Evaluating the CO2 Emissions Reduction Potential and Cost of Power Sector Re-Dispatch

Prior studies of the U.S. electricity sector have recognized the potential to reduce carbon dioxide (CO₂) emissions by substituting generation from coal-fired units with generation from under-utilized and lower-emitting natural gas-fired units; in fact, this type of “re-dispatch” was invoked as one of the three building blocks used to set the emissions targets under the Environmental Protection Agency's Clean Power Plan. Despite the existence of surplus natural gas capacity in the U.S., power system operational constraints not often considered in power sector policy analyses, such as transmission congestion, generator ramping constraints, minimum generation constraints, planned and unplanned generator outages, and ancillary service requirements, could limit the potential and increase the cost of coal-to-gas re-dispatch. Using a highly detailed power system unit commitment and dispatch model, we estimate the maximum potential for re-dispatch in the Eastern Interconnection, which accounts for the majority of coal capacity and generation in the U.S. Under our reference assumptions, we find that maximizing coal-to-gas re-dispatch yields emissions reductions of 230 million metric tons (Mt), or 13% of power sector emissions in the Eastern Interconnection, with a corresponding average abatement cost of $15–$44 per metric ton of CO₂, depending on the assumed supply elasticity of natural gas.