US coal plants delay shutdowns in stumbling block to clean energy transition

SHEBOYGAN, Wisc., Aug 10 (Reuters) – Travel brochures in Sheboygan, Wis., tout the city’s beaches on Lake Michigan as the Malibu of the Midwest. But the glossy photo pages leave out one feature of the landscape: a coal-fired power plant on the coast that will remain open until mid-2025 instead of closing this year as planned.

Alliant Energy Corp’s Edgewater coal plant in Sheboygan is one of at least six across the country that this summer have announced delays or possible delays in their planned shutdowns, citing concerns about power shortages.

A key culprit: The deployment of renewable energy, which was meant to replace these coal plants, has taken a hit in recent months due to supply chain setbacks related to COVID-19. Utilities say import tariffs on solar panels imposed by the US Commerce Department make it difficult to keep up with robust power demand.

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In addition to the delayed closure of its 400-megawatt (MW) Edgewater plant in Sheboygan, Alliant’s 1.1-gigawatt Columbia Power Center in Portage will close in June 2026, a delay of about 18 months.

WEC Energy Group Inc (WEC.N) has delayed the closure of the remaining units at its 1,135 MW Oak Creek power plant near Milwaukee for up to 18 months to May 2024 and the end of 2025.

NiSource Inc of Indiana (NI.N) blamed solar project delays of up to 18 months for postponing the closure of the 877 MW Schahfer coal plant for two years to 2025.

In Nebraska, the Omaha Public Power District board will vote Aug. 18 on whether to keep the 645 MW North Omaha plant open until 2026, a delay of up to three years, due to siting delays and backlogs in studies to switch to natural gas and solar.

And in New Mexico, PNM Resources Inc (PNM.N) delayed the closure of a unit at the San Juan plant for three months until September, as drought threatened hydroelectric power supply and heat boosted energy demand.

When burned, coal emits more carbon dioxide, a greenhouse gas, than any other fossil fuel. It also releases nitrogen oxide and sulfur dioxide, precursors to haze and smog that damage human lungs and hearts.

All the companies said that, despite delays and potential delays, they will meet their long-term voluntary targets on carbon emissions and that scrubbers and other pollution devices have removed most criteria pollutants from their emissions.

Holly Bender, senior director of energy campaigns at the environmental group Sierra Club, said the delays don’t herald a resurgence in coal use. Nearly 360 US coal plants have closed or plan to close in recent years, compared with 170 plants that remain active, according to the organization.

Rather, Bender said, the delays are a “warning sign of a lack of planning for the kind of clean energy growth that is needed.”

President Joe Biden’s goals of reducing US carbon emissions by 50% by 2030 from 2005 levels and decarbonizing the energy sector by 2035 will likely hinge on more coal plant closures.

Biden’s emissions plan will get a boost if the US House of Representatives, as expected, follows the Senate in passing the Inflation Reduction Act, which analysts say will cut emissions by 40% to 2030 by giving market certainty over hundreds of billions of dollars in clean energy taxes. credits and incentives.

The US coal industry has been hit by a surge in cheap natural gas, falling renewable energy prices, and regulations that crack down on pollution that causes direct health problems and threats to the environment. carbon dioxide. Coal generated about 20% of US electricity last year, up from 50% in 2006.

But cutting emissions further will not be easy.

“It is imperative that we increase the accountability of utilities, regulators and planners to ensure … the transformation of our energy sector from coal,” Bender said.

NOT HELPING THE PROBLEM

It is difficult to estimate the health effects of emissions from coal plants on people in exact areas, since their tall smokestacks disperse pollution into the wind. Pollution from vehicles and industry also harms air quality.

Still, like many densely populated industrial areas in the US, parts of Sheboygan County have been out of compliance with the revised US ozone standards since 2018, while all of Milwaukee County it has been out of compliance ever since, according to the federal Environmental Protection Agency.

And coal plants, even if they’re in areas that meet federal standards, can contribute to health problems, said Tracey Hollaway, an air quality scientist at the University of Wisconsin, Madison.

“It’s still affecting people’s air downwind,” he said of the delays. “Keeping these facilities open is not helping the problem.”

It’s an open question if the delays are a harbinger of more to come. But coal market players see at least temporary opportunities.

Joe Craft, chief executive of Alliance Resource Partners (ARLP.O), the third-largest US coal producer, told analysts this month that plants remaining open “is going to bode well for us.”

Strength in the US and European coal markets should drive Alliance’s year-over-year margin growth between now and 2024, Craft said.

Ted O’Brien, managing partner and chief commercial officer of Oluma Resources, a Pittsburgh-based fuel marketer, said no one believes coal plants will stay open in perpetuity, but delays could at least extend the life of mines. .

“Perhaps this will give coal staying power to hold its corner in the broader US energy mix,” O’Brien said.

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Information from Timothy Gardner; edited by Richard Valdmanis and Marguerita Choy

Our standards: the Thomson Reuters Trust Principles.

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