US coal plants delay shutdowns as barrier to clean energy transition

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

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

One of the main culprits: the deployment of renewable energy, which was to replace these coal-fired plants, has taken a hit in recent months due to supply chain problems related to COVID-19. Utilities say import tariffs on solar panels imposed by the U.S. Department of Commerce are making it difficult to keep up with strong demand for electricity.

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

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

Indiana’s NiSource Inc (NI.N) blamed solar project delays of up to 18 months for delaying the shutdown of Schahfer’s 877 MW coal plant by two years until 2025.

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

And in New Mexico, PNM Resources Inc (PNM.N) delayed the shutdown of a unit at the San Juan plant by three months until September as drought threatened hydropower supplies and rising heat. electricity 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 of the companies said that despite delays and potential delays, they would meet their voluntary long-term carbon emissions targets and that scrubbers and other pollution devices have eliminated most pollution criteria from their emissions.

Holly Bender, senior director of energy campaigns at environmental group Sierra Club, said the delays do not portend a resurgence in coal use. Nearly 360 U.S. coal-fired power plants have closed or plan to close in recent years, compared to about 170 plants that remain active, according to the organization.

Rather, Bender said, the delays serve as a “warning sign of failure to plan for the kind of clean energy growth that is needed.”

President Joe Biden’s goals to cut U.S. carbon emissions by 50% by 2030 from 2005 levels and decarbonize the electricity sector by 2035 will likely depend on even more plant shutdowns in the coal.

Biden’s emissions plan will be improved if the U.S. House, as expected, follows the Senate to pass the Cut Inflation Act, which analysts say will cut emissions by about 40% by by 2030 by providing market certainty on hundreds of billions of dollars in clean energy tax credits and incentives.

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

But further reducing emissions will not be easy.

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

DOES NOT HELP THE PROBLEM

It is difficult to estimate the health effects of coal-fired power plant emissions on people in specific areas because their tall chimneys disperse pollution into the wind. Pollution from vehicles and industry also affects air quality.

Yet, like many densely populated U.S. industrial areas, parts of Sheboygan County have been out of compliance with revised U.S. ozone standards since 2018, while all of Milwaukee County has been non-compliant since then, according to the federal agency. environmental protection.

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 still affects people’s air far downwind,” she said of the delays. “Keeping these facilities open does not help the problem.”

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

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

Strong coal markets in the United States and Europe are expected to drive Alliance’s year-over-year margin growth through 2024, Craft said.

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

“Maybe it helps coal keep its place in the broader US energy mix,” O’Brien said.

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Reporting by Timothy Gardner; edited by Richard Valdmanis and Marguerita Choy

Our standards: The Thomson Reuters Trust Principles.

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