When U.S. electric utilities began deregulating in the 1990s, they reduced their focus on internal RAM monitoring and analysis in an effort to cut costs that did not contribute directly to the bottom line. Today, a new set of changes, from the entry of renewable energy sources to the prospect of carbon trading, is on the verge of transforming the industry once again. This time, however, the changes promise to highlight – and heighten – the importance of an engineered approach to reliability and maintenance.
Based on abrupt changes in plant utilization observed in Europe after the introduction of carbon trading in 2005, we can anticipate similar upheaval at U.S. plants as renewables and potential cap-and-trade legislation transform the usage profile of generating units. To mitigate the impact of these changes, operators will have to reassess the best way to utilize and maintain their units for optimal performance. In this article, we take a look at some of the expected changes and how operators can prepare for them.
All data in the following analysis come
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Utilization is changing
Despite the fact that European units share similar generating technologies and fuels with North American units, the deployment of these assets has differed dramatically since carbon trading began in Europe in January 2005. While the introduction of carbon trading in the U.S. through cap-and-trade legislation is not a fait accompli, it is certainly a near-term possibility. Even without carbon trading, the increased emphasis on renewable fuels in the U.S. is certain to impact how units are utilized.
So, what can we learn from Europe’s example? As measured by Net Capacity Factor (NCF), defined as the percentage of actual net generation compared to total possible net generation if run at 100 percent load, we have seen a dramatic role reversal in Europe’s usage of coal vs. CCGT since 2005 (Figure 1). European coal plants show a substantial downward trend, while CCGT units demonstrate a similar upward trend. The result is that the utilization of CCGT units surpassed that of coal units for the first time in 2008.
During this same period, the use of North American coal plants continued on a slight upward trend.
But as wind power and other renewables continue to increase as a percentage of total U.S. net generation, we can expect the use of coal to decline relative to these sources. If a cap-and-trade regime is established, the change in usage patterns will be even more dramatic, paralleling the European experience.
As one might expect, changes in utilization in the European market have impacted reliability. As measured by Equivalent Unavailability Factor (EUF), defined as total unavailable megawatt-hours (MWh) due to both planned and unplanned outages and deratings as a percentage of total potential MWh, unavailability has increased significantly for European coal units (Figure 2). With this upward shift in EUF, European coal units have experienced increases in maintenance spending and market losses.
Causes of unavailability increases
Why, exactly, are these increases in unavailability occurring in European coal units? There are a number of factors to consider.
First, it is interesting to note that while unavailability increased for European coal plants, the EUF of European CCGT units (along with North American coal and CCGT units) remained relatively stable during this period. This stabilization can be attributed to the fact that while European coal units have moved away from their design basis as base-load units, European CCGT units have moved toward their design basis.
