Dive Brief:

• NRG Energy has decided not to pursue converting an upstate New York coal plant to burn natural gas, citing variables in the project and its timing, and the potential for up to $100 million in interconnection costs and fees.
• There are four units at the retired Dunkirk facility, and an earlier plan to convert them to gas was delayed by a lawsuit. That delay created the potential for steep interconnection costs and uncertainty over timing.
• While NRG says the possible costs made the project untenable, The Buffalo News reports community representatives feel the company misrepresented its intentions. 

Dive Insight:

The coal-to-gas conversion was proposed as New York is focused on adding large amounts of renewable energy and phasing out power plants with carbon emissions.

In April, the state announced its second large-scale renewables solicitation with bids expected to support the generation of 1.5 million MWh annually. New York has set a goal of reaching 50% renewable energy by 2030.

Meanwhile, the state's grid operator, New York ISO, has floated a carbon pricing proposal that would subject all suppliers inside the market to carbon charges. The state is targeting an 80% reduction in carbon dioxide emissions by 2050.

The Dunkirk community, in the far west region of upstate New York, was hoping the power plant conversion would be a boon to the economy. But with the project now scrapped, it will leave a void in the region's tax base, angering legislators, local media reports.

NRG "stuck a dagger in the heart of our community," state Sen. Catharine Young, R, said, according to the Buffalo News. "By making this decision at this juncture, it is apparent that NRG has been disingenuous about their intentions. They bailed out before they had all of the information."

Young argues that while interconnection costs could be as high as $100 million, that is a worst-case scenario. Supporters of the project also say the shutdown leaves the region more reliant on power imports, and susceptible to price spikes. But for NRG, the uncertainty surrounding the project was too much of an obstacle.

The company issued a statement saying it was disappointed to not move ahead with the project, particularly after investing millions of dollars over several years, "including voluntarily paying the full tax of $8+ million/year even when it was not required."

NRG blames Entergy, which filed the lawsuit leading to the 2015 repowering delay. Once the lawsuit was dropped, however, the delay meant Dunkirk's interconnection would be treated as a new project requiring upgrades that may not have been ready until 2024.