August 22, 2017 Read More →

Plans for U.S. Coal-Fired Electricity Expansion Grind to a Halt

E&E News:

About 16 percent of the U.S. coal fleet has retired in the past five years, but don’t expect major new coal-fired plants to fill that void.

The federal government counts four new coal projects on a list of planned power plants nationwide. Three of those face long odds, and none will be able to replace the millions of tons in lost coal demand resulting from recent retirements, even as the Trump administration has vowed to revive the ailing industry.
The developer of a proposed 320-megawatt unit in Wyoming is facing jail time after pleading guilty to stealing government cash. A Kentucky coke plant that would have generated electricity as a byproduct has been scrapped. And a planned $2.1 billion plant in Georgia has idled.

The sole U.S. coal facility under construction: a tiny plant being built by the University of Alaska, Fairbanks.

The dynamic amounts to an existential crisis for the U.S. coal industry. While coal still accounts for roughly a third of U.S. power generation, the industry is slowly contracting as plants retire and utilities replace them with natural gas and renewables. American Electric Power Co. Inc., one of the country’s largest coal-burning utilities, recently announced plans to build a $4.5 billion wind farm in Oklahoma (Energywire, July 27). PacifiCorp, another coal-centric power company, has similar plans to upgrade its wind fleet while slowly transitioning away from power plants fueled by the black mineral (Climatewire, April 6).

Utilities entered 2017 with plans to retire 4.5 gigawatts of coal — or 2 percent of 2016 U.S. coal capacity — and add 11 GW of natural gas and 8.5 GW of wind, according to figures from the U.S. Energy Information Administration.

The trend has prompted a series of rescue efforts. West Virginia Gov. Jim Justice (R) has proposed a $15-per-ton subsidy for utilities burning Appalachian coal (Greenwire, Aug 8). In Congress, there is an effort afoot to expand tax credits for power plants that use carbon capture and sequestration (CCS) (E&E Daily, July 13). Both efforts hint at coal’s long-term challenges and the reason for the dearth of planned coal plants.

Most of the few proposed coal plants in the pipeline are facing problems.

In Kentucky, SunCoke Energy Inc. recently decided not to proceed with a coke plant that would have generated a small amount of electricity as a byproduct, according to a company spokesman.

The two largest coal projects remaining on EIA’s list of planned power plants reflect the wider changes in the electricity market.

The Two Elk Energy Park in Wright, Wyo., and Plant Washington in Sandersville, Ga., were proposed in 1996 and 2008, respectively. At the time, power companies were projecting growing electricity demand and a need for new plants. That demand never appeared, ultimately wiped away by a combination of the Great Recession and improving energy efficiency.
Both now face long odds. Wyoming regulators yanked Two Elk’s permit in 2015, and the project’s developer, Mark Ruffatto, pleaded guilty to defrauding the federal government last year after he admitted to spending stimulus funds at Neiman Marcus, on carpeting and payments for a Mercedes-Benz (Climatewire, Oct. 25).

Power4Georgians, an independent power producer, says it is still proceeding with plans for the 850-MW Plant Washington. Work has been held up by uncertainty over federal greenhouse gas regulations for new coal-fired facilities, said Dean Alford, a company spokesman.

He said the company is still waiting for a resolution but hailed the Trump administration’s promise to revive the coal industry.

But many of the local utility cooperatives that initially backed the project have long since fled, and state regulators have made no moves to approve the company’s second request for a permit extension.

Karen Hays, who leads the Georgia Environmental Protection Division’s air protection branch, said state regulators have not heard from the company since it requested an extension on its construction permit early last year.

The small project at the University of Alaska, Fairbanks, that appears to be on track is a combined heat and power plant with an expected capacity of 17 MW. It is roughly 50 percent complete, according to the university.

Perhaps the most likely prospect for a major new coal plant in the United States is a project that’s not on EIA’s list. In March, Sunflower Electric Power Corp. Inc. beat back a lawsuit from the Sierra Club, paving the way for the power cooperative to pursue an 895-MW coal expansion at its Holcomb Station in southwestern Kansas (Energywire, March 20).

But even that is uncertain. Sunflower and its partner, Tri-State Generation and Transmission Association Inc. have yet to commit to the project, which was proposed roughly a decade ago and has an estimated price tag of $2.2 billion.

The cooperative is “examining its options,” said Sunflower Electric spokeswoman Cindy Hertel.

More: Will the U.S. ever build another big coal plant?

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