Dive Brief:
- Eight coal plants in southern Illinois, Midcontinent ISO Zone 4, can be retired without impacting reliability while also saving customers up to $14 billion, according to a report released by the Natural Resources Defense Council (NRDC) and Sierra Club.
- The report, prepared by Vibrant Clean Energy, shows that all of Vistra Energy Corp.’s coal plants could retire by 2025, and replacing them with wind and solar power would lead to lower electricity costs.
- Dynegy and Vistra Energy Corp. completed their merger last month, and the combined entity now has more than 40,000 MW of installed capacity. Dynegy has been considering exiting Zone 4, where it competes against subsidized nuclear generation.
Dive Insight:
Dynegy said before it completed the merger with Vistra that nuclear subsidies passed by Illinois lawmakers in 2017 had made some of its Illinois coal plants unprofitable, and said it was considering closing down some capacity. Now with the merger complete, the consolidated company believes it needs assistance to keep the plants running — or run the risk of reliability issues in southern Illinois.
Vibrant's report points to Illinois Senate Bill 2250 (House Bill 4141), which it says "would effectively provide subsidies for the 8 Dynegy-Vistra coal plants in Central and Southern Illinois."
But the plants are not needed, the report maintains. All could retire by 2025, "and central and southern Illinois would still have enough electricity to keep the lights on," it concludes.
In addition, because the coal plants are "costlier and dirtier to run than almost any other energy resource, replacing the plants with wind and solar power would lead to lower electricity costs."
Relative to 2017 prices, switching off the plants could save customers between $12 billion and $14 billion between 2018 and 2030, the report concludes.
The eight plants have a combined capacity of 5.86 GW and include: Baldwin Energy Station, Coffeen Power Station, Duck Creek Station, E. D. Edwards Generation Plant, Havana Power Station, Hennepin Power Station, Joppa Steam Plant and Newton Power Station.
Coal, nuclear and even some older gas plants have been under pressure from more efficient combined-cycle facilities, and the merger of Dynergy and Vistra was an attempt to maximize economies of scale. Vistra Energy's combined presence stretches across 12 states and serves 2.7 million residential customers.
More than 60% of the new company's generation is natural gas-fired, and 84% is located in the major competitive markets of the Electric Reliability Council of Texas, PJM Interconnection and the New England ISO.
