Cornerstone - Summer 2014 - (Page 21)
By Jim Spiers
Former Senior Vice President Business Strategy,
Chief Technology Officer
Tri-State Generation and Transmission Association, Inc.
he business of an electric utility is to manage the risk of
producing and delivering a reliable and affordable power
supply. Utilities do this on behalf of tens of thousands,
if not millions, of customers across large areas through an
economy of scale only known in the last century.
For decades, utilities have well managed operational, market,
financial, and regulatory risks to provide the electricity that
has allowed economies to thrive and quality of life to improve.
The responsible use of fossil fuels has been the foundation of
this prosperity, and fossil fuels will continue in this role.
Fossil fuel-based power generation has not been stagnant;
over decades, incremental technological innovation has driven
constant improvement in power plant efficiency and emission
controls. As a result, coal and natural gas offer not only energy
security and the low cost that drives economic growth, but
also increased sustainability.
For Tri-State Generation and Transmission Association, Inc., a
not-for-profit wholesale power supplier in the rural western
U.S., its mission to produce and deliver affordable and reliable
electricity to its 44-member electric cooperatives is founded
upon stewarding membership resources and insulating its
members from market volatility, managing risk, and maintaining options. Throughout the association's 62-year history, it
has focused on cooperative planning and, where appropriate,
the joint development of resources to mitigate risk.
"Breakthroughs can lead to
options to meet energy and
CO2 IS A UNIQUE RISK ACROSS MANY INDUSTRIES
The U.S. Environmental Protection Agency has proposed CO2
limits for new and existing fuel power plants. In fact, all fossil
fuel-consuming industries face the same issue and may face a
similar challenge. The discussion and imposition of these limits conveys a clear fact: In the U.S., power providers must be
ready for a carbon-constrained regulatory environment.
The emergence of this challenge poses tremendous risk to the
industry, including the nearly 900 GW of installed fossil-based
capacity in the U.S.,1 the installed fleet globally, and any new
fossil-based capacity or industrial facility affected by other CO2
Although the aggregate industry impacts of CO2 regulation are
daunting, the risk profile for individual utilities is highly driven
by its existing generation and transmission fleet, operational
characteristics, and access to resources.
The regulatory exposure of managing CO2 emissions from
power plants presents a unique risk to Tri-State, its member
electric systems, and their consumers. A plentiful and affordable fossil fuel supply and a modern, efficient baseload coal
fleet complemented with natural gas, hydropower, and other
renewable resources ensures that the association is in a position to effectively manage many of the risks of its industry.
Conversion of CO2 into other materials could contribute to
global CO2 mitigation efforts, but more R&D is needed.
To manage risks associated with CO2 regulations, there has
been a push for utilities to fuel switch, moving from coal to
natural gas and renewable resources. In the U.S., fuel switching to natural gas has been catalyzed in recent years by the
discovery of major new unconventional sources of methane,
brought on by advances in hydraulic fracturing. However, for
many utilities, including Tri-State, switching resources, and
reducing fuel options, introduces new risks, such as exposure
Table of Contents for the Digital Edition of Cornerstone - Summer 2014
From the Editor: Water Crisis Calls for Common Action
Cover Story: Shifting the Paradigms of Health and Safety in Mining
Commitment to Safety
Modern Energy: The “Golden Thread” That Connects People, Economies, and Progress
Studying the Dominance
of Coal in China’s Energy Mix
Advancing the Alleviation of Energy Poverty
Energy Poverty in India and
What’s Needed to Address It
Balancing South Africa’s Energy Poverty and Climate Change Commitments
Europe Struggles to Pay Its Energy Bill
Shenhua Group’s Preemptive Risk Control System: An Effective Approach for Coal Mine Safety Management
Evaluating Safety and Health
in Australia’s Mining Sector
CORESafety®: A System to Overcome the Plateau in U.S. Mine Safety and Health Management
Sustainable Charcoal: A Key Component of Total Energy Access?
An Analysis of the Interdependence Between China’s Economy and Coal
Synergetic Technologies for
Coal and Gas Extraction in China
The Global Need for Clean
Coal Technologies and J-COAL’s Roadmap to Get There
Cornerstone - Summer 2014