Environmental groups are shifting to economics-based arguments to shut down coal-fired units, and raising portfolio diversity-based concerns about new natural gas-fired units being built.
Utilities for years have asserted that cleaner energy sources -- like wind farms and solar projects -- are too costly for them to consider, Stephen Smith, executive director of the Southern Alliance for Clean Energy, said in a Wednesday interview.
"But in the last five years or so, the market dynamics have changed dramatically" as wind and solar prices have tumbled and the cost of energy from coal has risen, in part because of stricter environmental rules and the resulting need for coal units to be retrofitted with more emission controls.
Now, he said, environmental groups are able to "use the utilities' own rhetoric" on power plant economics "to make the case that maintaining the status quo is not economic."
Coal-fired generation is increasingly "out of the money," Smith said, pointing to a new Institute for Energy Economics & Financial Analysis study that recommended Georgia Power retire its four-unit, 840-MW Plant Hammond coal station because the facility is no longer cost-effective to run.
IEEFA said energy production at Plant Hammond has "declined precipitously since 2007 ... . Although a baseload power plant, like Plant Hammond used to be, typically operates at an average 60% to 80% capacity factor each year, Plant Hammond's generation has declined so substantially that the plant has averaged only a 16% capacity factor since the beginning of 2012."
IEEFA said Plant Hammond's units are being used far less often because they are less economic to run than gas-fired plants, and that power the facility produced is far more costly than Georgia Power's average cost of purchased power. Also Georgia Power is adding nearly 1,000 MW of solar capacity by the end of 2016 that will always be dispatched first, as it has no fuel-related costs.
Georgia Power spokesman John O'Brien said the utility is "aware of the report," adding "we will continue to follow the established and official integrated resource planning process" for determining which of its plants will remain in operation and which will be retired, and when.
David Schlissel, IEEFA's director of planning analysis, said "it's not 'Obama's war on coal. It's really natural gas and renewables' war on coal," as the lower cost of gas-fired power and renewable energy is what is undermining coal's traditional role.
SACE's Smith said, in addition to arguing coal-fired power is too expensive, groups like his have concerns about the "life-cycle impact" of natural gas, such as methane leakage, as well as the possibility of utilities becoming, as he put it, "70, 80, 90% dependent on gas."
Smith said that utilities should be wary of overdependence on gas, and should diversify their generation portfolios by adding increasing amounts of solar and wind power and expanding their energy-efficiency efforts.
