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U.S. Utilities Skip Natural Gas ‘Bridge’, Shift Directly to Renewables as Coal Plants Close

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  • Aug 24, 2020


A growing number of United States utilities are skipping the natural gas “bridge” and shifting directly to renewable energy as they phase out their aging coal plants. And at least one European Union country is looking to shift its decades-old gas infrastructure in the same direction.

In late June, utilities in Arizona, Colorado, and Florida unveiled plans that represented a notable departure from the industry’s past practice, the Institute for Energy Economics and Financial Analysis reports.

Two of the three proposals, from Tucson Electric Power (TEP) in Arizona and Colorado Springs Utilities (CSU), are part of comprehensive resource plans that outline the two companies’ intentions to transition to lower-carbon generation resources,” writes analyst Dennis Warnsted. “Such plans have become increasingly common across the U.S. utility sector, but the TEP and CSU proposals are markedly different as they do not rely on the construction of new gas-fired generation to support the transition.”

In the third announcement, Florida Power & Light and JEA, the municipal utility in Jacksonville, said they would rely on existing gas and new solar to phase out an 840-megawatt coal unit at Plant Scherer, the biggest remaining coal-fired power plant in the U.S.

The Tucson Electric Power plan calls for 2,457 MW of new solar and wind generation, including 457 MW in the next year. And “what the company is decidedly not proposing is any new gas-fired generation,” Warnsted says. “Even with the future planned retirement of 1,073 MW of coal capacity and 225 MW of natural gas capacity, TEP’s Preferred Portfolio does not include the addition of any new fossil-fuel resources,” the utility said in a statement.

The Colorado Springs plan “follows a similar approach,” he adds, with a plan for 500 MW of new wind capacity, 150 MW of solar, and more than 400 MW of battery storage. “To enable the early retirement of the Drake plant, the utility acknowledged that it will install temporary natural gas generators at the site ‘to ensure system reliability’. But those units will be removed as new transmission projects are completed in the years ahead.”

The storyline in Florida is that a coal plant retirement already slated for January 2022 was sped up by shifting economics. “While the Scherer units have long been low-cost generating units, changes in the natural gas market now make Scherer the highest-cost dispatch unit in JEA’s fleet,” JEA Acting CEO Paul McElroy said in a presentation to his board.

In Europe, meanwhile, the Dutch research agency TNO is looking for pathways to repurpose the country’s declining North Sea gas infrastructure as the energy transition gains momentum. “With Dutch gas production crumbling to its lowest level in nearly 50 years, the Netherlands’ North Sea infrastructure is ripe for decommissioning,” Petroleum Economist reports. “But what if instead of pulling it apart, some of the platforms, pipelines, and empty reservoirs found a new life in the country’s quest to clean up its energy system? From storing carbon in depleted offshore fields to producing green hydrogen powered by offshore wind, the Netherlands wants to repurpose the North Sea to serve its energy transition.”

“The North Sea is going to be a pivotal area to reach the Paris climate goals,” said TNO energy transition consultant Ellen van der Veer.

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