Navigant Research Blog

Transition Away from Coal-Fired Power Plants Keeps Building

— June 29, 2015

The transition away from coal-fired power plants continues among a number of U.S. utilities both in an effort to comply with carbon reduction standards and for cost-cutting reasons. In the last few months alone, several thousand megawatts of coal-generated capacity have been taken offline. The trend is similar in other industrialized countries, with a key exception.

In the United States, Columbus, Ohio-based American Electric Power (AEP) has ceased generation at 10 of its coal-fired plants across five states. Operations were halted in May at coal units in Indiana, Ohio, Kentucky, Virginia, and West Virginia; combined, these units generated more than 5,500 MW. AEP intends to close two more of its coal-fired plants in 2016 in Oklahoma and Texas. Similarly, PacifiCorp, the Berkshire Hathaway-controlled utility operating in several Western states, shut down two coal units at its Utah Carbon Plant (172 MW) in April. Also, the company laid out plans to take nearly 3,000 MW of capacity offline by 2029. As part of PacifiCorp’s long-term resource plans, the company expects to add more renewable energy resources, further reduce its use of coal, and meet most of its expected generation needs with increased energy efficiency over the next decade.

Though no recent plant shutdowns have taken place in North Carolina, Duke Energy did announce that its controversial Asheville plant (which was part of a recent federal criminal settlement related to groundwater contamination) would shift from coal to natural gas and solar generation over the next 4–5 years. A new 650 MW plant would replace the 376 MW coal-fired facility and would significantly reduce emissions, the company said. In Arizona, Salt River Project officials have agreed to buy the Los Angeles Department of Water and Power’s portion of the coal-fired Navajo Generating Station plant as a next step in the eventual closure of one of the three generators in order to comply with U.S. Environmental Protection Agency (EPA) regulations. Overall, the U.S. Energy Information Administration expects the proposed federal Clean Power Plan could lead to about 90 GW of coal-fired generation being removed by 2040 under one scenario, which would be more than double the amount taken offline if no new carbon standards were in place.

A Global Trend

This trend away from coal is playing out in most other major industrialized countries as well, with one exception. Canada and the United Kingdom have implemented policies for phasing out coal. In France, Italy, and Germany, the markets for coal are weak, according to E3G, a European public interest non-profit organization that conducted research for Oxfam on the topic among the G7 countries. For instance, France has shut down seven units in 2015 and is now down to a total of four. Japan is the exception; plans in the country call for an increase in coal-fired electricity generation in part due to the Fukushima Daiichi disaster, which led to the shutdown of nuclear power plants that made up 30% of Japan’s energy supply, with coal filling the gap for now.

With the exception of Japan, the shift away from coal-fired plants is underway in leading nations, though not fast enough nor in the way environmental groups like the Sierra Club and others would like. Nonetheless, the direction away from coal seems clear.

 

GM Aims For American Diesel and EV Leadership

— June 26, 2015

General Motors (GM) recently hosted a Chevrolet Innovation Day event in Detroit in conjunction with the reveal of the all-new 2016 Chevrolet Cruze compact car. During the sessions attended by media and analysts, GM executives, engineers, and designers covered a variety of topics including both internal combustion and electrified powertrain plans. As all automakers struggle with how to meet increasingly stringent fuel economy and emissions standards while also meeting customer expectations and remaining profitable, GM made it clear that it intends to be the market leader for both diesel and plug-in vehicles.

“We want to make EVs approachable to all, not just the elites,” said Pamela Fletcher, executive chief engineer for electrified vehicles, as she echoed a message dating back to the late 2006 previews of the original Chevrolet Volt concept while also taking a subtle jab at Tesla. At the time, GM officials explained that the Volt was badged as a Chevrolet rather than a Cadillac because the goal was to bring electric vehicles (EVs) to a mass audience at an affordable price. Navigant Research’s Electric Vehicle Market Forecasts projects that luxury brands will account for 50% of global light duty plug-in electric vehicle (PEV) sales by 2018, but Chevrolet clearly wants to shift the percentage toward more mainstream segments.

GM wasn’t entirely successful with the first-generation Volt, but it provided a valuable learning opportunity and those lessons have been fed into the second-generation Volt that is launching this summer. Perhaps more importantly, Fletcher’s team is moving aggressively to bring the knowledge it’s gained about lithium ion batteries and electric drive systems to full battery electric vehicles, such as the upcoming 200-mile range Chevrolet Bolt EV. After revealing the Bolt as a concept at the Detroit Auto Show in January 2015, GM announced just a few weeks later that it would be produced.

Setting a Pace

GM has moved quickly on development that clearly began long before we saw the Detroit concept. Bolt chief engine Josh Tavel announced that his team already has more than 50 pre-production prototypes running in the United States and South Korea where they were built. These are the first prototypes with production representative bodies and other systems, and they typically arrive about 18 months before production. Because of this, it’s reasonable to expect the Bolt to arrive in late 2016 or early 2017, putting it a year or likely more ahead of the Tesla Model 3. Many of the components for the Bolt have likely been tested for as much as 2 years in other vehicles before these prototypes were built.

Recognizing that not all customers have the same needs, GM isn’t planning to rely entirely on batteries to meet fuel efficiency requirements. In 2013, the automaker dipped a toe into the water with a diesel version of the Cruze that gets the best  Environmental Protection Agency- (EPA-) estimated fuel economy of any non-hybrid car in America. With virtually no promotion, Chevrolet sold 6,000 Cruze diesels in 2014. Dan Nicholson, vice president of global powertrain engineering announced that Chevrolet would offer an all-new 1.6L diesel engine in the 2016 Cruze that would offer even better fuel economy and more refinement.

“GM is aggressively going after passenger car diesels in North America and aims to be the market leader,” said Nicholson as he specifically called out long-time diesel champion Volkswagen. Along with new, more efficient gasoline engines with auto stop-start, diesel, and natural gas in trucks and future fuel cell vehicles, GM clearly intends to leave no stone unturned.

 

This Land Is a Demand Response Land for You and Me

— June 26, 2015

Just like the old folk song, June has been a good month for demand response (DR) from California to the New York Island. First, the California Independent System Operator (CAISO) released a proposal to allow aggregated distributed resources to bid into its markets, potentially as early as next year. Then, the New York Public Service Commission (NYPSC) approved all of the plans of the state’s utilities (aside from Consolidated Edison [ConEd]) to commence DR programs this summer. The programs are modeled on ConEd’s existing suite of DR programs.

CAISO found a way to introduce a new acronym, distributed energy resource provider, or DERP, into the industry lexicon. The proposal lays out a framework for allowing aggregated resources of at least 500 kW to participate in the market. There is also a requirement that any aggregations serving more than a single grid pricing point must be limited to a single type of technology. Metering has been one of the hurdles to DR participating in CAISO markets because the system requires generation-scale monitoring. The new rules would allow DR to be aggregated via the Internet, providing for a broader range of resources to be brought to market with less cost. DERP aggregators will be a scheduling coordinator metered entity, which will avoid “having each sub-resource in a DERP aggregation engaged in a direct metering arrangement with the CAISO,” according to the proposal. Access to ancillary markets, however, will still require resources to allow constant monitoring by CAISO. CAISO’s board is set to consider the proposal in July, but would need approval from the Federal Energy Regulatory Commission (FERC) before it can move ahead with the plan.

Meanwhile, in New York …

A week later across the country, NYPSC gave the green light for the upstate investor-owned utilities to follow ConEd’s lead and offer distribution-level DR programs to their customers starting this summer, a very quick turnaround time. This order is one of the early wins of New York’s Reforming the Energy Vision proceeding to transform the utility model in the state. The programs have three basic types: a peak shaving program to be called on a day-ahead basis when demand is expected to hit the summer peak; a local distribution reliability program to be called on as needed for localized issues; and a direct-load control program that lets customers install a device that can be controlled by utilities to control loads to compensate for system stress. Customers can take part in the programs individually or through an aggregator. This summer, the utilities are prioritizing areas that offer the greatest benefits at the lowest costs, based on factors including system stress and local distribution constraints for the year. All of the DR programs will be available starting next summer.

So, while the DR community continues to wait for the Supreme Court’s ruling on FERC Order 745 on DR compensation, the states are pushing the DR agenda ahead rather than waiting for direction from the feds.

 

Solving the Ocean Plastic Problem

— June 26, 2015

Every year, roughly 26 million pounds of plastic travels from coastlines around the world and into the oceans. This plastic contributes to massive floating garbage patches that threaten the health of marine life, humans consuming fish (ocean plastic creates high levels of pollutants and chemicals inside fish), and the oceans themselves. Common human health effects linked to these chemicals from plastic in fish are cancer, malformation, and impaired reproductive ability.

According to National Geographic, the well-known Great Pacific Garbage Patch is a massive collection of marine debris spanning the waters from the West Coast of North America all the way to Japan. Some scientists estimate that in its Eastern section (between Hawaii and California), the amount of garbage there is twice as large as the state of Texas, representing the largest landfill in the world.

A Potential Solution?

A project called The Ocean Cleanup plans to collect and remove plastic from the ocean, beginning with a coastal pilot deployment in mid-2016. The project plans to use a stationary array of long floating barriers that use the ocean’s natural currents to concentrate and collect the plastic. If implemented, this 1.2 mile cleanup device would likely be the world’s longest floating structure in the world. The Ocean Cleanup project claims that using a single 100 km (62 mile) cleanup array deployed for 10 years will passively remove 42% of the Great Pacific Garbage Patch. The project estimates that this would result in cleanup costs of €4.53 ($5.10) per kilogram.

Prevention Is the Best Tool

With 8 million tons of plastic ending up in the ocean every year, undoubtedly new solutions for ocean plastic removal are needed. Although interesting and potentially complicated solutions such as The Ocean Cleanup project are needed to get rid of the existing plastic in the oceans, the best long-term solutions are likely to be the simple ones; stop adding plastic to the ocean in the first place. According to the Natural Resources Defense Council, around 80% of marine litter (with most of it being plastic) originates on land. Beaches can offer better garbage and recycling options, individuals can choose to stop littering garbage while at beaches, and plastic producers can continue to design more fully recyclable packaging while reducing the amount of plastic in their products (e.g., smaller caps on water bottles).

 

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