Renewables Overtaking Coal and Nuclear in Midwest

May 29, 2016



For a snapshot of the woes of the U.S coal and nuclear industries, take a look at Illinois.

Following a four-year drop in electricity demand, power companies there announced the closing of coal and nuclear plants that account for more than 10 percent of generating capacity. The shutdowns come amid a fourfold increase in cheap wind from neighboring states and growing competition from generators burning low-cost natural gas.

Exelon Corp., the operator of 11 nuclear reactors in Illinois, and Dynegy Inc., which has 10 coal-fired plants in the state, are asking lawmakers to bail out their money-losing assets to prevent further job-cutting, closures and, in Exelon’s case, preserve carbon-free electricity production.

“You’ve got free wind power coming from the west and cheap gas coming from the east and that’s not a good place to be for coal and nuclear power plants,” said Travis Miller, a utility analyst for Morningstar Inc., an investment research firm.

The Atlantic:

But over the past couple of years, researchers have come across another potential solution, one that seems almost too simple. The wind is usually blowing somewhere, and the sun is usually shining somewhere. If we could just connect the whole country to a special grid that would let utilities tap into those resources anytime, wouldn’t that get rid of—or at least lessen—the reliability problem?

The most recent high-profile paper making this argument was published in January by researchers at the National Oceanic and Atmospheric Administration and the University of Colorado at Boulder. Christopher Clack and colleagues built a model to predict the long-term costs of putting all kinds of energy into the electrical system. When they imposed a constraint on their model—it couldn’t use coal—they found that the cheapest option involved a grid of transmission lines that could carry solar and wind energy from almost any part of the country to anywhere else. Other technologies—perhaps Gates’s imagined miracle—would still be required to get rid of carbon-emitting fuels altogether, but the new grid would get us quite far, reducing emissions from power plants by up to 80 percent within 15 years.

This conclusion, Clack said, appeared to surprise some energy researchers. Sending wind or solar energy long distances inevitably involves the loss of some power during transmission, and the alternating-current, or AC, lines that connect most of the U.S. are less efficient for long-distance transmission than direct-current, or DC, lines. The paper’s hypothetical grid would use DC instead of AC. Until recently, big investments in high-voltage DC lines have been rare, in part due to the cost of the technology required at substations to make the power usable. But the model found that if you built a nationwide grid, economies of scale would emerge. In short, the benefits of having long, efficient lines outweigh the cost of power conversion. “People assumed that storage was the key or that nuclear was the key—and now I think there’s more of a recognition that you can actually get quite a long way today,” Clack said, just by changing how renewable energy moves around.

Not just wind. Solar energy – coming online in greater and greater quantities, is moving around on the grid and supplying power to areas not normally associated with utility solar.
As solar expert Jigar Shah has said, in the near future, there will be two kinds of states, those that produce renewable energy, and those that buy it.


“We’re now seeing large amounts of solar in markets where we weren’t seeing it before, such as Indiana, Arkansas, Idaho, Oregon and Mississippi,” said Smith. “That was a tremendous surprise.”

In 2016, 11 percent of new solar capacity in the pipeline will come from retail procurement. Favorable economics — not necessarily sustainability efforts — are the driving force behind the sharp growth in long-term retail contracts.

“Sustainability initiatives do help, but usually these deals are primarily being driven by sourcing needs, price stability and better returns,” said Smith.

Government mandates on the local level are also still driving growth, Sands noted. “Some cities and municipalities have their own goals and targets for renewables,” she said. “So some utilities are adding solar to meet an RPS goal, just not one set at the state level.”

Also, some states offer their own tax breaks and other incentives that are driving solar outside of an RPS. For example, Smith pointed to North Carolina, which has become the largest PURPA market, now accounting for 60 percent of PURPA projects nationwide. “Leveraging the generous 35 percent state tax credit made these projects easily financeable,” said Smith.

Late last year, North Carolina lawmakers extended the state’s solar tax credit for one final year, through the end of 2016. Several developers are now quickly building very large projects within the state. After the credit expires, it’s expected that many solar developers will expand to other adjacent markets.

Below, Mark Jacobson of Stanford, who sees the big picture on this better than most, interviewed in December 2015.

9 Responses to “Renewables Overtaking Coal and Nuclear in Midwest”

  1. Bill Ramsay Says:

    hello i was intrigued with that chart/graph, why is it using a log scale for the y axis? any ideas?

  2. schwadevivre Says:

    One of the drivers for Smart Metering in the Britain is the ability to have a very precise picture of demand and thus route power from one part of the National Grid to another. Originally it was envisaged that this would allow “rationalisation” of supply, by having a few big nuclear stations supplemented by gas generation.

    But instead it actually works to allow renewables to become the cornerstone of generation.

    The only real fly in the ointment is that areas that with good wind and solar (and tidal, if the UK Government can pull its finger out) have poor grid connections to the rest of the country. In the past few years in Cornwall load dumping has had to be used because the infrastructure has not been sufficient to transmit the energy generated.

  3. Gingerbaker Says:

    The Atlantic article swamped with anti-grid trolls – wow!

  4. pendantry Says:

    I really don’t understand this thing called ‘the reliability problem’. The answer is simple: use excess power when it’s sunny/windy to pump water up a hill, and release it for hydro energy when it’s dark/calm. All that’s needed is to determine the size/height of the requisite tarn for any location. Problem solved.

  5. Gingerbaker Says:

    And let me add that those Atlantic trolls are shouting down the benefits of a smart grid (!) because of their religion – their “religion” being Evangelical renewable energy Localism.

    So, on one side we have serious people publishing peer-reviewed work on the wisdom of an approach which relies heavily on generating RE on ideally-sited large farms, and moving RE hundreds or thousands of miles to where it is needed, probably using commons projects as a funding model

    On the other side, we have people who are actually against progress because they have swallowed so deeply of the corporate marketing Kool-Aid that RE is all about the romantic independence you can enjoy by putting PV on your rooftop. And that the more localized is everyone’s RE capacity, the better off we will be……

    when the whole point of Clack’s article is that while the sun don’t shine and the wind don’t blow, they do so almost always LOCALLY only. That almost certainly there is some place in the country where the sun is happily shining and the wind happily blowing. And that a smart grid will take us very far down the road of energy independence indeed before we need to spent even more on storage.

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