Report finds O&M costs have increased for conventional power plants, decreased for renewables

By Michelle Froese

Windpower Engineering & Development

The costs to operate and maintain U.S. power plants and equipment have soared 74% over the past two decades, according to a new report by industrial artificial intelligence company Uptake. Costs, excluding fuel, rose to a median of $10.80/megawatt-hour (MWh) in 2017, up from $6.21/MWh in 1998, for investor-owned utility (IOU) power plants.

The report is based on an extensive analysis of the past 20 years of financial and operating data that major utilities submit annually to the Federal Energy Regulatory Commission (FERC). The approximately 2,500 plants analyzed represent nearly 40 percent of today’s U.S. electricity generation.

Among the findings in the report are:

  • Hydro operations and maintenance (O&M) per MWh costs increased the most, rising more than 145%.
  • Coal and combined-cycle natural gas O&M/MWh costs more than doubled, increasing 113%.
  • Nuclear O&M/MWh costs grew by 23%.
  • Coal O&M/MWh costs have risen more than natural gas.
  • Renewables and combustion O&M/MWh costs decreased by 14%.

“This data tells us we are facing an unsustainable situation. Without changes, the economic underpinnings of the grid will be jeopardized,” said Sonny Garg, Uptake’s global energy solutions lead. “To meet those demands in our increasingly digital economy, power plant owners will have to find ways to reduce O&M costs with new asset performance management tools to improve their bottom lines.”

During the past 20 years, electricity generated by these utilities has decreased to approximately 1,500 TWh, down from 2,300 TWh. While generation has decreased, total non-fuel O&M costs have virtually remained the same. These two trends have resulted in the upward trend found in today’s report.

Uptake works with investor-owned utility MidAmerican Energy, independent power producer (IPP) Pattern Energy, the nuclear Palo Verde Generating Station and a global energy company that has both merchant and regulated generation. All use Uptake’s Asset Performance Management application to increase electricity production while reducing costs.

To read the full report, click here.