PJM Report Indicates That the Most Expensive Power Plants Tend To Be the Most Polluting

March 23rd, 2016 by Jennifer Chen, Attorney, The Sustainable FERC Project

PJM, the regional grid operator serving 61 million energy customers in the Mid-Atlantic and Midwest, recently published a report showing that the emission rates of various pollutants from power plants operating within its territory recently have been decreasing, on average. In addition, the report shows that the most expensive plants to operate (which are largely coal and gas fired) also tended to pollute more for every unit of electricity they generated.

The important conclusion for electricity consumers to draw from the report is that reducing energy use (such as, through programs enabling a more efficient or smarter use of energy) shaves off the most highly polluting and expensive power plants first.

PJM’s report shows that for carbon dioxide, nitrogen oxides and sulfur dioxide pollution, the PJM system-wide average emission rates (in pounds of pollutant emitted per unit of energy produced) largely fell over the past several years, as indicated by the red-orange lines in the following three graphs. These numbers describe the emission rates (and not the total amount of pollution emitted) – lower emission rates mean that power plants (on average) are emitting less climate-warming carbon dioxide and smog and soot-forming nitrogen oxides and sulfur dioxide for every unit of energy generated.

PJM emissions 1

Source PJM – Carbon dioxide emission rates in pounds per megawatt-hour for electricity generators in PJM

PJM emissions 2

Source PJM – Sulfur dioxide emission rates in pounds per megawatt-hour for electricity generators in PJM

PJM emissions 3

Source PJM – Nitrogen oxides emission rates in pounds per megawatt-hour for electricity generators in PJM

The blue and green lines represent the emission rates from the “marginal units,” which are the power plants PJM calls on last to satisfy the last unit of electricity demand. These last units are the most expensive because PJM selects the cheapest means of meeting electricity demand first (for every five-minute interval of the day) and continues to procure increasingly expensive energy resources until electricity demand is balanced with supply. The blue lines represent the emission rates of marginal units during customers’ “peak” electricity usage (considered to be weekdays from 7 a.m. to 11 p.m.), and the green lines represent the emission rates of marginal units during nights and weekends, or “off peak.”

The most striking feature of the marginal units’ emission rates is that they are consistently, with few exceptions, greater than the average emission rates of all energy resources that PJM calls upon to keep the lights on, showing that marginal units tend to be more highly polluting generators in addition to being more expensive.

Another feature is that the blue and green lines are more jagged because the marginal units reflect a smaller set of power plants than the red-orange line, and the emission rates are highly dependent on the particulars of the marginal units. For example, the blue and green lines peak during the winter of 2014-15, which was exceptionally cold (recall the first polar vortex?). During that period of record high energy demand, PJM had to call on some of the least efficient generators, resulting in some of the highest emission rates from marginal units.

What are these marginal generators? As indicated in the table below, more than half are coal-fired units and around a third are gas-fired.

PJM emissions 4

Source PJM – Marginal units by fuel type

The table also shows that over the years, gas and oil are replacing coal as the marginal fuel type in some places. This is likely due to the fact that coal power plants are retiring. The fact that coal is beginning to phase out (and coal is one of the most polluting fuels) would also help explain the decrease in PJM’s system-wide average emission rates across the three pollutants.

Written by Jennifer Chen