaining future reliability?

Baseload Power Importance Political and Special Interests’ Views and Opinions – Power Grids are fairly complex and require many different technologies to reliably met electricity demands with adequate generation supplies.  The sources of power generation supplies have varied over the years and are very important to sustaining Power Grids’ reliable operations and managing costs.

The past Federal Energy Regulatory Commission (FERC) Chairman has reported “No new Nuclear or Coal plants may ever be needed in the U.S.” and that “baseload capacity is going to become an anachronism”.  These views or assumptions were made during the period when the Federal EPA was aggressively developing new Coal Plant emissions regulations, (reduced Hg, NOx, SOx, PM, etc.), and the Clean Power Plan (reduced CO2 emissions).  The combination of these and other Federal & State regulations (including the recent Paris Agreement) will significantly increase future Coal Power Plants’ costs, resulting in increasing-early retirements.

Special Interest groups, such as the America Wind Energy Association (AWEA), also advocate that “There Is No Inherent Need for ‘Baseload’ Power”.  This position is partially based on an Analysis Group study commissioned (paid for) by the Advanced Energy Economy Institute (AEE) and the AWEA.  A recent AEE/AWEA report states that there is: “No Evidence That Changing Power Mix Endangers Electric System Reliability”.  The Natural Resources Defense Council (NRDC) has also developed similar arguments that “Baseload” (is) an Outdated Term for Todays Changing Electricity Grids”.

Yes, even though Wind & Solar VRP have increased to historic highs in recent years and Baseload Coal Power has declined to a 34-year record low, the North America Electric Reliability Corporation (NERC, 2016 Long-Term Reliability Assessment) has determined that U.S. Power Grids have continued to meet needed power grid reliability levels.  The NERC generally agrees with some AEE/AWEA/NRDC views, such as the value of Power Generation ‘diversity’.  The NERC clearly identifies that ‘Single Fuel Dependency’ is a real risk-threat to Power Grid Reliability; i.e. the Power Energy mix is one of the important factors to sustaining U.S. Power Grids’ reliabilities in past and recent years.

The NERC, however, identifies other very important issues that the AWEA/AEE/NRDC reports generally overlook such as the importance of ‘Resource Adequacy’.  The NERC’s recent Reliability Assessment clearly identifies the major importance of adequate Reserve Margins  in enabling all Power Grids’ Operators to sustain required reliabilities.  Required ‘Reserve Power’ totally excludes Wind & Solar PV VRP, which cannot be ‘dispatched on-demand’ as required to properly manage-control short-term Power Grid demand changes.  In other words, Wind & Solar PV VRP are ‘non-dispatchable’ power sources and can actually increase the need for added Reserve Power, such as Natural Gas Power, in order to reliably maintain Power Grids supply-demand balances; depending on the time of day and year, and, weather conditions.

Other factors apparently overlooked by the AWEA/AEE/NRDC is that all Power Grid Owners-Operators are required to fully comply with existing FERC Electric Reliability’ standards-regulations.  These regulations include mandatory NERC standards, developed over many years to maintain and improve U.S. Power Grids’ reliabilities.  Also, somewhat overlooked by some Special Interests has been the past development of ‘Smart Grid’ technologies, which have contributed to significant Power Grids’ reliability improvements by Owner-Operators for decades.  Growing Wind & Solar VRP has also directionally increased the need for past and recent improvements in Smart Grid technologies; developed and installed by Power Grid Owner/Operators, and many Consumers ins some cases.

The AEE/AWEA/NRDC have routinely reported that sustained Power Grids’ reliability is due largely to “gas-fired resources and renewable capacity together providing both around-the-clock power and the flexibility to cycle and ramp as needed to meet and sustain bulk power system reliability objectives”.  Unfortunately, this view/assumption is not fully accurate since the only reliable-fully dispatchable ‘renewable capacity’ that can provide “around-the-clock power…as needed to meet and sustain bulk power system reliability” is Hydro, Geothermal, Biomass (wood + waste) and Solar Thermal power generation; not Intermittent Wind or Solar PV VRP.  These VRP sources absolutely require increased backup/reserve Natural Gas Power currently-continuously in order to reliably provide power to all affected Power Grids 24-7, year-round.

Most Important Operating Factors that have Impacted Baseload Coal Power Generation and Sustained Power Grids’ Reliability – The U.S. Power Sector’s major sources of (net) power generation have changed substantially over the decades as follows:

Data Source – EIA MER Table 7.2b.  Note: NG + Other = natural gas + other gases, and Bio + Geo = biomass (wood + waste) + geothermal.

U.S. Power Sector’s net generation sources have changed substantially over the decades due to a number of factors including evolving technologies (nuclear and renewables developments), regulations (renewables subsidies and mandates that constrain Fossil Fuels Power generation emissions) and market factors (lower cost natural gas and Wind/Solar PV construction costs most recently).  Between 1949-2007 Baseload Coal Power was the major source of total U.S. Power Sector’s net generation supplies; 52% on average.  Since 2007 the combination of lower cost natural gas fuels, increased Coal Power regulatory costs, and growing Wind & Solar VRP generation, led to historic increased Natural Gas Power net generation and major reductions in Baseload Coal Power.  During 2007-16, Coal Power net generation declined to 1982 net generation levels, and, Natural Gas and Wind + Solar Power increased to record highs.  Today, Coal, Natural Gas and Wind + Solar Power provide 31%, 33% and 7% (respectively) of total Power Sector’s net generation.  Nuclear Power continues to be the 3rd largest power source, at almost 22% of the total.

U.S. Power Sector net generation has been reliably supplied by a combination of fully  ‘dispatchable’ power sources, or more commonly called ‘Baseload’ Power, and, a combination of ‘Intermittent’ plus ‘Peaking’ Power generation.  Over the past decades the net generation levels and mix of these major power sources have changed overall as follows:

Data Source – EIA MER.  The Baseload includes all ‘fully’ dispatchable Coal, Nuclear, Natural Gas (from coal-to-NG fuels switching), Geothermal, most of Hydro and large percentages of Biomass and Petroleum.  The balance, or Peaking + Intermittent Power is based on the difference of Total Net Generation Power minus the sum of Baseload Power. 

EIA Power Sector data clearly shows that ‘Baseload Power’ is the major source of electricity that has supplied required Power Grids’ electricity demands, and supported required reliabilities and maximum efficiencies over most years.

Since 1949, the Baseload and Peaking + Intermittent power generation mixes have changed significantly.  For example, refer to the following Baseload Power (net) generation mix:

Data Source – EIA MER.  The above data include 100% net generation from total Coal, Nuclear, and Geothermal, 80% of total Hydro, 50% of total Bio(mass) and Petro(leum), and the balance of coal-to-Nat. Gas fuels switching for displaced Coal Power generation

Not clearly or more thoroughly covered in the most Special Interests’ recent articles is the fact that during 2007-16 ‘fueling switching’ from coal-to-natural gas (NG) power generation, was the primary action that enabled the Power Sector to substantially reduce Baseload Coal Power generation, without risking Power Grid’s reliabilities.  In other words, Baseload Coal was primarily displaced by newly scheduled-operated ‘Baseload’ Natural Gas Power.  The 2007-16 growth in Hydro and Geo+Bio Power was 8% and 24% respectively (each), also helped decrease the need for about 2% of total (2007) Baseload Coal Power net generation.  The above plot includes an average of 80% of Hydropower; primarily due to the fact that essentially all Hydropower is fully ‘dispatchable’ and an average of about 20% is normally used for Peaking Power; similar to the balance of Natural Gas Power generation.

Yes, Wind + Solar Power generation increased substantially since 2007, but these VRP, Intermittent and ‘non-dispatchable’ power generation sources have no or extremely limited capabilities to displace fully dispatchable Baseload Power generation sources.  In order to maintain Power Grid’s reliabilities,  power generation sources must be able to address: peak demand, variable demand & supplies (24/7), and maintain Power Grid’s frequencies and voltages.  Yes, the AWEA has referenced the development of advanced Wind turbine-generator technology, which enable new-future Wind Farms to help adjust power systems’ frequencies as needed to help maintain Grids’ reliabilities.  But, this new technology has fairly limited capability & capacity to adjust Power Grid’s AC power system’s frequencies and voltages/amperages.  To more effectively/significantly control power system’s frequencies & voltages, unfortunately requires reducing wind turbine-generators’ ‘capacity factors’ below maximums, in order to more significantly increase and/or reduce power output as required to help control AC systems frequency & voltage performance; as many Natural Gas, Hydropower and some Petroleum ‘Peaking’ Power Plants routinely are capable.

The balance of Peaking + Intermittent U.S. Power Sector net power generation sources 1949-2016 are as follows:

Data Sources – EIA MER.  Note: Natural Gas, Petroleum, Biomass and Hydropower Peaking/Intermittent Power is based on the balance of net generation not used for Baseload operation(s).  Intermediate Wind & Solar Power covers 100% of these VRP net generation sources.

Even with Natural Gas Power increasingly displacing Baseload Coal Power since 2007, fortunately there is more than sufficient total available Natural Gas Peaking and Reserve Power capacity available to continuously meet Power Grids’ Intermittent & Peaking’ demands; and the minimum required Reserve Power levels as mandated by the NERC standards.

Future of Baseload Power Generation – Even though some Special Interests continuously advocate that Baseload Power capacity is not as important as (Intermittent) Wind & Solar VRP, they appear to imply that variable power sources can directly displace Baseload Power such as Coal.  This assumption is not significantly accurate.  First, fully dispatchable Baseload Coal Power can be and is normally operated continuously at fairly large-constant generation rates for extended periods of time; weeks, up to months.  Wind & Solar VRP is, however, non-dispatchable or reliably schedulable, and this power generation is a function of uncontrollable variables; time-of-day and weather conditions (wind speeds & cloud formations) for most any given day.  Only Peaking Power/Reserve sources, primarily Natural Gas and some Hydropower, can normally be displaced by Intermittent Wind & Solar VRP generation, or provide increase power generation as required when the wind slows or stops, clouds buildup and/or the sun sets.  The above plot/data clearly shows that prior to about 2006 Natural Gas Power generation was the major source of required Peaking and Intermittent power as needed to balance Power Grids’ supply with demand.  Beginning in about 2007 as new Wind Power was built/put in-service.  This Wind VRP generation source generally displaced only and increasing amounts of Peaking/Reserve Natural Gas Power, and possibly some small amount of Hydropower.  Since about 2012, Solar Power began to have significant impact on also reducing the need to Natural Gas/Hydro Peaking Power generation during the sunny part of the days.

The good news in recent years is that Natural Gas Power capacity was high enough to displace all Baseload Coal Power decreases since 2006 (fuels switching), and, enable the growth of Wind & Solar VRP up to almost 7% of total net power generation today.  Based on existing and planned changes-growth to Natural Gas Power generation in the future, there appears to be sufficient Natural Gas Power generation capacity available (per the EIA AEO 2017 ) to enable future expanding total Renewable Power (including Hydro) up to almost 30% total supply in 2050; without compromising U.S. Power Grids’ reliabilities.

In Conclusion – Baseload, fully dispatchable power generation has been the major contributing factor to the Power Sector and associated Power Grids reliabilities, and, keeping costs under reasonable control.  Baseload Power has provided the vast majority of Power Grids’ supplies since 1949, refer to the following data plot:

Data Source – EIA data.  Note: the Baseload percentage is based on the sum total of Coal, (fuels switching to) Natural Gas, Nuclear, Geothermal, 80% of Hydro and 50% of Petro+Biomass divided by total Power Sector net generation.

EIA data clearly shows that the majority of Power Sector electricity supply comes from (fully-dispatchable) Baseload Power historically and today.  Yes, technology and infrastructure improvements have reduced the level of Baseload Power required to reliably meet Consumers’ demand since the late 1980’s by about 10%.  This current level of Baseload Power can and will likely be further reduced in the future (without risking Power Grids’ reliabilities and substantially increased Consumer costs) as further Smart Grids and other technology developments evolve.  These overall technology improvements-upgrades will include increased ‘demand response’ and ‘power storage’, and further upgrading/optimizing ‘T&D lines’ systems and operations controls.  Since these and other Power Systems’ upgrades are costly and will likely take multiple decades to develop and install, Power Grids’ electricity supplies and required systems’ reliabilities will most likely continue to require large levels of Baseload Power generation, well into the second half of this Century.

Yes, Baseload Coal Power will possibly continue to decline, but at a rate and to levels highly dependent on the continued availability of Natural Gas Power, and its current low market prices.  The future of Nuclear Power development and retirements can also impact Natural Gas Power utilization and available-required Reserve Power.  Also, as Wind & Solar VRP continue to expand in the future, at some point possible limited availability of Natural Gas Power generation capacities and/or fuel supplies/increased costs could become a growing problem-limitation to the Power Sector’s reliability and generation costs.  Further developments in fully-dispatchable, Hydro, Geothermal and Biomass Power generation will definitely help, but the future of these technologies is significantly uncertain due to numerous economic, and in some cases, environmental constraints.

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