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Appalachian Power IRP outlines heavy investment in solar, wind resources

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Appalachian Power IRP outlines heavy investment in solar, wind resources

will rely heavilyon solar and wind generation to meet current and future environmental regulations,according to the company's 2016 integrated resource plan. In addition, the utility plans to continue operating the majority of its baseload generation plantsand anticipates a reduction in certain capacity resources as it prepares for thePJM Interconnection LLCcapacity performance rule.

AppalachianPower filed its 2016 integrated resource plan, or IRP, April 29 with the VirginiaState Corporation Commission. The plan outlines the company's generation needs forthe next 15 years. (Case No. PUE-2016-00050)

As partof the IRP process, Appalachian Power said it developed a "hybrid plan"as a potential option to balance costs and other factors, such as environmentalconstraints and state regulations, to effectively meet its peak load obligations.

The planincludes the addition of 20 MW of large-scale solar energy by 2018 and up to 590MW of nameplate solar capacity by 2030. Appalachian Power also anticipates adding300 MW of wind energy by 2018 and a total of 1,800 MW of nameplate wind capacityover the 15-year planning period.

In addition,the hybrid plan accounts for customer and grid energy efficiency programs, as wellas the anticipated addition of 60 MW of distributed generation, such as rooftopsolar, by its customers by 2030. It also expects the addition of 10 MW of batterystorage resources in 2025.

AppalachianPower said it assumes that PJM's capacity performance rule may lead to the reductionof approximately 200 MW of pumped storage capacity contribution at its plants, as well as reductionsin wind resource and run-of-river hydro contributions.

The companysaid it will continue operating its JohnE. Amos and Mountaineercoal plants, as well as the Ceredoand Dresden Energygas plants. Appalachian Power also will maintain its share in Ohio Valley Electric Corp.'s Clifty Creek and Kyger Creek coal plants.

The utility'splan includes the conversion of ClinchRiver coal units 1 and 2 to natural gas, followed by their retirementin 2026.

In approvingAppalachian Power's 2015 IRP in February, the Virginia SCC said it expects , especially in regardto compliance with the U.S. EPA's Clean Power Plan, in its next IRP. These carbon-reductionregulations have been temporarilyhalted by the U.S. Supreme Court as legal challenges proceed, but Virginiais among the states moving aheadwith planning for compliance.

Whilenoting that a Clean Power Plan-compliantresource plan could result in incremental costs ranging from approximately $300million to $600 million, the company noted that "there are likely no materialcost differences between a 'mass-based'or 'rate-based' compliance approach."

AppalachianPower filed a similarIRP in January with the Public Service Commission of West Virginia. (Case No. 15-2003-E-P)