Georgia to retire all its coal-fired power plants by 2035

Tom Fanning, chief executive of Georgia-based utility group Southern Company, has been a long-standing defender of coal. “We must place a high priority on developing solutions that preserve this critical energy resource for the future,” he told a US Chamber of Commerce event in 2011. Since then, however, wind and solar generation has soared in the US, and confidence in the long-term availability of gas supplies has grown. And Southern’s Kemper project, intended to be the first large-scale coal plant with carbon capture in the US, proved a costly failure.

Last week, Southern’s Georgia Power subsidiary submitted a plan to state regulators, proposing to retire all its coal-fired power plants by 2035, and most of them by 2028. The company said in a statement that “coal-fired generation continues to be less economically viable, and its proposals would “thoughtfully transition its fleet to more economical, cleaner resources”.

More than 3.5 gigawatts of coal-fired capacity would be closed by 2028 under the plan, to be replaced by about 2.4 GW through new power purchase agreements with gas-fired plants, and 2.3 GW of renewables.

Some environmental campaigners complained that the plan included such a large contribution from gas to replace coal. Charline Whyte of the Sierra Club’s Beyond Coal Campaign in Georgia said: “Georgia’s electric system and energy infrastructure must be transformed to rely on renewable power like solar and battery storage rather than replacing one fossil fuel with another.” The state’s Public Service Commission gets to rule on the plan, and could require Georgia Power to add more renewables. 

However, Wood Mackenzie pointed out that unlike some other utilities that have been winding down their coal generation, Georgia Power is planning to replace the capacity through contracts with existing gas-fired plants, rather than investing in new ones.

The plan is another sign of how the economics of power generation in the US have shifted against coal, regardless of any further pressure from federal climate policy. Coal-fired generation capacity in the US is expected to drop from about 200 GW this year to only about 50 GW in 2032 and effectively zero in 2042, in Wood Mackenzie’s base case forecasts.

Even if President Joe Biden does not get to pass any legislation or implement any new regulations, the US power industry’s exit from coal is already being hastened by existing regulations such as the Environmental Protection Agency’s rules on the disposal of coal combustion residuals, finalised at the end of 2014.

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