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Report: Quicker transition from coal is best for Ind. economy, environment

Replacing Indiana's coal fleet with renewables will slash greenhouse gas emissions and produce billions of dollars in savings for the state, according to a recent analysis.

In its report, "A Future for Indiana Coal: Emissions and Costs of Alternative Electric Generation," Applied Economics Clinic, or AEC, pointed out that the quicker Indiana can transition away from coal to solar and wind, the more savings it will realize.

"Across all replacement scenarios, retiring all coal resources by 2030 is cheaper than waiting until 2040," researchers wrote in the Oct. 17 report, adding that the "greatest savings are realized in the scenario in which coal resources are replaced with 100[%] renewables by 2030."

Indiana produced 75,000 GWh of coal-fired generation in 2018, second only to Texas, according to the report.

The analysis was conducted on behalf of Citizens Action Coalition of Indiana and presented as a "preliminary examination" of the impacts of various potential energy investments the state may consider as it transitions away from coal.

Indiana passed a law earlier this year that establishes a 15-member energy task force to study the state's regulation of electric generation; evaluate how possible shifts in electric generation may impact reliability, system resilience and affordability; and develop recommendations to address portfolio concerns. The newly created 21st Century Energy Policy Development Task Force must issue a report of its recommendations by Dec. 1, 2020.

AEC researcher Bryndis Woods, one of the authors of the report, noted that the analysis did not consider the impact on grid resiliency and reliability from a shift to renewables. Instead, the analysis evaluated "the cost and emission impacts" over the next 30 years of continued reliance on coal, replacing coal with natural gas, replacing coal with natural gas plus wind and solar, and replacing coal with 100% renewable resources.

Woods added that researchers did not evaluate the impact of battery storage in the initial analysis.

"Maintaining Indiana's coal fleet for the next 30 years is the most expensive option for the state, while replacing all coal with 100[%] renewable resources by 2030 is the least-cost option," AEC researchers wrote.

"When we account for inevitable future costs of maintaining Indiana's aging coal plants, then continuing to run coal for the next 30 years becomes the most expensive option — $36 billion more than replacing coal capacity with gas capacity and $49 billion more expensive than replacing coal capacity with solar and wind over the next 30 years," the report said.

The researchers also pointed out that while replacing coal with natural gas will reduce emissions by 1 billion short tons cumulatively over the next 30 years, moving from coal to solar and wind will reduce the state's CO2 emissions by 2 billion short tons over that same period.

"There do not appear to be economic or environmental benefits of using gas as a bridge to renewables, given that a scenario that shifts all coal to renewables is the least expensive and also reduces emissions the most," Woods said in an email.

The AEC report said, "[R]eplacing coal with gas is $12 billion more expensive (in cumulative terms) than replacing coal with wind and solar over the 30-year analysis period, and results in 1 billion tons more cumulative emissions over that same timeframe."

NiSource Inc. subsidiary Northern Indiana Public Service Co., or NIPSCO, plans to retire all of its coal capacity within the next 10 years as part of the company's transition to cleaner energy resources. The utility has issued three separate requests for proposals targeting 2,600 MW of wind, solar and storage capacity to replace its aging coal-fired fleet.

The utility will retire the 1,625-MW R.M. Schahfer coal plant in 2023 and the 469-MW Michigan City coal plant in 2028. "They are 40-, 50-year-old units. They are just approaching end of life," NiSource President and CEO Joseph Hamrock said earlier this year in an interview with S&P Global Market Intelligence. "So, it didn't start with 'We got to get out of coal.' It started with 'Let's do an objective, thorough, all-factors analysis,' and it pointed at that, that's the retirement sequence."

Still, NIPSCO said it plans to continue operating the natural gas-fired, 563-MW Sugar Creek Facility in West Terre Haute, Ind., as part of its energy transition.

Indiana regulators in April rejected a request by Vectren Energy Delivery of Indiana-South, known legally as Southern Indiana Gas and Electric Co., to replace generation capacity from three coal-fired power plants with an 850-MW, combined-cycle natural gas plant. The regulator said the utility failed to adequately consider alternatives such as building multiple smaller-scale renewable generation resources.

Vectren is now owned by Houston-headquartered CenterPoint Energy Inc.