It’s no secret that coal-fired generation in the U.S. has faced significant challenges in the past five years.
With the cost of natural gas dropping, as well as an increase in environmental regulations, the Energy Information Administration reported 14.8 GW of coal-fired power plants retirements in 2015 and an estimated 13 GW in 2016.
As a result, the power industry is rapidly evolving to gas-based generation in conjunction with increased reliance on renewables, like wind and solar.
This year, for instance, Texas hit a new wind production record of 16.1 GW. And solar production in California continues to break records with renewable energy achieving 50 percent of the total generation load.
Yet, the integration of renewable energy is only adding to instability of the grid because of the intermittency of the renewables. This instability is creating wide variably in market pricing for generators.
In fact, wind or solar generation can experience a rapid drop off, creating increased demand on the fossil generators resulting in a spike in pricing.
On the other end of the spectrum, sometimes there is an overcapacity of solar during the day in the CAL ISO market and overcapacity in wind generation in the ERCOT market that results in financial challenges to the generators on the grid by creating negative pricing.
Modernization of automation in power plants can address the instability associated with these recent changes, and bring along a variety of other benefits.
Modernization is more than migrating from an old, legacy system to its modern equivalent where a single technician completes the task. It is a big-picture effort.
It involves rethinking applications and upgrading multiple technologies. But, it can transform your processes and help solve your biggest challenges to reposition your operations for the next 20 to 30 years.
By modernizing older or obsolete automation systems that make up only a fraction of the total plant capital costs, power producers have the ability to manage assets more efficiently, and leverage advanced analytics to monitor and optimize plants across the fleet.
A seamless, unified control system brings visibility to any plant in any location.
Defining the economic benefits of modernization and developing a compelling business justification can be difficult. Plant upgrades usually involve switching out a control system that might be 30 or 40 years old – consider a phased approach to modernization.
This is especially appealing if your modernization project involves several plants around the world, or if you need to disperse project costs across a long period of time.
Rockwell Automation has experts who can help unlock the true potential of your plant by studying and developing strategies for modernizing your legacy systems.
While answering these questions is a big step forward, moving forward with a plan is an even bigger feat. Rockwell Automation provides power producers, like you, the resources to advance at your own pace – whether this includes self-service or working with your company on an entire turnkey upgrade.
Let’s face it: Most organizations strapped with legacy equipment understand the benefits of modernization. Their challenge comes in getting the funds required to implement a sizable modernization project. But they shouldn’t let this stop them.
Instead, they should seek out automation leaders with creative contract models that allow them to modernize over a longer period while still receiving uninterrupted support for their legacy equipment.
This can be an especially invaluable option during times of tightening capital expenditures.
It’s clear that the decline in coal-fired plants has caused a disruption to the power generation industry.
As you take the next step toward upgrading operations to meet these challenges, you want to ensure you’ve made the right decision.
Leading-edge technologies can result in efficient and sustainable operation, while “bleeding edge” technologies lead you down the quagmire of operational risk and instability.
Companies should prepare a modernization plan to avoid risky investments while also achieving reliability, visibility and faster startup time across the grid.