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Age, lack of use prompt upcoming retirement of US gas-fired capacity

More than 7,400 MW of aging and little-used gas-fired generating capacity is expected to be retired in the U.S. between 2019 and 2026, according to an S&P Global Market Intelligence analysis.

In recent years, large amounts of coal-fired capacity in the U.S. have been retired, as have been several nuclear plants. Nuclear plant operators have also warned that several other remaining plants are at risk of closure.

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Excluding coal and nuclear capacity, the U.S. has about 8,340 MW scheduled for retirement through 2026. Along with natural gas capacity, hydro, oil and wind facilities are in the mix.

This total represents just about 1% of the 752,400 MW of current operating capacity from non-nuclear, non-coal facilities. Though minuscule and drowned out by over 40,000 MW of new capacity coming on in 2019 alone, the retirements are driven by a mix of reasons, including a lack of buyers for the plants' output and therefore little use.

Most of the 7,429 MW of gas-fired capacity due to be retired will close by the end of next year and involve aging steam turbines that will be between 40 and 70 years old when they retire. For instance, wholesale power generator GenOn Holdings Inc. plans to shut the 1,516-MW Ormond Beach Generating Station in California in 2020. The closure comes after the plant's reliability must-run contract with the California ISO expires in 2019. Also in 2020, AES Corp. plans to retire 1,997 MW across six steam turbines at its Alamitos plant in Long Beach, Calif., the oldest of which began operating in 1956.

AES plans to repower the site with 1,040 MW of combined-cycle capacity and the 300 MW/1,200 MWh AES Alamitos Energy Battery Storage Array. A third AES gas steam plant in Southern California, the 1,347-MW Redondo Beach facility, will also retire, with part of the capacity coming off this year and the remainder in 2020. The plant's oldest units are from the mid-1950s. Two power purchase agreements, with local utility Southern California Edison Co. and asset manager Bear Energy LP, both expired in May 2018.

In addition to older steam turbines, a pair of combined-cycle plants in California and Louisiana will retire between 2019 and 2021. Both will be between 40 and 50 years old when they retire. The city of Glendale, Calif., plans to close the 118-MW Grayson CC in 2021, when it will be 44 years old, as part of a plan to replace the plant's capacity with more efficient generation that lowers the project's carbon footprint. In Louisiana, Entergy Corp. shut a 55-MW unit at its Sterlington station in January; it was 45 years old. Two other units at the plant, totaling 111 MW, that started up that same year are still in service but have rarely operated in the last five years.

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Between 2021 and 2026, a total of 822 MW of gas turbine capacity is set to be retired. Though some turbines will be 40 to 50 years old by their retirement year, about 39% of the capacity is less than 20 years old, but does not run often. For example, Exelon Corp. plans to retire the 320-MW Southeast Chicago Energy in 2020, just 18 years after it started operation. The station is one of nine plants that Exelon plans to close because they are rarely used in the PJM Interconnection market. Among others in this group of plants are the 128-MW Notch Cliff gas plant in Maryland and two landfill gas plants in Pennsylvania: the 60-MW Fairless Hills Steam Generating Station and 5.4-MW Pennsbury Generating Station.

Outside of natural gas capacity, the 146-MW B.L. England unit 3 in Cape May County, N.J., is among the largest oil units retiring. The oil-fired unit has only been used in peak-demand summer or winter months. In Washington state, the Grant County Public Utility District plans to shut 104 MW out at its 1,202-MW Wanapum dam on the Columbia River, but that is part of a multiyear refurbishment project that will result in additional generation capacity from each of the dams mid-1960s units. At the 20-year-old Lake Benton II wind plant in Minnesota, NextEra Energy Inc. plants to retire 103.5 MW of capacity and repower the facility with a much smaller number of turbines, due to be in service in September.

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