U.S. Coal-Fired Plants Depend on Maintenance Projects as Market Toughens

Researched by Industrial Info Resources (Sugar Land, Texas)--Coal-fired power generation continued to see its status diminish in the domestic energy market in 2018. With more coal-fueled plants closing and the Trump administration yet to find a way to reverse the trend, coal-power generators are depending on maintenance projects to keep existing plants in shape. Industrial Info is tracking about 60 maintenance projects at coal-fired power plants across the U.S. that are slated to kick off in first-quarter 2019.

Click on the image at right for a graph detailing the top 10 U.S. states for maintenance projects at coal-fired plants in first-quarter 2019.

The Trump administration announced Thursday that it will roll back an Obama-era rule requiring new coal plants to slash carbon emissions, which supporters say could lead to new coal-fired plant construction in the coming years. But many industry observers doubt new plants will emerge, given the far more advantageous price of natural gas--which is only expected to go lower next year--and declining prices for wind, solar and battery technologies.

The Environmental Protection Agency's (EPA) proposal to allow new coal plants to emit up to 1,900 pounds of carbon dioxide (CO2) per megawatt-hour of electricity, compared with the 1,400 pounds currently allowed, is almost certain to be challenged by lawsuits from environmental activists and other concerned parties, according to The New York Times and Reuters. The move follows a report from the U.S. Energy Information Administration (EIA) that domestic coal consumption in 2018 is expected to hit its lowest level since 1979; for more information, see December 5, 2018, brief - EIA: U.S. Coal Consumption Drops to Lowest Level Since 1979.

Texas leads all other states in first-quarter turnarounds at coal-fired power plants, in both number and total investment value (TIV). Maintenance projects can be found in every corner of the Lone Star State, including Vistra Energy Corporation's (NYSE:VST) (Irving, Texas) $9 million outage on Unit 1 at the Martin Lake Power Station in Tatum, which will include major inspections and repairs to a 793-megawatt (MW) tandem-compound steam turbine from Siemens; Xcel Energy Incorporated's (NASDAQ:XEL) (Minneapolis, Minnesota) $8 million outage on Unit 1 at the Harrington Power Station in Amarillo, which covers a 350-MW condensing steam turbine, also from Siemens; and CPS Energy's (San Antonio) $8 million outage on Unit 1 at the J.K. Bruce Power Station in San Antonio, which covers a 546-MW tandem-compound steam turbine from General Electric (NYSE:GE) (Boston, Massachusetts).

Vistra and Xcel are among the power-generating companies that are phasing coal out of their systems for both environmental and economic reasons. Curt Morgan, Vistra's chief executive officer, recently said his company had retired about 4,200 MW of "uneconomic" coal assets in 2017 and 2018, while investing in a major solar project and other energy sources. Earlier this year, Xcel announced it plans to ditch coal entirely with its Clean Energy Plan, which will close 660 MW of coal-fired generation a decade earlier than scheduled and shift the company's portfolio toward renewables.

Both companies are taking advantage of the far more advantageous price of natural gas--which is only expected to go lower next year--and declining prices for wind, solar and battery technologies. For more information, see Industrial Info's reports on the Martin Lake, Harrington and J.K. Bruce projects.

One of the most vocal champions of the EPA's proposal is Senate Majority Leader Mitch McConnell, a Republican from the coal-heavy state of Kentucky. The Bluegrass State is second only to Texas for first-quarter coal-fired maintenance kickoffs, in both number and TIV, with projects covering rural and urban areas. They include East Kentucky Power Cooperative's (Maysville, Kentucky) $20 million outage on Unit 4 at the H.L. Spurlock Power Station in Maysville and Louisville Gas & Electric Company's $10 million outage on Unit 2 at the Trimble County Power Station in Louisville. The affected units generate 329 and 750 MW, respectively, using GE and Hitachi turbines. For more information, see Industrial Info's reports on the Spurlock and Trimble County projects.

PacifiCorp, a subsidiary of Berkshire Hathaway Incorporated (NYSE:BRK.A) (Omaha, Nebraska), is at work on more maintenance projects next quarter than any other company. These include three in the Rocky Mountains region: a $12 million outage on Unit 2 at the Huntington Power Plant in Huntington, Utah; a $4.6 million outage on Unit 3 at the Dave Johnston Power Station in Glenrock, Wyoming; and a $3 million outage on Unit 3 at the Jim Bridger Power Station near Point Of Rocks, Wyoming. Each involves maintenance on GE tandem-compound steam turbine, with capacities of 480 MW, 230 MW and 578 MW, respectively. For more information, see Industrial Info's reports on the Huntington, Dave Johnston and Jim Bridger projects.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.