By - Jim Vess

Utilities to close coal-fired units but plans to replace them with natural gas draws fire

Energize Weekly, July 10, 2019

Utilities are moving to close coal-fired power plants and add more renewable generation, but the large role played by new gas-fired power plants is drawing fire from environmental groups, arguing that no more fossil fuel-based units should be built.

In the last two weeks the Tennessee Valley Administration (TVA), Xcel Energy Minnesota and Public Service of New Mexico have all filed resource plans or applications that envision shutting down coal plants, adding renewables and building natural gas-fired units.

TVA’s 2019 Integrated Resource Plan (IRP) would add 14 gigawatts (GW) of new solar generation, 5.3 GW of energy storage and seek 2.2 GW of energy savings by 2038.

At the same time, TVA seeks to add around 17 GW of new natural gas capacity.

The plan calls for 800 megawatts (MW) to 5.7 GW of new combined-cycle (CC) gas plants by 2028 and up to 9.8 GW by 2038 “if a high level of load growth materializes,” according to the plan.

“Future CC needs are driven by demand for electricity and gas prices, as well as by solar penetration that tends to drive CT instead of CC additions. The plan also calls for adding up to 5.2 GW of gas combustion turbines (CT) by 2028.

“TVA’s IRP reflects what we know today and can reasonably expect for the coming years,” the plan said.

The proposal, however was met with skepticism. “Even though TVA is moving in a smarter economic and environmental direction, its planning vision still relies too heavily on risky gas, and comes up short on energy efficiency,” the Sierra Club said in a statement.

TVA, the Sierra Club said, “must start planning for an energy future that doesn’t just trade coal for gas—which not only exposes customers to a volatile market, but also worsens the climate crisis.”

For several years, the Sierra Club has waged a “Beyond Coal Campaign” focused on lobbying for coal plant closures around the country, the campaign was supported with $80 million from former New York Mayor Michael Bloomberg.

In June, Bloomberg Philanthropies launched a new “Beyond Carbon” campaign that is also taking aim at gas-fired plants.

In Minnesota, Excel Energy is proposing to add 3 GW of utility-scale solar power by 2030 and to close 2.4 GW of coal units. That would leave Xcel with no coal-fired generation on its Minnesota system by 2030.

Xcel’s Upper Midwest Integrated Resource Plan, however, also calls for the utility to take ownership of the Mankato Energy Center, which has 760 MW of gas-fired capacity, and for the utility to build an 800 MW CC plant in 2026.

“These dispatchable resources will be critical as we retire 2,400 MW of coal-fired baseload and transition to a system that is nearly 60 percent renewable and intermittent generation,” the plan said.

While praising the plan’s commitments to clean energy, Jessica Tritsch, a spokeswoman for the Sierra Club campaign, said “unfortunately, Xcel also proposes to build a huge new expensive and unnecessary gas plant … We can’t avoid the dangerous and expensive impacts of the climate crisis if we swap coal for another polluting fossil fuel.”

On July 1, Public Service of New Mexico (PNM) filed an application with the New Mexico Public Regulation Commission to shutter the San Juan Generating Station closing the remaining 850 MW at the station in 2022.

The recommended replacement capacity in the application includes 350 MW of solar, 130 MW of battery storage and 280 MW of natural gas peaking units.

“The recommended scenario for replacement power results in the lowest cost to customers and achieves significant reductions to carbon emissions, meets reliability standards and brings significant investment to New Mexico,” the company said in a statement.

PNM wants to use low-cost securitization bonds to recover $348 million in stranded costs at the San Juan Station and to finance the renewable energy development.

The securitization bonds, which are repaid through a charge on customers’ bills, were part of a comprehensive energy bill that was adopted this spring and has a goal of 50 percent renewable energy by 2030 and 100 percent carbon-free electricity by 2045.

The Sierra Club once again raise questions about the plan. “Our initial numbers show that battery storage plus renewables are the cheapest alternative, but this is the beginning of a conversation,” Sierra Club Rio Grande Chapter Executive Director Camilla Feibelman told the Albuquerque Journal. “We’ll all have an opportunity to see the models and come up with the best alternative.”

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