Coal news and updates

AEP revising upward its projected coal generation to 51%

American Electric Power is revising coal's projected share of the company's nearly 38,000 MW generation capacity in 2020 to 51%, with coal's gain likely to come at the expense of natural gas, a company spokeswoman said Monday.

For more than a year now, the Columbus, Ohio-based company has estimated coal's portion of its generation mix will decline from 65% in 2020 to 46% in 2020 as roughly 6,500 MW of older coal units are retired to meet new US Environmental Protection Agency rules.

But in updates expected to be filed soon with government agencies, AEP is increasing coal's forecasted piece of its generation pie to 51%, AEP spokeswoman Tammy Ridout said Monday.

"It's actually been raised to 51% by 2020," she said about coal's predicted contribution to the generation portfolio six years from now. "It has been updated to 51%."

Although reasons for the revision were not immediately clear, rising natural gas prices that spiked in the bitterly cold winter of 2013-2014 could play a part. So, too, could AEP's commitment to coal.

Nick Akins, AEP CEO, told the Wall Street Journal's ECOnomics Conference in California last week that coal "has to be part of the puzzle' as the US plans its energy future.

In a newly filed report with the Ohio Public Utilities Commission, AEP said the long-term transformation of its generation business is expected to reduce its reliance on coal from 65% of its generation capacity in 2012 to approximately 46% in 2020. That is among the reports expected to be updated in several weeks.

AEP affiliates "are heavily invested in renewable energy resources and highly successful energy efficiency programs," the company said. "This balancing of our fuel resources and demand reduction efforts will move us forward on the path to continued carbon dioxide reductions, helping us achieve our voluntary 2020 goal to reduce GHG emissions by 10 percent from 2010 levels."

Ridout said AEP's use of renewable energy is "expected to go up a little bit" by 2020 as the company attempts to comply with Ohio's 2008 renewable portfolio standard. Those rules require utilities to get at least 25% of their power from renewables such as wind and solar and "advanced energy" like clean coal and nuclear by 2025, with at least half coming from inside the state.

Newly filed state legislation, S.B. 310, backed by Ohio Senate Republicans would freeze renewable and energy efficiency standards for about a year while lawmakers determine whether the 2008 law, S.B. 221, should be scrapped or amended.

Under AEP's updated generation plan, "we'll use less gas than we had projected previously," Ridout noted. "Gas is still going to increase but not as much as we had projected. Coal generation will not fall as much as previously forecasted."

In February 2012, AEP retired 450-MW Unit 5 at its Philip Sporn baseload coal plant in New Haven, West Virginia. Unit 3, a 165-MW facility, was shuttered at the Conesville baseload plant in Conesville, Ohio, in December 2012.

By June 1, 2015, according to the report filed with the PUC, AEP plans to retire another 2,500 MW of coal-based capacity: three units totaling 630 MW at the Kammer plant in Moundsville, West Virginia; five units totaling 1,425 MW at the Muskingum River plant in Beverly, Ohio; one 53-MW unit at the Beckjord plant in New Richmond, Ohio; one 100-MW unit at the Picway plant in Lockbourne, Ohio; and two additional units representing 300 MW at the Sporn plant.

Other coal unit retirements are planned at several baseload plants in Virginia, Indiana, Kentucky, Oklahoma and Texas.

AEP told the PUC it is focused on "taking practical, short-term actions to reduce emissions of CO2 and other GHGs, such as improving energy efficiency, investing in the development of cost-effective and less carbon-intensive technologies" and evaluating its assets, including power plants, office buildings and its mobile fleet across a "range of reasonable scenarios."

Whether the 50-MW Turning Point solar project once proposed for Ohio remains in the mix is uncertain.

The PUC more than a year ago placed the project in limbo when it prevented AEP Ohio from recovering its portion of the large solar array that would be developed by other investors.

Turning Point is not necessarily dead, however, AEP Ohio spokeswoman Terri Flora said Monday. "From our perspective right now, it's dormant," she said.

The project may be revisited, she suggested, once the General Assembly makes a definitive decision on the fate of the RPS and energy efficiency.

Source: Platts