September 12, 2017 Read More →

On the Blogs: Keeping Aging Coal Plant Online in Texas Will Cost $100 Million

Rivard Report:

CPS Energy‘s newest coal plant at Calaveras Lake operated at a $135 million loss in 2015 and 2016, according to a new report by a Massachusetts-based utility research firm. The report states that the public utility would save money if it closed the plant and instead invested in renewable energy sources – by purchasing power off the grid or building more of its own wind and solar capacity.

“Furthermore, CPS Energy could lose $100 million more in the next few years if it continues current operations,” said Avi Allison, an economics expert and author of the report by Synapse Energy Economics, on Thursday. The firm’s report was commissioned by the Sierra Club’s Beyond Coal campaign, which seeks to replace coal-based power production with cleaner energy.

But shutting down the plant southeast of San Antonio is not an option, CPS Energy officials said in response to the report, because it provides reliable, baseline energy that wind and solar cannot.

“We don’t disagree with report’s overall perspective that the market is moving away from coal,” CPS Energy Chief Operating Officer Cris Eugster told the Rivard Report on Thursday. “The challenge of [retiring the plant] is if you shut it down, without energy storage, you can’t run a city on solar today.”

The utility has made great strides in diversifying its energy portfolio, Eugster said, including next year’s shutdown of the older J.T. Deely 1 and 2 coal-fired units – 15 years ahead of schedule – instead of installing $550 million scrubbers. CPS Energy purchased a natural gas plant in 2010 to offset capacity loss from Deely.

Seven years ago, 80% of electricity consumed by CPS Energy customers was from coal or nuclear power plants. By investing more in renewables, natural gas, and other sources, the 2016 energy portfolio is vastly different: about 30% nuclear, 27.6% coal, 24% natural gas, 10.6% wind, 2% solar, and 4.8% purchased power. CPS Energy also has been able to realize a 3% savings from energy efficiency and demand-response initiatives, Eugster said.

CPS Energy acknowledges that the Spruce units cost more money than they produce energy, he said, but they are still needed to “bridge into renewables.”

When demand can be covered by wind, solar, and other sources, the coal plant is dialed down. But peak load times when the wind isn’t blowing and the sun isn’t shining is when the coal plant needs to be ramped up, Eugster said. And the price of natural gas continues to be a factor.

More: Coal Plant Losing Money, But CPS Energy is Keeping it – For Now

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