Coal news and updates

Power stations switch to gas, but coal stays on the menu

Power utilities American Electric Power Co and Southern Co say the U.S. needs to keep coal in the mix for electricity generation because it’s cheap and plentiful.

“Coal has to be part of the puzzle,” Nick Akins, chairman and chief executive of power giant AEP said Thursday at The Wall Street Journal’s ECOnomics conference in Santa Barbara, Calif.

The dirtiest of the fossil fuels, coal has lost major market-share to natural gas in recent years as power generators switching to burning gas to create electricity. Columbus, Ohio-based AEP plans to shut down up to 6,000 megawatts of coal-fired power plants by 2016 – enough to light between 3 million and 6 million homes – mostly so it can comply with tighter federal pollution limits.

By 2020, the company will generate about 46% of its electricity from coal, down from 60% today.

But Mr. Akins argued the U.S. has so much coal that the federal government should fund expensive carbon-capture and storage projects, even though AEP abandoned a West Virginia clean-coal project in 2011.

“There have been some interesting advancements on the table-top side, but we haven’t gotten it to scale,” he said.

Southern Co. Chief Executive Tom Fanning said in the past six years his Atlanta-based utility has shifted from generating 70% of its power from coal to just 35%. Electricity made by burning natural gas has skyrocketed to 45% from 16% over that time period, he said.

Even so, Southern owns one of the nation’s largest coal fleets, although it’s trying to find cleaner ways to use coal.

The company is building a power plant in Kemper County, Miss. that will convert coal into a synthetic gas and will capture up to 60% of the carbon dioxide. It’s expected to enter service by the end of the year.

But so-called clean coal is expensive. Earlier this week Southern said its costs associated with the Kemper plant rose another $177 million in February, due to lower labor productivity, bringing total project costs, including the cost of a mine and CO2 pipeline, to more than $5.2 billion.

Source: The Wall Street Journal