Coal news and updates

Ameren Missouri says coal to remain large part of power generation mix

Coal is expected to remain a large part of the generation mix at Ameren Missouri even as the St Louis-based utility diversifies its portfolio over the next 20 years, in part by investing $1 billion in wind energy, company officials said Wednesday.

While coal will not fuel 80% of the utility's 10,500-MW generation fleet two decades from now as it does today, largely because of environmental regulations, it will remain part of a balanced generation mix that also includes nuclear, natural gas and renewables, Michael Moehn, Ameren Missouri chairman and president, told St. Louis Public Radio.

Moehn and Ajay Arora, the utility's vice president of environmental services and generation resource planning, cited coal-fired power's relatively low generation cost in defending the utility's continued use.

Moehn said Ameren Missouri's electric rates are 25% below the national average.

Critics, including the Sierra Club, have been calling for Ameren Missouri to move away from coal.

By 2034, Moehn said, Ameren Missouri is forecast to get about a third of its power from coal, with the remainder coming from nuclear, gas, wind and solar.

"What we can agree on is we need to diversify our portfolio," he said.

Earlier this year, Ameren Missouri pushed back against critics advocating the closing of the 2,389-MW Labadie baseload coal plant in 2016 or, at the latest, 2023. Meeting those deadlines would cost the company as much as $3.6 billion, driving up energy costs for customers, the utility said.

Moehn and Arora said Ameren Missouri is in a comparatively good position to meet the Environmental Protection Agency's newly released Clean Power Plan that aims to reduce carbon dioxide emissions, mainly from coal plants.

In its current integrated resource plan, Ameren Missouri committed to cutting CO2 emissions by 30% by 2034, Moehn said. The CPP, likely to face a raft of legal challenges from states and other parties, mandates a 30% reduction for Missouri by 2030.

Arora said the final CPP is "more stringent" than the preliminary plan unveiled by EPA last year.

If implemented in its existing form, Moehn said, the CPP would cost Ameren Missouri about $4 billion more over 20 years than the IRP.

Because the plan is state-centric, Moehn said it is important for Missouri investor-owned utilities, co-ops and municipal electric systems to get on the same page.

"We are beginning to have conversations with other utilities and co-ops to see how we're going to comply with the CPP," he said.

Nuclear power will remain a key part of utility generation. Ameren Missouri has received a 20-year license extension from the Nuclear Regulatory Commission to continue operating its 1,190-MW Callaway County nuclear plant until around 2044.

Moehn said his company is not considering building a new nuclear plant, largely a result of the estimated $7 billion-$8 billion cost for a new plant. But, he said, the Callaway County plant could be expanded.

Moehn touted the company's plans to spend $1 billion on wind energy in response to a caller who asked why Ameren Missouri only has about 100 MW of wind generation, far less than Kansas City Power & Light, Missouri's other large IOU on the western end of the state.

"The bulk of our investment over the next five to 10 years will go to wind," Moehn said.

source: http://www.platts.com