Dive Brief:
- Southwest Power Pool's coal-fired generation this June was 6.6% lower than the year before, Argus Media reports, largely due to low gas prices.
- While coal is still the largest fuel in the SPP territory – it makes up almost 60% of the market – natural gas' share of the supply mix is rising.
- SPP has been planning new generation and transmission to help it meet the expected Clean Power Plan regulations, due out in October, and could need more than 20 GW of gas capacity in the next decade.
Dive Insight:
Argus takes a look at the generation mix in the SPP market and finds falling natural gas prices are already edging coal out – and that's before new carbon regulations come into play, likely forcing a significant restructuring.
According to Argus, coal generation in the Southwestern grid averaged 16,568 MW in a nine-stare area. It's share was still 59%, but that was down from 63% a year before. Natural gas reached 21% of the supply, up from 17%.
Looking ahead to CPP compliance, the Southwest grid operator is considering two scenarios, but they each call for significant new investments in natural gas. Under one, SPP would bring 15.3 GW of gas capacity online. In a second scenario, new gas capacity reaches 21 GW.
According to SPP's analysis of the rule's impacts, “generating-unit retirements expected as a result of the CPP will cause significant reactive power deficiencies and numerous overloaded facilities.” The EPA anticipated 9 GW of coal- and gas-fired generation to be taken offline by 2020, SPP said, 6 GW more than it planned otherwise.
