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    “U.S. utilities are skipping the gas bridge” [GasTransitions]


Utilities in three U.S. states have recently announced plans to close one or more of their coal plants and build new renewables—without adding any new gas-fired generation to serve as a “bridge”, according to a report from the Institute for Energy Economics and Financial Analysis (IEEFA), a think tank committed to the energy transition. [Gas Transitions Volume 1, Issue 6]

by: Karel Beckman

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Natural Gas & LNG News, Americas, Insights, Gas Transitions, Energy Transition, United States

“U.S. utilities are skipping the gas bridge” [GasTransitions]

Two of the three proposals, from Tucson Electric Power (TEP), in Arizona, and Colorado Springs Utilities (CSU), are part of comprehensive resource plans that outline the two companies’ intentions to transition to lower-carbon generation resources.

IEEFA notes that “such plans have become increasingly common across the U.S. utility sector, but the TEP and CSU proposals are markedly different as they do not rely on the construction of new gas-fired generation to support the transition.”

The third proposal, an agreement between JEA, the municipal utility serving Jacksonville, Fla., and Florida Power & Light, will rely on existing gas and new solar to enable the companies to retire the 860-megawatt (MW) Unit 4 at Plant Scherer, which is the largest coal-fired power plant in the U.S. with a combined operating capacity of 3,440 MW.

TEP’s integrated resource plan calls for the closure of all its coal-fired generation (over 1,000 MW) by 2031. To replace this capacity, TEP will add 2,457 MW of new wind and solar generation. It will also add 1,400MW of battery storage, but it will not build any new gas-fired generation.

“We’re accelerating our transition to cleaner energy resources through a cost-effective plan that supports reliable and affordable service from increasingly sustainable resources,” Tuscon Electric Power CEO David Hutchens said when the plan was released. “We’ll be reducing carbon emissions at a pace that places us at the forefront of global efforts to combat climate change.”

Early retirement

The plan put forward by Colorado Springs Utilities follows a similar approach, notes IEEFA. CSU will close the coal-fired 208 MW Martin Drake Power Plant no later than 2023 and the similarly sized Ray Nixon plant in 2030. As with TEP, Colorado Springs will replace the lost coal capacity with renewable energy resources.

Specifically, the utility’s plan calls for the construction of 500 MW of new wind generation, 150 MW of solar and more than 400 MW of battery storage capacity. To enable the early retirement of the Drake plant, the utility acknowledged that it will install temporary natural gas generators at the site “to ensure system reliability.” But those units will be removed as new transmission projects are completed in the years ahead.

FPL in Florida will continue to make use of its gas-fired capacity, but it did cancel a new combined-cycle plant that had been planned for completion in 2026, notes IEEFA. FPL is planning to build 7,300 MW of new solar capacity through 2029.

In addition to these three announcements, IEEF notes that a plan put forth recently by the New Mexico Public Regulation Commission also recommends a gas-free transition in New Mexico. The plan is meant to ensure the state’s utility, PNM, has sufficient capacity resources following its planned retirement of the remaining two units at the coal-fired San Juan Generating Station in 2022. PNM has put forward a plan that includes 280 MW of new gas-fired capacity. The issue now heads to the full commission for a decision.

Transition away

Meanwhile, the state of Massachusetts may become the third state in the U.S. to transition away from gas heating, IEEFA reports in other news. Massachusetts Attorney General Maura Healey has called for the Department of Public Utilities (DPU) to investigate the future of the state’s natural gas industry “to protect ratepayers and ensure a safe, reliable, and fair transition away from reliance on natural gas and other fossil fuels.”

Massachusetts has set a legally binding statewide limit of net-zero greenhouse gas emissions by 2050, which Healey said would require “sizeable reductions in its use of fossil fuels to achieve.”

Healey’s call for an investigation of the gas sector follows similar actions in New York and California, notes IEEFA. “In January, the California Public Utilities Commission opened a rulemaking proceeding to consider challenges relating to the state’s gas infrastructure safety and reliability while it pursues decarbonization. And in March, the New York Public Service Commission opened an investigation to consider issues related to gas utilities’ planning procedures.”