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News
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LCG, August 14, 2024 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2025, highlighting the region's rapid transition toward increased reliance on renewable energy resources and battery storage.
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LCG, August 14, 2024 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2025, highlighting the region's rapid transition toward increased reliance on renewable energy resources and battery storage.
Read more
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Industry News
AEP Announces Plans to Comply with Proposed EPA Regulations
LCG, June 10, 2011--American Electric Power (AEP) yesterday announced its plan to comply regulations proposed by the U.S. Environmental Protection Agency (EPA) that target coal-fueled power plants. AEP's compliance plan would significantly impact nearly three quarters of its coal fleet.
AEP currently owns nearly 25,000 MW of coal-fueled generation, which accounts for approximately 65 percent of its total generating capacity. AEP's compliance plan includes: retiring nearly 6,000 MW of coal-fired units; upgrading or installing emissions controls on another 10,100 MW; converting 1,070 MW of coal-fired generation from coal to 932 MW of natural gas capacity; plus constructing 1,220 MW of natural gas-fired generation.
AEP chairman and chief executive officer, Michael Morris, stated, "We support regulations that achieve long-term environmental benefits while protecting customers, the economy and the reliability of the electric grid, but the cumulative impacts of the EPA's current regulatory path have been vastly underestimated, particularly in Midwest states dependent on coal to fuel their economies. We have worked for months to develop a compliance plan that will mitigate the impact of these rules for our customers and preserve jobs, but because of the unrealistic compliance timelines in the EPA proposals, we will have to prematurely shut down nearly 25 percent of our current coal-fueled generating capacity, cut hundreds of good power plant jobs, and invest billions of dollars in capital to retire, retrofit and replace coal-fueled power plants. The sudden increase in electricity rates and impacts on state economies will be significant at a time when people and states are still struggling."
The estimated cost of AEP's compliance plan ranges from $6 billion to $8 billion in capital investment through 2019. Many other electric utilities that depend heavily on a fleet of coal-fired units are in a similar dilemma. AEP's costs could be higher, as utilities across the country race to meet the EPA's schedule and drive the demand for labor and materials up to new levels.
AEP stated that it has already invested over $7.2 billion since 1990 to reduce emissions from its coal fleet. Furthermore, AEP claims that, since 1990, its annual emissions of nitrogen oxides sulfur dioxide emissions are 80 percent and 73, respectively.
AEP's announced compliance plan, on a unit by unit basis, is outlined as follows. First, AEP would permanently retiring the following coal-fueled power plants:
- Glen Lyn Plant, Glen Lyn, Va. - 335 MW (retired by Dec. 31, 2014);
- Kammer Plant, Moundsville, W.Va. - 630 MW (retired by Dec. 31, 2014);
- Kanawha River Plant, Glasgow, W.Va. - 400 MW (retired by Dec. 31, 2014);
- Phillip Sporn Plant, New Haven, W.Va. - 1,050 MW (450 MW expected to retire in 2011, 600 MW retired by Dec. 31, 2014); and
- Picway Plant, Lockbourne, Ohio - 100 MW (retired by Dec. 31, 2014).
Second, AEP would retire generating units at the following locations but continue operating some generation, some of which being repowered with natural gas, at the sites:
- Big Sandy Plant, Louisa, Ky. - Units 1 and 2 (1,078 MW) retired by Dec. 31, 2014;
- Big Sandy Unit 1 would be rebuilt as a 640-MW natural gas plant by Dec. 31, 2015;
- Clinch River Plant, Cleveland, Va. - Unit 3 (235 MW) retired by Dec. 31, 2014; Units 1 and 2 (470 MW total) would be refueled with natural gas with a capacity of 422 MW by Dec. 31, 2014;
- Conesville Plant, Conesville, Ohio - Unit 3 (165 MW) retired by Dec. 31, 2012; Units 5 and 6 (800 MW total) would continue operating with retrofits;
- Muskingum River Plant, Beverly, Ohio - Units 1-4 (840 MW) retired by Dec. 31, 2014; Muskingum River Unit 5 (600 MW) may be refueled with natural gas with a capacity of 510 MW by Dec. 31, 2014, depending on regulatory treatment in Ohio;
- Tanners Creek Plant, Lawrenceburg, Ind. - Units 1, 2 and 3 (495 MW) retired by Dec. 31, 2014; Unit 4 (500 MW) would continue to operate with retrofits; and
- Welsh Plant, Pittsburg, Texas - Unit 2 (528 MW) retired by Dec. 31, 2014; Units 1 and 3 (1,056 MW) would continue to operate with retrofits.
Third, the two coal-fueled generating units at Northeastern Plant (935 MW) in Oolagah, Okla., would be idled for a year or more while emission reduction equipment is installed. Both units would be idled beginning Jan. 1, 2016. One unit would return to service by Dec. 31, 2016. The other unit would return to service by Dec. 31, 2017.
Fourth, AEP will complete construction of the Dresden Plant (580 MW natural gas) in Dresden, Ohio, in 2012.
Fifth, AEP would install or upgrade emissions controls at seven other coal-fueled power plants in Arkansas, Indiana, Louisiana, Ohio and Texas.
AEP's plan could change significantly, depending upon the EPA's final regulations and related regulatory approvals from state commissions.
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