A newly proposed coal plant closure in Missouri is the latest demonstration that the Energy Secretary’s new power plan won’t save the US coal industry. The 200-megawatt, 1970s-vintage plant underwent a series of expensive upgrades since first constructed, when it had a monopoly on power production. However, new competition from wind power ultimately won out.
Like coal, the US wind industry is partly supported by federal subsidies of one kind or another. The big question now is whether or not wind will continue to reap those benefits.
Another coal power plant bites the dust
The coal plant in question is the Asbury power plant near Joplin, Missouri. It is operated by the Empire District Electric Company which was acquired just year by Canada’s Algonquin Power & Utilities.
Jordan Larimore of The Joplin Globe reports:
Empire says a dramatic flip in market forces has made it far more feasible economically to generate wind power as the cost continues to drop. The company estimates its costs for generating power with coal at Asbury are about $38 per megawatt-hour but would be close to $24 with wind, leading to a projected savings of more than $300 million over 20 years.
The company predicts that even factoring in the cost of upgrades to the soon-t0-be-shuttered coal plant, residential ratepayers will save an average of $10.00 monthly on their electricity bills due to the lower cost of wind power.
Interestingly, part of the savings will occur at the source end, as Empire expects to trim costs by constructing its own wind farms in the area rather than purchasing grid-supplied wind power from distant locations.
Contributing jobs to the local economy will also benefit the company’s profile, though the new wind jobs won’t necessarily go to the 55 employees displaced by the coal plant closure.
Coal Is Running Out Of Steam
Also of interest, the new wind power project demonstrates that coal has finally run out of technology — and money — to fix its pollution problems.
The plant converted to low-sulfur coal in the 1990’s at a cost of $30 million to reduce sulfur emissions. Barely 20 years later another $32 million went into cutting nitrogen oxide emissions.
Just seven years after that came the 2015 overhaul, which cost $112 million and hiked ratepayer bills by $8.00 per month.
That’s not the end of it. As reported by Lattimore, work on that upgrade had barely started when the company began laying plans for yet another round of improvements involving ash disposal.
Energy Secretary Rick Perry has proposed new protections for coal power plants, but the cascade of pollution issues for coal was coming to a head long before the ink dried on the Paris Agreement on climate change.
In addition, though President Trump’s pro-coal policies have isolated the US as the only nation on Earth not on board with the Paris Agreement, that position is most likely unsustainable.
Sooner rather than later, coal power plants will face renewed pressure to act on carbon emissions, with more costly upgrades in store.
Another Sign That Natural Gas Could Be Next
Empire had initially anticipated closing the plant around 2034, but now that the wind power alternative is available the date has been pushed up to 2019.
Considering that low-cost natural gas has been the main driver pushing coal out of the picture, the Asbury project should send up all kinds of red flags for natural gas stakeholders.
Wind isn’t the only renewable source beginning to close in on natural gas. Last year, for example, Enel Green Power won approval for a 150-megawatt distributed solar project in Minnesota after officials ruled that the solar plan was more economical than natural gas.
According to Lattimore, Empire is closing the coal plant rather than selling it, because “the company believes it would not attract buyers in today’s energy marketplace.”
The whole project is still in the proposal stage, but things are moving along at a rapid clip. Empire already has land for wind farms in three counties, and a decision by state regulators is expected by next summer.
To help move things along, Empire has loaded up its website with all the good news about wind energy, with an emphasis on the locally-sourced aspect (the new wind farms will be located withing a 150-mile radius of Joplin):
…Up to 500 megawatts of this may be developed in Southwest Missouri, keeping economic benefits here at home. The potential local sites for wind development are in rural areas of Barton, Jasper, Dade, and Lawrence counties. The first land lease option was signed in April 2017, and nearly 50,000 acres have been secured.
Local development will provide local property tax revenue, economic stimulus during construction, and attractive jobs for ongoing operation. Landowners also receive a new source of steady income while much of their land remains available for existing uses like farming and livestock production.
Wind Subsidies On The Chopping Block…Or Not
Republican members of Congress have not looked kindly on the wind industry, with the notable exception of Iowa Senator Chuck Grassley.
With heat rising over the proposed new federal budget, tax relief for the wind industry could be in jeopardy sooner than expected. A key tax credit for wind power is not set to expire until 2020, but the House budget passed by Republicans includes a measure that would chop the value of the credit practically in half, and make it more difficult to build new wind farms that qualify for the credit.
However, Bloomberg has been asking around, so it seems that the tax credit may slip through as-is:
…three GOP senators — each of them on the tax-writing committee — have now said they oppose changes to the wind tax credit. Republicans hold a 52-48 advantage in the upper house. Democrats are largely opposed to the tax overhaul bill, and so the bill writers need the support of nearly every Republican in the Senate in order for the measure to pass.
Negotiations are still under way, so stay tuned.
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Image (screenshot): via Empire District Electric Company.
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