Southeastern Coal Plants Retire and Convert | Other Shorts

AV's Intern Team | February 13, 2013

The growing share of electricity generated by natural gas and recent announcements of coal plant retirements are rapidly changing the energy sector across the southeast. On Jan. 7, Georgia Power announced its plans to retire 15 coal- and oil-fired units at four plants across the state.

The same week as Georgia Power’s announcement, Duke Energy touted three facilities that came online at the end of 2012. The new units include natural gas-fired generation at the Dan River Power Station and the H.F. Lee Plant, both in North Carolina.

Duke Energy has also received approval from the N.C. Utilities Commission to convert the Sutton Steam Station in Wilmington, N.C., to natural gas and said it plans to retire the Riverbend and Buck plants this April, two years ahead of schedule.

Senate Investigation to Scrutinize Coal Export Royalties

As U.S. coal exports hit a record high and the industry attempts to expand ports in the Pacific Northwest, the winners of the Powder River Basin bonanza, including Arch Coal, Peabody Energy and Cloud Peak Energy, are coming under fire.

On Jan. 4, members of the Senate Energy and Natural Resources Committee directed the U.S. Department of the Interior to investigate whether coal companies are avoiding paying royalties by underpricing coal mined on federal and tribal lands. Federal officials are auditing export sales from the past few years to determine whether coal companies fairly priced and paid royalties on coal shipped overseas.

Near Future Could be Bright for Coal

According to a new report from the U.S. Energy Information Administration, the percent of electricity generated by burning coal will get a bump this year as natural gas prices increase. The agency predicts that coal will provide around 40 percent of total generation this year.

If natural gas remains cheap, however, coal’s share could be lower than predicted. Over the long-term, Appalachian coal production will continue to decline and coal-plant retirements will far outpace generation coming online.