Federal plan could help cut carbon: panelists

Federal plan could help cut carbon: panelists

Megawatt Daily

By Markham Watson

Electric utilities and communities have been cutting carbon dioxide emissions substantially without a federal mandate, but a nationwide program would make that process more efficient, speakers at a University of Texas Energy Week panel said Thursday.

Beth Garza, who heads Potomac Economics’ independent market monitor office at the Electric Reliability Council of Texas, said the average age of the Texas coal fleet is 26 years, and some plants are much older, and it is behind the current round of coal plant retirements. The idea that increased federal environmental mandates are forcing those plants’ retirements, she said, “I would argue is a misnomer.”

“If a power plant is as old as I am, it should probably be retired,” she chuckled during a panel discussion entitled “De-carbonizing the Grid” in Austin, Texas.

The growth of the wind fleet in Texas, now about 16,000 MW, is diminishing the economic value of those coal plants, she said. For about 3,000 hours a year in 2014, the amount of load available after subtracting wind generation in ERCOT was less than it was in 2007 — less than about 30,000 MW, she said. ERCOT’s record peak, set August 10, was 69,783 MW.

“We’re whittling away at the available amount of demand for fossil-fueled generation to be able to serve,” Garza said.

Khalil Shalabi, Austin Energy vice president for market operations and resource planning, said that during Thursday’s late morning talk, 86% of the load of the Austin, Texas, municipal power demand was being served by carbon-free generation, including wind, solar and nuclear power.

Also, Garza said, cheap natural gas combined with more efficient gas generation generally means it is about half as expensive to operate as older coal units.

An audience member asked whether natural gas truly was a cleaner alternative, once one accounts for leakage of methane from drilling and transportation.

Jim Marston, Environmental Defense Fund regional director for Texas, said studies jointly funded with industry have shown that methane leakage does diminish the value of natural gas as a clean fuel, but not enough to overcome its overall enhanced efficiency.

‘A no-brainer’ to cut methane leaks: Marston

The natural gas industry is working to reduce methane emissions, occasionally with encouragement from state governments such as in Colorado and Wyoming, Marston said.

“It’s kind of a no-brainer,” Marston said. “I mean, that is product that you are losing.”

However, Shalabi acknowledged that the electric industry “should worry about diversity and should also worry about making predictions about the electricity market.”

“Almost 40% of generation in the US is still coal,” Shalabi said. “We’ll see where that goes.”

Nuclear power has consistently been producing about a fifth of US electricity as demand has grown for about 35 years, Shalabi said, largely by upgrades and enhanced efficiency.

Another audience member asked the panel if a carbon tax would be a more efficient way to reduce carbon emissions.

Marston said a cap-and-trade bill, which he described as the one that passed the US House of Representatives in 2010 but stalled in the Senate, would have benefited coal generation and utilities generally.

Marston noted that cap and trade “was a Republican idea.”

Shalabi said, “Having a federal system would be better, because it would level the playing field.”

Regional efforts more costly

Ross Baldick, University of Texas professor of electrical and computer engineering, said “it would be nice to be able to monetize” carbon emissions, which could be easier in a federal system.

For example, California has spent much money on building renewable power infrastructure when it would be cheaper simply to buy wind power from Texas, Baldick said.

Marston said, “It may be possible, after … Obama is out of office, that there could be some good deal made for a corporate tax rate in exchange for some deal on carbon.”

But as almost all Republican candidates deny the existence of climate change, Marston said he does not expect such a deal to happen.