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So far, COVID-19 fallout not altering plans to retire US coal-fired plants

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Tri-State Generation and Transmission Association Inc. retired the 100-MW Nucla coal plant in southwestern Colorado in September 2019. The plant was initially set to be retired by the end of 2022.
Source: Tri-State Generation & Transmission Association Inc.

While U.S. power generators continue to assess what the total implications could be of a decline in electricity demand caused by the economic impacts of the COVID-19 pandemic, those forecasting a shift to less carbon-intensive assets have not yet changed near-term plans to retire coal plants.

In 2019, U.S. power generators retired 13,863 MW of coal-fired generation, the highest amount of coal capacity retired since 2015 when new mercury regulations drove the retirement of 15,124 MW of coal-fired capacity, an S&P Global Market Intelligence analysis shows. As of April 17, generators had 9,038 MW worth of capacity slated for retirement in 2020 and another 23,010 MW of coal capacity set to retire between 2021 and the end of 2025.

In April, renewables generated more electricity than coal every day of the month, the first time that has happened in the U.S., an analysis from the Institute for Energy Economics and Financial Analysis recently pointed out. Lower power demand due to the coronavirus pandemic is one of several reasons the transition away from coal has accelerated in 2020, the group added in a May 4 news release.

While companies around the world are reassessing capital spending forecasts and looking to preserve liquidity, most utilities set to retire coal plants said they are not yet seeing a reason to slow those plans. Eleven companies responded to a set of questions from S&P Global Market Intelligence regarding their COVID-related generation demand impacts and whether the pandemic will prompt any reassessment of their coal plant retirement plans.

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"Across our jurisdictions, we've seen daily peak demands reduced due to COVID-19 impacts but also because of milder weather. The increased residential use from people working from home hasn't made up for the loss in load usually required by the many businesses that have closed," Duke Energy Corp. spokesman Neil Nissan said in an April 29 email response to S&P Global Market Intelligence.

"We dispatch our fleet on economics so generally, we're now running our coal plants less due to low natural gas prices and less load," Nissan said, adding that Duke Energy has "not changed any of the current retirement dates for coal units at this time due to COVID-19."

Duke Energy plans to retire 862 MW of coal capacity by 2024. This includes units 1, 2 and 3 at the 1,130-MW G.G. Allen coal plant in Gaston County, N.C., and the 280-MW R. Gallagher coal plant in Floyd County, Ind.

The utility also has revealed plans to move up the retirement of other coal units, including units 4 and 5 at G.G. Allen and units at its Cayuga and Gibson coal plants in Indiana.

"Moving forward, we'll continue to focus on retiring coal units, investing significantly in renewables and energy storage, continuing to use natural gas and continue to seek license renewals for our carbon-free nuclear units," Nissan said.

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American Electric Power Co. Inc. has "not changed any of our coal-fueled unit retirement plans or other generation planning based on the pandemic," company spokesperson Melissa McHenry said.

AEP recently ceased operations at the last 780-MW unit at its Conesville coal plant in Coshocton County, Ohio. The plant's official retirement is set for May 31.

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Michigan-based Consumers Energy Co. spokesman Brian Wheeler said this early into the pandemic, the company's long-term planning has not changed, but the utility does continue to monitor industry and economic trends closely. The company's Clean Energy Plan already called for eliminating coal from its generating portfolio on the way to achieving net-zero emissions by 2040.

"We don't share information publicly about the status of individual power plants, but we do forecast we will continue to move over time away from coal as an energy source, including eliminating it altogether by 2040," Wheeler said, noting total sales were down 10% in April.

Consumers Energy projects 2 million tons fewer carbon emissions from its coal plants in 2020, a dip of about 12% from original projections, due in part to the economic slowdown caused by the pandemic.

NiSource Inc. subsidiary Northern Indiana Public Service Co. plans to retire all of its coal capacity in Indiana within the next 10 years as part of the utility's transition to cleaner energy resources.

A new Indiana law designed to pause coal plant retirements is not expected to "materially change" this generation strategy and it appears the coronavirus pandemic will not either.

"Regarding our future generation plans, including our announced coal retirements, we don't see significant changes in that direction," NIPSCO spokesman Nick Meyer said in a May 1 email.

The long-term impact of the pandemic on the service area of the Tennessee Valley Authority is still unclear, said TVA public information officer Jim Hopson. For now, the majority of TVA's power is being generated by nuclear, natural gas and hydroelectric facilities, due to scheduled outages already making most of its fossil generating units unavailable during this period.

TVA's long-term plans include the retirement of the Bull Run coal-fired power plant in 2023. Hopson said the TVA will wait until the timing and nature of economic recovery is better understood before making additional determinations

Dominion Energy Inc. subsidiary Dominion Energy Virginia plans to retire the remaining units at its 1,032-MW Chesterfield coal plant in 2023 as modeled in the utility's 2020 integrated resource plan, or IRP, filed with the Virginia State Corporation Commission.

A new Virginia law requires Dominion Energy Virginia, known legally as Virginia Electric and Power Co., and AEP utility Appalachian Power Co. to "retire all generating units principally fueled by oil with a rated capacity in excess of 500 [MW] and all coal-fired electric generating units operating in the Commonwealth" by Dec. 31, 2024. The Virginia Clean Economy Act, which takes effect July 1, provides an exception for coal plants co-owned with a cooperative utility and for Dominion Energy Virginia's 624-MW Virginia City Hybrid Energy Center.

Still, Dominion models the tentative retirement of the 881-MW Clover coal plant, which it co-owns with Old Dominion Electric Cooperative, in 2025 under all four scenarios in its IRP.

The company said it could not provide an immediate comment on how the coronavirus pandemic has impacted its coal usage or generation planning.

South Carolina state-owned utility Santee Cooper, known legally as South Carolina Public Service Authority, still plans to retire all four units at its 1,150-MW Winyah coal plant starting with units 3 and 4 in 2023, according to spokesperson Mollie Gore.

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"This pandemic gives a lot of validity to our new power supply plan, which replaces the Winyah coal units and addresses future energy needs by adding renewables, storage and natural gas in smaller, modular units," Gore said in an email. "That flexibility is critical in allowing utilities to adjust when plans and forecasts are turned upside down, whether that is by a pandemic — or a more positive development like rapidly changing technology."

Tri-State Generation and Transmission Association Inc., composed of members and public power districts in Colorado, Nebraska, New Mexico and Wyoming, said it is waiting to see the full impact of the virus and sharp drop in oil prices. Mark Stutz, a public relations specialist with Tri-State, said the association had not changed plans to retire its Escalante generating station in New Mexico by the end of the year or its Craig coal plant in Colorado by 2030.

"We do know that recent events will have a downward pressure on demand in the short term, but we are in a strong position financially and operationally to deal with those impacts," Stutz said.

PacifiCorp spokesman David Eskelsen said they have not determined any changes are necessary to their current action plan, which involves retiring 2,800 MW of coal-fired generation by 2030 and nearly 4,500 MW by 2038 to make way for renewable energy and battery storage capacity.

"It is too early to be certain, because much depends on how long the public health crisis persists," Eskelsen said.

Representatives of the Salt River Project also said they did not expect the impacts of the pandemic to change their projected coal plant retirements.