Beyond coal: What’s next for America’s coal-firing plants?

December 4, 2014 Bill Shelley

As alternative energy sources grow, what will happen to coal-based power plants? The site can have value after shut down 

 

Utilities are experiencing significant changes in all parts of their business model, from increasingly stringent environmental regulations to reduced electrical demand due to our more energy-efficient culture. To continue operating as a viable business, most utilities are considering the few options for what to with their aging coal-fired power plants: convert them to gas-firing plants or close them down altogether.

Converting to a gas-fired boiler could not only increase availability, supply, and moderation in pricing, but also help reduce MATS (Mercury and Air Toxics Standards) and carbon dioxide emissions, two significantly regulated emissions. Converting allows utilities to reuse existing plant equipment, which minimizes capital expenses and permit requirements, and to potentially leave coal feeders in place to allow changing back to coal if economic conditions warrant. The costs of conversion can be economical for a number of power plants, depending on the availability of gas and the amount of work required to modify the boiler.

Decommissioning a plant and shutting it down poses a major challenge for the owner: what do you do with the plant, land, and equipment? Leave the buildings empty? Sell equipment for scrap? Raze the whole thing and develop a reuse plan? Most utilities have not planned for this process and do not have the financial resources available to undertake such an effort. 

 

We’ve helped several power plants consider the decommissioning/shut down process. In those assessments, we found that plant sites can, indeed, have value for the utility or new owner beyond scrap, from the potential for reusing equipment to tap into alternate source of electricity supply, to repurposing site infrastructure like water systems or rail lines, to redeveloping land typically near metropolitan areas.  

By looking at sites as resources instead of liabilities, utilities can develop plans that reuse the site characteristics in new ways. With the right mix of power engineering, brownfield remediation, and land planning expertise to guide them, plant owners can recoup value for the utility and the surrounding community. 

About the Author

Bill Shelley

Bill Shelley is a senior vice president and business leader for power. With over 30 years of power sector business experience, Bill has been involved in every major segment of the power market.

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