August 12, 2014 | By Barbara Vergetis Lundin

Many retiring nuclear and coal power plants may not need to be replaced on a megawatt-to-megawatt basis -- as technologies and distributed generation (DG), coupled with soft energy demand growth, enable utilities to replace retiring plants with ones that produce less energy, according to Black & Veatch.

This is creating a crossroads for many utilities as an influx of new technologies, new energy sources and new generation approaches, create immense challenges and opportunities.

DG, in particular, creates unique challenges for utilities, according to Black & Veatch. DG requires rapid changes to the power grid in order to integrate new assets and resources. Utilities must also be able to ramp up capacity to account for varying renewable energy output. Where DG reduces demand, utilities will have to revisit their current revenue structure in order to ensure continued reliable service.

"Every kilowatt that is now being produced by a third party or a consumer is a kilowatt not being sold by the utility," said John Chevrette, president of Black & Veatch's management consulting business. "At the same time, utilities still carry the burden of building, maintaining and operating the bulk of the power delivery system. Given the high cost of maintaining these assets, we expect to see more utilities making the case with regulators to adjust their business models."

In its research, Black & Veatch found that more than 60 percent of utility leaders believe that by 2020, DG will grow beyond its current 5 percent share of the U.S. power generation market. Further, half of respondents say their company is planning to replace retiring coal and nuclear power plants with gas generation, which will also be used as backup power for renewable generation. 

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http://www.fierceenergy.com/story/some-retired-power-plants-may-not-need-replacing/2014-08-12