Heat Rate Cost – Part 2: Impact of Increased Renewables

This blog is Part 2 of a three-part series.  Part 1 covered the impact of fuel cost on heat rate.  This blog covers the impact of cycling on heat rate. Conventional power plants are expected to cycle as much as renewables such as solar and wind to increase their penetration into the market.

At least 38 states and the District of Columbia have established a renewable goal. In 12 of those states (and the District of Columbia), the requirement is 100% clean electricity by 2050 or earlier.  As a result of their low levelized costs when compared to conventional (mainly coal and natural gas) fossil-fuel electrical generating units (EGUs), these conventional EGUs will likely be affected significantly by this increased solar and wind EGU penetration.  These effects include:

• Reduced capacity factor
• Operation at reduced output for participation in Regulation and Reserve markets
• Increased frequency and magnitude of changes in output in steady-state operation
• Increased cycling

Cycling refers to the operation of EGUs going on and offline or operating at varying output levels in response to changes in system load requirements.  Every time an EGU shutsdown or restarts, the boiler, steam lines, turbine, etc. are subjected to large thermal and pressure stresses. This causes wear and tear on the unit and also adds to the operational cost since this is inefficient compared to steady base-line operation.

Since fossil EGUs will probably have marginal costs higher than wind and solar and wind EGUs, they will be shut down more often than in the past.  High-cost fossil units will be started only when the price of electricity is high enough to cost-justify their operation.  Startups and shutdowns are expensive and force the EGU, whether gas turbine-based or fossil Rankine Cycle, to operate in modes where air emissions are high.  Increased cycling also increases thermal cyclic fatigue, which results in greater maintenance costs.

Part 1 Recap

Part 1 showed the annual savings in fuel cost for a slight improvement in heat rate.  These savings can be substantial.  Sadly, the reverse effect takes place with the reduced heat rate that results from increased cycling.  Increased cycling ultimately results in reduced efficiency.  This increases EGU marginal cost of generation, making it less competitive and likely leading to reduced capacity factor, furthering the issue.  Operation with reduced efficiency also increases air emissions of all sorts on an lb/MWh basis.

Be sure to look for Part 3 of this blog, which will discuss ways to improve heat rate, including potential engineering, operations, and maintenance improvements at your facility.