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Power Industry Continues to Face Uncertainty and Change [PODCAST]

April 7, 2018

Tennessee Valley Authority (TVA) CEO Bill Johnson in an exclusive interview with POWER suggested that the power industry continues to face an uncertain future. Johnson said that during his 40-year career, he has seen more change in the last five years than in the previous 35 combined. Several indicators imply that will continue going forward.

According to Johnson, one thing driving change is declining demand for power, which has resulted from efficiency improvements, a shift toward a more-service-oriented economy, and lower population growth, among other things. Johnson said customers are interested in cleaner, more-flexible sources of power and information. The challenge for utilities is to figure out how to integrate new behind-the-meter resources after having focused for so long on big centralized power stations.

Other power industry changes include a shift away from coal-fired generation. Johnson said TVA generated about 60% of its energy from coal 10 years ago, but by the end of the decade that figure will be down to only 20%.…

PJM: More Than 3,600 MW Will Retire in 2018

April 5, 2018

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Data from regional transmission organization (RTO) PJM Interconnection shows about 630 MW of power generation will be taken offline in the grid operator’s territory in April, with more than 3,600 MW scheduled to be retired this year, according to the organization’s website. This month’s deactivations are scheduled to begin April 16.

Last week, Ohio power company FirstEnergy said its competitive arm would close four uneconomic nuclear units in PJM with generation capacity of 4 GW by year-end 2021. Then over the weekend, FirstEnergy’s coal and nuclear generation divisions filed for Chapter 11 bankruptcy protection.

FirstEnergy Solutions (FES), FirstEnergy’s power plant subsidiary, on March 29 wrote a letter to Department of Energy (DOE) Secretary Rick Perry, asking Perry to “find that an emergency condition exists” in PJM, and wanting the grid operator to compensate coal and nuclear plants in the RTO for their “fuel security and diversity” benefits—akin to the outline of the DOE’s “Grid Resiliency Pricing Rule” proffered last fall that directed the Federal Energy Regulatory Commission (FERC) to require that independent system operators (ISOs) and RTOs “establish just and reasonable rates for wholesale electricity sales” for power plants that show “reliability and resiliency attributes.”…

Troubled FirstEnergy Companies Seek Bankruptcy Protection

April 3, 2018

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FirstEnergy Corp.’s competitive arm FirstEnergy Solutions (FES) and several key subsidiaries, including FirstEnergy Nuclear Operating Co. (FENOC), on March 31 sought Chapter 11 bankruptcy protection. FirstEnergy said the move would facilitate an “orderly financial restructuring” and accelerate its strategy to become a fully regulated utility.

FES—the parent company of FE Aircraft Leasing Corp., FirstEnergy Generation, FirstEnergy Nuclear Generation—along with FirstEnergy Generation Mansfield Unit 1 Corp., Norton Energy Storage, and FENOC filed the voluntary petition seeking relief under Chapter 11 with the U.S. Bankruptcy Court for the Northern District of Ohio.

In aggregate, the companies have about $ 3.8 billion of funding indebtedness. FES, which sells power and related services to retail and wholesale customers in Illinois, Maryland, Michigan, New Jersey, Ohio, and Pennsylvania, in December 2017 reported total assets, liabilities, and capitalization of about $ 5.5 billion, but brought in revenues of about $ 3.1 billion.

FES holds about $ 1.5 billion of funded indebtedness, including a $ 700 million secured revolving credit facility; about $ 332 million of 6.05% of unsecured notes, which are due in 2021; about $ 363 million of 8.80% unsecured notes due in 2039; and a $ 150 million revolving credit note with Allegheny Energy Supply Co.,…

Minnesota May Be Next to Support Nuclear Plants

April 1, 2018

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Following the lead of Illinois and New York, which have enacted policies supporting nuclear power plants, the Minnesota Legislature is weighing a bill that could help the owner of two nuclear facilities within its borders.

Minnesota is home to the single-unit 671-MW Monticello nuclear plant and the dual-unit 1,100-MW Prairie Island plant (Figure 1). Xcel Energy owns a 100% stake in both of them.

1. Home on the prairie. The Prairie Island Nuclear Generating Station generates about 20% of the electricity used by Xcel Energy’s customers in the Upper Midwest. Unit 1 began operation in December 1973 and Unit 2 followed in December 1974. The reactors are licensed until 2033 and 2034, respectively. Courtesy: Nuclear Management Co.

Current Minnesota regulations require investor-owned utilities, such as Xcel, to file multi-year integrated resource plans (IRPs) with the Minnesota Public Utilities Commission (MPUC). Companies give details about their future generation mix in the IRPs. Once the MPUC approves the plan, the utility decides how much money to allocate toward capital, and operations and maintenance expenses at each of its generation facilities.…

Moody’s: Battery Storage Viability is Increasing

March 24, 2018

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Battery storage’s emergence as a tool to boost grid reliability and a viable project finance opportunity is good news for utilities and grid operators, said Moody’s Investor Service in an infrastructure and project report on March 19.

The ratings agency noted that currently, lithium ion battery costs hover at about $ 400/kWh installed—the battery itself which is about $ 200/kWh, and the balance of the plant (with traditional electric components) at another $ 200/kWh. While that figure is the result of an already significant cost decline over the last several years, if current trends continue, costs will continue to decline to $ 100/kWh between 2020 and 2022.

The cost decline could translate to a “significant reduction in project costs, which will make storage applications more economically viable,” it said.

Cost declines for battery storage can be pegged to growing economies of scale in manufacturing and improvements in battery technology, Moody’s noted. The energy storage sector also has regulatory backing. Along with energy storage mandates in several states, including California, Massachusetts, New York, and Hawaii, a 30% investment tax credit is available for energy storage coupled with renewable generation at a federal level.…

Utility Managers Build Business Case for Digital Technologies

March 22, 2018

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The rise of digital technologies for power plants has moved in fits and starts over the past several years, with some generators quickly embracing digitization of their assets while others are looking to justify potential investments.

Suppliers of digital technologies have widely marketed the benefits, but many generators are looking to current end users for information about what the implementation of digitization means for their plants. Presenters at POWER magazine’s ELECTRIC POWER Conference + Exhibition on March 22 talked about the benefits—and some of the challenges—they’ve experienced with digitization at their facilities, in a session titled “Building a Business Case for Digital Technologies.”

Phillip Yakimow, manager and principal engineer for performance monitoring for Xcel Energy; Michael Reid, general manager for technical programs for Duke Energy; Crystal Bettinger, supervisor of predictive maintenance at Westar Energy’s Jeffrey Energy Center in Kansas; and Brian Wolf, lead performance and optimization consultant for Black & Veatch, presented case studies outlining how digitization has worked at their plants.…