From Scott Carlberg

Opinions and viewpoints. Everybody seems to have many of them.

Even a story that seems to be good news generates lots of opinions. A friend reminded me that, “In political science this is known as Miles’ Law:  Where you stand depends on where you sit.”

A coal plant closing announcement in the Mid-continent recently caught our eye. What specifically stood out to us is the way this story exemplifies how many different viewpoints can come from one energy story. It also says something about the most competent utilities of the future.

On the surface the story would likely be viewed as positive. The story is from Minnesota’s Great River Energy. Neat energy organization. The utility announced that it will take these steps:

  • Retire a 1,151-megawatt (MW) North Dakota coal plant in the second half of 2022
  • Add 1,100 MW of wind energy purchases by the end of 2023
  • Modify the 99-MW, coal and natural gas-based plant to be all natural gas
  • Install a 1-MW, long-duration battery demonstration system

The company’s top executive said, “We are taking advantage of cost-competitive renewables and reliable access to market energy while fostering innovation as the technology of our industry evolves.”

Shifting away from coal is a headline. Coal has taken its lumps as a high-carbon fuel. Coal has become more expensive as a fuel with added regulatory costs.

Minnesota has a good profile for wind power and the company plans to tap that resource. It will also engage in a special project for energy storage, which has long been noted as a hurdle to jump for most effective use of renewable energy.

I note the differing viewpoints about this story. Here are some we saw.

An engineering professor commented that the plant closure “is a very significant development.  Coal Creek is a mine-mouth lignite-fired power plant. You will not find many coal power plants with lower cost fuel than Coal Creek.  If its owners have concluded that they cannot justify continuing to operate it, that speaks volumes about the economic viability of coal power in the US.” (These from a social media feed.)

Another professor took a different view. “The plant will be replaced by 1,100 MW intermittent wind power physically located in Iowa. Taking into account wind capacity factor of 32%, this is equivalent to the generating capacity of 352 MW – one quarter of Coal Creek.” He also said that the plant to be closed had high efficiency. He sees the decision as questionable.

That is an example of viewpoints between engineering people.

Elected officials weighed in, too. North Dakota’s governor is unhappy with the plant closing and lost jobs. (The corporate actions will add new jobs elsewhere.) He notes that the plant is the state’s “most efficient and updated coal-fired plant.” That may be true.

Another policymaker suggests gathering stakeholders together to look at the plant closing, “…look at all available options moving forward.” Another notes the reliability of coal and says, “renewable sources like wind simply cannot compete with — to keep the power on.” (Source)

Some of this discussion revolves around the loss of jobs and taxes. Recognizing that, “Great River Energy plans to make voluntary annual payments of the local government share of the plant’s taxes for five years after the plant’s closure.”

A Minnesota-based clean energy trade group called the company’s plan “bold.”

Differing viewpoints, same news story. Miles Law. 

That’s why I wrote this blog. The energy industry is changing. It will continue to change. Viewpoints depend on technical training, who voted you in, perspectives on the economy, feelings about business, and the list goes on.

All that is under normal circumstances. Given the transformations in the energy industry, and the complicating factors of a pandemic and contracting economy, there’s another edge. The utilities that serve customers best will be the ones with a strong degree of competence, dexterity, and resources. Customers, regulators, and investors can keep eyes on that.

The overall energy future is toward lower carbon, less centralized power generation, corporate efficiency, new models of customer service, and technical improvements. That direction will move forward.

It can be a messy process. Discussing those changes will continue, and so will the debates about the technical, political, human, and economic dimensions of those changes.

  ***

I mention Great River Energy in this blog. That utility is not alone in this kind of activity. On May 12 S&P reported that Ameren Energy (St. Louis-based) said it is “transitioning to a cleaner generation profile” and will add 700 MW of wind generation while coal-fired generation goes down to 8% of its rate base by 2024.

On May 7 Duke Energy reported on its work on reducing its carbon footprint.

On May 1 Dominion Energy reported its progress on a reduced carbon future.