October 22, 2018 Read More →

Indiana utility tells regulators renewables are cheaper than coal

Utility Dive:

NIPSCO’s upcoming IRP is more evidence that coal generation is steadily declining in the U.S. despite efforts from the Trump administration to save it.

In Indiana, as elsewhere, the issue is economics. The youngest generating units at NIPSCO’s 1900 MW Schahfer plant were built in the mid-1980s, and the utility’s analysis found that keeping them on the system would be more expensive than replacing them with new wind, solar and batteries.

NIPSCO’s current preferred resource plan…would see it retire all four units of the Schahfer plant in 2023 and the last coal unit at its Michigan City plant in 2028. Eliminating coal from its portfolio would actually be the cheapest option, NIPSCO reported. Taking all the Schahfer and Michigan City units offline by 2023…was the lowest cost resource plan, but it presented “unacceptable” reliability risks to the utility.

Coal’s inability to compete persisted even when NIPSCO modeled scenarios friendly to the resource. At the request of the Indiana Coal Council, a trade group, the utility analyzed a situation with high natural gas prices, no price on carbon, and a flat fee for delivered coal. In that scenario, retiring coal faster was still cheaper than keeping it around, and the least cost plan was still more expensive to consumers than NIPSCO’s preferred scenario.

To replace the retiring coal, NIPSCO plans to propose a mix of 1,500 MW of solar and storage, 150 MW of wind, 125 MW of efficiency and demand-side management and 50 MW of market purchases by 2028….The plans are based on renewable energy prices NIPSCO received in response to a request for proposals (RFP) earlier this year. Adding those renewables was also cheaper than building natural gas plants or converting coal facilities to gas, NIPSCO found, even though Indiana does not have state policies supporting wind and solar.

NIPSCO’s upcoming IRP represents an acceleration in its move away from coal and toward renewables. In 2016, the utility announced it would retire two units at the Schahfer plant by 2023, but planned to keep the other units open years into the future.

More: Even in Indiana, new renewables are cheaper than existing coal plants

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