Georgia’s Shifting Power Generation Portfolio:
The Need for Vogtle
The North American Electric Reliability Corporation (NERC) recently released its 2018 Summer Reliability Assessment that focuses on issues related to the U.S. electric power system’s ability to respond to peak demand, which typically occurs during the summer. Central to this assessment is the evaluation of a system’s reserve margins, which is the amount of unused available capacity of a power system, at peak load, as a percentage of total capacity. This unused capacity is to be held in reserve to meet demand during exceptional periods when the peak period may also be compounded by a typical generator outage. While the electric power sector is a unique industry where supply meets demand exactly and just-in-time, that same sector must have in reserve enough capacity to maintain that exact, just-in-time delivery—capacity that must be callable at any moment. Otherwise, power outages ensue, which in the middle of summer are life-threatening. This raises important issues regarding not only reserve margins, but also the age of a power generation fleet and the planning efforts for ensuring reserve margins can be sustained over the long-term.
This is a quick, brief overview/profile of the power generation fleet for select utilities and IPP non-CHP providers in the state of Georgia.
Overview of the Georgia Fleet by Age Range
Figure 1 illustrates the overall power generation fleet by resource, capacity and age range for the electric utilities and IPP non-CHP providers in Georgia, as previously noted. The utilities and providers in this overview are Georgia Power Company, Oglethorpe Power Corporation, Municipal Electric Authority and Southern Power Company and the total fleet capacity is 29,776.2 MW. Since this post is about reserve margins, these are capacity data, not generation data.
One remark about Figure 1 that’s relevant to later comments is that 3,539 MW of coal capacity has been retired since 2002 (Figure 4). This coincides with the addition of 11,523.6 MW of natural gas capacity added in the 0-20 year age range.
More Detailed Breakdown
Table 1 is a breakdown of the power generation fleet for the state of Georgia by age range, resource and capacity, as well as fractional shares for each resource and for each age range indexed to the total fleet and to the resource itself. A few bulleted points and comments:
- The lower right of the table, highlighted in blue, represents the oldest generation capacity in the fleet—over 50 years. This is all hydroelectric and constitutes 1.2% (337.3 MW) of total fleet capacity;
- The middle age range, 20-50 years and highlighted in yellow, constitutes 49.3% (14,652.2 MW) of the total fleet capacity. This is predominantly coal (32.7%; 9,722.2 MW) and nuclear (13.6%; 4,041.8 MW) and represents most of the fleet’s onsite, storable baseload capacity. In addition, 49.8% of the coal fleet is 40-50 years of age and 50% of the nuclear fleet is 30-40 years. A more detailed breakdown of coal-nuclear is provided later;
- The upper left, highlighted in green, represents the youngest generation capacity in the fleet, 0-20 years, and constitutes 40.5% (12,052.1 MW) of total fleet capacity. Most of this is natural gas (38.7%; 11,523.6 MW) with the remaining being solar (1.8%; 528.5 MW).
Table 1. Detailed breakdown of the power generation fleet for the state of Georgia by age range, resource and capacity with further detail on percent share. For select utilities and IPP non-CHP providers.
It’s safe to say there will be no more hydroelectric capacity added to the Georgia fleet. Moreover, with low-carbon constraints likely to be an issue of increasing importance in the environmental and political debates of U.S. energy policy, it’s also very likely that, in the absence of economical carbon capture and storage technology, there will be no additional coal capacity. Since Georgia has no economically viable wind resource, at this point, solar PV will be the predominant renewable resource for Georgia’s future power generation portfolio. Biomass is acknowledged, here, but for the foreseeable future it isn’t showing signs of substantial contributions.
With the retirement of the aforementioned coal capacity since 2002, coupled with the abundance of inexpensive domestic natural gas and the availability of Georgia’s solar resource, it stands to reason that natural gas and solar are the most recent assets being added to the fleet—and, more than likely, will continue to be added to the fleet. However, natural gas cannot be stored on the plant site and must be piped in from out-of-state suppliers, thus exposing the reliability of the state’s power generation to upstream issues beyond the control of in-state providers. As for solar, its inherent intermittency will continue to be its major constraint until battery storage becomes economically feasible to help optimize the resource.
Onsite, Storable Baseload Capacity for Georgia
The constraints of natural gas and solar are not debilitating, yet they must be accounted for in long-term planning so the state doesn’t become overly dependent on flow resources. This, then, motivates some concern for the fleet in the middle age range of 20-50 years, which is dominated by coal and nuclear capacity—two resources that represent the only onsite, storable baseload resources in the fleet and which contribute substantially to reserve margins (Figure 2). This is particularly important given that the average life span for various generation technologies is about 50 years for coal, 40 years for natural gas, 60-70 years for nuclear and 25 years for solar PV.
A few bulleted points and comments on onsite, storable baseload capacity as per Table 2 and Figures 2&3:
- The total capacity of onsite, storable resources (coal, nuclear and petroleum liquids) totals 15,029.2 MW, which is 50.5% of total fleet capacity (Table 1).
- In the 20-50 year age range, coal and nuclear capacity combine for 13,764 MW, of which 9,722.2 MW is coal and 4,041.8 MW is nuclear (Table 2; Figure 3). This is 91.6% of the fleet’s total onsite storable capacity and 46.3% of total fleet capacity (Table 2).
- Of near-term concern is the 6,355.6 MW of coal that is over 40 years of age (Figure 3), as this is 21.3% of total fleet capacity and 42.3% of onsite storable capacity (Table 2).
The summary point of this brief overview is that the power generation fleet for Georgia has been shifting toward natural gas for the past twenty years, offsetting the retirement of over 3,500 MW of coal (Figure 4) during that period. However, the loss in coal capacity is, for all practical purposes, permanent. With natural gas and solar constituting all new capacity over the past twenty years, this translates into a loss of onsite, storable baseload capacity. With respect to reserve margins, this is a trend toward offsite resources that can expose the fleet to upstream resource availability issues beyond the control of the providers. In light of this shift, it’s worth reiterating that 49.8% of the coal fleet is 40-50 years of age and 50% of the nuclear fleet is 30-40 years. It is further noted that the age range of the recently retired coal units is 46-60 years. This elevates the importance of the 2,200 MW of new nuclear capacity under construction at Vogtle Units 3&4 as it will provide additional onsite storable capacity that will help balance the trend toward natural gas and solar.
For a current example of problems that can accompany poor planning around natural gas and renewables, look no further than California, which was recently hit with a triple digit heat wave that resulted in a peak demand that its power grid was unable to handle. The result—major power outages for over 34,000 homes and businesses. This wasn’t surprising and was actually part of NERC’s 2018 assessment where it warned: “the California Independent System Operator (CAISO), which oversees the operation of California’s bulk electric power system, “faces significant risk of encountering operating conditions that could result in operating reserve shortfalls”. The assessment pointed to two reasons: 1) The retirement of 789 MW of dispatchable natural gas generation that had been available in prior summers; and 2) Uncertainty about the status of its natural gas system and the challenges that system is dealing with.”
Georgia’s natural gas disposition isn’t necessarily like California’s. However, the point here is that Georgia needs new onsite storable capacity to offset the loss of that capacity over the past twenty years and to ensure grid reliability. To that point, Georgia’s decision to construct two new nuclear reactors will prove to be one of the wisest, forward-thinking decisions the state has ever made with respect to its electric power sector. It may take a few years before it comes into focus, but one day hindsight will look back kindly and thankfully on the decision to construct Vogtle Units 3&4, and Georgia’s economy and ratepayers will be the biggest winners.