April 13, 2017 Read More →

On the Blogs: ‘Vanishing Demand’ for Coal-Fired Electricity


It’s planning time in the electric utility industry, and a raft of new reports make two points abundantly clear:

  • Efforts to “save” the coal industry are bound to founder since utilities, as a group coal’s largest customer by far, have moved on and are planning a cleaner future in which the black rock’s current share of the electricity market, in the low 30 percent range, is as high as it’s ever going to get.
  • Vanishingly small increases in demand (and the occasional outlook for declines) will be a major issue for the industry in the next 10 years.

In its latest 10-year power plant siting plan, for example, Florida Power & Light pointed out that it was continuing its efforts “to move away from coal-fired generation.” In total, the utility said it planned to take 1,216 MW of coal-fired generation off its system by the first quarter of 2019. (FPL’s site plan can be found here.)

Similarly, in its recently filed 2017 integrated resource plan (IRP), PacifiCorp, the sprawling utility holding company that serves 1.8 million customers in six western states, said its preferred generation portfolio going forward “reflects a cost-conscious transition to a cleaner energy future.” Through 2028, PacifiCorp said it would be able to meet its system-wide power needs through demand side management (DSM), new renewable (primarily wind) generation and short-term purchases on the wholesale market. Looking longer-term, the company said it planned to shutter 3,650 MW of coal-fired capacity by 2036. (PacfiCorp’s IRP and other backup information can be found here.)

To the south, Tucson Electric Power offered up a similar plan in its just-filed 2017 IRP. “TEP will continue to diversify its generation portfolio and reduce its significant reliance on coal by expanding cost-effective renewable resources, particularly solar,” the company told Arizona regulators. Existing plans will lead to the retirement of 508 MW of coal-fired capacity over the next five years, TEP said, adding: “This reduction in coal resources will result in significant cost savings for TEP customers and will result in meaningful reductions in air emissions and water consumption.”

The company’s goal, TEP continued, “is to serve at least 30 percent of our retail load from renewable resources by 2030.” Arizona has an existing state statute calling for its utilities to reach 15 percent renewable by 2025. (TEP’s IRP and other information can be found here, scroll down once you are there.)

Finally, Xcel Energy, long a significant player in the utility renewable generation arena, kicked it up another notch last month, announcing plans for 11 new wind farms in seven states that would add 3,380 MW to its system. By 2021, the company said, wind could supply nearly 35 percent of its total energy needs.

Vanishing Demand, Not Trump Coal Crusade Is Real Issue For Utilities

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