The average coal plant in the US is 45 years old[1], born the same year as Queen’s rock anthem “Another one bites the dust.” It’s a little too fitting that this has also become the anthem of coal power generation capacity in the US, which has declined by at least 40% since 2011.[2] Outcompeted on cost and flexibility, the coal plant retirement trajectory has remained relatively stable through three administrations, a pandemic, unprecedented natural gas price spikes, and supply chain disruptions. Moreover, these aging plants are increasingly suffering forced outages[3] and failures during extreme weather,[4] eroding their usefulness as assets to “keep around just in case.”
However, in many places these plants are kept online beyond their economic lifetimes not for their energy, but for the ancillary grid services they provide as a byproduct.[5] Often, these plants operate under costly “Reliability Must-Run” (RMR) agreements[6] that create uncertainty in the market, and tie up transmission capacity that could be used by lower cost resources waiting in line to connect. It’s similar to running a gas stovetop to keep your house warm – a really inefficient and unhealthy way to stay comfortable. Even the coal plant industry views RMR agreements negatively due to their market distortion effects.[7] This begs the question, how long can we stand the heat?
Fortunately, recent technology improvements and policy updates have opened the opportunity to replace these plants while still maintaining grid reliability. GridLab, with the help of its experts, has released several recent papers this year that we believe will help move the industry beyond the old practice of RMRs.
Surplus Interconnection Service has been allowed in most of the country under FERC Order 845 since 2018. This service allows interconnection of new resources behind existing generator interconnections without going through the clogged up[8] standard interconnection process. Researchers found that there is an opportunity to connect over 800 GW of new low cost solar and wind resources in these locations by 2030 to lower cost and increase reliability. Much of this opportunity is at existing coal plants who only operate less than 20% of the year and could sublet their interconnection facilities to new resources. The MISO and SPP transmission operators already have a combined 7GW of surplus interconnection requests under study as of February 2025, but uptake has been slow elsewhere. PJM recently updated their tariff to allow for a more functional process, with the goal of bringing more resources online quickly.
In addition, emerging technologies are providing new means to cost effectively address the Transmission Reliability Impacts of Retiring Conventional Generation. While these impacts are real and require adequate engineering attention to overcome, new tools like High Performance Conductors (a.k.a “Advanced Conductors”), Grid Enhancing Technologies, and Flexible AC Transmission Systems (FACTS) can reduce or eliminate the need for RMRs in many cases.
The effectiveness of each tool varies based on the specific conditions, but the important fact is that the menu of options is expanding and improving, offering new ways to maintain reliability while lowering costs.
One particular solution, Battery Energy Storage Systems (BESS) with Grid-Forming Inverter (GFM) capability can increase grid strength, reduce curtailment of generation, and allow a 100% inverter-based grid stable. GridLab experts worked with the Energy Systems Integration Group to test this new, low-cost solution on industry models as well as a model of the Wisconsin transmission network and found that storage with GFM functionality could provide many of the same transmission services provided by legacy generators. If adopted broadly, GFM controls can ensure system stability while increasing the hosting capacity for new, low cost generation sources. Given the continued cost declines of solar, wind, and storage,[9] a virtuous cycle is emerging where low-cost energy supplied from renewables combined with the flexible capacity and ancillary services offered by storage are outcompeting other generation sources.[10]
Putting these recent findings together, a strategy is emerging for a rapid and cost effective way to address the reliability concerns of retiring generation: install BESS with GFM capability using Surplus Interconnection Service at aging coal plants.[11] This solution, along with others presented in this recent work by GridLab and its partners, can provide options to the industry to help reduce costs, outages, and emissions. And more affordable and reliable energy should have everyone singing “we are the champions.”
Keep an eye out for more updates from GridLab this year on these exciting developments in the energy space.