Dive Brief:
- Luminant announced plans Friday to shutter two more coal-fired plants by early 2018, citing low wholesale power prices, cheap natural gas and a glut of renewable energy as reasons.
- The utility will retire its Sandow Power Plan and Big Brown Power Plant in Central Texas, taking a combined nameplate capacity of roughly 2,300 MW offline.
- This is Luminant's second coal plant retirement announcement this month, as the resource struggles to compete in the Electric Reliability Council of Texas (ERCOT).
Dive Insight:
The Trump administration is repealing carbon regulations and demanding compensation in wholesale markets to support coal, but those efforts don't appear to be enough to save the embattled industry.
Luminant's retirement plans come as the U.S. Environmental Protection Agency head Scott Pruitt moved to rescind the Obama administration's Clean Power Plan, which sought to cut emissions from power plants. And Energy Secretary Rick Perry is pushing for compensation for baseload generation in wholesale markets through a Notice of Proposed Rulemaking.
ERCOT, however, is exempt from the NOPR, since FERC has no jurisdiction over the Texas power market. DOE has also narrowed the scope of the NOPR, which now only focuses on power plants within regions containing active "energy and capacity markets", such as PJM Interconnection, ISO-New York and ISO-New England.
California-ISO and the Southwest Power Pool do not have a capacity market, and the Midcontinent ISO has a voluntary capacity market, creating uncertainty over how the rule would be applied there.
Repealing the Clean Power Plan however, could have a bigger impact on Texas coal plants, according to a recent analysis from the Rhodium Group. While the power sector is largely on track to achieve the rule's carbon targets, even without the plan, some states may not reach the individual carbon targets, Texas among them. Even so, a recent report by the IEEFA Texas noted coal-fired generation is on the downswing in Texas, and unlikely to recover.
