ValleyWatch

November 23, 2018 – by IEEFA – Editor’s note, Valley Watch has long been opposed to the use of carbon capture and sequestration (CCS) due to its deleterious economics.  

Study details lack of economic feasibility around North American initiatives; costly and/or failed efforts at Duke’s Edwardsport, NRG’s Petra Nova, SaskPower’s Boundary Dam, and Southern Co.’s Kemper plant; technology seen as unworkable and too expensive for fast-changing electricity-generation markets

A study published today by the Institute for Energy Economics and Financial Analysis concludes that costly efforts undertaken in North America to develop workable, economic technology to capture carbon from coal-fired generation have come up short

Further, the study concludes that technology developments in the renewable energy and natural gas sectors have obviated the need for continued efforts to retrofit carbon capture technology on the nation’s shrinking coal fleet.

The report— “Holy Grail of Carbon Capture Continues to Elude Coal Industry”—tracks the history and performance of four highly touted projects: Saskatchewan Power’s Boundary Dam Power Station in Canada, NRG’s Petra Nova project in Texas, Southern Co.’s Kemper plant in Mississippi, and Duke Energy’s Edwardsport plant in Indiana.

“What all four of these projects have in common is their dismal performance,” said David Schlissel, IEEFA’s director of resource planning development and lead author of the report. “While Petra Nova and Boundary Dam are both operational, neither in truth can be considered anything other than demonstration units, the integrated gasification combined cycle project at Edwardsport has performed abysmally, and the Kemper clean coal project was essentially abandoned.”

While the report focuses on North American initiatives, it speaks as well to long-standing U.S. coal industry plans to sell carbon-capture technology abroad.

“Our findings serve as a cautionary tale for any country considering broad adoption of CCS for coal,” Schlissel said. “The technology remains unproven at full commercial scale, it is wildly expensive, there are serious questions regarding after-capture transport, injection and storage of the captured CO2 and—most important—more reliable and far cheaper power-generation options exist.”

The report traces a legacy of costly experimentation that began over a decade ago under the direction of the U.S. Department of Energy, which began in the early 2000s to seek ways to capture coal-generated carbon emissions to address climate change. American electricity markets relied on coal for more than 50 percent of power generation nationally at the time, a figure that has dropped to less than 30 percent and is continuing to shrink as natural gas and renewables gain market share.

“Electricity produced by renewable energy, particularly wind and solar, amounted to little more than a rounding error in the Energy Information Administration’s 2003 edition of its Annual Energy Review,” the report notes. “Today they account for more than 10% of the nation’s electricity generation, and both continue to gain market share fast.”

Meanwhile, technology-driven advances in natural gas production have given the energy sector a huge lift: “Supplies have soared and costs have been cut to the point that gas is now the only viable option for developers looking to build new fossil-fuel generation. Further, the utility industry itself, long a source of support for coal in general and specifically for CCS development financing, is now moving quickly away from coal.”

The report describes further how market forces have undercut the economics of retrofitting carbon-capture technology on the aging American coal fleet.: “High-risk, high-cost CCS investments looked potentially viable a decade ago but are being eclipsed today by less-costly ways to produce electricity while curbing carbon emissions,” it states.

Full report: “Holy Grail of Carbon Capture Continues to Elude Coal Industry”

Media Contact:
Karl Cates kcates@ieefa.org 917 439 8225

October 26, 2018-By Robert Walton, in UtilityDive.

Henderson Municipal Utilities operates two units in this complex that also hosts the Louisville Gas and Electric Company ‘s Reid Station. File Photo © 2018 BlairPhotoEVV.

Dive Brief:

• Henderson Municipal Power and Light in Kentucky will close its coal plant early next year and turn to the open market for its power needs, as the aging plant’s energy production is consistently more expensive than available supplies.
• Henderson’s 300 MW coal plant, Station 2, is operated by Big River which sells the excess energy. However, power from the plant costs approximately 33 times more than alternative generation and it ran infrequently, local news station WFPL reported earlier this year.
• In a letter earlier this month, the Midcontinent ISO (MISO) approved the shutdown of Units 1 and 2 effective Feb. 1, 2019, after determining the generation was not necessary as a system support resource.
  

  Dive Insight:

  Coal-fired generators continue to close down, and Henderson’s power plant is only the most recent example. According to the Sierra Club, the plant is the 277th coal generator that has shut down or announced plans to do so since 2010. And new research finds closures are accelerating.

  The Institute for Energy Economics and Financial Analysis (IEEFA) on Thursday released an analysis estimating 15.4 GW of coal-fired capacity will close this year, including 44 units at 22 plants. This year at least 11 GW have retired and the final tally is predicted to eclipse the previous record of 14.7 GW retired in 2015. IEEFA estimates another 21.4GW of coal-fired capacity will close over the next six years.

  

  A literal “mountain” of coal ash sits along the Green river just south of the Big Rivers/Henderson Municipal coal plant near Sebree, KY. © 2010  BlairPhotoEVV

  “The competitive environment for coal-fired power in the generation marketplace is becoming ever more challenging,” Seth Feaster, IEEFA data analyst and author of the report, said in a statement. He pointed to the declining cost of renewables and natural gas prices that “are expected to remain low for the foreseeable future.”

  There have been exceptions. Just last week, FirstEnergy announced it would delay closing its 1,300 MW coal-fired Pleasants Power Station in West Virginia. The plant had been slated to close next year, but will instead continue operating into 2022. That decision, however, had less to do with coal’s long-term viability and more with the bankruptcy proceeding of FirstEnergy Solutions. 

  IEEFA estimates that in July the U.S. coal fleet stood at about 246 GW, but by the end of 2024 that capacity could be reduced 15%.

  “Cost is the biggest force in the decline of coal, as renewables and gas-fired generation are proving cheaper and more flexible,” the analysis said, also warning the electric generation industry is “well into a fundamental transition that is gaining momentum and will probably accelerate as technology disruptions occur.”

  As for the Henderson plant, MISO informed Big River three weeks ago that “the decision to retire is considered final and the existing interconnection rights for the generators will be terminated as of the retirement date.”

October 13, 2018 – By Barbra Streisand

October 8, 2018-Now You Know with Zac and Jesse 

On today’s episode of “In Depth” Zac & Jesse talk about the overwhelming support by the public for going 100% renewable, and the what your utility isn’t telling you. Please consider supporting us on Patreon. We have some pledge rewards you may be interested in, so go check that out. Now You Know! #nowyouknow #renewableenergy #tesla

August 13, 2018- by John Blair, valley watch.net editor 

Today, for perhaps the first time ever, the Indiana Office of Utility Consumer Counselor came out against a proposal by Vectren Corporation that if approved by the Indiana Utility Regulatory Commission would ultimately increase electric rates for southwest Indiana residential and commercial electric customers bills by nearly $1 billion.

While Valley Watch has fought for years for reduced usage of coal as an energy source, and was pleased when Vectren announced their intention to retire three coal units in the 2016 Integrated Resource Plan, we have had serious reservations about the sheer size and cost of their proposal build a giant natural gas facility at the AB Brown site in southeast Posey County at a cost to could cause significant economic harm to most of the residential and commercial customers.

Today’s announcement by the OUCC sill surely set in motion a clash between Vectren, Valley Watch Citizen’s Action Coalition and other intervenors as to the future of that plan. 

OUCC Counselor, Bill Fine said in their announcement, “Any electric utility that seeks to overhaul its generation fleet today must evaluate all possible options. It must also carefully examine the ways its options would impact its customers in terms of both money and electric reliability. In this case Vectren has not evaluated all options or shown that that it is proceeding on the most prudent manner.”

Source: Citizens Action Coalition

Earlier today, in a release sent out by the consumer watchdog, Citizens Action Coalition, Valley Watch president, John Blair asserted, “It is time for the IURC to finally step up, say no to Vectren, and deny this nearly one billion-dollar ratepayer rip-off. Vectren residential customers already pay the highest rates in Indiana. Ratepayers shouldn’t be forced to subsidize alleged Vectren growth in the industrial sector. Why should residential customers subsidize industrial customers at all?”

Valley Watch, whose purpose is to “protect the public health and environment of the lower Ohio River Valley, is committed to fair, just rates for clean, safe energy. Currently, southwest Indiana and western Kentucky  is home to nearly 15,000 megawatts off coal fired electric generating capacity that for decades has impacted the health of citizens of the region in very negative ways. All but around 4,000 of those megawatts are sent out of the region and that 4,000 serves to run the enormous electric needs of three of the USA’s remaining eight aluminum smelters.

Alcoa Warrick Operations is the largest aluminum smelter in the US. It emitted more than 4 million pounds of toxic chemicals into the SW Indiana environment in 2009. © 2011 John Blair

Air pollution, water pollution and land pollution from these giant facilities permeate our environment and will have negative impacts for the region for years after they cease operation.

May 31, 2018 – By Jennifer Dlouhy in Bloomberg News 

AEP’s Rockport power plant has become uneconomic to operate of late but since it uses coal, a plan by the Energy Department is designed to use a World War 2 era regulation to make sure that it keeps operating even if it requires higher rates for customers just so Trump can keep his campaign promise to revive the coal industry. Photo © 2003 BlairPhotoEVV.

Trump administration officials are making plans to order grid operators to buy electricity from struggling coal and nuclear plants in an effort to extend their life, a move that could represent an unprecedented intervention into U.S. energy markets.

The Energy Department would exercise emergency authority under a pair of federal laws to direct the operators to purchase electricity or electric generation capacity from at-risk facilities, according to a memo obtained by Bloomberg News. The agency also is making plans to establish a “Strategic Electric Generation Reserve” with the aim of promoting the national defense and maximizing domestic energy supplies.

[Read the memo here]

“Federal action is necessary to stop the further premature retirements of fuel-secure generation capacity,” says a 41-page draft memo circulated before a National Security Council meeting on the subject Friday.

The plan cuts to the heart of a debate over the reliability and resiliency of a rapidly evolving U.S. electricity grid. Nuclear and coal-fired power plants are struggling to compete against cheap natural gas and renewable electricity. As nuclear and coal plants are decommissioned, regulators have been grappling with how to ensure that the nation’s power system can withstand extreme weather events and cyber-attacks

Although the memo describes a planned Energy Department directive, there was no indication President Donald Trump had signed off on the action nor when any order might be issued. The document, dated May 29 and distributed Thursday, is marked as a “draft,” which is “not for further distribution,” and could be used by administration officials to justify the intervention.

While administration officials are still deciding on their final strategy — and may yet decide against aggressive action — the memo represents the Energy Department’s latest, most fully developed plan to intervene on behalf of coal and nuclear power plants, pitched to the president’s top security advisers.

Energy Department representatives did not respond to an emailed request for comment.

Always-On

Trump administration officials who advocate taking action say they want to preserve nuclear and coal-fired plants that have fuel on site and provide reliable, always-on power capable of snapping back after intense storms and emergencies.

“Too many of these fuel-secure plants have retired prematurely and many more have recently announced retirement,” only to be replaced by less-secure, less-resilient natural gas and renewable power sources, the memo said.

Over dozens of pages, the memo makes the case for action, arguing that the decommissioning of power plants must be managed for national security reasons and that federal intervention is necessary before the U.S. reaches a tipping point in the loss of essential, secure electric generation resources. U.S. Defense Department installations are 99 percent dependent on the commercial power grid, one reason that electric system reliability is vitally important to national defense and homeland security, the memo asserts.

For two years, the Energy Department would direct the purchase of power or electric generation capacity from a designated list of facilities “to forestall any future actions toward retirement, decommissioning or deactivation,” according to the memo. The proposed Energy Department directive also would tell some of those facilities to continue generating and delivering electric power according to their existing or recent contracts with utilities. Continue reading →

May 25, 2018 – by Jeffrey Tomich, E&E News. Editors note: Valley Watch, along with the Citizens Action Coalition, Save the Valley and the Hoosier Environmental Council, collaborating as the Indiana Clean Energy campaign worked tirelessly in the early years of this century to shut down the Clifty Creek facility that sits on the western edge of Madison, IN. We knew they were going to have to place controls for both Nitrogen Oxides and Sulfur Dioxide which would cost billions and it was our position then that this was money being wasted. But because  all the owners, Including Vectren and Duke had their hands in ratepayer pockets, both Democrat and Republican Administrations in Indiana allowed them to go forth. This story shows how our predictions were, once again, correct. 

When FirstEnergy Solutions Corp. sought bankruptcy protection this spring, included in the avalanche of legal filings was a motion to exit a partnership that runs a pair of 1950s-era coal plants on the Ohio River.

Clifty Creek power plant sits adjacent to Clifty Falls State Park, just outside Madison, IN. It serves no current useful purpose except to keep rates its owners charge higher than they need to be. File Photo © 2009 BlairPhotoEVV

The reason was clear: The 1,304-megawatt Clifty Creek plant in Indiana and the 1,086-MW Kyger Creek plant in Ohio are bleeding red ink and are a barrier to the financial turnaround of FES. Backing the plea was analysis from an expert, ICF International Inc. Managing Director Judah Rose, who forecast the company’s tiny stake in the venture would produce a $268 million loss over the life of an agreement to keep the plants running.A year earlier, Duke Energy Ohio submitted very different testimony concerning the same coal plants in another proceeding, this one before the Public Utilities Commission of Ohio.

In that case, Duke asked regulators to require the utility’s 700,000 electric customers in southwest Ohio to subsidize the plants on the basis that they provided a hedge against volatile, rising natural gas prices.

Backing up Duke’s request was testimony from an industry expert: ICF’s Judah Rose.

How can two companies tell a federal judge that the 60-year-old coal plants are a financial albatross and simultaneously argue to utility regulators that the plants are a good investment for consumers? And rely on the work of the same consultant? The answer depends on who’s paying the bill.

Unlike industries vulnerable to disruptors such as Amazon.com Inc. and Uber Technologies Inc., electric utilities — even those in deregulated markets like Ohio — continue to press lawmakers and regulators to shield them from competition. And they’re doing so by playing on fears that letting plants shut down will lead to a shortage that will result in a price shock — or, worse yet, the lights going out.

Ezra Hausman, an electric industry consultant who has analyzed the plants’ economics, has a simpler explanation.

“They made a bad bet and they don’t want to live with the consequences,” said Hausman, a former vice president at Synapse Energy Economics Inc., who prepared a report on the plants for the Sierra Club last year.

So far, two Ohio utilities, American Electric Power Co.’s Ohio utility and Dayton Power and Light Co., have gotten approval from Ohio regulators to subsidize the plants in the name of stabilizing consumer rates until at least 2024.

Those decisions are being appealed. The Office of the Ohio Consumers’ Counsel is challenging the AEP order at the Ohio Supreme Court, and environmental groups have asked PUCO to reopen the Dayton Power and Light case. The Duke request is still pending.

Other disputes involving the same troubled plants are playing out before the Ohio Legislature and state Supreme Court, the Federal Energy Regulatory Commission, and the U.S. bankruptcy court.

Meanwhile, the group of seven Midwest utilities and electric cooperatives say they are contractually bound to run the money-losing plants for another two decades, until 2040, when each will be 85 years old.

Patriotic origin

The two plants weren’t always controversial. In fact, they were built to support the federal government during the Cold War — a bit of history that utilities continue to play up a half-century later.

The plants are operated by a utility consortium known as OVEC, or the Ohio Valley Electric Corp. The group includes a handful of investor-owned utilities as well as two generating and transmission cooperatives.

The companies run the plants according to terms of an intercompany power agreement, under which each “sponsor” company shares in the plants’ output and costs according to their ownership interest. The largest owner is Columbus-based AEP, which has about 40 percent interest through three utilities.

OVEC was founded in the early 1950s to supply power to the Atomic Energy Commission’s uranium enrichment plant in Piketon, Ohio. For 50 years, they quietly served that purpose until the plant closed and the contract with the AEC’s successor agency, the Department of Energy, ended in 2003.

The end of the relationship included a $97.5 million “termination payment” by DOE to OVEC to cover uncollected post-retirement and plant closure costs. Continue reading →

May 23, 2018 – Peter Finch in the MGM movie Network, 1976

42 years after the movie Network ran in theaters across America, we are now living its reality. Just watch and see how prophetic this movie was.