IEEFA update: Heartland U.S. utilities continue to move away from coal

Activity of note this week in Arizona, Colorado, Illinois, Minnesota and Wisconsin

The Trump administration’s proposal to invoke the wartime Defense Production Act as a back-door way to keep failing coal-fired electricity plants is little more than a sideshow to the real action taking place outside the beltway.

All across America, the transition from coal to cleaner, cheaper forms of electricity generation continues, and will likely continue, regardless of White House rhetoric.

Consider several events that occurred just this week.

On Wednesday, the board of directors Great River Energy in Minnesota approved a management plan that mandates the utility to secure 50% of its power from renewable energy sources by 2030. The wholesale power cooperative supplies electricity to 28 distribution co-ops across the state that serve roughly 685,000 members.

In announcing the move, David Saggau, Great River Energy’s president and CEO, pointed out that the co-op already has met the state’s 25% renewable energy requirement—and that it did so eight years ahead of deadline. To maintain its transition momentum, Great River also established interim goals of 30% in 2020 and 40% in 2025.

‘Renewable energy, particularly wind, is currently our lowest-cost option for new generation resources.’

The co-op doesn’t intend to turn away completely from coal, and on that point its executives point out that its 1,100-megawatt (MW) Coal Creek Station in North Dakota is a strong operator, economically speaking, even in the face of growing competition from zero-fuel-cost renewables.

That said, Great River is no different from any other utility in the U.S. in that is has no plans for new coal-fired generation. As Saggau noted: “Renewable energy, particularly wind, is currently our lowest-cost option for new generation resources.”

The same day Great River made its announcement but a bit to the east at the annual meeting of the Dairyland Power Cooperative in Wisconsin, management stressed its intention to diversify the co-op’s power supplies by way of its latest three-year resource-development plan. According to CEO Barbara Nick, the policy will involve adding up to 150 MW of new renewable capacity by 2019, bringing the co-op’s renewable generation to 20% of its overall generation portfolio.

Diversification “is just simply good business, regardless of regulation, legislation or global politics,” Nick said at the co-op’s annual board of directors’ meeting, according to yesterday’s  La Crosse Tribune. “These [renewable resources] diversify our portfolio and improve sustainability at a competitive price,” Nick said.

Dairyland serves roughly 262,000 customers through 41 rural cooperatives and municipal utilities in Wisconsin, Minnesota, Iowa and Illinois.

EARLIER IN THE WEEK, JOHN DEERE, THE ICONIC 180-YEAR-OLD MACHINERY COMPANY that knows a thing or two about shifting gears, announced plans to use renewable energy for 50% of its electricity needs by 2022. In adopting this goal, the company, based in Moline, Ill., said it is aiming to cut its greenhouse gas emissions by 15 percent.

John Deere is part of a corporate movement toward renewable electricity generation. This year alone through mid-May, 27 corporate deals totaling almost 2,500 MW in generation have been signed, putting the sector on pace to break the 3,120-MW record set in 2015.

Further to the west, in Colorado, Xcel Energy—a behemoth with over three million customers in eight states—asked state regulators for clearance to close two aging coal plants in Pueblo, Comanche Unit 1 and Unit 2 and to replace them by building or buying 1,807 MW of new wind- and solar-generation  capacity. Unit 1, a 325-MW station, entered commercial service in 1973; Unit 2, which has a capacity of 335 MW, went online in 1975. Xcel’s s plan calls for the plants to be closed and the new generation online and operating by 2026.

And in Arizona, the future of Navajo Generating Station, the biggest coal-fired plant west of the Mississippi, grew increasingly tenuous as the board of the Central Arizona Project—one of the station’s biggest customers, voted not to renew its power purchase agreement with NGS.

Dennis Wamsted is an IEEFA associate editor.

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