Latest News

January 22, 2018

cQuant Insight: GE Rings Funeral Toll for Baseload Generation

***This article is the first in a two-part series on the effects of high renewable penetration on thermal generation operational paradigms. The next article will discuss how utility supply planners, generation asset managers, and renewable PPA purchasers can leverage today’s best practices in energy analytics to position their portfolios for a future without baseload power.*** 

The fact that our generation mix is transforming is no surprise. What may surprise you, however, is just how transformed it’s already become. General Electric, a global leader that produces some of the world’s most efficient natural gas combined cycle generating technology, is already finding its plants uneconomical in electricity markets with high renewable penetration. A recent post on GE’s blog cites intermittent patterns in renewable generation as the main cause for this operational transformation.

It’s no secret that renewable energy has been coming onto the grid at an ever-accelerating pace. Over the past decade, technology costs for solar and wind have experienced dramatic declines and consumers have advocated with increasing fervor for “green” sustainable energy. The result has been a focus on renewable generation for utility-scale capacity expansion like never before. Since 2014, renewables have accounted for more installed capacity in the U.S. than all other forms of generation combined, while at the same time over 40 gigawatts of outdated coal and natural gas fossil generation have retired. The way electricity is generated in both the U.S. and around the world is rapidly transforming.

One of the most insightful windows into this transformation is the way thermal generation technology is being forced to respond. Combined cycle natural gas plants used to run for long periods of time to satisfy baseload electricity demand. Baseload demand is essentially the lowest point on the daily and weekly cyclic patterns of electricity demand in a given region; that is, it’s the amount of demand that can always be counted on no matter what the time of day or day of week. When renewable generation peaks, it reduces the amount of “net demand” that fossil-fueled generators are needed to satisfy. When that net demand begins dropping below the capacity of some of the baseload power plants themselves, these plants have to ramp down to follow suit, or, in some cases, shut down completely. This becomes extremely expensive, since fossil plants often incur high fixed costs each time they start back up and usually run at significantly lower efficiency when ramped down below their maximum generation capacity. The increased operational costs of cycling can quickly eat away at profits for once-baseload generating facilities, forcing them into early retirement.

Here’s the kicker: this dynamic is already happing. GE’s article notes that the Irsching combined cycle plant in Germany was forced to close despite being the most efficient power plant in the world at the time. Despite its high efficiency under baseload operation, it was simply not flexible enough to operate within Germany’s electricity supply stack, which had been transformed by large quantities of wind and solar generation. Other European markets are seeing similar baseload-destroying trends, such as the UK, where the country’s largest energy services provider has noted it’s giving up on combined cycle generation altogether. In these markets, it’s not an exaggeration to say that the very concept of baseload power has become obsolete.

So how much renewable generation does it take to kill baseload power? If you want to see the energy issues the U.S. will likely face ten years from now, just look at Western Europe today. Take Germany, for example: today, roughly 27% of Germany’s electricity comes from renewable energy, whereas this number was just 9% a decade ago. According to the U.S. Energy Information Administration, renewable energy accounted for about 15% of U.S. electric generation in 2016. With recent trends showing an acceleration in renewable generating capacity, it’s likely we’re already well within a decade of where the German and British electricity supply stacks are today.

The U.S. is firmly on a path toward a future where baseload power is a thing of the past. Now, with GE second-guessing its own efficient baseload technology, the funeral dirge for baseload power in the U.S. may have already begun:

“And therefore never send to know for whom the bell tolls; it tolls for thee, Baseload. It tolls for thee.”

 Read Full Original Article Here: Evolution of Combined Cycle Performance: From Baseload to Backup

Need a solution for your energy analytics? We can help! Request your free demo today.

Request Your Demo Today

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll to top