How coal’s decline complicates an Appalachian utility’s transition to clean energy
As a utility in Appalachian coal country seeks to add more renewable energy, the long-term decline of the industry that once made the region prosperous is a complicating factor.
Appalachian Power (APCo), whose territory includes parts of Virginia, West Virginia and Tennessee, has had to close older coal-fired power plants due to federal clean air regulations, but still has enough capacity that regulators won’t allow it to make big investments in cleaner alternatives, either.
At the same time, the coal industry’s long-term downturn has suppressed energy demand in the region, which also has prevented the company from adding more capacity, including wind and solar energy. The coalfield communities in central Appalachia that comprise the largest part of APCo’s service area have suffered from large-scale loss of employment due both to the mechanization of the coal industry and to competition from natural gas as a power source.
With most of its territory having a slow-growth economy at best, APCo proposed no new generation projects in its 2018 integrated resource plan, filed in Virginia. Despite promises by President Trump and West Virginia Gov. Jim Justice to revive the coal industry, the subsidiary of American Electric Power has reiterated that it has no plans to build new coal-fired power plants.
For that matter, it’s not planning to build any gas-fired plants in the near future, either. It will buy power from a third-party solar facility under construction in central Virginia, but its bid to buy a pair of wind farms in Ohio and West Virginia was blocked by Virginia regulators—largely because they said the utility had no need for the additional capacity.
Appalachian Power’s IRP forecasts a “modest” capacity shortfall by 2030, so it proposes a few investments in solar, energy storage and energy efficiency.
‘We’ve got a long way to go’
Compared to Dominion Energy, Virginia’s largest electrical utility, however, Appalachian Power has become almost an afterthought for clean energy activists.
“Their customer base and their load really isn’t growing at all, unlike Dominion, which plays up robust growth even if it’s not showing up,” said Will Cleveland, a lawyer with the Southern Environmental Law Center. “Appalachian Power isn’t proposing to build a bunch of new fossil generation the way Dominion is. In that regard, they are far less problematic from a carbon emissions and climate-change perspective. Their climate emissions are only going down as they continue to retire outdated plants. Does that mean they’re the perfect utility? No. But by virtue of their business model, they behave differently.”
Ivy Main, renewable energy chair for the Virginia Chapter of the Sierra Club, said the company’s political profile leaves a lot to be desired.
“I think we’re seeing an improvement in tone from AEP, but I’m not seeing a difference in the culture of the company, particularly APCo,” Main said.
Main said she’s hopeful that the shifting energy market will result in Appalachian Power shifting more to renewables, but again, she’s skeptical.
“From one year to the next, we see dramatic changes as wind and solar become more competitive,” Main said. “I’d hesitate to expect a sea change from APCo until it really happens. Even with Dominion’s plans, even if they build more solar, we’re still talking about that providing only 10 percent of their electricity supply. We’ve got a long way to go, so we’ve got to be careful about getting too excited about incremental progress.”
According to the IRP, coal still provides a majority of Appalachian Power’s generating capacity, at 60 percent. By 2032, it still expects coal to provide 55 percent of its capacity. It expects solar generation to grow from nothing today to 13 percent in 2032, largely from construction of the 15 MW Coronal Depot solar facility in Campbell County, which is expected to begin operating in 2021.
Appalachian Power’s 2017 IRP had predicted a big jump in wind energy, from 5 percent in 2017 to 19 percent in 2031. That growth in wind has evaporated from the 2018 IRP, with expected capacity in 2032 only at 7 percent.
New capacity not needed
The reason for that dramatic shift in projections stems from an April decision by Virginia’s State Corporation Commission, an appointed board that regulates utilities and other businesses, to deny Appalachian Power the right to recoup costs from the purchase of the Beech Ridge IT and Hardin wind farms under construction in West Virginia and Ohio, respectively.