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Utilities Predict Major Decline In Ky. Coal Plants Regardless Of Climate Policy

Erica Peterson

Kentucky’s largest electric utility expects to be powered more than 80 percent by natural gas or renewable energy by the middle of this century — regardless of whether the country’s energy policies change.

Last month, PPL — the corporation that owns both Louisville Gas and Electric and Kentucky Utilities —released a climate assessment called for by shareholders. It looks at the Kentucky fleet under three possible scenarios:

  • under current policies;
  • if the Clean Power Plan or some similar carbon regulations are enacted; and
  • if future policies seek to limit carbon dioxide to keep the planet’s temperature increase to 2 degrees Celsius from pre-industrial levels by 2100.

Assuming a 55-year lifespan for coal-fired power plants, the analysis found approximately 10 percent of LG&E and KU’s fleet would be existing coal plants by 2050. That’s compared with nearly 80 percent today.
If the coal plants are run for 65 years, they account for a slightly larger amount of the fleet’s generation by 2050 — about 18 percent.

“Just by virtue of [economics], you’re going to have substantial reductions and when you look out to 2050, substantial retirements of our coal-fired units will have happened by then,” said PPL spokesperson Ryan Hill.

This report comes as the Trump Administration is weighing the future of the Obama Administration’s carbon dioxide regulations, — regulations which Trump’s team has argued will hurt the U.S. coal industry and power generation.

But at least in terms of LG&E and KU, the regulations will have virtually no effect on how much coal the utilities burn, at least in the long term.

By 2050, the bulk of the LG&E and KU fleet will be new natural gas facilities and renewable energy. There’s not even a category for “new coal” plants on this climate assessment — that’s because Hill said there’s no scenario where new coal plants will make economic sense.

“We have no current plans to build any new coal-fired power plants,” he said. “You’ve seen natural gas prices come down over the past five, six, seven years and that’s really spurred a transition in the generation mix across the country. And certainly we’ve seen that transition begin a bit at our LG&E and Kentucky Utilities companies as well.”

LG&E retired the coal-fired Cane Run plant in Louisville in 2015, and KU recently announced plans to retire two of the three coal units at the E.W. Brown plant near Danville. All of the company’s decisions are bound by the Kentucky Public Service Commission’s requirement that any electricity generation is the “least-cost reasonable” option.

So, what does this mean for Kentucky, where the coal industry has imploded over the past decade?

For one, it means significant future reductions of carbon dioxide, coal ash and other toxic byproducts of burning coal for electricity.

And it also means the commonwealth will lose major consumers of Kentucky coal. About 35 million tons of coal went from Eastern and Western Kentucky coal mines to power plants in the U.S last year,according to the annual Kentucky Coal Facts. More than half of that coal was consumed by Kentucky coal plants — and half of that went to power plants operated by either LG&E or KU.

Looking at it in a different way, Kentucky mines produced about 43 million tons of coal last year. LG&E and KU power plants bought and burned about 21 percent of that coal.

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