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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The "energy trilemma," a much-discussed topic among electric utility officials, calls for balancing electric reliability, affordability and sustainability as the industry decarbonizes. Balancing all three goals is not easy under the best of conditions, and the extreme weather and supply-chain bottlenecks stemming from the COVID-19 pandemic have made that juggling task even more difficult.
Recent regulatory filings from Evergy Incorporated (NASDAQ:EVRG) (Kansas City, Missouri), which serves about 1.7 million customers in Kansas and Missouri, show how external events such as supply-chain bottlenecks and mandates from grid operators can upend even the most careful decarbonization plans. In June 15 filings with the company's Kansas and Missouri regulators, the company said it will delay building some renewable electric generation, delay the retirement of some coal-fired generation and build new gas-fired generation to meet the requirements of its grid operator, the Southwest Power Pool (SPP) (Little Rock, Arkansas).
It's possible other utilities will be adjusting their long-term resource plans as they respond to the same forces confronting Evergy.
On June 15, Evergy issued a statement that explained these changes. As part of this year's IRP updates, it said, its planning process "incorporated significant new projects in both Kansas and Missouri, the impacts of increasing electricity demand across the region and changes in requirements of the SPP In addition, the timing of new renewable and other generation resource projects reflected the impacts of global supply-chain constraints and the long lead times to receive approval by the SPP to connect new generation projects to the power grid."
"Our service area is experiencing some of its most robust electricity demand growth in decades, including very large projects like the Panasonic electric vehicle battery manufacturing factory and the Meta datacenter, as well as broad-based economic development in both Kansas and Missouri," said Chief Executive Officer David Campbell. "Aided by well-coordinated efforts by state and local organizations, these projects are successfully bringing in investment and jobs across our region."
As for the grid operator mandates, following extreme weather in recent years, such as the December 2022 blackouts in the Carolinas and the February 2021 Winter Storm Uri, which led to rolling blackouts in several states and the deaths of hundreds of people, the SPP increased the reserve capacity required by utilities to ensure customer electric needs are met, Evergy said. Utilities must have dispatchable reserves equal to 15% of their retail electric load, up from 12% previously. SPP also changed the way reserves were measured. The net effect was that Evergy, an SPP member, was required to construct almost 900 megawatts (MW) of new dispatchable generation in short order.
Building that new gas-fired generation meant deferring for four years the planned retirement of about 485 MW of coal-fired generation as well as deferring, for now, construction of some renewable generation.
Click on the images at right to see Evergy's June 2022 and June 2023 updates to its IRP.
Two years ago, Evergy announced plans to retire the coal-fired Lawrence Energy Center by the end of this year and add 700 megawatts of solar power by the end of 2024. Now, it doesn't plan to add any solar power until 2026 and will keep the Lawrence coal plant open until 2028. For more on Evergy's prior resource plan, see July 22, 2021, article - Evergy Boosts Capital Spending as it Pursues Net-Zero Carbon by 2045 Goal.
Environmental organizations were quick to blast Evergy as backsliding on its decarbonization commitments.
Local news organizations quoted Billy Davies, conservation organizer for the Sierra Club, as criticizing Evergy for not moving more swiftly to close its Hawthorn Power Plant in Kansas City, Missouri. "Evergy has a plethora of tools to move more quickly to clean energy as its customers have demanded, but unfortunately it appears the utility is choosing not to use them, as we're watching climate change impact our region through wildfire smoke from out west and drought locally." He said Evergy's decision was "unacceptable."
In aggregate, the changes will not materially affect Evergy's capital investment program, which is estimated at approximately $11.6 billion over the five-year, 2023-2027 period.
Industrial Info Resources is tracking about 20 active capital projects involving Evergy, with a total investment value (TIV) of approximately $725 million.
Click on the image at right to see a breakdown by function of Evergy's 2023-2027 capital program.
Evergy denied it was greenwashing. In its June 15 statement, it said, "by 2035, Evergy plans to add more than 3,300 megawatts (MW) of renewable energy and retire more than 1,900 MW of coal-based fossil generation, while investing in approximately 1,300 MW of hydrogen-capable advanced combined cycle generation to maintain reliability for its customers and provide dispatchable generation to complement the ongoing addition of new, cost-effective wind and solar resources."
The company emphasized that it has retired 2,200 MW of fossil-fueled generation and compiled a wind portfolio of more than 4,400 MW. Today, Evergy's carbon-free generation resources produce the equivalent of about half of its retail customers' energy needs.
Earlier this year, Evergy solicited bids for potential new generation resources; all potential sources, including renewables, batteries and hydrogen-enabled natural gas, were included in the request for proposal (RFP). The cost, timing, and mix of new generation resources in the revised resource plans for Kansas and Missouri reflect the results of the RFP.
"Evergy is committed to leading a responsible energy transition while keeping affordability and reliability at the forefront," said company chief Campbell.
To buttress this claim, in announcing first-quarter earnings May 5, Evergy shared rankings from two organizations showing its performance on environmental, social and governance (ESG) and sustainability matters.
Click on the image at right to see Evergy's improving performance on ESG and sustainability metrics in research conducted by outside research organizations.
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).
Recent regulatory filings from Evergy Incorporated (NASDAQ:EVRG) (Kansas City, Missouri), which serves about 1.7 million customers in Kansas and Missouri, show how external events such as supply-chain bottlenecks and mandates from grid operators can upend even the most careful decarbonization plans. In June 15 filings with the company's Kansas and Missouri regulators, the company said it will delay building some renewable electric generation, delay the retirement of some coal-fired generation and build new gas-fired generation to meet the requirements of its grid operator, the Southwest Power Pool (SPP) (Little Rock, Arkansas).
It's possible other utilities will be adjusting their long-term resource plans as they respond to the same forces confronting Evergy.
On June 15, Evergy issued a statement that explained these changes. As part of this year's IRP updates, it said, its planning process "incorporated significant new projects in both Kansas and Missouri, the impacts of increasing electricity demand across the region and changes in requirements of the SPP In addition, the timing of new renewable and other generation resource projects reflected the impacts of global supply-chain constraints and the long lead times to receive approval by the SPP to connect new generation projects to the power grid."
"Our service area is experiencing some of its most robust electricity demand growth in decades, including very large projects like the Panasonic electric vehicle battery manufacturing factory and the Meta datacenter, as well as broad-based economic development in both Kansas and Missouri," said Chief Executive Officer David Campbell. "Aided by well-coordinated efforts by state and local organizations, these projects are successfully bringing in investment and jobs across our region."
As for the grid operator mandates, following extreme weather in recent years, such as the December 2022 blackouts in the Carolinas and the February 2021 Winter Storm Uri, which led to rolling blackouts in several states and the deaths of hundreds of people, the SPP increased the reserve capacity required by utilities to ensure customer electric needs are met, Evergy said. Utilities must have dispatchable reserves equal to 15% of their retail electric load, up from 12% previously. SPP also changed the way reserves were measured. The net effect was that Evergy, an SPP member, was required to construct almost 900 megawatts (MW) of new dispatchable generation in short order.
Building that new gas-fired generation meant deferring for four years the planned retirement of about 485 MW of coal-fired generation as well as deferring, for now, construction of some renewable generation.
Two years ago, Evergy announced plans to retire the coal-fired Lawrence Energy Center by the end of this year and add 700 megawatts of solar power by the end of 2024. Now, it doesn't plan to add any solar power until 2026 and will keep the Lawrence coal plant open until 2028. For more on Evergy's prior resource plan, see July 22, 2021, article - Evergy Boosts Capital Spending as it Pursues Net-Zero Carbon by 2045 Goal.
Environmental organizations were quick to blast Evergy as backsliding on its decarbonization commitments.
Local news organizations quoted Billy Davies, conservation organizer for the Sierra Club, as criticizing Evergy for not moving more swiftly to close its Hawthorn Power Plant in Kansas City, Missouri. "Evergy has a plethora of tools to move more quickly to clean energy as its customers have demanded, but unfortunately it appears the utility is choosing not to use them, as we're watching climate change impact our region through wildfire smoke from out west and drought locally." He said Evergy's decision was "unacceptable."
In aggregate, the changes will not materially affect Evergy's capital investment program, which is estimated at approximately $11.6 billion over the five-year, 2023-2027 period.
Industrial Info Resources is tracking about 20 active capital projects involving Evergy, with a total investment value (TIV) of approximately $725 million.
Evergy denied it was greenwashing. In its June 15 statement, it said, "by 2035, Evergy plans to add more than 3,300 megawatts (MW) of renewable energy and retire more than 1,900 MW of coal-based fossil generation, while investing in approximately 1,300 MW of hydrogen-capable advanced combined cycle generation to maintain reliability for its customers and provide dispatchable generation to complement the ongoing addition of new, cost-effective wind and solar resources."
The company emphasized that it has retired 2,200 MW of fossil-fueled generation and compiled a wind portfolio of more than 4,400 MW. Today, Evergy's carbon-free generation resources produce the equivalent of about half of its retail customers' energy needs.
Earlier this year, Evergy solicited bids for potential new generation resources; all potential sources, including renewables, batteries and hydrogen-enabled natural gas, were included in the request for proposal (RFP). The cost, timing, and mix of new generation resources in the revised resource plans for Kansas and Missouri reflect the results of the RFP.
"Evergy is committed to leading a responsible energy transition while keeping affordability and reliability at the forefront," said company chief Campbell.
To buttress this claim, in announcing first-quarter earnings May 5, Evergy shared rankings from two organizations showing its performance on environmental, social and governance (ESG) and sustainability matters.
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).
