The inexorable collapse of coal-fired generating capacity continues, with four more major plants set to retire in the next two days. The Trump administration’s proclaimed goal of saving coal appears entirely irrelevant as coal plant shutdowns continued apace.
So, too, does the Sierra Club’s “Beyond Coal” campaign, fueled by Michael Bloomberg’s deep pockets, despite the green group’s claims.
The culprit clearly is economics: cheap natural gas (which many environmentalists abhor), and slow to stagnant growth in demand for electricity. Aged coal plants simply cannot compete in competitive markets in today’s economic environment. All of the closures are plants that compete in wholesale competitive markets regulated by the Federal Energy Regulatory Commission.
Here’s the schedule for the coming coal plant closures:
* Today, NIPSCO (Northern Indiana Public Service Company) is scheduled to shutter its 604-MW Bailly station in the far northwest corner of the state, following approval of the shutdown by the Midcontinent Independent System Operator. MISO concluded that scuttling the plant will not impact reliability in the 15-state competitive wholesale market. The two-unit plant (the first unit came into service in 1962 and the second in 1968) announced the shutdown in 2016. NIPSCO also cancelled a nuclear plant at the Bailly site in 1981, before construction began.
* Tomorrow, Dayton Power & Light, a subsidiary of AES Corp., is scheduled to pull the plug on two southern Ohio major coal-fired plants, the J.M. Stuart (2,300 MW) and Killen (614 MW) stations. The four-unit Stuart plant came into service in the 1970s, while Killen – a two-unit, dual coal-and-oil fueled plant, came on line in 1982.
* Also on June 1, Avenue Capital Group, a private equity hedge fund, will close the Charles P. Crane 400-MW coal-fired plant near Baltimore, Md. The two-unit plant came into service in 1961 and 1963. Avenue bought the plant from independent power producer Talen Energy, which bought the plant in a convoluted series of sales from the original owner, Baltimore Gas and Electric. Chicago-based Exelon Corp. acquired the Baltimore utility and in 2012 sold several coal-fired generators to Raven Power Holdings, which became Talen Energy, as a condition of its purchase of the Baltimore utility. POWER magazine awarded Crane a “Top Plant” award in 2012.
The Sierra Club claimed a key role in the decisions to close the plant, noting agreements from the generators to commit to increased investments in renewable wind and solar generation. For example, the club said in a January 2017 news release touting the agreement to close the two Ohio plants that the company agreed to “Develop at least 300 MW of solar and wind energy projects in Ohio no later than 2022. These projects will provide a boost to Ohio construction, manufacturing, and other important clean energy jobs throughout the renewable energy supply chain.”
That’s window dressing and back-patting. The promised solar and wind capacity comes nowhere close to replacing nearly 3,000 MW of dispatchable coal capacity. None of the companies that agreed to shut down their coal capacity would have done so, in the face of the Sierra Club’s campaign, if the economics continued to favor coal.
As a Penn State website on the economics of power generation, transmission, and distribution puts it: “The economics of central station generation is largely a matter of costing. As with any other production technology, central station generation entails fixed and variable costs. The fixed costs are relatively straightforward, but the variable cost of power generation is remarkably complex.”
–Kennedy Maize