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Economics are driving Northern Indiana Public Service to do what the Clean Power Plan could not -- shutter one of the dirtiest coal generating stations in America.

Clean Power

Indiana Utility Says Replacing Coal With Renewables Will Save Customers $4 Billion

Economics are driving Northern Indiana Public Service to do what the Clean Power Plan could not — shutter one of the dirtiest coal generating stations in America.

Coal is king in Indiana when it comes to making electricity, but not for much longer. On October 31, Northern Indiana Public Service Co. filed its latest Integrated Resource Plan — the company’s road map to the future. After considering more than 30 different proposals, NIPSCO found a mix of solar, wind, energy storage, and demand management — along with a small amount of purchases from Midcontinent ISO — to be the most cost effective way to supply its customers with electricity in coming years.

Schahfer coal fired generating station will be replaced by renewables

In fact, the analysis that went into creating the IRP shows the plan will save NIPSCO customers more than $4 billion over the next 30 years. The plan will see the role of coal decrease from 65% today to 15% in 2023 before reaching zero in 2028. The company owns and operates the 1900 MW Schahfer coal generating station located in Wheatfield, Indiana. Schahfer is one of the dirtiest facilities in the US, spewing out more than 8 million tons of carbon dioxide a year. Its newest units were built in the 1980s.

To replace its Schahfer and Michigan City coal fired generating plants, NIPSCO plans to use a mixture of 1,500 MW of solar and storage, 150 MW of wind, 125 MW of efficiency and demand-side management, and 50 MW of market purchases by 2028, according to Utility Dive.

The Indiana Coal Council begged the utility to take another look at its figures before making a decision. But even taking the best case scenario suggest by the Council, which included higher natural gas prices than exist today, the numbers still added up to a win for renewables. “Across all scenarios, converting both Unit 17 and 18 [of Schahfer] would cost NIPSCO customers between $540 [million] to $1.04 [billion] more than retirement and replacement with economically optimized resource selections from the RFP results,” the utility reported.

The score? Renewables 1, coal 0. That is remarkable in a state that ranks 7th in the US in coal production and 3rd in coal consumption. The transition will come with some costs, however. Connecting all those new renewable resources to the grid will require some expenditures to build new infrastructure. The IRP calls for a temporary increase of $11 in the monthly utility bills of NIPSCO customers, reports the Indianapolis Star.

Mark Maasel, president of the Indiana Energy Association, says “There is no question that there are efforts out there to sustain the coal industry, but the reality is that economics are driving the decisions that these utilities are making.” Economics are also doing what the Obama Clean Power Plan wanted to do (the Schahfer plant was one of the primary targets of the CPP) but couldn’t. They will also overwhelm the political fight in places like Arizona where voters last Tuesday rejected a plan that would require the state’s utilities to get 50% of their energy from renewable sources by 2030.

Economics will do what politicians cannot. There is no engine on Earth that can restrain the imperative of lower prices for long.

 
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