AES Corp most likely will not build any more coal-fired power plants after it completes two projects in India and the Philippines, according to AES CEO Andres Gluski.
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The head of the Arlington, Virginia-based power producer told the Barclays CEO Electric-Power Conference in New York the company continues to diversify its generation portfolio, although coal still accounts for 39% of its total of 35,687 MW of installed capacity.
Almost all of AES' coal plants worldwide are fully scrubbed to reduce sulfur dioxide and other emissions, said Gluski, whose company operates in 18 countries, with a third of its business coming from the US.
In India and the Philippines, AES is constructing coal plants equipped with supercritical technology to decrease pollution even more, he said. Still, "those will possibly be our last two coal plants."
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But while AES may be diversifying more into natural gas, renewables and battery storage, it is not giving up on coal.
In Indiana, it has invested heavily in recent years at its Indianapolis Power & Light subsidiary to add controls at the 1,700-MW Petersburg baseload plant so it can comply with the US Environmental Protection Agency's Mercury and Air Toxics Standards rule, he said.
And, AES has decided not only to keep its Dayton Power & Light subsidiary in Ohio, but retain the utility's coal-dominated portfolio as well, AES spokeswoman Amy Ackerman said in a Wednesday email.
DP&L is seeking Ohio Public Utilities Commission approval for a electric security plan, starting in January 2017, that includes a "reliable energy rider" surcharge aimed at providing support for its roughly 2,000 MW of "at-risk" coal generation.
Gluski predicted the PUC will approve the rate plan before the end of 2016. Public hearings are scheduled for October in Columbus, Ohio.
Since it acquired DPL, DP&L's then-parent, in 2011, AES' strategy has been "to pay down debt over the past five years to achieve the right leverage ratio," Gluski said. "We've paid down $700 million in debt at DP&L and DPL. Our interest is to deliver this company to a point where we can start receiving cash from a stable utility in the Midwest."
While coal still represents 39% of AES' portfolio worldwide, with gas and renewables second and third at 34% and 23%, respectively, gas is the unquestioned leader in the US, at 51%. Coal is runner-up at 40%, followed by renewables at 8%.
All told, AES owns 11,898 MW of generation in the US.
That figure will climb by 671 MW when IP&L's combined-cycle gas plant near Martinsville, Indiana, begins commercial operations. "It is expected to come online next year," Ackerman said. The $600 million facility is replacing the 341-MW Eagle Valley coal plant that recently was retired.
Altogether, AES has about 8,000 MW of energy projects under construction globally. This year, the company "will cut the ribbon" on about 2,400 MW of projects, according to Gluski. All of the projects are targeted for completion by 2020-2021.
One of the newest projects in the US is the 1,284-MW combined-cycle gas and 100-MW battery-based storage project in California.
Gluski said construction will begin on the gas plant in 2017, with completion for 2020. For the energy storage capacity, commercial operation is due to begin in 2021.
In November 2014, AES was awarded 20-year power purchase agreements by Southern California Edison for the output of the projects.
The projects have received approval from the California Public Utilities Commission and are on track to receive final environmental permits early next year.
--Bob Matyi, firstname.lastname@example.org
--Edited by Keiron Greenhalgh, email@example.com