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Illinois power industry positioning for change

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Kent Knutson's picture
Energy Market Specialist, Hitachi Energy USA Inc.

Kent Knutson is a market specialist focusing on energy industry intelligence for Hitachi Energy.  He has more than 30 years of experience designing and developing intelligence products for some...

  • Member since 2018
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  • May 3, 2021

Across Illinois, there are more than 10,000 MW of capacity scheduled for retirement over the next seven years – 6,600 MW expected during the next two years alone. Most of this capacity is older coal and nuclear power plants. Based on proposed financial support by Governor J.B. Pritzker, announced on April 28, 2021, about one-third of these closures, four reactors at two nuclear plants, may be delayed up to five years. You may not know that Illinois is the second leading state in carbon-free electricity production – only Texas produces more clean power across the United States. In 2019, power production from carbon-free resources accounted for 61.7% (114.2 million MWh) of the state’s output. Nuclear generation is the primary driver behind Illinois’s high ranking – nuclear power plants accounted for 53% (98.7 million MWh) of all electricity generated in the state. This relatively large contribution to the state’s power resource mix is from 13 reactors at just six power plant locations – the total operating nameplate capacity is 12,916 MW. Electricity production from Illinois power plants has primarily come from coal and nuclear resources. Still, in recent years, wind and natural gas have contributed significantly more to the state’s power output. 

Illinois electricity production by fuel, MWh

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In 2019, renewable energy resources accounted for 8.8% (16.3 million MWh) of total electricity production in the state – nearly 90% (14.5) from wind farms. That is about to change. 

State plans for more wind, solar and energy storage

According to data compiled by the Hitachi ABB Power Grids’ Velocity Suite research team, most of the planned capacity additions (14,000 + MW) in the state are wind and solar (65.9%), while natural gas (33.6%) accounts for most of the remainder. The data reveals that only 26.7% (3,782 MW) of these development projects are currently under construction or testing. Of that figure, only 1,319 MW are wind and solar projects – most of the capacity (2,451 MW) are natural gas plants. The wind and solar pipeline are significant, with nearly 8,000 MW proposed, pending approval or permitted. The early closure of coal and possibly some nuclear power plants as planned will open the door for wind and solar development.       

Things to know about Illinois’s power supply

Illinois is a net exporter of electricity. In 2019, the state exported about one-fifth (34.7 million MWh) of total production to neighboring states. Most operating capacity in Illinois is owned by independent power producers (91.3%), while electric utilities (8.7%) account for the remaining portion. The state’s supply and distribution systems reside in the two largest organized power markets in the U.S., the PJM Interconnect (PJM) and the Midcontinent Independent System Operator (MISO). Currently, 68.2% (33.4 GW) of the operating capacity in the state is connected to the PJM grid, while 31.8% (15.6 GW) is connected to MISO. The majority (2.6 GW) of capacity additions currently under construction across the state reside within the PJM, with 1.2 GW in MISO. Looking at the overall development pipeline, both regions have about 7.0 GW of capacity in pre-construction development – most of this is wind and solar capacity.           

Among all American states in 2019, Illinois ranks:

  • 1st in the production of nuclear power (98.7 Million MWh)
  • 2nd in the production of carbon-free electricity (114.2 million MWh)
  • 5th in electricity production (184.5 million MWh)
  • 6th in CO2 (carbon) emissions from power plants (63 million tons)
  • 8th in Retail Sales (138.3 million MWh)
  • 31st in the average retail price of electricity ($95.60/MWh)

Illinois’s power industry carbon footprint declining

As recently as 2011, Illinois fossil fuel power plants emitted over 100 million tons of CO2. In less than a decade, the carbon footprint declined by 37%, dipping to 63 million tons in 2019.  

The closure of older coal plants, 6,378 MW since 2011, and the significantly reduced average annual capacity factor at operating power plants contributed most to the decline in carbon output. In 2011, coal power plants averaged 68% capacity factors (CF), but by 2019, coal averaged only 45.5% – from baseload to cycling. During the same time frame, natural gas combined cycle (CC) units in the state went from only 13.1% CF to an annual capacity factor of 48.9% — higher than coal plants on average. Despite the large increase in CF, natural gas is not a large power supplier in Illinois. Gas CC units account for only 3.6 GW (7.3%) of total state-wide operating capacity, while coal accounts for about 12.3 GW.      

Electricity output by retiring fleet

The generating units scheduled for retirement have been large contributors to the state’s total production over the years. In 2019 these units generated 30.8% of the total state output. In 2003 and 2004, the 17 units scheduled for closure accounted for more than 40% of the state’s electricity production.

Electricity production from Illinois power plants scheduled for retirement, 2021 thru 2027

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That could change if the four reactors that are currently scheduled for retirement stay open. 

  • Byron Generating Station Unit 1, 1,307 MW (1985) in Ogle County
  • Bryon Generating Station Unit 2, 1,307 MW (1987)
  • Dresden Unit 2, 1,009 MW (1970) in Grundy County
  • Dresden Unit 3, 1,009 MW (1971)

In August 2020, Exelon Corporation, owner and operator of all Illinois nuclear plants, announced that two additional plants, Lasalle (2 units/2,313 MW each) and Braidwood (2 units/2,384 MW), were also at risk of closure due to economic reasons. Currently, there are no set dates for the retirement of these units – all, including Byron and Dresden, are dedicated to the PJM Market.

Currently, the Zero-Emissions Credit Initiative (ZECs) compensates two of the states operating nuclear power plants. The two-unit Quad Cities facility (2,019 MW in total) is in the PJM market, while the single unit Clinton facility (1,108 MW) is in MISO. The Quad Cities units, owned by Exelon Corp. (75%) and Berkshire Hathaway (25%), started commercial operation 48-years-ago in 1972. The Clinton Nuclear Plant, also owned by Exelon, came online 33-years-ago in 1987.

Some good news for the state’s nuclear fleet

On April 28, 2021, Illinois Governor J.B. Pritzker proposed support for short-term subsidies to keep open Byron and Dresden – $70 million per year over five years. The announcement called for the total phase-out of coal by 2030 and the phase-out of natural gas by 2045. Along with these efforts, the Governor is calling for 1 million electric vehicles (EVs) on the road by the end of the decade.

On April 29, 2021, the PJM Interconnection proposed to the Federal Energy Regulatory Commission (FERC) the elimination of the market’s Minimal Offer Price Rule (MOPR) for all state-subsidized renewable and nuclear power plants. The MOPR would have raised the price for these resources in upcoming capacity market auctions, which is good news for zero-carbon wind, solar, energy storage, and nuclear power in the state. Clean energy providers are praising the rule change as an important win.

Older coal plants lead the closure list

Currently, there are 14 units at six coal power plants across Illinois scheduled to shutter over the next seven years. The total operating capacity at these facilities is 5,147 MW – 34% (1,744 MW) is scheduled for closure by December 2022.

Illinois fossil plants scheduled for closure:

  • E D Edwards (Vistra Energy), 2 units/644 MW total (coal), Peoria County, 2022 
  • Joppa Power Plant (Vistra Energy), 6 units/1,100 MW total (coal), Massac County, 2022
  • MEPI GT Facility (Ameren Corp), 5 units/302 MW total (natural gas), Massac County, 2022
  • Dallman (Springfield Water & Light), 1 unit/207 MW (coal), Sangamon County, 2023
  • Baldwin Energy Complex (Vistra Energy), 2 units/1,260 MW total (coal), Randolph County, 2025
  • Kincaid Generation (Vistra Energy), 2 units/1,319 MW total (coal), Christian County, 2027
  • Newton (Vistra Energy), 1 unit/617 MW (coal), Jasper County, 2027 

On April 6, 2021, Vistra Energy announced plans to shutter their coal-fired Joppa Power Plant by September 1, 2022, three years earlier than previously planned. The primary driver cited is mounting financial and legal pressures. The companies forward focus is on passing the Coal to Solar and Energy Storage Act (HB 3446/SB 529), enabling reinvestment and repurpose sites like Joppa into zero-emission generation sites. The companies have announced a plan to invest $550 million to transform coal plant sites into renewable energy centers. The Joppa plant is in the MISO market. The proposal includes investment in 300 MW of utility-scale solar and 175 MW of battery storage. The Vistra plan would involve construction at nine sites and is estimated to triple its solar generation capacity and more than double its battery energy storage – all by 2025. The Act proposes a $59 million, 45 MW battery storage project for the Joppa site.

Other key legislative initiatives include the Clean Energy Jobs Act (HB 0804/SB 718). The legislation promotes renewable energy, energy efficiency, and utility accountability to mitigate climate change impacts. One key feature of the legislation is support for coal plant communities across the state.   

Joppa Steam Plant electricity production (MWh) and CO2 emissions (Tons)

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Joppa has been a large and consistent generator in the state for years. Over the past decade, the plant has generated more than 135 million MWh. The highest annual electricity production occurred in 2003 when 8.7 million MWh was produced. In recent years, power output dropped significantly to an annual low of 4.2 million MWh in 2020. 

State mandates require more renewables

Illinois has set a goal for electric utilities and other state power suppliers to achieve 25% of total electric sales by renewables by 2025, with 45% by 2030 and 100% of all energy including power supply, transportation, and other carbon-emitting sectors, by 2050. Today renewables account for about 9% of the power supply. The 25% by 2025 plan mandates 75% of the goal from wind farms, and 6% come from solar farms.

Fossil plant closures across Illinois will open the door for rapid development of renewable capacity over the next several years. Still, with the possible closure of nuclear power plants, Illinois’s position near the top of the carbon-free power states will likely slip. Wind, solar, and battery storage are positioned to play a major role in achieving these lofty but achievable goals. Other critical elements to meet standards include grid modernization efforts such as new transmission and the digitalization of operations.

Matt Chester's picture
Matt Chester on May 3, 2021

Illinois's debates on existing nuclear plants seems to be at the center of a lot of this discussion, almost as a litmus test for what each 'side' finds successful and useful to then use in other states where the debates loom. 

What lessons do you think are most important for the utility execs to take from this current situation playing out in real-time in Illinois? 

Bob Meinetz's picture
Bob Meinetz on May 3, 2021

"You may not know that Illinois is the second leading state in carbon-free electricity production – only Texas produces more clean power across the United States."

Kent, it should be noted Texas also produces more dirty power across the United States. The Lone Star State is #1 in carbon emissions - alone at the top.

Still, with the possible closure of nuclear power plants, Illinois’s position near the top of the carbon-free power states will likely slip. Wind, solar, and battery storage are positioned to play a major role in achieving these lofty but achievable goals.

Wind, solar, and battery storage are positioned to do nothing of the sort. As a native of Chicago, I can state categorically there is no credible scenario in which Illinois could reduce carbon emissions by closing its nuclear plants. For months of winter the sky is covered by leaden, gray clouds, making solar a non-starter. Wind, with a 30% capacity factor, is highly variable over a period of weeks, and is thus 100%-dependent on natural gas for backup.

Unknown to many, Chicago currently has the cleanest electricity of any city in the country (71% carbon-free) and it's all thanks to nuclear energy. That makes it a big target for Environmental Law Policy Center (ELPC), ally of a front group for coal-generator NRG, and other wolves in green clothing.

As home of the Manhattan Project, Argonne National Laboratory, and FERMILAB, Illinois has a longstanding pro-nuclear culture, and a growing awareness of how moneyed fossil fuel and renewables interests are attempting to hitch a ride on the green gravy-train. They can try to kill nuclear in Illinois, but they will fail.

Kent Knutson's picture
Kent Knutson on May 4, 2021

Matt and Bob, thanks for your comments.  Nuclear is indeed the central topic.  I was working on an article that would highlight the huge loss of power resources through retirement . . . then . . . late last week . . . two stories hit the airwaves.  First, the Governor's proposal to support subsidies for Byron and Dresden . . . then the PJM announcement they prefer to do away with the MOPR . . . which hugely benefits nuclear, as well as, wind and solar.  The big story, that doesn't appear to be changing, is the tremendous number of coal power plants slated for closure.  The nuclear plants will stay operating for some time . . . but what replaces the coal units?  If not wind and solar, then what?  Since the state is a large exporter of power it might just be that the lost coal generation is not replaced fully.  Interesting stuff . . . but like almost every state, the focus is on carbon-free or carbon-reduced (e.g. natural gas) power resources.  Once again, thanks for sharing your thoughts.  Oh yea, and "Go Cubs" . . . actually I am a Rockies fan, but I just wanted to state my support for Illinois and Chicago.  LOL!

orestes macchione's picture
orestes macchione on May 5, 2021

Thanks for the article and the comments. Perhaps as I think the grid from the transmission viewpoint, I'm not sure of the value of looking at Illinois as a generating entity. Why not consider PJM / MISO as a whole? Why not also include SPP? With transmission the grid can be all interconnected. The wind efficiency and land abundancy in MISO / SPP is huge -so at least if the target is achieving lower carbon energy generation, Illinois should consider adding transmission to interconnect with wind generation from the great plains. There are plenty of recent studies i.e. Macrogrid, that quantify the benefits of such approach. 

Kent Knutson's picture
Kent Knutson on May 5, 2021

Orestes, thanks for your comments . . . I've written quite a bit on how transmission enables renewable energy . . . it is a great opportunity . . . here's two of the stories . . .   and,  Cheers, Kent

Bob Meinetz's picture
Bob Meinetz on May 8, 2021

"Illinois should consider adding transmission to interconnect with wind generation from the great plains."

Orestes, no doubt wind developers in Great Plains states, and renewables advocates throughout the country, will agree with you. Illinois will do what is best for Illinois, though, and becoming dependent on another state for their clean energy is in no Illinoisan's best interests.

They already have reliable, clean energy - why would they want to export $billions from their own economy for the unreliable kind?

Kent Knutson's picture
Thank Kent for the Post!
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