The best way to optimize the value of older, unregulated, supercritical coal-fired plants is to implement a long-term maintenance strategy that positions them to compete in the low cost regime of plants selling power into deregulated markets. This paper, which is based on a 2006 study that determined the depreciable life of plants built in the late 1960s and early 1970s, explains how this can result in high dispatch levels, favorable operating economics, and the positive earnings necessary to sustain a capital improvement program designed to meet the combined goals of operational efficiency and environmental compliance. That is, how this can result in what is described below as a "virtuous cycle". The first section discusses how a long-term maintenance and capital improvement program can extend the life of plants almost indefinitely. The second section discusses the economics of achieving this-i.e., can this be done in a manner that allows plants to remain competitive and profitable. The final section explains what is meant by a virtuous cycle and the elements of long-term maintenance and capital improvement program designed to achieve this.
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