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Released October 26, 2022 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Southwestern Electric Power Company (SWEPCO) (Shreveport, Louisiana), a unit of American Electric Power (NASDAQ:AEP) (AEP) (Columbus, Ohio), has spent more than $1 billion in recent years to decarbonize its electric generation mix. To accelerate its decarbonization journey, last month it released request for proposals (RFPs) for up to 2,400 megawatts (MW) of new renewable generation.
The RFP, issued September 29, calls for up to 1,900 MW of new wind resources and up to 500 MW of new solar generation. Wind resources must be a minimum of 100 MW and solar resources must be a minimum of 50 MW. All projects must interconnect to the Southwest Power Pool (SPP) and need to be located in either Arkansas, Louisiana, Texas, Oklahoma, Kansas or Missouri.
Although a SWEPCO spokesperson declined to provide an estimated cost for the 2,400 MW of renewables it is seeking, based on market prices the amount is expected to exceed $2 billion.
Bids are due November 17. The utility, which provides electricity to about 548,000 customers in Louisiana, Texas and Arkansas, wants the new resources to be operational by either December 1, 2025, or December 1, 2026. The utility plans to purchase the renewable energy projects it selects.
The current RFP follows an active few years in which SWEPCO spent about $1 billion to acquire approximately 809 MW of wind power in the three separate wind projects that comprise the North Central Energy Facilities (NCEF) in Oklahoma. A SWEPCO sibling utility, Public Service Company of Oklahoma (PSO) (Tulsa, Oklahoma) purchased the other 675 MW of the NCEF project, which was developed by Invenergy LLC (Chicago, Illinois).
The NCEF includes the 999-MW Traverse project, which came online in March 2022; the 288-MW Maverick project, which achieved commercial operations in September 2021; and the 199-MW Sundance project, which began operating in April 2021.
This past March, when the Traverse windfarm came online, Malcolm Smoak, SWEPCO president and chief operating officer, said, "We are excited to have the final piece of the North Central Energy Facilities project in place to bring even more clean and affordable energy to customers in Arkansas and Louisiana. This wind energy helps customers meet their own renewable energy and sustainability goals and makes the communities we serve in Louisiana and Arkansas more competitive for economic development."
"Over the next 20 years, SWEPCO's diverse energy resource mix will include significantly more wind and solar," Smoak said in a March 22, 2022, statement. "This transition puts us further along the path to achieve AEP's goal of net zero carbon dioxide emissions by 2050."
SWEPCO plans to take all of the electricity generated by the Rocking R solar project, which is scheduled to begin operating by the end of 2024. That 72.5-MW project is slated to be built in Caddo County, Louisiana. It has a total investment value (TIV) of about $68 million. The project is being developed by D.E. Shaw Renewable Investments LLC (New York, NY). Construction is scheduled to begin in early 2024.
Earlier this year, SWEPCO began the process to obtain regulatory approval for three other renewable energy projects:
In its 2018 integrated resource plan (IRP), SWEPCO projected that about 43% of its generating capacity would burn coal in 2019. Natural gas generation capacity was scheduled to be about 40% of its capacity that year. But in terms of actual electricity generation, the utility told regulators it planned to rely on coal for about 83% of the electricity it actually generated in 2019.
By 2038, the utility told regulators in 2018, coal-fired generation capacity would decline to about 25% while gas would decline to about 27% of capacity. Wind generation capacity would rise to approximately 24% of generation capacity, up sharply from 8% in 2019. But in terms of actual electricity generated, about 44% of the utility's power would come from coal in 2038, the utility projected.
The utility's current fuel mix is 40% coal and lignite, 39% natural gas, and 21% wind.
In explaining its embrace of non-emitting generation, SWEPCO in a May 31, 2022, statement said its need for capacity is driven by the retirement of aging SWEPCO generation units, including the retirement of five gas units in 2019 and 2020, the scheduled retirement of Dolet Hills Power Station, a 650-MW coal-fired facility in Louisiana, and the announced 2023 retirement of the 660-MW, lignite-fired, Henry W. Pirkey Power Station in Harrison County, Texas.
With these retirements, the utility continued, SWEPCO is facing a capacity deficit beginning in 2023 that grows to 1,574 MW in 2028 after the retirement of other generating units. SWEPCO said it "intends to evaluate and/or conduct additional requests for proposals to explore more opportunities to add least-cost renewable generation and capacity in the coming years."
A SWEPCO spokesperson declined to provide any additional details on the utility's effort to decarbonize its electricity mix.
At its October analyst day, officials from corporate parent AEP said the holding company, which provides electricity to 5.5 million customers in 11 states through seven operating companies, said it would have net-zero carbon dioxide emissions by 2045, five years earlier than its prior commitment.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The RFP, issued September 29, calls for up to 1,900 MW of new wind resources and up to 500 MW of new solar generation. Wind resources must be a minimum of 100 MW and solar resources must be a minimum of 50 MW. All projects must interconnect to the Southwest Power Pool (SPP) and need to be located in either Arkansas, Louisiana, Texas, Oklahoma, Kansas or Missouri.
Although a SWEPCO spokesperson declined to provide an estimated cost for the 2,400 MW of renewables it is seeking, based on market prices the amount is expected to exceed $2 billion.
Bids are due November 17. The utility, which provides electricity to about 548,000 customers in Louisiana, Texas and Arkansas, wants the new resources to be operational by either December 1, 2025, or December 1, 2026. The utility plans to purchase the renewable energy projects it selects.
The current RFP follows an active few years in which SWEPCO spent about $1 billion to acquire approximately 809 MW of wind power in the three separate wind projects that comprise the North Central Energy Facilities (NCEF) in Oklahoma. A SWEPCO sibling utility, Public Service Company of Oklahoma (PSO) (Tulsa, Oklahoma) purchased the other 675 MW of the NCEF project, which was developed by Invenergy LLC (Chicago, Illinois).
The NCEF includes the 999-MW Traverse project, which came online in March 2022; the 288-MW Maverick project, which achieved commercial operations in September 2021; and the 199-MW Sundance project, which began operating in April 2021.
This past March, when the Traverse windfarm came online, Malcolm Smoak, SWEPCO president and chief operating officer, said, "We are excited to have the final piece of the North Central Energy Facilities project in place to bring even more clean and affordable energy to customers in Arkansas and Louisiana. This wind energy helps customers meet their own renewable energy and sustainability goals and makes the communities we serve in Louisiana and Arkansas more competitive for economic development."
"Over the next 20 years, SWEPCO's diverse energy resource mix will include significantly more wind and solar," Smoak said in a March 22, 2022, statement. "This transition puts us further along the path to achieve AEP's goal of net zero carbon dioxide emissions by 2050."
SWEPCO plans to take all of the electricity generated by the Rocking R solar project, which is scheduled to begin operating by the end of 2024. That 72.5-MW project is slated to be built in Caddo County, Louisiana. It has a total investment value (TIV) of about $68 million. The project is being developed by D.E. Shaw Renewable Investments LLC (New York, NY). Construction is scheduled to begin in early 2024.
Earlier this year, SWEPCO began the process to obtain regulatory approval for three other renewable energy projects:
- Wagon Wheel, a 598-MW project scheduled to be built across several counties in Oklahoma. The project is being developed by American Electric Power, with support from Invenergy. The total investment value of this project is $999 million. Construction is scheduled to begin in late 2023, and the project is expected to be operating by 2025.
- Diversion, a 300-MW wind project scheduled to be built in Baylor County, Texas, by Invenergy. Construction is slated to begin in early 2023, and the plant is scheduled to be operating by the end of 2023. This project has a TIV of $325 million, but SWEPCO is only scheduled to take two-thirds of its electrical output.
- Mooringsport, a 200-MW solar project scheduled to be built in Caddo Parish, Louisiana.
In its 2018 integrated resource plan (IRP), SWEPCO projected that about 43% of its generating capacity would burn coal in 2019. Natural gas generation capacity was scheduled to be about 40% of its capacity that year. But in terms of actual electricity generation, the utility told regulators it planned to rely on coal for about 83% of the electricity it actually generated in 2019.
By 2038, the utility told regulators in 2018, coal-fired generation capacity would decline to about 25% while gas would decline to about 27% of capacity. Wind generation capacity would rise to approximately 24% of generation capacity, up sharply from 8% in 2019. But in terms of actual electricity generated, about 44% of the utility's power would come from coal in 2038, the utility projected.
The utility's current fuel mix is 40% coal and lignite, 39% natural gas, and 21% wind.
In explaining its embrace of non-emitting generation, SWEPCO in a May 31, 2022, statement said its need for capacity is driven by the retirement of aging SWEPCO generation units, including the retirement of five gas units in 2019 and 2020, the scheduled retirement of Dolet Hills Power Station, a 650-MW coal-fired facility in Louisiana, and the announced 2023 retirement of the 660-MW, lignite-fired, Henry W. Pirkey Power Station in Harrison County, Texas.
With these retirements, the utility continued, SWEPCO is facing a capacity deficit beginning in 2023 that grows to 1,574 MW in 2028 after the retirement of other generating units. SWEPCO said it "intends to evaluate and/or conduct additional requests for proposals to explore more opportunities to add least-cost renewable generation and capacity in the coming years."
A SWEPCO spokesperson declined to provide any additional details on the utility's effort to decarbonize its electricity mix.
At its October analyst day, officials from corporate parent AEP said the holding company, which provides electricity to 5.5 million customers in 11 states through seven operating companies, said it would have net-zero carbon dioxide emissions by 2045, five years earlier than its prior commitment.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
