Coal news and updates

In blow to coal, TVA to shut 8 units

Coal-Burning Generating Stations Located in Alabama, Kentucky


The Tennessee Valley Authority will retire eight coal-burning generating stations at three locations in Alabama and Kentucky, a decision that deals another blow to the coal industry, which is shrinking under more stringent environmental regulations and struggling to adjust to changing fuel prices.

The TVA's power-generation overhaul is intended to save the utility money and sharply reduce its coal use. Across the U.S., utilities are shuttering coal-fired power plants, but the trend is hitting the mining industry hardest in the Central Appalachian states of Tennessee, Kentucky, Virginia and West Virginia. Coal is costlier there than in other parts of the U.S., and it's becoming more labor-intensive to extract because mining companies are being forced to tap coal seams deeper in the earth.

Forty years ago, the TVA got more than 80% of its power from coal. Today coal accounts for 38%, a number that is dropping fast as a drilling boom in the U.S. pushes down the price of natural gas, the fuel that competes with coal for power generation.

When the TVA is done with its announced coal-plant retirements, only 33 of its 59 coal units will remain in service. Some of those are still under review, said TVA spokesman Duncan Mansfield.

The new plant retirements build on a 2011 agreement the TVA signed with the Environmental Protection Agency. At that time, the utility agreed to take 18 coal-burning units out of service by 2018 to reduce pollution.

On Thursday, the TVA said it would take down a unit at Alabama's Widows Creek plant and all five units at the Colbert Fossil Plant in Tuscumbia, Ala. Two of the three coal units at the TVA's Paradise Fossil Plant near Central City, Ky., will be retired. The company said that continuing to run the plants would risk noncompliance with new mercury rules coming into effect.

The TVA plans to build a new gas-fired power plant of an undisclosed size in Kentucky.

But its new goal is to get 40% of its electricity from its nuclear power plants. The utility is building a new reactor at its Watts Bar site in eastern Tennessee that is slated to go into service by the end of 2015. The other 60% of the TVA's power needs would come from coal, gas and renewable sources, in roughly equal amounts, to serve nine million people in seven Southeastern states.

In 2012, U.S. power generators bought more than 92% of the mined U.S. coal, but so many coal plants have been idled recently that power flows on the grid are changing.

Terry Boston, the chief executive of PJM Interconnection LLC, the big grid operator just north of the TVA, said his operators recently observed a new phenomenon: electricity flowing east to west over high-voltage transmission lines, crossing the Allegheny Mountains. Gas-fired plants along the Eastern Seaboard were furnishing electricity to inland areas that have traditionally been served by coal-fired plants.

In the 13-state PJM market region, which spans the Midwest to mid-Atlantic region, about 27% of coal-fired capacity is expected to be retired over the next few years. Much of that capacity will be replaced by power plants that will burn natural gas from the nearby Marcellus shale formation.

Source: Wall Street Journal