Kentucky Leads The Country In 2020 Coal Retirements
Two of the largest coal-fired power plant retirements in the U.S. in 2020 are happening in Kentucky.
The Tennessee Valley Authority’s Paradise Unit 3 near Drakesboro is scheduled to shutter this December while Owensboro’s Elmer Smith Generating Station will cease operations in June.
These older, more inefficient power plants are the latest to be priced out of the market, and are now trudging toward the elephant graveyard of legacy coal-fired plants in the Ohio Valley.
Together, power generation from the two plants represents more than a quarter of the total coal-fired capacity set to retire this year, based on an analysis using U.S. Energy Information Administration data.
“Basically what you hear from the experts in the field is there is not going to be another coal plant built in Kentucky or anywhere else, probably… forever,” said Andrew Melnykovych, spokesman for Kentucky Public Service Commission, the state’s utility regulator.
Sales of electricity in Kentucky have declined over the last decade, mostly due to a loss in large industrial customers, and future increases are expected to be offset as people use less energy overall due to energy efficiency improvements (LED lightbulbs, Energy Star appliances etc.), according to EIA data.
So new power generation is likely to come online as older plants retire and as customers begin demanding cleaner sources of energy.
“You’re starting to see customers, you know big commercial and industrial customers, who are saying 'OK, we’re in your service territory but we want renewable power,'” Melnykovych said.
The Future of Coal And Natural Gas
Coal power has long been a staple of the Ohio Valley. The Appalachian Basin provided the coal and the Ohio River supplied the water. Together, they’ve spun the steam turbines that have powered an era’s worth of industry.
But for the most part, the efficiency of legacy plants are locked into the time they were built.
“There’s also a certain point where coal-fired units tend to reach the end of their viability, as far as their age, and it doesn’t make sense to invest more money into units,” said Scott Brooks, TVA spokesman, about the Paradise Fossil Plant.
To look at it another way, it can take a legacy coal plant 24 hours to begin generating power while a combined cycle natural gas plant goes from 0 to 100 within minutes.
TVA’s Paradise Fossil Plant is one such example. Unit 3 just doesn’t have the flexibility to power up when the extra energy capacity is needed, and it’s not worth investing in, Brooks said. The utility has already made up for the coal plant’s power generation by the addition of a 1,025 megawatt combined cycle gas plant that TVA built in 2017 at the same site.
Across the state, most of the coal generation that's retired has been replaced by natural gas.
In 2008, 94 percent of Kentucky’s electricity came from coal. Today, that’s closer to about 75 percent, according to EIA data. Meanwhile, the use of natural gas for power generation has exploded, from about 1 percent to 18 percent of the state's energy mix from 2008 to 2018.
But that doesn’t necessarily mean coal’s days are numbered either. Minus the two plants retiring this year, there are still 12 coal-fired power plants in Kentucky and utilities are incentivized to get a healthy return on their investments before putting them out to pasture.
Louisville Gas and Electric for example, has said its four coal-fired power plants have remaining lifespans of about 30 years.
Last summer, the former head of Kentucky’s Energy and Environment Cabinet predicted that coal plant retirements would slow in the coming years.
“Coal-fired plants that exist in Kentucky are fairly modern vintage so I think we should level out and not have many future retirements for many years in Kentucky,” said former Energy and Environment Cabinet Secretary Charles Snavely.
The longer those coal and natural gas power plants operate, the more carbon is released into the atmosphere, the bigger risk we take. The consensus of the scientific community is that humans must reduce carbon emissions as quickly as possible in order to avoid the worst impacts of climate change.
Solar Picking Up Steam In Kentucky
Growth in new solar and wind energy generation is expected to outpace natural gas this year across the country, but not in Kentucky.
No new large-scale solar projects are expected to come online this year, according to the EIA, but the pace is expected to pick up in the coming years. A company called BayWa r.e. Solar Projects is planning an 80 megawatts solar field in Harrison County for 2021, according to the EIA.
Following the closure of the Elmer Smith Station, Owensboro will continue to purchase coal power from Big Rivers through 2026, but it’s also approved a separate agreement to purchase 32 megawatts of solar power from an array in Western Kentucky that’s set to open in 2022.
Meanwhile, Henderson, Kentucky, has been reviewing more than two dozen proposals to energize its city with up to 150 megawatts of solar power. The city’s utility manager hopes to award a contract early this year and complete construction by 2023.
Kentucky’s Public Service Commission has also seen more interest in utility-scale solar.
“I think there is likelihood that we will see some fairly substantial solar projects coming to the state in the next five years or so,” said Melnykovych, with the Public Service Commission.
Melnykovych thinks much of that solar will be built by business owners competing with utilities in regional energy markets.
The future of distributed solar, also known as rooftop solar, largely depends upon how the Public Service Commission decides to value net metering credits in utility-filed rate cases that can begin going before the commission this year.