With the entry of large amounts of wind energy and the emergence of a U.S. carbon market, Solomon’s Power Generation team thinks this might cause U.S. fossil plant utilization to follow the utilization patterns seen in Europe.

The team believes there is an affirmation in current data of what has to date only been speculated about regarding potential changes in deployment of North American coal assets if North America follows the pattern of Europe.

“There has been a change in Europe in terms of the utilization of their units – chiefly coal units – due to a carbon market, fuel price changes and the entry of renewables into the market,” states Ed Platt, Vice President, Power. “While the U.S. does not yet have a carbon market the other two factors are already here and carbon is likely coming in the future.”

Some of the elements are already in place to force that change – for example the high percentage of wind energy in the Texas market. While the change will not be easy or quick, the impact likely will be seen before there is a formal carbon market.

“It happened in Europe because companies are changing strategies in anticipation of new regulations,” says Platt. “It will be a tough transition for some, but those who use data to identify emerging trends and opportunities to improve their operations will benefit the most and suffer the least.”

To learn more about how the utilization of coal units in North America will likely follow the pattern observed in Europe, see Ed Platt speak at the PowerGen International Conference in Orlando, FL on December 15 or contact the Power group here.