In addition to coal units slated for outright retirement, generators are also planning to convert a significant number of coal units to burn another fuel, primarily natural gas. While some of these conversion projects are hard to pin down because of companies’ constantly evolving plans, an SNL Energy review found that approximately 11,200 MW of coal capacity is being targeted for conversion to other fuels. Of that total, an estimated 7,600 MW is planned conversions and the remaining 3,600 MW consist of units that are being targeted for either conversion or retirement. The vast majority of proposed coal conversions are being mulled for the 2014 to 2016 time frame to help generators comply with EPA rules.
Major coal conversions that are still in the works include NRG Energy Inc.’s commitment to switch the 575-MW Unit 2 at the Big Cajun II plant to gas and Southern Co.’s plan to convert two units totaling 707 MW from coal to gas at its Yates station. PacifiCorp has said in the past it might convert the 330-MW Unit 3 at the Naughton plant in Wyoming from subbituminous coal to gas, but it is revisiting that proposal and could end up retiring the unit.
Since SNL Energy’s last coal unit retirement analysis, several coal-to-gas conversion projects have been taken off the table in favor of retirement. American Electric Power Co. (AEP) for example, now plans to retire the 500-MW Unit 4 at its Tanners Creek plant in Dearborn County, Ind., rather than refuel it with natural gas. AEP said the cost of refueling Tanners Creek was not the right capital investment for the company in light of relatively flat electricity demand from customers of its Indiana Michigan Power Co. unit. More recently, Integrys Energy Group Inc. subsidiary Wisconsin Public Service Corp. (WPS) submitted a request in March to the Midcontinent Independent System Operator Inc. for permission to retire coal-fired units 5 and 6 at its J.P. Pulliam power plant in Brown County, Wis. Under a settlement agreement with the EPA, WPS could have refueled or repowered the Pulliam units with natural gas or another fuel.
Of the 27,143 MW of formalized coal unit retirements in the U.S. between March 2014 and the end of 2022, the majority is slated to occur in the mid-Atlantic and parts of the Midwest and South. Breaking them out by North American Electricity Reliability Corp. region, ReliabilityFirst Corp. (RFC) will be the most affected by a wide margin, with 11,885 MW of coal capacity scheduled to be retired during the period. RFC is followed by the SERC region, where generators have announced plans to shutter approximately 7,400 MW of coal capacity. Other NERC regions to be affected during the 2014-2022 period include the Western Electricity Coordinating Council, with 3,841 MW of planned retirements; the Northeast Power Coordinating Council, with 1,283 MW; the Southwest Power Pool, with 1,095 MW; the Texas Reliability Entity, with 840 MW slated for retirement; and the Midwest Reliability Organization, with 800 MW.
Assessing the impact of announced retirements on ISOs and RTOs, the PJM Interconnection continues to be the operator that would be most affected, with 11,801 MW of coal capacity planned to be closed between March 2014 and 2022. PJM saw more than 2,700 MW of coal capacity retire in 2013, including FirstEnergy Corp.’s Hatfield’s Ferry station, a 1,710-MW, supercritical coal plant in Greene County, Pa. Other grid operators to be affected by retirements include MISO and ISO New England, where 1,816 MW and 1,283 MW, respectively, of coal retirements have been announced between 2014 and 2022. CAISO and the Southwest Power Pool will also be impacted, with 1,182 MW and 1,095 MW, respectively, slated to be retired during the period. Approximately 9,127 MW of announced retirements during the period would occur outside an ISO.
On a company-specific level, AEP, the nation’s largest coal burner, continues to have more coal unit retirements scheduled than any other generator by a significant margin. AEP has 6,561 MW of coal capacity scheduled to shut down between March 2014 and the end of 2018.Other generators with a significant amount of retiring capacity during the 2014-2018 period include TVA, with 3,128 MW; NRG Energy, with 2,588 MW; Southern Co., with 2,154 MW; and Energy Capital Partners LLC, with 1,133 MW.
