Late last year we reported in this blog about the wave of old coal plant retirement announcements throughout the Southeast in which we counted 11 likely retirements in 4 Southeast states. A year later, we can report modest increases in that number – Southeast utilities have collectively announced plans to retire 15 coal plants in 7 states, including a first-ever official retirement announcement from Tennessee Valley Authority (TVA).
The new total of 15 retirements is only slightly more than this time last year, but the climate has changed significantly in the past year–that is to say, the political climate has changed. Last year was marked by optimism that federal climate change legislation might actually become law, while this year is marked by the knowledge that Congress did not act on this pressing issue. So what is driving these retirement announcements and is it all good news?
In the past 12 months we’ve seen multiple Environmental Protection Agency rules pursued and finalized, which make the cost of burning coal higher, and costs of cleaner alternatives more competitive. Four major EPA rulemaking processes were actively considered during the past year and one was finalized: Clean Air Transport Rule (formerly CAIR), Coal Combustion Residuals (or coal ash waste), the Tailoring Rule (covering greenhouse gas emissions from new and modified major sources), and the revision of Ozone NAAQS ( the National Ambient Air Quality Standards). While ideal energy sources such as wind and solar are slowly catching up with coal cost-wise, other options, such as natural gas, have become dramatically more affordable in comparison. Likewise, utilities across the region are discovering that they can reduce the need for coal by increasing their efforts at energy efficiency and demand reduction.
Many of the Southeast’s coal plants are around 50 years old and require frequent maintenance and pollution control upgrades in order to meet new air quality standards. Left uncontrolled, they literally release tons of pollutants into the air, and installing the necessary environmental upgrades is expensive. Additionally, when these plants burn coal a toxic coal ash is left behind. Until recently, states and the EPA largely ignored this massive coal ash waste stream, but EPA is pursuing coal ash regulations and utilities realize that they must spend money to address this risky waste.
All of these factors and more are driving coal plant operators to reevaluate the cost-effectiveness of keeping their smaller, old, inefficient facilities online when there are cost-competitive, cleaner, efficient alternatives. We applaud these new announcements that will assist us in decreasing our dependence on dirty coal and are cautiously optimistic that each plan will come to fruition. We are hopeful that the plans are indicators that the entire region is slowly moving in the right direction when it comes to our clean energy future. Unfortunately, though, it’s not all good news because even as we’re seeing a decent increase in old coal plants scheduled for retirement, 2 massive new facilities are in the works for Virginia and North Carolina – the Virginia City facility in SW Virginia and Cliffside, Duke Energy’s new addition in Rutherford County. Together these new facilities will negate 11 million tons of CO2 that would otherwise have been retired and stopped polluting. Instead of 35 million tons out of the air, we’ll actually only see 24 million tons gone.
See state by state details below:
TENNESSEE:
In 2006 the state of North Carolina sued TVA, claiming that emissions from a number of TVA plants were entering North Carolina and contributing to decreased air quality. A trial judge ruled in favor of North Carolina, and that ruling indicated to us that TVA would likely retire some of the plants identified in the lawsuit; namely, Widows Creek in Alabama and John Sevier in Tennessee. However, since our 2009 update, an appeals court reversed the ruling in the TVA v. NC case, and sided with TVA. This unfortunate occurrence altered expectations about TVA retirements, but to our pleasant surprise, TVA declared in August that it will still retire a number of old coal units across their service region, including two of the four units at John Sevier in Tennessee.
All the units at John Sevier were built between 1955 and 1957 and collectively release nearly 4 million tons of CO2 each year. We believe that it is likely that TVA will soon decide to shutter the entire John Sevier plant since they are planning to build an $820 million natural gas plant in the coal plant’s shadow.
It is perhaps also worth identifying a few other modest retirements that seem imminent and likely but have not yet been formally announced. In addition to John Sevier, we also expect that TVA will soon announce the complete closure of their Johnsonville coal plant in Middle Tennessee. This plant is the oldest in TVA’s fleet, it consists of 10 highly inefficient boilers and contributes just shy of 5.5 million tons of CO2 to the atmosphere each year. Further, Johnsonville has reached capacity for storing its coal ash and has begun shipping the ash across the Tennessee River to a privately operated ash landfill. That landfill is rife with problems. With all these issues in mind, from age and efficiency to ash disposal, Johnsonville is a prime example of a plant that TVA would be wise to shutter.
TVA is currently completing a long-overdue integrated resource planning (IRP) process. At the conclusion of that process, TVA will likely commit to taking a total of between 2,000 and 5,000 MW of old coal offline. TVA committed to 1,000 MW with its August announcement, so we think we can expect at least another 1,000 MW in the near future. In order to see TVA get to the full 5,000 MW, we hope to hear of at least another 3,000 MW planned for retirement soon.
There is, however, a serious shortcoming in TVA’s latest actions. In the IRP and in the August announcement, TVA has not actually committed to decommission these facilities and completely rendering them non-operational. Rather, TVA is envisioning “layups.” According to the draft IRP, “the goal of the long-term layup is preservation of the asset so that it could be re-integrated into TVA’s generating portfolio in the future if power system conditions were to warrant it.” This caveat in their plans falls short of the full commitment to retirement that we need to truly usher us into an era of clean energy.
ALABAMA:
Among the units tagged in the NC v. TVA lawsuit and in this summer’s TVA retirement announcement were units 1-6 at Widows Creek. These old units will be taken down in tiers, with the first two units coming off-line in 2011 and the remaining 4 coming down by 2016. As with so many coal units, these 6 are over 50 years old and they lack advanced environmental controls for air pollution.
KENTUCKY:
TVA operates two coal plants in Kentucky, Paradise and Shawnee, and as part of their August announcement they slated one unit at the Shawnee plant for retirement. This unit will come off-line between 2011 and 2016 and it appears that officials are evaluating conversion of Unit 10 to run on biomass. Unfortunately, TVA’s current plans leave another 9 units operating at the plant. These remaining units lack advanced environmental controls, were all built in 1955 or earlier and generate nearly 8 million tons of CO2 annually. All units at Shawnee need to be on TVA’s target list for additional retirements, especially as it lacks advanced air pollution control technology.
NORTH CAROLINA:
North Carolina has been something of a hotbed for retirement announcements in the last 12-16 months. Last year Progress Energy and Duke Energy announced retirements to occur between 2011 and 2017 at Weatherspoon, Cape Fear, Sutton and Lee (all Progress facilities) and Cliffside, Dan River and Buck plants (all Duke facilities). These plants account for a total of almost 10 million tons of CO2 per year. In their 2010 IRP, Duke announced one additional retirement at all 4 units of the Riverbend plant by 2015. This plant was built before 1955 and releases another 5,320,381 tons of CO2 annually.
SOUTH CAROLINA:
At this time last year no plants in South Carolina were slated for retirement, but Duke Energy announced this year that its W.S. Lee plant would shut down three boilers by 2020. This is an extraordinarily long lead time, but it will reduce CO2 by almost 500,000 tons per year.
FLORIDA:
No new retirements were announced for Florida in the past year. We reported last year on Progress Energy Florida’s announced retirement of two coal units at its Crystal River Energy Complex. That retirement will account for around 4.5 million tons of CO2 per year. Unfortunately, Progress Florida does not intend to retire these units until 2020. Even then, when the units do eventually come off-line, there will be two remaining coal units with over 7 million tons of CO2 emissions and Progress will have completed its new Levy County nuclear plant.
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Coal is dirty business from cradle to the grave. From mountaintop removal to air pollution to toxic coal ash, every aspect of energy generation from coal involves a massive human health an environmental cost. This overwhelming impact is the reason that SACE will continue to push for new retirement announcements around the region. The trend of new retirement commitments is positive, but the rate is still inadequate. With the availability and affordability of alternative energy, there is no reason that regional utilities should continue to operate old, dirty, inefficient coal plants. In the coming year, SACE will work to hold utilities accountable to these announcements and make new decisions to transition to cleaner energy in the future.
Hopefully, by this time in 2011 we will have many more retirements to report.