How Does Uneconomic Coal Generation Impact the Grid? A Discussion with Regulators

November 20, 2019
Photo: PDTillman/Wikimedia Commons
Joseph Daniel
Senior Energy Analyst

On November 19th I had the privilege to sit on a panel of industry luminaries discussing an issue I’ve been researching for some time: Coal-fired power plants that operate uneconomically in wholesale markets.

Wholesale power markets all have rules in place that are designed to prevent power plants from running uneconomically. However, some power plant operators use those same market rules to bypass the market decision-making process through a process known as “self-committing.” Self-committing coal-fired power plants allow those plants to operate out of “merit-order” (from least cost to highest cost) and can result in serious market distortion and inflated consumer costs.

Here are some of my past blogs on the subject:

  • Presenting the results of a national analysis of the issue [link]
  • Discussion how self-committing coal can distort the market [link]
  • Laying out a few possible solutions to the problem [link]
  • Below is a video of my presentation which includes a crash course on uneconomic self-committing coal and includes the preliminary results of our latest and ongoing research on how it affects the MISO system.

See video of the panel conversation here.

My slides can be found here.

As Commissioner Freeman astutely pointed out, “this is a leadership issue.” With more commissioners now aware of the issue, I’m looking forward to seeing more state regulators taking a leadership role on self-committing coal-fired power plants.

About the author

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Joseph Daniel is a senior energy analyst and manager of electricity markets with the Climate & Energy program at the Union of Concerned Scientists. In his role, he serves as the primary point person for coordinating UCS’s utility regulatory work at state public utility commissions, independent system operators, and the federal energy regulatory commission.