How Old Power Plants Can Accelerate Clean Energy Deployments
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Old power plants have connections to regional power grids that can be repurposed to deploy renewable energy sources. Doing this essentially provides a head start for the integration of clean energy into the grid. Not only that, but there is a potential financial incentive for this as well, courtesy of the clean energy tax credits offered via the Inflation Reduction Act.
Pros and Cons of Leveraging Old Power Plants for Renewable Energy
Like most things in this world, using old power plants for this purpose has both pros and cons. It probably goes without saying that the main advantage of doing this is that the physical infrastructure development would not have to be accomplished from scratch. Certainly, upgrades would be required, but at least the physical foundation would already exist. Simply put, reusing the existing links these plants have to the transmission system means that these links do not have to be built from the ground up, saving both time in terms of development and regulatory approvals (potentially years) and money (potentially millions).
Less obvious are the potential downsides, the most impactful of which is reduced competition. This is because, at least for some regional system operators like PJM, companies that own existing power plants have so-called “capacity interconnection rights.” These rights allow companies to make money by selling power into the regional power market.
These rights are supposed to expire 1 year after a plant retires, but companies can find ways to retain and horde these rights by assigning them to new development projects. This hoarding could prevent new power facilities, including renewable sources, from connecting to the grid, making it more expensive and time consuming to deploy clean energy.
As you can probably tell, this is an extremely complex issue that involves many stakeholders. But if these issues can be resolved, using old power plants to help fast-track renewable energy projects seems like a slam dunk.
