Intermittent Success in the Battle between Coal and Renewables

Intermittent Success in the Battle between Coal and Renewables

June 30, 2015

On June 29, 2015, industry newsmakers announced “a blow” to President Obama’s environmental plan. On that day, the US Supreme Court overturned the Environmental Protection Agency’s (EPA’s) Mercury and Air Toxics Standards (MATS) limiting mercury and other hazardous air pollutants released from power plants. These standards apply mainly to generators fueled by coal and oil. As explained by the justices, the decision was prompted by an excessively high cost of compliance estimated at $9.6 billion annually, which would outweigh the expected benefits of $4-6 million. No doubt, this decision marked a noticeable victory of the opposition that has been standing its grounds in the battle against MATS for over four years now. At the same time, the multi-billion-dollar question of how long this victory will last is still hanging in the air, as the renewable generation walls are closing in.

These walls are not laws and regulations that can be fought with in courts and Congress; they are true bottom-up forces that transpire in technological innovations, like Powerpack, and even in completely new market entities – microgrids. Most utilities and system operators recognize that the current pace of renewable generation, whether being part of the main grid, distributed, or aggregated into microgrids, will only accelerate. So they adapt by revising business practices, introducing new services, tools, and products, which will support the painless transformation of power systems into the new realm.

Incidentally, during the month of June, several ISOs announced initiatives that promote the smooth integration of renewable generation. ERCOT announced improvements to its wind forecasting methodology for the expected availability of wind power capacity during peak demand periods.The formula updates, among other changes, include the segregation of data and the introduction of several zones for wind forecast. NYISO’s 2015 Power Trends report identified the areas of adjustments needed for successful integration of distributed energy resources into the grid: the introduction of dynamic pricing, the availability of currently inaccessible “behind-the-meter” data for load forecasting, and the development of new capacity and ancillary services and products to be offered by distributed resources through aggregators. California ISO expanded its set of Energy Imbalance Market data offerings by now streaming fifteen-minute and real-time dispatch prices at thousands of points through ISO Today, the mobile app.

If you believe that in open competition market forces shape a market economy and define the industry, and that market data, changes in data sources, and the introduction of new data reports serve as indicators of these forces, your conclusion should be easy to arrive at. It looks like coal is celebrating a rather intermittent victory over the intermittent renewable generation.

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