SNL: 21 GW of coal, natural gas, nuclear capacity 'at risk' of closure through 2020

Dive Brief:

  • SNL Energy has identified 21,357 MW of coal, gas and nuclear generation "at risk" of early closure through 2020 by forecasting operating margins, examining the age of the plants and accounting for past auction results.
  • The energy news site calculated the average lifespan of a power plant, based on capacity-weighted average age, to 43 years: 51 for coal, 38 for gas and just 30 for nuclear.
  • SNL's "at risk" definition includes plants already slated for mothballing, including thousands of MW of coal and nuclear generation from last year. In just one day this April, 2,000 MW of coal capacity located in the Midwest was taken offline.

Dive Insight:

SNL analyzed power plants looking at several key criteria, labeling it at-risk if it was older than the average lifespan for its fuel type and posted negative operating margins between 2016 and 2020. While many at-risk plants are actually slated for closure, some which appear financially vulnerable may have alternate revenue streams or a financial hedge, SNL noted. 

Long-term closure estimates are a challenge, as power plants adjust to new regulations and cheap natural gas has pressured nuclear generation in some markets.

Entergy announced plans last year to close its 680 MW Pilgrim Nuclear Power Station in Plymouth, Mass. no later than June 1, 2019. The company has also shut down Vermont Yankee and plans to close its FitzPatrick plant in New York next year as well. 

Exelon is planning the early retirement of its Clinton and Quad Cities nuclear plants in Illinois.

In April, Indianapolis Power & Light retired four units at its Eagle Valley Generating Station, with Duke Energy Indiana, Consumers Energy and Holland Board of Public Works in Michigan also mothballing facilities on the same day. All total, the single-day retirements amounted to 2,000 MW of coal capacity located in the Midwest.

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Filed Under: Generation