Appalachian Natural Gas Power Plant Build-Out Update (April 2020)

Appalachian Natural Gas Power Plant Build-Out Update (April 2020)


As coal plants continue to close due to unprofitability, pollution and carbon emissions, and due to age, more gas plants are under construction and in planning in the Appalachian region. This region is the most profitable for gas plants due to proximity of the gas resource and the need for power due to high population. Nuclear plants are also closing due to unprofitability and age. Even with some state government bailouts the trend is likely to continue. Clean energy advocates might agree with bailouts for nuclear plants but not for coal plants.


The switch from coal to gas in power production is the main reason the U.S. is leading the world in greenhouse gas emissions reduction and another more local benefit is the continuous decline in all major air pollution emissions since the advent of high-volume hydraulic fracturing of horizontal shale gas wells in the region. (see graph for pollutant emissions in Ohio below). Sometimes newer and more efficient combined cycle gas plants replace older less efficient gas plants too. Natural gas in the region is plentiful and cheap. 


Detractors say that building gas plants now in the “energy transition” to lower carbon sources is a bad idea as they can become stranded assets if and when decarbonization is accelerated. However, newer combined cycle gas plants continue to get more efficient and emit less. In the future if carbon capture, utilization, and sequestration become more viable, then these newer built gas plants could perhaps be adapted for that. 


In this post I am focusing on four states: Ohio, Pennsylvania, West Virginia, and Kentucky. All four of these states are strong coal-producing states where coal-fired plants remain dominant in West Virginia and Kentucky but have been overtaken by gas plants in Ohio and Pennsylvania. West Virginia and Kentucky have been slower to switch from coal to gas.


Ohio


Ohio has gas five gas plants slated to come online in the next few years with a combined capacity of 6.135 gigawatts. Previous to that, since 2017, 4.02 gigawatts of gas power capacity have come online. Ohio went from 94% coal generation in 2007 to 58% coal generation in 2017. Below is a graph from the Energy In Depth article referenced below that shows how nearly all significant pollutants have dropped consistently as gas replaced coal on the grid.

Pennsylvania


In Pennsylvania the last unit at Three-Mile Island nuclear plant closed recently. Pennsylvania has 21 gas plants under construction with a generation capacity of about 6.4 gigiwatts. Planned retirements of 15 nuclear, coal, diesel, and landfill gas plants since 2018 total 4.391 gigawatts. Pennsylvania in late 2019 was 34% natural gas but by year-end 2022 is expected to be at nearly 45% gas, 24% coal, and 17% nuclear. Gas was at just 23% in 2009. Gas production in Pennsylvania increased nearly 30-fold since 2007 while U.S. gas production has nearly doubled since then.


West Virginia


In West Virginia there are just two gas-fired plants in the works, one in Harrison County and one in Monongalia County. Between 2007 and 2017 coal generation in WV dropped from 97% to 94% and gas went from less than 1% to about 2% in 2017. Apparently, several planned gas-fired projects in West Virginia have faced legal challenges funded by the coal industry, said Anne Blankenship, director of the West Virginia Oil and Natural Gas Association. Natural gas is cheap and available in much of Northern and Western West Virginia and offers cleaner air, less carbon emissions, and much greater efficiency. The state produces nearly 2TCF of natural gas annually. The Longview Power project in Monongalia County is also set to include the largest solar farm in West Virginia. There is currently a unit there burning coal. Its total capacity is set to be 2 gigawatts but the planned natural gas portion is at 1.2 gigawatts. The huge solar field has a generating capacity of just 50-70 megawatts (0.05-0.07 gigawatts). With the considerable natural gas resources in West Virginia it is quite odd and simply unacceptable that gas currently makes less electricity in the state than hydro and also less than wind! The Harrison County project is at 625 gigawatts. The Brooke County plant that may be starting construction soon adds 830 megawatts for a total of 2.625 gigawatts of gas capacity ahead for the state. Even with these additions, gas power will be far lower than it should be in the state. Clearly, West Virginia has more potential for natural gas plant buildout and due to the momentum of decarbonization and the life of gas plants it would be better to build them sooner rather than later. The monopolic power of coal and the coal lobby in the state is unfair to competition and should be challenged. Energy Solutions Consortium LLC has been trying without luck to push plans for building three gas-fired plants in the state. According to Jamison Conklin in article referenced below: “… the company cleared a major hurdle when the West Virginia Supreme Court upheld its siting permit for an 830 megawatt {0.830 gigawatt} facility in Brooke County, allowing construction to start this year. The coal-backed Ohio Valley Jobs Alliance had challenged it in court.” Below is the astounding grid energy mix in West Virginia that favors coal and disfavors gas.

Kentucky


While Kentucky has been slow to move away from coal, it is now accelerating that move a bit. Two of the largest coal-fired plants in the state are scheduled to shutter in 2020. Both are older inefficient plants. From 2008 to 2018, Kentucky coal went from 94% to 75% generation while natural gas went from just 1% to 18% generation. However, the existing 12 coal plants in Kentucky are fairly modern and some could be running for up to 30 years from now. As of a couple years ago there were only 4 power plants in Kentucky burning natural gas with a capacity of just less than 3 gigawatts. Clearly, there is much more potential to switch from coal to gas in the state. Sierra Club and Michael Bloomberg have targeted the state to retire coal plants but also to replace them with renewables rather than gas plants, which would require a truly massive amount of land under solar panels. Wind is not a great resource in the state. While there is some hydro potential of the “run-of-the-river” type, mainly on the Ohio River, due to long permitting times and low capacity factors it is mostly not viable as a replacement for coal power. 


Environmentalist Arguments Against Coal to Gas Switching


There has been some push back among environmentalists of the switching from coal to natural gas. This is unfortunate and perhaps has some to do with the wrongly perceived threats to groundwater and surface water via fracking and the over-predicted magnitudes of methane leakage, much of which is mitigatable even if true. As mentioned above the Sierra Club and Michael Bloomberg have been pushing their Beyond Coal campaign in such a way as to also push for no new gas plants. Quite obviously, switching from coal to gas in power generation is the quickest and cheapest means we currently have of making meaningful reductions of carbon emissions and pollution. Mark Szybist of the Natural Resources Defense Council has argued that the PJM Interconnection that runs power capacity markets in the region has unfairly advantaged natural gas over renewables. One reason is due to no carbon pricing. Another is that the capacity market is designed in such a way that allows gas to seasonally outbid renewables such as wind and solar. He also argues that it prices out some nuclear. He does not advocate subsidizing nuclear but acknowledges and shrugs at the already significant subsidization of wind and solar. He also acknowledges that due to fracking Pennsylvania’s carbon emissions have dropped by a whopping 30% in the past decade. Then he goes on to bash any nuclear subsidy plans as flawed (I think there is a plausible case for some nuclear subsidies). While it may be argued that the PJM capacity market should be more favorable to renewables (essentially subsidizing them twice) the clear economic situation in Pennsylvania is the continued potential of plentiful cheap local gas to replace coal generation, clean the air, reduce carbon, and keep electricity affordable. It would take years of renewables development to replace one mid-sized gas plant as current rates of deployment. He then goes on to state the debatable methane emissions arguments. It should also be noted that methane emission rates among the recent shale gas wells in Appalachia are among the lowest in the nation.


Conclusions


Ohio and Pennsylvania have taken the lead among the four Appalachian states covered here in switching from coal to gas in power generation. Kentucky is also coming around a little even though they have considerably less gas resources than the other 3 states. West Virginia has been the slowest state to make the switch and is the biggest tragedy here but also the biggest potential. Coal to gas switching means cheaper, more efficient, much cleaner, and less climate impacting energy. Projects in these 4 states will likely lead to 15 gigawatts of new natural gas capacity in the next few years but quite a bit more is possible and should be implemented sooner rather than later.


References:


More Than $15 Billion Being Invested on Natural Gas Power Plants in Ohio – by Nicole Jacobs, in Energy in Depth, March 12. 2020


Report: Gas-Fired Generation Will Rise in Pennsylvania as Coal, Nuclear Decline – by Darrell Proctor, in Power (powermag.com), Sept. 4, 2019


Electric Power Outlook for Pennsylvania 2018-2023 – by Pennsylvania Public Utility Commission, August 2019


Pennsylvania’s Gas Power Problem, Part I: The Build-Out – by Mark Szybist, in Natural Resources Defense Council, May 10, 2019


Pennsylvania’s Gas Power Problem Part II: Cost and Risk – by Mark Szybist, in Natural Resources Defense Council, May 10, 2019


Gas-Fired Power Projects on the Rise in West Virginia – by Charles Young, in WV News, Oct. 7. 2019


Another Gas-Fired Power Plant Moving Ahead in West Virginia – by Jamison Conklin, in Natural Gas Intelligence (NGI), Sept. 13, 2019


Kentucky Leads the Country in 2020 Coal Retirements, in wfpl.org


New Electric Generating Capacity in 2020 Will Come Primarily from Wind and Solar – by Energy Information Administration, Jan. 14, 2020


Kentucky – State Energy Profile Analysis – by Energy Information Administration, May 16, 2019


Longview Power Plant – entry in Wikipedia