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Power Generation and Supply Monthly Roundup, August 2019

By FirmoGraphs Staff

Hello Everyone!

Please take a few moments and read our second Power Generation & Supply Roundup. 

 

Industry News and Drivers

Drivers-min

  • Driver:  EPA Sued By Coalition of 29 States and Cities Over Trump Administration’s Rollback of Clean Air Rule

    On Aug. 13, 2019, Attorneys General from 22 states and 7 major cities, including Los Angeles, Chicago and Miami filed a lawsuit in the United States Court of Appeals. The lawsuit is aimed to block the Trump administration from repealing Obama-era restrictions on coal-burning power plants.

    For additional information see:

     

  • Driver:  Bipartisan Senate Support for Nuclear With $7.5B Bill to Extend the Life of Current Fleet

    The Nuclear Energy Renewal Act introduced by Sens. Chris Coons, D-Del., and Martha McSally, R-Ariz., on August 1, 2019, authorizes $755 million per year (from 2019 to 2029) to "enhance the economic viability of the current U.S. nuclear fleet.

    For additional information see

     

  • Driver:  Wisconsin Gov. Tony Evers Orders to Make the State 100% Carbon Free By 2050

    In his Executive Order #38 (relating to Clean Energy in Wisconsin), Governor Tony Evers created the Office of Sustainability & Clean Energy.  The primary goal is to assure all electricity consumed within the State of Wisconsin is 100% carbon-free by 2050. The order was signed by Governor Evers on Aug. 16, 2019.

    For additional information see 

    Executive Order: tinyurl.com/Executive-Order-38

Using EIA Data and Business Intelligence to see the U.S. Power Fleet Evolution

As you know, the power generation mix in the U.S. fleet has been undergoing important changes.  As a power industry service provider and marketer, it is important to note and assess the overall power generation resources mix for a better understanding of the U.S Power Industry.

Thinking About the U.S. Power Fleet

Let’s start with the definition of ‘Nameplate Capacity’.  Power generation plants are assigned a Nameplate Capacity which is also known as the nominal capacity or maximum effect. The Nameplate Capacity represents the total output of a power generation plant, ideally, over some specified time period. It is commonly stated in MWs (Megawatts). For most technologies – fossil fuels, geothermal or nuclear generation, the nameplate capacity can be estimated on the basis of the system’s engineering. However, for solar and wind power, the overall estimate may vary based on the manufacturer's operating decisions.  

We derive most of our base information from data published by the EIA.  These are some of the most-important EIA data sources:

  • The EIA survey Form EIA-860 gathers specific information related to operational and planned generators along with related equipment that operate at power plants with 1 MW or greater nameplate capacity. 
  • The EIA survey Form EIA-923 collects in-depth data related to electricity generation on a monthly and annual basis - fossil fuel stocks, fuel consumption and different receipts at prime mover level and power plants.

In addition to publishing raw data, the EIA also publishes useful monthly and annual analysis. For example:

  • Energy consumption data
  • Average Sale (retail) prices
  • State and Federal energy development in U.S

These data sources can be very useful when you are projecting your own business in the U.S. power market.

Added Power Generation Capacity

With the Business Intelligence software from Qlik populated with data, we can let look at new generation capacity that has been onboarded in the past 10 years.  

Graph 1

  • Renewables -  wind and solar, have been added as shown here, have experienced a significant increase in their share of power generation mix, especially in the last few years. You can see that the count of units is very high, because the average nameplate capacity tends to be much lower than traditional fossil-generated energy.  
  • From a fossil energy perspective, note that no coal power generation units have been added in the last 10 years. However, natural gas has experienced a significant boost in terms of becoming the most utilized source as power generation.
  • Virtually no nuclear capacity has been added in the last several years, with the last plant commissioned in June, 2016 - Unit 2 Tennessee Watts Bar.

Retired Power Generation Capacity

Next, consider what has been retired.

Graph 2

  • Coal plants have been retiring and will continue to do so. From the year 2010 till the start of 2019, 100s of coal power units have been retired.
  • Gas plants have been increasing mainly due to higher efficiency.
  • Some renewable power capacity is also retiring, however, the projection by EIA assumes an overall increase in power generation from renewables.

Most of the utility-level power plants retired in the U.S during the period of 2008 and 2017, were fossil fuel power plants.  According to NARUC (National Association of Regulatory Utility Commissioners), coal power plant life span averages around 40 years.

As reported by the U.S EIA, 47% of coal power plants and 26% of natural gas generation capacity was retired. Most of the projected retirements of power generation by 2020, are the ones that use coal or natural gas as a resource. More than 70% of the coal power plants operating in the U.S are over 30 years old. 

Conclusion

As you serve your electric utility market customers, it is important to anticipate:

  • The retirement of older generation units, and how that changes the entire supply chain for design and construction services, equipment, production and transportation of fuels, and decommissioning
  • The market shift from coal to renewables including solar and wind, with those related opportunities for project siting, permitting, construction, and maintenance
  • New market opportunities particularly relating to storage technologies and transmission projects, to accommodate the irregular and distributed production of solar and wind energy

Moreover, you need to be well aware and foresighted with respect to state and federal law making.  For example, ‘How will power generation projects in a state be affected by the new laws and regulation?’ or  ‘What new business opportunities may be arising?’

To avail yourself of opportunity arising from the changing dynamics of the market, it is critical to analyze these market shifts at a tactical level.  Our analysis and insights take into consideration the micro and macro level market indicators and KPIs. Through application of effective business intelligence, we provide actionable, decision making information to help you efficiently assess and succeed in the growing industry of power generation.

 

Notable M&A

roundup-min

As per FirmoGraphs’ records, the following  M&A transactions in the Power Generation and Supply Industry, stand out in the month of August:

  • UGI Corporation and AmeriGas Partners, L.P. successfully completed the merger transaction between its subsidiary and AmeriGas, on Aug. 21. UGI acquired approximately 69.2 million public common units of AmeriGas it did not already own.
  • WE Energies and Madison Gas & Electric (MGE), announced a new partnership to acquire the remaining 150 megawatts (MW) of the Badger Hollow Solar Farm. The two companies filed a joint application on Aug. 1, 2019, with the Public Service Commission of Wisconsin. We Energies will own 100 MW, and MGE will own 50 MW.
  • Atlantic Power Corporation acquired equity ownership interests held by AltaGas Power Holdings (U.S.) Inc. in the Craven County and Grayling contracted biomass plants on Aug. 14, 2019. They acquired a 50% interest from AltaGas; the remaining 50% interest is held by CMS Energy.
  • GlidePath Power Solutions, one of America’s leading independent energy storage developers, acquired eight wind projects in North Texas with a total capacity of 149MW, on Aug. 20, 2019. The transaction provided the company with an opportunity to optimize the performance of the wind farms though the addition of battery storage.
  • OG&E, a subsidiary of Oklahoma City-based OGE Energy Corp., acquired Oklahoma Cogeneration LLC facility in Oklahoma City on Aug.20, 2019 and subsequently renamed it Frontier Power Plant. The acquisition followed the May purchase of the AES Shady Point plant near Poteau, Oklahoma, which is known as River Valley Power Plant now.
  • Castleton Commodities International LLC (CCI) fully acquired NedPower Mt. Storm LLC through one of its subsidiaries, on Aug. 28, 2019,. CCI had previously closed on a 50% ownership stake in Mt. Storm in June 2019, and concluded the acquisition of the remaining 50%, in August.
  • Vistra Energy entered into an agreement to acquire Ambit Energy for $475 million plus net working capital in an all-cash transaction, on Aug. 20. As a result Vistra's share of the ERCOT residential market will grow from approximately 25 percent to approximately 32 percent and an industry-leading 26 percent in all U.S. competitive markets.

 

Meeting Planner

Meeting Planner-min

Don't miss the opportunity to have face-to-face meetings with your prospects and customers!  We track meetings of interest to our customers serving the US power generation and supply industry so you won’t miss upcoming meetings and deadlines.  

Meetings in September & October, 2019

Early Bird Registration Deadlines

Call for Papers Deadlines

Event: AWEA Wind Project O&M and Safety Conference

Association: American Wind Energy Association

URL: https://www.awea.org/conferences/awea-wind-project-o-m-and-safety-conference

Dates: From February 26 to February 27, 2020

Location: Coronado, California

Call for Papers Deadline: September 13, 2019

Disclaimer

None of the information we provide may be taken as legal advice. Please consult an attorney if you require a legal interpretation of this information. 

Any information contained on this website or within any attachments is offered without representation or warranty as to its accuracy or completeness and FirmoGraphs, LLC cannot be held responsible for loss or damage caused by errors, omission, misprints or your misinterpretation of such information. Seek competent professional advice prior to relying on or utilizing such information in any manner as any such use is at your own risk.

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