Indiana electric customers could save $12 billion with a ‘fast transition’ to renewables
Energize Weekly, October 30, 2019
Indiana electric customers could save $12 billion if the state’s utilities moved directly to renewable generation and skipped the strategy of using natural gas-fired plants as a bridge, according to a report to the task force developing a statewide energy plan.
The report, done for the Indiana Citizens Action Coalition, was submitted to the bipartisan task force created by the state legislature with a two-year mandate to draft a comprehensive energy plan.
The 21st Century Energy Policy Development Task Force is composed of legislators from both parties and experts appointed by the governor.
The study, prepared by the Applied Economics Clinic, estimates that there are large savings for the state’s electricity customers in moving out of coal-fired generation and into renewable generation as quickly as possible.
In 2018, Indiana got 70 percent of its electricity from coal-fired units, and several utilities have already announced plans to close coal plants and add wind and solar generation.
However, there are also plans to add natural gas-fired generation as a baseload bridge to ensure grid viability.
The Applied Economics analysis looked at the potential cost savings across a range of scenarios including replacing coal-fired units with a mix of renewables and natural gas or with just renewables and battery storage.
“The greatest savings are realized in the scenario in which coal resources are replaced with 100 percent renewables by 2030 – a $49 billion savings over continuing to run coal for another 30 years,” according to the report.
The nature gas-renewable scenario was $12 billion more expensive than the “fast transition” scenario of moving to all renewable generation by 2030.
“Using gas as a transition or a bridge, it doesn’t bear out what the benefit of that would be,” Bryndis Woods, an Applied Economics researcher, told Northeast Indiana Public Radio.
Still, natural gas-fired generation figures heavily into the plans of some Indiana utilities. In 2018, Northern Indiana Public Service filed an integrated resource plan that indicated it could save its customers more than $4 billion over 30 years by moving from 65 percent coal-fired generation to 15 percent in 2023 and zero coal in 2028.
The shift to other generation sources initially included a plan for a natural gas-fired plant, but that was dropped after it faced criticism from environmental groups and customers. The plan now looks to replace coal with a mix of renewable generation and storage.
Under a proposed 20-year plan, Duke Energy Indiana would move up the retirement of more than 4,100 megawatts (MW) of coal-fired plants and add renewable generation. It would also make major investments in new natural gas-fired capacity.
Under the plan, Duke would add 700 MW of wind power, 1,650 MW of solar generation. It would also add 1,240 MW of new natural gas-fired capacity.
When the plan was unveiled in June 2019, it was criticized by environmental groups for adding new fossil fuel generation and the greenhouse gas emissions it would create. “It’s as if Duke Energy Indiana lives on another planet – but here on Earth, climate change is impacting our communities,” the Sierra Club said in a statement.