Closing a coal plant and contracts for offshore wind are signs of utility industry’s shift

Energize Weekly, July 24, 2019

In a sign of the shifting fortunes in the utility industry, on the same day came news of the largest coal-fired plant closure in nearly a decade and the largest U.S. offshore wind contracts ever.

On July 18, American Electric Power (AEP) agreed to close a 1.3-gigawatt (GW) coal-fired unit in southern Indiana, and New York Gov. Andrew Cuomo announced an agreement for the development of 1.7 GW of wind projects.

The agreement to close the Rockport Unit 1 coal plant by 2028 came as a modification to a 2007 consent decree in federal court reached in an air pollution case against AEP involving Northeastern states, the Sierra Club and the U.S. Environmental Protect Agency.

The Sierra Club said that it is the single largest plant closure since the environmental group began its “Beyond Coal” campaign in 2010. The campaign has lobbied for the closing of coal-fired plants across the country.

AEP said that since 2010, it has spent more than $9 billion to reduce coal-fired plant emissions, and the agreement to close Rockport Unit 1 (Unit 2 will continue to operate) will come with cost savings.

“This modified agreement greatly benefits our Indiana Michigan Power customers,” Nicholas K. Akins, AEP CEO, said in a statement. “It eliminates the need to spend nearly $1 billion to install flue gas desulfurization, or scrubber, equipment at the Rockport Plant while still achieving emission reductions at a lower cost and sooner than previously planned.”

The plant has been a target of local environmental and community groups. “Community leaders and advocates in South Bend, Muncie, and Fort Wayne have been organizing against the Rockport coal-burning power plant for five years,” Rev. Kimberly Koczan, a board member of Hoosier Interfaith Power and Light, and Sierra Club volunteer, said in a statement.

AEP said it has retired more than 8,600 MW of coal-fired generation since 2011 and will retire another 1,100 MW by the end of 2020.

At the same time, the utility has added 724 MW of wind and battery generation, and has proposed adding more than 9,100 MW of wind and solar generation to its regulated power plant fleet by 2030.

“This shift in focus achieves ongoing emission reductions and provides the resources and services that our customers have told us they expect from their energy company,” Akins said.

In New York, Cuomo announced the awarding of contracts to two Scandinavian developers to build wind facilities off the coast of Long Island.

Denmark-based Ørsted A/S in a joint venture with Eversource Energy will build the 880-megawatt Sunrise Wind project, which will serve Long Island.

Norway’s Equinor will build the 816-MW Empire Wind project, delivering electricity into New York City.

“With this agreement, New York will lead the way in developing the largest source of offshore wind power in the nation,” Cuomo said in a statement.

New York State has a goal of developing 9,000 megawatts of offshore wind by 2035.

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