By releasing a proposed replacement for the Clean Power Plan, the Trump administration once again showed its determination to save struggling coal-fired power plants. But some of the nation’s largest operators of the plants don’t appear to be reaching for the rope.
Word of the release of the Trump administration’s Affordable Clean Energy rule proposal came on the first day of last week’s Electrification 2018 conference. The event, organized by the Electric Power Research Institute, brought together more than 1,800 electric power industry stakeholders to discuss economywide electrification in the United States and beyond.
The Obama administration’s Clean Power Plan empowered states to pursue emissions reductions and energy savings across the power grid, beyond the fence line of any individual power plant. The new Trump administration proposal directs the focus back to individual power plants by urging operators to make onsite efficiency upgrades. The proposal also delegates authority to states to determine if individual power plants are in compliance with clean air rules.
But because more efficient plants would be more economical to run, the rule could lead owners to run the upgraded coal plants more often, potentially increasing power sector emissions. According to the EPA’s own data, the proposal could lead to as many as 1,400 premature deaths annually by 2030.
Greentech Media reached out to utilities at EPRI’s electrification conference — particularly those with a sizable share of coal in their power generation mix — for comment on the Affordable Clean Energy proposal. In a sign of the political sensitivity of the topic, the utilities declined on-the-record interviews at the conference but did provide emailed statements from company spokespersons.
The utilities welcomed the EPA’s efforts to grant states additional regulatory control over power plants, but they also affirmed their commitment to deploy clean energy and meet emissions reduction targets.
Here is a roundup of the utility responses.
Southern Company
Southern Company owns 46,000 megawatts of generating capacity and serves 9 million customers across its range of subsidiaries. The utility delivers 30 percent of its electricity from coal and 46 percent from natural gas.
The utility said it has reduced carbon emissions by 36 percent, mostly by switching from coal to gas. It plans to transition "toward low- to no-carbon operations by 2050."
"Southern Company is reviewing EPA’s proposed emission guidelines for greenhouse gas emissions from existing electric utility generating units. Southern Company supports a constructive and durable rule to regulate greenhouse gas emissions that is consistent with the Clean Air Act," wrote a utility spokesperson.
American Electric Power
American Electric Power owns 26,000 megawatts of generating capacity and serves 5 million customers. Coal accounts for 47 percent of the utility's energy mix.
AEP said it will continue to pursue lower carbon dioxide emissions "through a variety of actions" that include renewables, efficiency, natural gas and demand response. The utility will continue to "review the rule," but offered a positive take on keeping coal plants running.
"The U.S. EPA’s proposed Affordable Clean Energy rule appropriately focuses on actions that can be taken at coal-fired power plants to improve efficiency and provides states with a key role in developing specific requirements for individual sources, both consistent with EPA’s authority under the Clean Air Act," wrote a utility spokesperson.
"AEP’s business strategy is focused on modernizing the power grid, expanding renewable energy resources and delivering cost-effective, reliable energy to our customers. That strategy will not change. AEP already has cut its CO2 emissions by more than 57 percent from 2000 emission levels, and we have established a clean energy strategy with a goal to achieve an 80 percent reduction in carbon dioxide levels from our fleet of power plants by 2050."
FirstEnergy
FirstEnergy owns 11,200 megawatts of generating capacity. Nearly 60 percent of that capacity comes from coal.
The utility has faced severe financial troubles. Earlier this year, FirstEnergy explicitly asked the Trump administration to save its coal fleet. Despite these challenges, the utility said it will "continue to reduce emissions going forward."
"In general, we support allowing states the ability to determine performance standards for the individual fossil-fueled plants within their borders. States have more intimate knowledge than the EPA of the particular characteristics of each plant and would be better able to design performance standards for each unit that control emissions while maintaining a diverse, reliable and affordable electric supply," wrote a FirstEnergy spokesperson.
"The Affordable Clean Energy rule does not change FirstEnergy's decision to exit competitive generation, which is based on challenges of operating in a competitive market. We are reviewing the proposed rule to fully understand any potential impact to our two regulated coal plants in West Virginia (Harrison and Fort Martin)."
Southern Company pledges low- to no-carbon future
Notable, too, are the messages the utilities wanted to impart at EPRI’s electrification conference. FirstEnergy’s exhibition booth was dedicated to high-efficiency electric equipment for commercial kitchens. (Sheets of freshly baked chocolate chip and red devil’s food cookies from a Cres Cor electric oven, at the booth, were the most popular giveaways in the exhibit hall.)
Southern Company sent one of its top executives to the conference to talk distributed clean energy resources such as microgrids and electric-vehicle charging infrastructure, not coal or gas.
“Our business strategy starts with the customer at the center of everything we do,” said Stan Connally, president and CEO of Southern Company subsidiary Gulf Power, during the conference’s closing plenary session. Connally filled in for Southern Company CEO Thomas Fanning, who had been scheduled for the speaking slot.
“That means we want to provide safe, clean, affordable energy to those customers — whether it’s an electricity customer or a gas customer,” he added. As of 2017, Southern Company’s power generation mix was composed of coal (30 percent), natural gas (46 percent), nuclear (16 percent), and renewables (8 percent).
“But going forward,” he went on, “we want to do that while transitioning to the low- to no-carbon future. We have come out and stated that Southern Company wants to be a low- to no-carbon future by 2050. We believe that’s also what our customers want from us.”
“Electrification works for our customers,” he said.
A smart neighborhood and microgrids
Connally also highlighted Southern Company subsidiary Alabama Power’s Smart Neighborhood project at Reynolds Landing, in suburban Birmingham, Alabama. The 62 homes in the neighborhood are 35 percent more efficient than a standard new home built in the state.
The homes are connected to what Southern Company claimed is the Southeast’s first community-scale microgrid. The microgrid, outfitted with a ground-mounted solar PV array, battery storage and backup natural-gas generator, can power the entire neighborhood in an outage, and interacts with the homes’ water heaters and HVAC systems. A similar project is planned by Southern Company subsidiary Georgia Power.
The development also supports a two-year R&D project undertaken in partnership with Southern Company; the homebuilder, Signature Homes; EPRI; Oak Ridge National Laboratory; and product vendors, including Rheem, Carrier and Vivint.
The goal, said Connally, is for researchers to learn more about microgrid integration and how to value the services provided by a microgrid.
He said natural gas is a part of Southern Company’s plan to achieve its long-term climate targets, but that the utility is also investing in R&D for dispatchable wind, solar and battery power combinations, as well as microgrids.
“That’s an area that we want to explore more within the Southern Company, the microgrid concept,” he said.
***
Join GTM at the upcoming Power & Renewables Summit! We'll cover how decarbonization, sector electrification and shifting regulatory developments will transform power markets over the next 10 to 20 years. We have already confirmed senior executives with FERC, Exelon, ERCOT, PJM, APS, Microsoft, Dell, CPS Energy, NRG, CohnReznick, Los Angeles Department of Water & Power and many more. Learn more here.