Coal news and updates

Kentucky officials say they do not expect the US Environmental Protection Agency's latest climate change rules to result in any additional coal-fired power plant retirements beyond those already announced.

 

EPA's proposed 30% reduction in carbon dioxide emissions from existing plants compared with 2005 levels can mostly be achieved through pending coal plant closures, Sean Alteri, director of the Kentucky Division of Air Quality, said Monday.

 

During the past year or so, several Kentucky electric utilities including Louisville Gas & Electric, Kentucky Utilities and Kentucky Power disclosed plans to shutter over 1,600 MW of coal generation by 2016 or 2017.

 

The Tennessee Valley Authority is converting two older coal units to natural gas at its 2,201-MW Paradise plant in Muhlenberg County. The baseload plant's largest unit, representing about 1,100 MW, will continue to burn coal.

 

Alteri and John Lyons, Kentucky assistant secretary for climate policy, briefed state lawmakers on the potential impact of the GHG rules late last week in Frankfort.

 

Their belief that no additional coal plant retirements are anticipated in the next several years is "based upon current energy prices," Alteri said. "Currently, nobody has announced a retirement as to these [CO2] rules. Nobody's mentioned to us they're going to retire due to those rules."

 

LG&E and KU, subsidiaries of Pennsylvania's PPL, say they are confident most of their existing plants could meet the CO2 mandates. Together, LG&E and KU intend to retire more than 800 MW of older coal-fired generation in the next couple of years.

 

Kentucky Power, an American Electric Power subsidiary, plans to close the 800-MW Unit 2 at its Big Sandy baseload coal plant in Lawrence County.

 

The state Public Service Commission is expected to issue a final order in the middle of July on the utility's request to convert 278-MW Unit 1 at Big Sandy to gas.

 

Most of those planned retirements are attempts by the utilities to comply with other EPA regulations, such as the new Mercury and Air Toxics Standards rule.

 

The coal plant retirements are expected to reduce coal's share of Kentucky generation from 92% to 78% in 2020.

 

While state officials do not expect GHG-related retirements, Alteri said, there are other uncertainties. Among those is natural gas.

 

Lower gas prices in recent years have had as much an impact, if not more, on utilities switching away from coal generation. Some units switched back to coal, though, as gas prices began rising in 2013.

 

Alteri said Kentucky officials are concerned, however, because of the historic volatility of gas prices. Several companies have submitted applications to the Division of Air Quality for new or converted gas plants.

 

 

Source: Platts