PowerPlantRetirements:TrendsandPossibleDrivers

Authors:

AndrewMills,RyanWiser,JoachimSeel

EnergyAnalysisandEnvironmentalImpactsDivisionLawrenceBerkeleyNationalLaboratory

November2017

This work was supported by the Transmission Permitting & Technical Assistance Division of the U.S.Department of Energy’s Office of Electricity Delivery and Energy Reliability under Lawrence BerkeleyNationalLaboratoryContractNo.DE-AC02-05CH11231.

Disclaimer

ThisdocumentwaspreparedasanaccountofworksponsoredbytheUnitedStatesGovernment.Whilethisdocumentisbelievedtocontaincorrectinformation,neithertheUnitedStatesGovernmentnoranyagencythereof, nor TheRegents of theUniversity of California, nor anyof their employees,makes anywarranty,expressorimplied,orassumesanylegalresponsibilityfortheaccuracy,completeness,orusefulnessofanyinformation,apparatus,product,orprocessdisclosed,orrepresentsthatitsusewouldnotinfringeprivatelyowned rights. Referenceherein to any specific commercial product, process, or serviceby its tradename,trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement,recommendation,orfavoringbytheUnitedStatesGovernmentoranyagencythereof,orTheRegentsoftheUniversity of California. The views and opinions of authors expressed herein do not necessarily state orreflect thoseof theUnited StatesGovernmentor any agency thereof, or TheRegentsof theUniversityofCalifornia.

Ernest Orlando Lawrence Berkeley National Laboratory is an equal opportunity employer.

Acknowledgements ThisworkwassupportedbytheTransmissionPermitting&TechnicalAssistanceDivisionoftheU.S.DepartmentofEnergy’sOfficeofElectricityDeliveryandEnergyReliabilityunderLawrenceBerkeleyNationalLaboratoryContractNo.DE-AC02-05CH11231.Wethankoursponsorsforsupportingthisresearch:CaitlinCallaghan,MatthewRosenbaum,LawrenceMansueti,WilliamParks,DavidMeyer,andTravisFisher.Wealsoappreciatethereviewerswhothoughtfullycommentedonearlierdraftsofthemanuscript:WilliamBooth(EIA),PeterBalash(NETL),TrieuMai(NREL),StephenCapanna(DOE),andCharlesGoldman(LBNL).Ofcourse,anyomissionsorerrorsthatremainaresolelytheresponsibilityoftheauthors.

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Abstract Thispapersynthesizesavailabledataonhistoricalandplannedpowerplantretirements.Specifically,wepresentdataonhistoricalgenerationcapacityadditionsandretirementsovertime,andthetypesofplantsrecentlyretiredandplannedforretirement.Wethenpresentdataontheageofplantsthathaverecentlyretiredorthathaveplanstoretire.Wealsoreviewthecharacteristicsofplantsthatrecentlyretiredorplantoretirevs.thosethatcontinuetooperate,focusingonplantsize,age,heatrate,andSO2emissions.Finally,weshowthelevelofrecentthermalplantretirementsonaregionalbasisandcorrelatethosedatawithasubsetofpossiblefactorsthatmaybecontributingtoretirementdecisions.

Thisbasicdatasynthesiscannotbeusedtopreciselyestimatetherelativemagnitudeofretirementdrivers.Nordoweexploreeverypossibledriverforretirementdecisions.Moreover,futureretirementdecisionsmaybeinfluencedbydifferentfactorsthanthosethathaveaffectedpastdecisions.Nonetheless,itisclearthatrecentlyretiredplantsarerelativelyold,andthatplantswithstatedplannedretirementdatesare—onaverage—noyounger.Weobservethatretiredplantsaresmaller,older,lessefficient,andmorepollutingthanoperatingplants.Basedonsimplecorrelationgraphics,thestrongestpredictorsofregionalretirementdifferencesappeartoincludeSO2emissionsrates(forcoal),planningreservemargins(forallthermalunits),variationsinloadgrowthorcontraction(forallthermalunits),andtheageofolderthermalplans(forallthermalunits).Additionalapparentpredictorsofregionalretirementsincludetheratioofcoaltogaspricesanddeliverednaturalgasprices.Otherfactorsappeartohaveplayedlesserroles,includingthepenetrationvariablerenewableenergy(VRE),recentnon-VREcapacityadditions,andwhethertheregionhostsanISO/RTO.

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Introduction 1

Therehasbeenasignificantamountofretirementsofthermalgenerationassetsinrecentyears,drivenbyavarietyofmarket,policy,andplant-specificfactors.Thereisuncertainty,however,onwhichfactorshaveplayedthelargestcontributingroles.

• Averagewholesaleelectricitypriceshavedeclinedwhich,allelsebeingequal,willerodetherevenuepossibilitiesofinflexiblegenerationunits(more-flexibleunitsareinasomewhatbetterpositiontowithstandaveragepricedeclines,astheyareabletodispatcharoundhigh-andlow-pricedperiods).1

• Wholesalepricereductionsmaybeimpactedbydecliningnaturalgasprices,growthinvariablerenewableenergy(VRE),lowloadgrowthandhighreservemargins,aswellasotherfactors.

• Newpowerplantsmayofferadvancedtechnologiesthatenableimprovedheatrates,loweroperatingcosts,loweremissions,and/orincreasedflexibilityinoperations,puttingpressureontheeconomicpositionofolderplantsthatuseless-advancedtechnology.

• Theoperatingcostsofmanyexistingplantsarealsorisingovertime,asthoseplantsageandreachtheendoftheirplannedlifetimesand/orfaceincreasedregulatorypressuresduetoenvironmentalregulations(e.g.,coalandgasplants)orrelicensingneeds(nuclearandhydropower).

• Awidearrayoflocal,state,ISO/RTO,andfederalrequirementsandincentivesdirectedatpowerplantsofalltypesandgeographiclocationsalsomaybeinfluencingretirementdecisions.

• Finally,whileretirementshaveincreasedrecently,theyhavenotdonesoinavacuum,asgenerationcapacityadditionshavealsooccurred,especiallyofnaturalgas,wind,andsolar.

Thispapersynthesizesavailabledataonhistoricalandplannedretirements.Afterdescribingourdatasources,wepresentdataonhistoricalgenerationcapacityadditionsandretirementsovertime,andthetypesofplantsrecentlyretiredandplannedforretirement.Wethenpresentdataontheageofplantsthathaverecentlyretiredorthathaveplanstoretire.Wealsoreviewthecharacteristicsofplantsthatrecentlyretiredorplantoretirevs.thosethatcontinuetooperate,focusingonplantsize,age,heatrate,andSO2emissions.Finally,wepresentvariouschartsthatdepictthelevelofrecentthermalplantretirementsonaregionalbasisandcorrelatethosedatawithasubsetofpossiblefactorsthatmaybecontributingtoretirementdecisions.

Thisbasicdatasynthesiscannotbeusedtopreciselyestimatetherelativemagnitudeofretirementdrivers.Nordoweexploreeverypossibledriverforretirementdecisions.Moreover,futureretirementdecisionsmaybeinfluencedbydifferentfactorsthanthosethathaveaffectedpastdecisions.Nonetheless,itisclearthatrecentlyretiredplantsarerelativelyold,andthatplantswithstatedplannedretirementdatesare—onaverage—noyounger.Weobservethatretiredplantsaresmaller,older,lessefficient,andmorepollutingthanoperatingplants.Basedonsimplecorrelationgraphics,thestrongestpredictorsofregionalretirementdifferencesappeartoincludeSO2emissionsrates(forcoal),planningreservemargins(forallthermalunits),variationsinloadgrowthorcontraction(forallthermalunits),andtheageofolderthermalplans(forallthermalunits).Additionalapparentpredictorsofregionalretirementsincludetheratioofcoaltogaspricesanddeliverednaturalgasprices.Otherfactorsappeartohaveplayedlesserrolessofar,includingVREpenetration,recentnon-VREcapacityadditions,andwhethertheregionhostsanISO/RTOorremainstraditionallyregulated.

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Data and Methods 2

Thedatausedinthispapercomefromseveralsources,summarizedbelow:

• HistoricalandplannedretirementsandhistoricaladditionsdataprimarilycomefromABB’sVelocitySuitedataset2(which,inturn,sourcesmuchofitsdatafromEIA-Form860M3).Historicaldistributedandutility-scalesolaradditions,however,comefromGTM/SEIAandIREC.4

• Summernon-coincidentpeakloadisestimatedbysimplysummingthepeakloadofeachregion,asreportedinABB’sVentyxVelocitySuite.

• SummerplanningreservemarginscomefromEIA-Form411,updatedasofMarch2017.5• PowerplantagescomefromABB’sVelocitySuitedataset.• VREregionalpenetrationestimatescome,inpart,fromannualwindgenerationreportedinABB’s

VelocitySuitedividedbytotalgenerationintheregion.Forgeneratorsthathadnotyetreported2016data,weassumed2015-leveloutputafteraccountingforretiredunits.SinceABBdoesnotincludegeneration<1MWandsincelarge-scalesolargenerationdataweresubstantiallyincompletefortheyear2016,weestimatesolargenerationbasedonstate-levelcapacity,andregionalcapacityfactorsfromNREL.6DistributedsolargenerationalsoaddedtototalgenerationwhencalculatingVREpenetrations.

• RegionaldemandgrowthcomesfromEIA’sdatasetofretailsalesofelectricitybystate,witheachstateassignedtooneoftheISOornon-ISOregions.7

• RegionalsulfurcontentofcoalcomesfromEIA’sdatasetonthequalityoffossilfuelsinelectricitygeneration:sulfurcontentofcoalbystate.8

• Regionalandplant-levelSO2emissionsratescomefromABB’sVelocitySuitedataset.• PlantsizeandheatratebothcomefromABB’sVelocitySuitedataset.• Deliveredgasandcoalprices,byregion,comefromgeneration-weightedregionalaveragesofthe

monthlypowerplantfuelcostsbetween2010-2016reportedinABB’sVelocitySuitedataset.

Retirements and Additions over Time 3

Figure1presentsdataonpowerplantretirementsandadditionsovertime,comparedtonationalnon-coincidentpeakload.Figure2segmentsrecentretirements(2010-2016)andplannedretirements(2017-2023)bygenerationtype:coalplants,natural-gassteam(NGST)plants,combustionturbine(CT)plants,combined-cyclegasturbine(CCGT)plants,nuclearplants,hydropowerplants,andother.TheNGSTcategoryisbroadlydefinedtoincludebothnaturalgasandoilfiredsteamplants.Similarly,whilemostCTsarenaturalgasfired,someareprimarilyoilfired.

Severalobservationsareapparentfromthesecharts:

• Retirementsofthermalplantshaveoccurredthroughouthistory,buthaveincreasedsince2010• Coal&NGSTunitsaretheprimaryrecentcontributors,withCTs&nuclearadistantthirdandfourth• Asforplannedretirements,coal,NGST,andnuclearplantsaredominant• DisregardingVRE,therehasbeenanetlossofgenerationcapacitynationallysince2012• IfVREisincluded,however,netnameplatecapacityadditionshavecontinuedsincethattime9• HistoricallysignificantlevelsofCCGTandCTadditionsareapparentfrom2000-2005• Historicallysignificantlevelsofwindandthensolaradditionsareapparentsince2007

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• Non-coincidentpeakloadwashighestin2006andhasnotrecoveredtothatpeakasof2016• Anetincreaseinthermalcapacityexistssince2006notwithstandingthelackofgrowthinpeakload

Asaresultofallofthesetrends,excessgenerationcapacityexistsnationallyandregionally.10

Somecautionshouldbeappliedtoanyinterpretationoftheplannedretirementdata,asactualretirementsmaydiffersubstantiallyfromwhatispresentlyplannedandreportedassuchtoEIAandothersources.

Source:LBNLanalysisofABBVelocitySuiteData,withsolarestimatesfromIRECandGTM/SEIA

Figure 1. Retirements and Additions to the U.S. Generation Fleet over Time

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Source:LBNLanalysisofABBVelocitySuiteData

Figure 2. Plant Type Distribution for Recent and Planned Retirements

Project Age of Recent and Planned Retirements 4

Figure3presentshistogramsofprojectageofrecent&plannedretirementsforcoalplants,natural-gassteam(NGST)plants,combustionturbine(CT)plants,nuclearplants,andcombined-cyclegasturbine(CCGT)plants.11Notetheverydifferentscaleineachchart,withfarlargeramountsofretirementsforsometypesofplantsthanothers.Figure4,meanwhile,presentstrendlinesfortheageofretiringplantsovertime,whilealsoextendingthetrendlinetoconsiderplannedretirements.

Severalobservationsareapparentfromthesecharts:

• Recentlyretiredplantshavebeenrelativelyold,acrossallgenerationtypeso Themostcommonageofrecentlyretiredcoalunitsis50-60yearso ThemostcommonageofrecentlyretiredNGSTunitsis40-50yearso ThemostcommonageofrecentlyretiredCTunitsis40-50yearso Themostcommonageofrecentlyretirednuclearunitsis30-40years

• Plantswithannouncedretirementdatesarealsorelativelyold,basedonexpectedageatretiremento Nuclear&NGSTplantsplannedforretirementwillbeolderthanrecentlyretiredplantso Coal,CT&CCGTplantsplannedforretirementwillbeslightlyyoungerthanrecentlyretiredplants

• Thereisnoobservablebroadhistoricaltrendtowardsretiringyoungerplants

Coal53%

NGST29%

CT9%

Nuclear5%

CCGT1%

Hydro1%

Other2%

RECENT(2010-ENDOF2016):97GWTOTAL

Coal49%

NGST19%

CT8%

Nuclear17%

CCGT4%

Hydro2%

Other1%

PLANNED(2017-ENDOF2023):48GWTOTAL

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Source:LBNLanalysisofABBVelocitySuiteData

Figure 3. Histograms of Project Age for Recent and Planned Retirements

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Source:LBNLanalysisofABBVelocitySuiteData

Figure 4. Trend in Project Age of Past and Planned Power Plant Retirements

Asnotedearlier,cautionshouldbeappliedtoanyinterpretationoftheplannedretirementdata,asactualretirementsmaydiffersubstantiallyfromwhatispresentlyplannedandreported.

Comparison of Recently Retired Plants to Operating Plants 5

Figure5showsthatthecharacteristicsofplantsthatrecentlyretiredorthatplantoretirearedifferentthanforplantsthatcontinuetooperatewithnoimmediatereportedretirementplans.Inparticular,weobservethatretiredplantstendtobesmaller,older12,lessefficient,andmorepollutingthanoperatingplants.Thefiguresdemonstratethefollowing:

• Retiredplantsaresmaller:Recentlyretiredcoalplantshadanaveragecapacityof122MW,whereasplantsnotscheduledforretirementarelargerat239MWonaverage.Recentlyretirednuclearandgas-firedplantsaresimilarlysmallerthanoperatingplants.Plantswithplannedretirementdatesover2017-2023arelarger,onaverage,thanrecentlyretiredplants—morecomparabletothoseplantsthathavenotreportedplanstoretireinthenearfuture.

• Retiredplantsareolder:Coalplantsthatretiredbetween2010-2016hadanaverageageof52yearswhilecoalplantsthatdidnotretireandarenotscheduledforretirementhadanaverageageof37yearsin2016.Therecentlyretiredgasplantsaresimilarlyolderthanoperatingplants.Recentlyretirednuclearplants,ontheotherhand,wereonlyslightlyolderthantheageoftheoperatingplants.Plantswithneartermplansforretirementarealsoconsiderablyolderonaveragethanplantswithnosuchreportedplans.

• Retiredcoalandgasplantsarelessefficient:Theaverageheatrateofrecentlyretiredcoalplants(10,386Btu/kWh)wasslightlyhigherthanplantsnotscheduledforretirement(10,046Btu/kWh),indicatingthattheplantsthatretiredwerealsosomewhatlessefficient.Theheatrateofrecently

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retiredCCGTandCTplants,meanwhile,wasconsiderablyhigheronaveragethanplantsnotscheduledforretirement.Plantswithneartermplansforretirementarealsolessefficientthanthoseplantswithnoimmediatereportedretirementplans.

• Retiredcoalplantsaremorepolluting:Theaverageemissionsrateofcoalplantsthatretiredbetween2010-2016was1.2lbsSO2/MMBtu,whiletheaverageemissionsrateoftheplantsnotscheduledforretirementwas0.2lbsSO2/MMBtu.Plantswithannouncedretirementsfrom2017-2023haveemissionsratesmoreconsistentwiththoseplantsnotreportedlyplanningtoretire.

Source:LBNLanalysisofABBVelocitySuiteData

Figure 5. Comparison of Recently Retired or Planned Retirements to Operating Plants

Possible Drivers for Varying Levels of Regional Retirement 6

Figure6summarizestheregionaldistributionofrecentretirementsbothforallthermalunitsand,ofthattotal,thesubsetthatincludesonlycoalandnuclearunits.ThetotalthermalunitscategoryincludestheNGST,CCGT,CT,Coal,andNuclearcategoriesusedpreviously,whileexcludingtheVRE,Hydro,andOthercategories.Thefigurealsonormalizestheseabsolutesumsbypresentingthemasapercentageofnon-VREcapacityasof2016ineachregion.

Inabsolutemagnitude,thelargestamountofrecenttotalthermal-plantretirementsandcoal&nuclearretirementshaveoccurredinPJM,MISO,andthenon-ISOportionofSERC.Thesesameregions,alongwithCAISO,alsohavethelargestamountofretirementsonapercentage-of-non-VREcapacitybasis.

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Notably,naturalgasplantsdominatetherecentretirementsinERCOT,CAISO,FRCC,andNYISO;coalandnuclearmakesmallercontributions.

Source:LBNLanalysisofABBVelocitySuiteData

Figure 6. Recent Thermal Plant Retirements, by Region

ThefinalsetofchartsshowninFigure7correlateregionalretirementpercentageswithasubsetoffactorsthatmaybecontributingtothestrikinglydifferentlevelsofrecentretirementexperiencedinvariousregions.Mostchartsprovidedatapointsforbothtotalthermalplantretirementsand,separately,onlycoalandnuclearretirements.Insomecases,however,theinvestigatedfactorsaremostlikelytoaffectonlycoaland/orgasplants;wefocusinthoseinstancessolelyonthoseplanttypes.

Ninespecificpossibleexplanatoryfactorsareexplored:

• VREpenetrationinpercentageterms,consideringutility-scalewindandPVanddistributedPV• Regionalgrowth(orcontraction)inelectricalloadfrom2010to2016• Averageplanningreservemargin(basedonsummercapacityandpeakloads)from2010to2016• AverageSO2emissionsratesofthe25%ofcoalplantsineachregionwiththehighestemissions• Averagepercentsulfurcontentofcoaldeliveredtotheregionfrom2010to2015• Ratioofdeliveredcoalpricestodeliveredgaspricesintheregionfrom2010to2016• Averageregionaldeliverednaturalgaspricefrom2010to2016• Averageageoftheoldest25%ofthermalpowerplantsintheregionin2010• Newnon-VREcapacityadditionssince2010asapercentageoftotalnon-VREcapacity

Visualinspectionofthesefiguresdoesnotofferperfectclarityonthecoredriversforregionalretirementtrends.Nordohistoricaltrendsnecessarilytelluswhatmightdriveretirementdecisionsonagoing-forwardbasis.However,weobservethefollowingbasedonthesegraphics:

• VREPenetration:TheredoesnotappeartobeanyobviouswidespreadrelationshipbetweenVREpenetrationandrecenthistoricalregionalretirementdecisions.PJMandSERC,bothwithverylow

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VREpenetrations,haveamongthelargestamountofrecenttotalthermalplantandcoal&nuclearplantretirement.ERCOT,SPP,andthenon-ISOportionofWECC,ontheotherhand,allhavesizableVREpenetrationsbutlowretirementpercentages.CAISOhasexperiencedstronggrowthinVREandhasthehighestleveloftotalthermalplantretirementsonapercentagebasis,mostofwhichareolderNGSTplants;manyofthoseplantshaveretiredasacompliancemechanismwithCalifornia’spolicytophaseoutonce-throughcooling.13

• LoadGrowth:Thereappearstobearelativelystronginverserelationshipbetweenloadgrowthandretirementpercentages.Regionsthathaveexperiencedloadcontractionfrom2010to2016tendtohavelargeramountsofretirementthanthoseregionsthathaveexperiencedgrowth.

• ReserveMargins:Thereappearstobearelativelystrongrelationshipbetweensummerplanningreservemarginsandretirementpercentages.Regionswithhigherreservemarginsfrom2010to2016tendtohavelargeramountsofretirementthanthoseregionswithlowerreservemargins,perhapssuggestinganongoing‘marketcorrection’toexistinglevelsofexcesscapacity.

• SO2EmissionsRateofCoal:OnemightanticipatethatcoalplantswithhighSO2emissionsratesmaybesubjecttomorestringentenvironmentalupgradeandretrofitneeds,whichmaythendriveretirementdecisions.Thisrelationshipisclearlyapparentinthegraphic,suggestingthatenvironmentalcompliancehasbeenakeydriverofcoalretirementsespeciallyinPJMandSERC.

• SulfurContentofCoal:TherelationshipbetweentheaveragesulfurcontentofcoalintheregionandcoalretirementsisnotasrobustasfortheSO2emissionsrate,presumablyreflectingadoptionofcontrolequipmentinareaswithhighsulfurcoalbutloweremissionsrates.

• Coal-to-GasPriceRatio:Gasandcoalcompeteinthedispatchstack,andthereappearstobeaweakrelationshipbetweentheratioofdeliveredcoal-to-gaspricesandthelevelofregionalcoalretirement.Someregionsthathaverelativelylowercostcoaland/orrelativelyhighercostnaturalgashavetendedtoexperienceasomewhatlowerlevelofcoalretirement.Someregionswithinexpensivegasand/orhighcostcoal,ontheotherhand,havetendedtoseemorecoalretirement.

• GasPrice:Itiswidelyrecognizedthatreductionsinnaturalgaspriceshavebeenacoredriverforlowerwholesaleprices,andresultingthermalplantretirements.Onemightalsoexpectthatregionswithrelativelylowerdeliveredgaspricesmighthaveexperiencedgreaterlevelsofretirement.Aweakrelationshipofthisnatureappearstoexist.

• PowerPlantAge:Onewouldexpectthatregionswitholderpowerplantsmightwitnessagreateramountofretirement.Thegraphicsuggeststhatthisrelationshipmayexist,especiallyforcoal&nuclearplants,withthenotableexceptionofCAISOhavingsignificantretirementswithrelativelyyoungerplants.

• Non-VREPowerPlantAdditions:Theredoesnotappeartobeaclearrelationshipbetweengrowthinnon-VREcapacityadditionssince2000andthelevelofrecentretirements.

• ISOvs.Non-ISORegions:ItisnotobviousthattherecentgrowthinthermalplantretirementsisaffectedbywhethertheregionhasawholesalemarketoverseenbyanISO.SERCistraditionallyregulatedandhasamongthehighestamountofretirementofallregions.TheWECC(notincludingCalifornia)andFRCCalsoremainundertraditionalregulation,buthaveexperiencedrelativelylowerlevelsofretirementsofar.AmongthemanyregionswithISOs,retirementpercentagesvarywidely.

Again,visualinspectionofthesechartsisnotdispositiveinestablishingcausalrelationships.Nordothesechartsexploreeverypossibledriverforregionalretirementvariations.Moreover,futureretirementdecisionsmaybeinfluencedbydifferentfactorsthanthosethathaveaffectedpast

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decisions.Nonetheless,basedonthesesimplecorrelationgraphics,thestrongestpredictorsofregionalretirementdifferencesappeartoincludeSO2emissionsrates(forcoal),planningreservemargins(forallthermalunits),variationsinloadgrowthorcontraction(forallthermalunits),andtheageofolderthermalplans(forallthermalunits).Additionalapparentpredictorsofregionalretirementsincludetheratioofcoaltogaspricesanddeliverednaturalgasprices.Otherfactorsappear,basedonthissimpleanalysis,toplaylesserroles;theseincludeVREpenetration,recentnon-VREcapacityadditions,andwhethertheregionhostsanISOorremainstraditionallyregulated.

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VREPENETRATION

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Source:LBNLanalysisofABBVelocitySuiteData,alongwithsupplementalsourcesasdescribedearlier

Figure 7. Possible Drivers for Regional Retirement Trends

Future Research 7

Thispaperprovidesacursorylookatretirementtrendsanddrivers,butbynomeansisthefinalwordonthesubject.Tounderstandthesetrendsanddriversinmoredetailwouldrequireanunderstandingofhoweachpossibledriveraffectsplantprofitability,anexplorationofadditionaldrivers,andabetterunderstandingofinteractionsamongthepossibledrivers.Suchanalysismightusefullyfocusonspecificresourcetypesseparately(e.g.,coal,nuclear,orCCGTs),beconductedonaregionalasopposedtosolelyanationalbasis,andconsiderplannedaswellasrecentretirements.Itmaybeusefultoconsider,forawidervarietyofpossibledrivers,notonlyregionalaveragesbutthedistributionofplantswithinthoseaverages.Assessingretirementdriversovertime,notonlyacrossregions,maybeinformative.

Inconductingfurtheranalysis,additionaldriverstoconsiderinclude:(1)additionalexistingandprospectivestate,regional,andfederalpoliciesandregulations(e.g.,carbon,NOx,mercury,water,plant

CAISO

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AllThermalReBrements Coal&NuclearReBrements

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relicensing,RPS,etc.);(2)thespecificimpactsofwear-and-tear,cycling,andotherfactorsonoperationalcosts;(3)regionaltrendsinwholesaleenergyandcapacityprices;(4)thepossibledifferentialimpactsofwindandPV,asopposedtothecombinedimpactofVRE;and(5)thermalplantheatratesandcapacityfactors.Regressionanalysisandreviewsofregulatoryandfinancialfilingsofferusefultoolstohelpbetteridentifytheunderlyingcausesofinvestordecisions.

Endnotes and References

1Whereactivewholesalemarketsdonotexist,thesamebasicdynamicshold:thedecliningcostofnaturalgas,forexample,putseconomicpressureoninflexibleunitseveninmarketsthatdonotfeatureanISO/RTO.Generationthat is locked into longer termphysicalor financial contractsmaybe temporarily isolated fromsomeof theseforces,butwillstillbeaffectedby,e.g.,naturalgasandwholesalepricechangesatleastoverthelongerterm.

2ABBVelocitySuitedataset.AccessedMay2017.3https://www.eia.gov/electricity/data/eia860m/4Specifically,GTM/SEIAdatawereusedtoestimatestate-levelsolarcapacityadditionsfortheyears2010-2016(GTMResearch,SolarEnergyIndustriesAssociation(GTM/SEIA).2017.“U.S.SolarMarketInsight,2016YearinReview”,pp.51-57).State-leveldatafromIRECwereusedtosupplementcapacitydataforstatesthatwerenotcoveredbyGTM/SEIAintheyears2010-2013andforsolarcapacitydatafortheyears1996-2009(personalcommunicationwithLarrySherwood,dataareassociatedwiththe “U.S. Solar Market Trends” report series, 2006-2013, by the Interstate Renewable Energy Council (IREC)).http://www.irecusa.org/wp-content/uploads/2014/07/Final-Solar-Report-7-3-14-W-21.pdf.

5https://www.eia.gov/electricity/data/eia411/6Specifically,weusedthesolarcapacitydatafromGTM/SEIAandIRECtodevelopstate-levelsolargenerationdatabasedonsector-specific capacity factor estimates reportedbyNREL (National Renewable Energy Laboratory. 2012. “U.S. RenewableEnergyTechnicalPotentials:AGIS-BasedAnalysis”.http://www.nrel.gov/gis/re_potential.html). State-level solargenerationdatawerethenaggregatedtoISOregions(futureworkcouldrefinethestate-levelassignmenttoregions).California'ssolargeneration isapportionedamongCAISOandnon-CAISOWECCbasedonEIA861NEMratiosfordistributedsolarandABB'sregionalgenerationratiosforlarge-scalesolar.WeusedABBdataforwindgenerationandtotalISOgenerationdataacrossallfueltypestocalculateISO-levelVREpenetrationlevels.

7 https://www.eia.gov/electricity/data/browser/. Future work could refine the state-level assignment to regions, or insteadutilizedifferentdatasources.

8https://www.eia.gov/electricity/data/browser/.Futureworkcouldrefinethestate-levelassignmenttoregions.9Futureworkcouldlookatnetadditionsbasedontheestimatedcapacitycreditofeachresourcetype.10SeevariousNERCreportsfocusedonexisting,nearterm,andlongertermreservemargins.11Wedonotanalyzehydropowerretirementsinmoredetailassomeofthecapacitycategorizedasretiredisinsteadpartofanupratingofahydropowerfacilitythatcontinuesoperations.Overall,hydropowerisaverysmallshareofbothhistoricalandplannedretirements.

12Theageofplantsisbasedontheageatretirementforplantsthatretiredbetween2010-2016,theageintheyearthattheyplantoretireforplantsslatedtoretirebetween2017-2023,ortheagein2016foroperatingplantsthathavenotreportedplanstoretireoverthetimeframeconsideredhere(2017-2023).

13CaliforniaEnergyCommission(CEC).2017.“Once-ThroughCoolingPhase-Out.”CaliforniaEnergyCommission.http://www.energy.ca.gov/renewables/tracking_progress/documents/once_through_cooling.pdf.