We Energies to retire 1,190-MW Wisconsin coal plant
We Energies confirmed Wednesday that it plans to retire its 1,190-MW Pleasant Prairie coal-fired plant in Kenosha County in southeastern Wisconsin in the second quarter of 2018, but industry observers differ over the power price impact of the decision.
A unit of WEC Energy Group, We Energies met with workers at the Pleasant Prairie plant on Tuesday to discuss plans for the plant, which has been operating on a seasonal basis since January. The first of the two coal units went into operation in 1980, and the second in 1985.
“It doesn’t really surprise me,” said Michael Rutkowski, managing director of the Navigant consultancy’s energy practice, in an email Wednesday. “With continued low gas price expectations and the relatively high fixed [operations and maintenance] cost that comes with operating coal plants, there are other options available in the [Midcontinent Independent System Operator] market for meeting WEC’s energy and capacity needs.”
Rutkowski said the retirement of the Pleasant Prairie plant would likely only affect prices during the peak winter and summer periods, “and given the current capacity situation in MISO, I would expect price impacts to be minor.”
But Matthew Cordaro, a former MISO CEO who now resides in New York, said that “the elimination of a large block of coal capacity will ultimately result in an increase in electricity prices” because natural gas-fired generation and renewables would face less competition.
The Pleasant Prairie plant in 2016 had a capacity factor of about 58% and a heat rate of about 11 MMBtu/MWh, according to S&P Global Market Intelligence’s power plant database.
We Energies spokesman Barry McNulty said the retirement decision was “largely … driven by economics.”
Such factors included sustained low natural gas prices, the reduced cost of renewable power and “limited or no growth in electricity demand,” McNulty said.
SEEKING TO CUT CO2 EMISSIONS BY 40%
“Obviously, we have a desire to reduce our carbon footprint,” McNulty said. “We’re reshaping our generation fleet toward more clean production.”
We Energies has set a goal of cutting its carbon dioxide emissions by 40% from 2005 levels by 2030, McNulty said.
One step in that has been the decision to develop 350 MW of utility-scale solar by 2020, but We Energies has not yet picked sites or a partner for the project, McNulty said.
Navigant’s Rutkowski said increasing use of solar power “is consistent with WEC’s strategy.”
“The scale and speed is somewhat surprising, however,” Rutkowski said, adding that “350 MW of solar in a little over two years would put them in the ranks of one of the larger [investor-owned utility] solar portfolios.”