By Joe Smyth | email@example.com | @joesmyth
Coal can't compete with cheap renewable energy
After more than a decade of efforts to dramatically expand the Sunflower Electric Power Corporation’s coal-fired power plant in Holcomb, Kansas, Tri-State Generation and Transmission Association, the principal backer, now considers it unlikely that the project will move forward.
The Holcomb coal plant expansion project received a key air permit in March, following a Kansas Supreme Court decision. As the economic reality facing the coal industry continues to make it less and less likely that new capacity will be added, Holcomb seemed to be a potential outlier; last month it was called “perhaps the most likely prospect for a major new coal plant in the United States.”
But without the support of Tri-State, a Colorado-based utility, prospects for the 895-megawatt coal unit are increasingly dim.
In an August 14 filing with the Securities and Exchange Commission, Tri-State reported that it had “assessed the probability of us entering into construction for the Holcomb Expansion as remote.” As a result, the utility reported that it had written off more than $93 million it spent trying to build the coal unit.
Lee Boughey, Tri-State’s senior manager for communications and public affairs, acknowledged in an email that the utility had determined that some of the project’s costs were not recoverable, but said the Tri-State Board of Directors hadn’t made a final decision about the fate of the project.
The discussion that took place at a recent board meeting, however, indicates that at least one member of the board considers plans for the coal plant to be effectively over.
At an August 10 board meeting of Mountain Parks Electric, Carl Trick II, a Mountain Parks board member who also serves on the Tri-State board, gave an update on the Holcomb coal plant expansion project. (The Tri-State Board of Directors is composed of one representative from each of the 43 electric cooperatives in Colorado, Wyoming, Nebraska, and New Mexico that purchase electricity from Tri-State.)
According to Trick, “the board has voted to get out of Holcomb. So there’s the possibility that we could sell it, but I don’t know who would want to buy it. I don’t think there’s going to be any coal plants built.”
“Holcomb is over,” Trick added.
Tri-State and Sunflower Electric originally sought to expand the Holcomb coal plant in 2007, but the project had been blocked by legal challenges from the Sierra Club and Earthjustice. Since then, the economic case for building a new coal-fired power plant in the U.S. has essentially evaporated — even without accounting for the costs of carbon pollution and the health impacts that stem from burning coal.
While the Trump administration has sought to blame the decline of coal on federal clean air and water rules, vowing to revive the industry despite countless expert analyses to the contrary, utilities are increasingly choosing to invest in renewable energy instead of coal simply because it is cheaper.
Windy states like Kansas are particularly well situated to benefit from the declining costs of wind energy. A March report from Moody’s Investors Service found that in the 15 states with the best wind resources, new wind generation now costs significantly less than existing coal-fired power plants. Kansas is among those windy states, along with the four states where Tri-State sells electricity: Colorado, New Mexico, Wyoming, and Nebraska.
In addition to dramatic declines in renewable energy costs, energy efficiency improvements mean that electricity demand has not grown as utilities expected, and natural gas prices have remained low — all discouraging new investments in coal.
After the Kansas Supreme Court ruling approved its air permit, Sunflower Electric did not commit to building the Holcomb plant, instead stating that it would “continue to assess the project relative to other resources.”
In response to Tri-State’s assessment that it is now unlikely to build the plant, a spokesperson for Sunflower Electric maintained that non-committal approach, stating in an email that “Sunflower continues to keep the Holcomb Expansion Project as an option. As with every project, our Board will take into consideration current industry demand and dynamics and will only move forward with the project if it is in the best interest of our Members and those they serve.”
As far as Tri-State is concerned, spokesperson Lee Boughey explained that “much has changed over the past 10 years since the project was originally proposed. Tri-State has been able to meet the current and projected electric needs of its members by adding other generation resources, including renewable and natural gas resources.”
Boughey said that Tri-State has added nearly 470 megawatts of renewable energy resources since 2008, and plans to add another 75 megawatts of wind generation later this year.
“It appears Tri-State is finally realizing that new coal expenditures are a losing proposition,” said Zach Pierce, senior campaign representative for Sierra Club’s Beyond Coal Campaign.
“The costs of wind and solar have dropped so sharply that Tri-State customers will benefit from a planned transition away from all coal as the fuel becomes increasingly uncompetitive,” Pierce continued. “This is the right moment for the utility to listen to the growing demands of its member co-ops in Colorado to allow for more localized clean energy solutions that will lower costs and stimulate new job growth.”
Crossposted from ThinkProgress
Project Tundra coal carbon project faces delays, higher costs, and departing contractor
Lignite Energy Council shouldn’t be funded by utility ratepayers, Minnesota Attorney General argues
Major co-op supports Biden coal debt relief proposal that NRECA has sought to undermine
Basin Electric faces growing pressure on coal from co-ops, insurers, and banks
Tri-State: Moving a cooperative power provider from coal to clean energy
Tri-State will replace coal plants with a gigawatt of new wind and solar
United Power and La Plata Electric ask Colorado Public Utilities Commission to determine Tri-State exit fee
Colorado Rural Electric Association spent electric cooperatives’ money supporting Republican politicians
Colorado Public Utilities Commissioner questions "whether or not Tri-State has been candid with us"
Rural America could power a renewable economy - but first we need to solve coal debt
Tri-State explores FERC rate regulation to limit state oversight
Poudre Valley Electric sets "80 by 2030" carbon free goal
Guzman Energy proposal would finance retirement of Tri-State coal plants, add 1.2 gigawatts of new wind and solar power
Colorado Public Utilities Commission will oversee Tri-State resource planning
Colorado communities and state Energy Office urge Public Utilities Commission oversight of Tri-State
Reports examine the impacts of Tri-State's high wholesale power costs
Tri-State executive involved with anti-Clean Air Act group since 2005
US Congressional Committee requests details of Tri-State funding to anti-Clean Air Act group
Renewable energy projects stalled in 2018 among Tri-State member co-ops
Second co-op asks Tri-State to pull “Better Together” ads
Tri-State won’t allow co-op members to attend annual meeting
Tri-State expects member co-ops to support bylaw changes at annual meeting
Rocky Mountain Farmers Union calls on Tri-State to adopt flexible contracts and more clean energy
Co-ops in Colorado push for change at Tri-State
Will Municipal Energy Agency of Nebraska remain reliant on coal?
Tri-State ad campaign tells co-ops they’re “better together”
La Plata Electric concerned Tri-State debt will lead to higher rates
Colorado Public Utilities Commission asserts jurisdiction over Tri-State
More Colorado co-ops announce clean energy goals
Ski industry climate change efforts shift to electric utilities and their regulators
Public Utilities Commission rejects Tri-State motion to exclude Colorado Energy Office from exit charge case
Tri-State claims that co-ops "have intervened on Tri-State's behalf at the PUC” don’t add up
Colorado state legislators urge Public Utilities Commission to determine Tri-State exit charge
United Power says Tri-State policies are turning away large customers
Next PUC Commissioner John Gavan "consensus choice" of Governors Hickenlooper and Polis
Tri-State policy change discourages battery projects in rural Colorado and New Mexico
Colorado Public Utilities Commission orders Tri-State to "satisfy or answer" exit charge complaint from Delta Montrose Electric
United Power seeks solutions to "increasingly outmoded G&T business models"
Clean Energy Means Business Summit highlights renewable energy opportunities and challenges in rural Colorado
Governor-elect Jared Polis says moving Colorado toward more renewable energy will be a top priority
Electric cooperative officials discuss cheap renewable energy and an “eroding monopoly”
Delta Montrose Electric members vote for new financing options, supporting a potential buyout of Tri-State contract
Poudre Valley Electric requests Tri-State policy changes and fuel mix study
Holy Cross Energy plans to shift away from coal, aiming for 70% renewable energy
What do corporate renewable energy commitments mean for electric utilities?
Colorado Energy Plan approval will mean new renewable energy investments in rural Colorado
Report: Tri-State could save $600 million by shifting from coal to renewable energy
Delta Montrose Electric seeks new financing options to end contract with Tri-State
Wind energy jobs in rural Colorado attract bipartisan support
Colorado Energy Plan analysis shows switching from coal to renewable energy will boost jobs and local tax revenue
Poudre Valley Electric and Xcel Energy Colorado President win national awards from Smart Electric Power Alliance
Latest coal plant subsidy proposal could hit electricity bills in the West
Moody’s report: “High quality renewable resources” could help Tri-State and Basin Electric navigate rising carbon transition risks
Senator Heinrich highlights “frustrations in New Mexico” with Tri-State’s limits on local solar
Moody’s report shows Tri-State’s coal plants are more expensive than new renewable energy
Tri-State’s limits on local energy development are a growing problem for co-op members
Governor Hickenlooper discusses Tri-State at the Climate Leadership Conference
Bids for Xcel’s Colorado Energy Plan include a proposal for the world’s largest battery
New wind and solar power in Colorado is now cheaper than existing coal plants
Companies' 100% renewable energy goals are getting results in Colorado
What does cheap solar mean for electric cooperatives?
Colorado towns and cities are helping push utilities to embrace renewable energy
How are electric cooperatives navigating the transition from coal to cheap clean energy?
Blocked from building more solar projects, United Power shifts to community batteries
Economic reality sets in for Tri-State efforts to expand the Holcomb coal plant
Solar projects in the works in Grand and Jackson counties
Mountain Parks Electric grapples with solar