One way the energy sector is compensating for the loss of capacity from the retirement of coal-fired power plants is by upgrading transmission systems and thereby increasing the amount of electricity that can travel from one region to another. 

According to the U.S. Energy Information Administration (EIA), PJM Interconnection, a regional transmission organization (RTO), is using this approach to respond effectively to the announced retirement of 13 percent of total generating capacity in the Ohio portion of the PJM electric system.  The EIA reports that PJM has identified 35 individual transmission projects, each costing more than $5 million, to improve power flow into the region. 

Cost-effective alternative

Environmental regulations and the low cost of natural gas are compelling energy companies to retire older, smaller, and relatively inefficient coal-fired power plants.

Electric systems can ensure a reliable supply of electricity by building new power plants, but in a highly populated area that requires significant backup power in reserve, it may be more cost-effective to upgrade the transmission system to improve the flow of power between regions.  PJM has an overall reserve margin of 29 percent, 13 percentage points above its target, but the recently announced retirements created reliability concerns that PJM plans to address through transmission upgrades, taking advantage of the higher reserve margin elsewhere in the system.

The Ohio region faced a capacity shortfall after companies owned by FirstEnergy announced the retirement of 1,400 megawatts (MW) of coal-fired capacity in 2012, followed by another 885 MW in 2015. This represents a 21 percent drop in the amount of electric capacity in this region while the rest of PJM will remain relatively well-supplied.  The upgrade projects will avoid the need to install new generating capacity in the region.  Substantial retirement activity will occur along Lake Erie, and a large part of the enhancement activity will occur around Cleveland.

Sample projects

Enhancements include equipment replacements, new substations, rebuilding existing lines, and constructing  new ones.  The EIA notes the following projects:

• Installation of the Toronto-Harmon 345-kilovolt (kV) transmission line that runs west from a substation in Toronto, Ohio (near the border of West Virginia), to Harmon in northeastern Ohio at an estimated cost of $218 million.
• Installation of the Mansfield-Northfield 345 kV transmission line from the Mansfield substation in Beaver County, Pennsylvania, to the Northfield substation, about 20 miles southwest of Cleveland, at an estimated cost of $184.5 million.
• Conversion of the retiring coal-fired generators at the Eastlake and Lakeshore power plants to synchronous condensers at a total estimated cost of $120 million. Synchronous condensers provide voltage support in the form of reactive power to the transmission grid, allowing the zone to bring in more power from the rest of PJM.

PJM has reported that even as generator retirements were being announced, the organization was attracting a record 4,900 MW in new generation throughout its entire system.  Most of the new generation will be fueled by natural gas, which has become plentiful and economical through development of shale formations in the United States.  The two largest reserves—Marcellus and Utica—are in the middle of the region PJM serves. 

Additional information