ORIGINAL REPORTING: PacifiCorp and other analyses point to more coal shutdowns as replacement demands rise
As PacifiCorp and other analyses point to more coal shutdowns, replacement questions rise; A recent PacifiCorp analysis points to a growing trend among utilities, and analysts are watching to see how modeling and reliability issues can best be addressed as retirements continue.
Herman K. Trabish, Dec. 13, 2018 (Utility Dive)
Editor’s note: Evidence continues to mount that buying new low-cost renewables and shuttering existing coal can save customers money.
The economics of coal took another hard hit in Oregon on Dec. 3. A report to the Oregon Public Utilities Commission (OPUC) from PacifiCorp confirmed that the bulk of its coal units cost more to run than to close and replace. The analysis joins a host of other analyses finding, among other things, that despite White House efforts to support coal, consumption is decreasing and the fuel is no longer a cost-effective option. But while closing coal plants early could save money, it would result in capacity shortfalls. Pacificorp sees addressing that challenge as a next step in the process and industry analysts have a number of ideas on how to do so, such as securitization.
PacifiCorp's analysis marks the first time the utility "has publicly revealed its data showing early coal plant retirements could bring hundreds of millions of dollars in net benefits to customers," Stanford University Precourt Energy Institute Research Scholar and Rocky Mountain Institute Principal Uday Varadarajan told Utility Dive. PacifiCorp's analysis not only provides critical economic justification for the growing transition away from coal, but also addresses legitimate questions of reliability costs and modeling that more utilities may be able to take example from as coal retirements continue. Over 133 GW of U.S. coal capacity has been shuttered or is scheduled to be shuttered since 2010. More retirement announcements expected in 2019 and 2020 will leave an estimated 150 GW of operating coal generation, according to the Sierra Club. Utilities like PacifiCorp are leading this transition and the key driver is economics… click here for more
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