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CEIC-12-08

Production Cost and Air Emissions Impacts of Coal-Cycling in Power Systems with Large-Scale Wind Penetration David Luke Oates and Paulina Jaramillo 

Abstract:
Wind power introduces variability into electric power systems. Due to physical characteristics of wind, most of this variability occurs at inter-hour time scales and coal units are therefore technically capable of balancing wind. Operators of coal-fired units have raised concerns that additional cycling will be prohibitively costly. Using PJM bid-data, we observe that coal operators are likely systematically under-bidding their startup costs. We then consider the effects of a 20% wind penetration scenario in the coal-heavy PJM West area, both when coal units bid business as usual startup costs, and when they bid costs accounting for the elevated wear and tear that occurs during cycling. We conclude that while 20% wind leads to increased coal cycling under business as usual startup costs, including full startup costs shifts the burden of balancing wind onto more flexible units. This shift has benefits for CO2, NOX, and SO2 emissions as well as for the profitability of coal plants, as calculated by our dispatch model. It is therefore not clear that increased cycling needs to be a major concern for operators of coal plants in systems with high wind, nor for those concerned with reducing air emissions.

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