Dive Brief:
- AES Corp. has shuttered a small coal plant in Pennsylvania two years ahead of schedule, scrapping plans to convert the facility to burn natural gas after being unable to find a buyer for the power, the Pittsburgh Post-Gazette reports.
- The 125-MW facility lost its largest customer in 2013, when West Penn Power paid a $60 million fee to end a power purchase agreement three years early.
Dive Insight:
AES' decision to shutter the Beaver Valley coal plant early caught local officials by surprise, reports the Pittsburgh Post-Gazette. "It really came as a surprise to us when we saw the barriers go across the driveway," Rebecca Matsco, chair of the Potter County board of supervisors, told the newspaper.
AES had told PJM Interconnection it would shutter the plant in 2017, but after it was unable to find a customer for its power, the company was forced to write off more than $45 million in value at the plant. Despite briefly considering a switch to natural gas, the plant's owners opted instead to shut down operations.
AES cut a deal with Nova Chemicals to get out of its lease at the plant. Nova said it is considering demolishing the plant over the next several years. Built in 1942, the cogeneration plant also provided steam to Nova and BASF in the surrounding industrial buildings.
The Post-Gazette says the remaining equipment, including three boilers and two generators, is worth a little more than $1 million and has been transferred to Nova.
Closure of the plant is indicative of larger trends in the fuel mix. Gas is steadily increasing its share of the fuel mix, mostly at coal's expense, and natural gas-fired generation surpassed that of coal for the second time ever in July. The heyday of gas, however, could be short lived if energy storage technologies advance quickly, eliminating the need for fossil fuel peakers and leading to what some predict is "a future with no gas turbines."
