The document discusses the decline of coal power in the U.S. due to new EPA regulations and the retirement of coal plants, and explores alternative energy sources, particularly solar power's potential in the ERCOT market. It highlights various regulations such as the Clean Air Interstate Rule and Carbon Pollution Standards aimed at reducing emissions from power plants. Additionally, the document presents capacity data and projections for renewable energy growth, emphasizing the significant solar potential available in Texas.

1. Principal Solar Institute
As Coal Dims, Will Solar Shine?
Perspective on a Changing Electricity
Industry
Ron Seidel
Director, Principal Solar
Ron Seidel is principal of RBS Energy Consulting, working with private
equity, investment banks, and government on electric energy issues
primarily in the ERCOT market. Previously, he was president of Texas
Independent Energy, senior vice president of Energy Supply at City Public
Service of San Antonio, and an executive at TXU where he was senior
vice president of Fossil Generation and Mining, president of TXU Energy
Trading, and operations manager at the Comanche Peak Nuclear Plant.

2. Agenda
 If we are the Saudi Arabia of coal, why are
the prospects for coal declining?
– New EPA environmental regulations
– Retirement of coal plants
 What fuel sources will replace coal power?
 Will solar power play a significant role?
 What happened to the capacity shortage
situation in ERCOT?
 The solar potential in ERCOT

3. EPA Emissions Regulations
Clean Air Interstate Rule (CAIR)
Cross State Air Pollution Rule (CSAPR)
Mercury and Air Toxics Rule (MATS)
Carbon Pollution Standard for New Power Plants
Carbon Pollution Standard for Existing Power
Plants

4. Clean Air Interstate Rule
(CAIR)
Effective in 2005, under the Clean Air Act of 1970
Addresses power plant pollution drift between
states
Includes 27 Eastern States and District of Columbia
Target pollutants
– Sulfur Dioxide (SO2)
• Phase I – 50% reduction 2010 to 2014
• Phase II – 65% reduction 2015 and beyond
– Nitrogen Oxides (NOx)
Phased in caps between 2009 and 2015
Interstate Cap and Trade System for allowances

5. States Covered by CAIR
NOx
SO2
NOx and SO2
Source: EPA

6. Cross State Air Pollution Rule
(CSAPR)
Replaces CAIR, addresses power plant pollution
drift between states
Limits NOx and SO2 from power plants
Final rule to be effective January 2012
– Five month implementation period
– Revised in late 2011 and twice in early 2012
– Vacated by DC Circuit court in August 2012
– Supreme Court reversed DC Circuit in April 2014
– The DC Circuit has not reinstated CSAPR
CAIR in place until CSAPR reinstated
 Between 1,400 and 6,000 MW capacity loss in Texas
estimated when implemented

7. Cross State Air Pollution Rule
Affected States
Source: EPA

8. Mercury & Air Toxics Standard
(MATS)
Issued December 2011 (1117pages!)
– Numerous revisions since
Rule finalized in April 2012
Compliance by April 2015
1100 coal and 300 oil fired units affected(>25MW)
Limits on emission rates for:
– Mercury
– Non-mercury metallic toxics (measured as PM)
– Acid gases (measured as HCl or SO2)
Will require SO2 and Mercury removal equipment

9. Carbon Pollution Standard
New Power Plants
Effective January 1, 2015
Proposed CO2 limits:
– Utility boilers (coal, gas, oil) = 1,100 lb CO2/MWh
– Combined cycle units = 1,000 lb CO2/MWh
Typical current CO2 emissions
– Utility coal boilers = 2,000 lb CO2/MWh
– Utility gas boilers = 1,500 lb CO2/MWh
– Combined cycle units = 1,000 lb CO2/MWh

10. Carbon Pollution Standard
Existing Power Plants
Effective June 30, 2016
Objective is to cut U.S. CO2 emissions 30% below
2005 levels by 2030
State flexibility to determine reductions
– Renewables
– Fuel switching
– Demand management
But the EPA has final authority over state plans
Let the litigation begin!

11. CO2 Target Reductions
Below 2005 levels by 2030
-39%

12. U.S. Coal Plant Retirements
2012 - 2040
MATS Effective Date
Source: EIA
Retirements = 60,000 MW (19%)

13. ERCOT Coal Capacity
Megawatts
20,000
19,500
19,000
18,500
18,000
17,500
17,000
16,500
16,000
Net retirements = 600 MW (3%)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Source: ERCOT

14. Worldwide PV Capacity
Source: EPIA

15. 2013 U.S. Electric Capacity Additions
Megawatts
Source: EIA

16. U.S. Renewable Capacity Additions
Megawatts
Source: EIA

17. U.S. Generating Capacity
Gigawatts
600
500
400
300
200
100
0
2012 2015 2020 2025 2030 2035 2040
Year
Coal
Gas/Oil
Nuclear
Solar PV
Solar Therm
Source: EIA

18. New ERCOT Capacity
2015 - 2019
198 240
3,581
8,613
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Solar Coal Gas Wind
M
W
Capacity Type
Source: ERCOT

19. ERCOT SOLAR CAPACITY
Megawatts
350
300
250
200
150
100
50
0
Actual Planned
2010 2011 2012 2013 2014 2015 2016
Year
Source: ERCOT

20. ERCOT Reserve Margins
May 2012 / May 2013 / May 2014 Reports
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Target =13.75%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
%
December 2012 May 2013 May 2014
Source: ERCOT

21. ERCOT Peak Load
Megawatts
68294
70000
68000
66000
64000
62000
60000
58000
56000
54000
52000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

22. New Capacity Needed in ERCOT
Reserve Margin = 13.75%
-380 -215 -44
1,020
2,817
3,870
4,623
5,671
6,716
7,764
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
-1,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
M
W
Year
Sources: ERCOT / RBS Energy Consulting

23. Utility Scale PV Potential
Rural areas
U.S Total: 152,974 GW 280,613,217 GWhrs 3,186,955 km2
Texas: 20,411 GW 38,993,582 GWhrs 425,230 km2 (61%)
Source: NREL

24. Achievable Solar PV Energy
in Texas
Reference: ERCOT Peak Load ~68 GW
Urban PV = 154 GW (13% of U.S. Total)
Rural PV = 20,000 GW (14% of U.S. Total)
Achieving just 1% of this capability would
produce over 200 GW or almost three times
the current ERCOT maximum load.
Sources: NREL, RBS Energy Consulting

25. Questions and Discussion
Please enter your questions into the Chat window
Ron Seidel
Director, Principal Solar