Upcoming, Recent Coal-Fired Power Unit Retirements
By Michael Niven and Neil Powell
With a 2015 deadline looming for compliance with the U.S. EPA’s Mercury and Air Toxics Standards, U.S. power generators are continuing to refine their plans for noncompliant coal units, albeit in relatively slow and methodical fashion.
After a very heavy year for coal unit retirements in 2012 when a whopping 8,800 MW of coal capacity was permanently shuttered, retirements have come at a slower pace so far in 2013.
According to SNL Energy data, approximately 1,258 MW of coal capacity has been retired in 2013, as of mid-August, and an additional 4,523 MW is scheduled to be retired by the end of the year. Assuming the planned retirements stay on schedule, roughly 5,781 MW of coal capacity is currently planned to be shuttered in 2013, or 34% less than in 2012.
Planned coal unit retirements, as defined by SNL Energy for this analysis, include those with a firm retirement year that was either publicly disclosed by the company or confirmed by SNL.
While the pace of retirements has slowed compared to 2012, the amount of coal capacity slated to close this year has actually increased substantially compared to SNL Energy’s last analysis published in late January. At that time, only 1,756 MW of coal capacity was announced for closure in 2013, compared to the 5,781 MW identified in the latest analysis.
The biggest change since the last analysis was the addition of nearly 2,000 MW of capacity to be closed by FirstEnergy Corp. The company announced in July that it would close its Hatfield’s Ferry and Mitchell coal plants due to the high cost to comply with new federal air pollution rules, coupled with low electricity demand.
Coal unit conversions
From mid-August 2013 through the end of 2022, U.S. power companies have formalized plans to permanently retire nearly 28,000 MW of coal-fired generating capacity, according to SNL Energy’s analysis. But those future retirements provide just part of the picture of the rapidly changing coal generation landscape.
Another piece of the puzzle is the planned conversion of existing coal units to burn other fuels such as natural gas or biomass. According to SNL Energy’s analysis, nearly 11,000 MW of coal capacity is being targeted for conversion to other fuels. Of that total, an estimated 7,000 MW are planned conversions and the remaining 4,000 MW consist of units that are being targeted for either conversion or retirement.
The vast majority of proposed coal conversions are being planned for the 2014 to 2016 time frame.
Between 2008 and 2012, nearly 1,700 MW of coal capacity was converted to burn other fuels, according to an SNL Energy analysis of U.S. Energy Information Administration Form 860 filings.
Among the biggest coal units converted during this period were a 174-MW unit at Xcel Energy Inc.‘s Riverside plant in Minnesota, which converted to natural gas, and two units totaling 260 MW at Calpine Corp.‘s Edge Moor plant in Delaware, which also converted to natural gas.
Major coal conversions that are still in the works include NRG Energy Inc.‘s commitment to switch the 575-MW unit 2 at the Big Cajun II plant to gas, Southern Co.‘s plan to convert two units totaling 707 MW from coal to gas at its Yates station, and PacifiCorp‘s proposal to switch the 330-MW unit 3 at the Naughton plant in Wyoming from subbituminous coal to gas.
NRG also is planning to convert its Avon Lake plant in Ohio and New Castle station in Pennsylvania to burn gas instead of coal. The plants have five active coal units with a combined capacity of approximately 1,070 MW.
Of the 27,734 MW of formalized coal unit retirements in the U.S. between Aug. 19, 2013, and the end of 2022, the majority is slated to occur in the Mid-Atlantic and parts of the Midwest and South.
Breaking them out by North American Electricity Reliability Corp. region, ReliabilityFirst Corp. will be the most affected by a wide margin, with 13,141 MW of coal capacity scheduled to be retired during the period. RFC is followed by the SERC region, where generators have announced plans to shutter approximately 7,584 MW of coal capacity. Other NERC regions to be affected during the 2013-2022 period include the Western Electricity Coordinating Council, with 4,012 MW of planned retirements; the Southwest Power Pool, with 1,006 MW; the Midwest Reliability Organization, with 896 MW; and the Texas Reliability Entity, with 871 MW slated for retirement.
Assessing the impact of announced retirements on ISOs and RTOs, the PJM Interconnection continues to be the operator that would be most affected, with 13,379 MW of coal capacity planned to be closed between Aug. 19, 2013, and 2022. That marks an increase of more than 2,000 MW of retirements from SNL Energy’s last analysis, reflecting FirstEnergy’s recently announced plans.
Other grid operators to be affected by retirements include the Midcontinent Independent System Operator and the California Independent System Operator, where 1,667 MW and 1,182 MW, respectively, of coal retirements have been announced between 2013 and 2022. Approximately 9,405 MW of announced retirements during the period would occur outside an ISO.
On a company-specific level, American Electric Power Co. Inc., the nation’s largest coal burner, continues to have more coal unit retirements scheduled than any other generator by a significant margin. AEP has 6,061 MW of coal capacity due to shut down between Aug. 19, 2013, and the end of 2018.
Other generators with a significant amount of retiring capacity during the 2013-2018 period include FirstEnergy, with 2,883 MW; NRG, with 2,607 MW; Southern Co., with 2,479 MW; Duke Energy Corp., with 2,099 MW; and Tennessee Valley Authority, with 1,932 MW.
To view an updatable SNL template of coal unit retirement data, click here. This template uses SNL’s plant-level ownership to assign owners to power plant units. To view a version of the template that uses SNL’s unit-level ownership data, click here.