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Chapter 9 EnergySector Fundamentals: Economic Analysis, Projections, and Supply Curves Appendices A.9.1 Baseload Power in Grid Operations Baseload plants tend to be older than gasfired combustion turbine units and are usually powered by coal, oil, or nuclear fuel – they also can be hydroelectric. In contrast, most peakload plants, called “peaking units,” are fueled by natural gas. Intermediateload – or midrange loadfollowing plants – are often smaller, older, coalfueled plants that have been modified to allow them to ramp up and down without damage. As system loads have grown, new generation has been built to supply that load. However, there have been relatively few new baseload plants completed in the United States since the 1990s. Thus, the baseload units tend to be older than the gasfired combustion turbine units and are usually powered by nuclear, coal, and, to a very small extent, oil. The new plants have either been of the midrange load following or peak varieties. Peaking plants may only run for 100 to 200 hours a year and, at most, a few hours in any given day. Midrange loadfollowing plants may serve load in key daytime hours by following load changes during the day. Therefore, there has been a small and gradual shift in the percentage of the system load served from baseload plants to midrange plants. The amount of load served by peaking plants grew somewhat during the 1990s, but has leveled off during the past decade. Natural gasfired plants, originally deployed for peaking capacity, are now increasingly being used for baseload power. This has tended to increase prices of delivered energy in many urban markets in the United States. Furthermore, the dramatic increase in the price of natural gas has resulted in many stranded combinedcycle units, unable to produce economical electricity in the current market. As a result of some older power plants being taken out of service and because of the types of new plants that have been built, the amount of natural gasfueled generation to serve overall load has increased. At the same time, the amount of generation fueled by coal has remained relatively constant. During the past decade, a move to install new gasfired combinedcycle plants has displaced some of the new demand for coal power generation. This phenomenon seems to be abating in the face of sustained and expected high prices for natural gas in domestic, Canadian, and imported markets. As a consequence, future use of natural gas for baseload power generation is likely to be constrained by price and, ultimately, by supply. Simultaneously, expansion of coalbased power generation is constrained by environmental and air quality regulations that have slowed new permitting and suggest stricter plant design criteria in the future.2 The baseload requirements of most regions are served by a combination of coalfired generation, nuclear steam generation, and hydroelectric facilities. There are several features of this combination of resources that suggest higher prices and tightened supplies in the future. These include: a. fuel prices b. additions of new generating capacity and capacity constraints c. transmission capacity d. retirements of existing stock e. environmental regulations and future CO2 emissions costs. 949PDF Image | Energy Sector Fundamentals
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