Indianapolis Power & Light announces early retirement for 2 coal units, but NGOs eye bigger target

Dive Brief:

Indianapolis Power & Light’s 2019 integrated resource plan will propose the early retirement of 630 MW across two coal-fired units, the procurement of 200 MW of firm capacity and an increase in demand side management programs, the utility said Dec. 9.
The plan would continue IPL’s shift away from coal, which made up nearly 80% of the utility’s generation mix in 2007, but only 43% today. After the proposed retirements of the coal-fired units 1 and 2 at the Petersburg plant by 2021 and 2023, respectively, coal would provide less than 30% of IPL’s generation.
The Sierra Club, however, said that during the IRP process it will urge IPL to also retire two other, larger coal units at the Petersburg plant that would be kept open under the plan. Retiring those units would eliminate coal-fired power from the portfolio of plants owned by IPL.

Dive Insight:

Petersburg units 3 and 4 have an installed capacity of 547 MW and 531 MW respectively, and a useful economic life through 2042, compared to what IPL had previously determined was 2032 and 2034 for the two smaller units at the plant.

“While several systematic changes in wholesale power markets are impacting the viability of coal in [the Midcontinent Independent System Operator], Petersburg Units 3 and 4 provide firm, dispatchable capacity. Maintaining those units preserves optionality in the face of great uncertainty over the next five years,” including the outcome of the next federal election, IPL said in a summary of the IRP, which will be officially filed with Indiana regulators on Dec. 16.

But IPL plans to “monitor” if the market conditions around Petersburg 3 and 4 support their continued operation and may reevaluate them in its 2022 IRP.

The Sierra Club says that Petersburg is one of the worst-polluting plants in the country and wants IPL to retire all four units no later than 2028. The group points to a letter from 15 members of the Indianapolis City-County Council recently sent to IPL President Vincent Parisi. The council has passed a resolution calling for reduced carbon emissions, and the city of Indianapolis has a goal of 100% renewable energy by 2050.

“A good and necessary first step for IPL to take in order to support the City’s goals is to go coal-free by 2028 and announce the retirement of the Petersburg Super Polluter within that timeframe during their current planning process,” the letter said. “Furthermore, IPL should replace that coal power with renewable energy, energy efficiency and storage — not more fossil fuels.”

IPL is owned by AES Corp., a major battery storage developer, and the utility currently operates a 20-MW battery array at its Harding Street plant, a former coal plant that has been converted to run on natural gas. The IRP envisions storage filling 8% of IPL's resource mix by 2039. The utility’s current mix is 45% natural gas, 43% coal 8% wind and 4% solar. The IRP projects 47% gas, 28% coal, 11% wind and 15% solar by 2023.