In the latest sign of the shift to gas power from coal in the US, the Homer City generating station in Pennsylvania will close in July, the US Energy Information Administration (EIA) said. citing the owner of the plant.
The 1,888-megawatt (MW) Homer City coal-fired power plant is closing after 54 years of powering Pennsylvania and New York. The plant was built near coal reserves and included what was then a high-capacity transmission line to service areas in western New York and eastern Pennsylvania, the EIA said in a press release. For 30 years, the plant operated almost continuously, achieving a utilization rate, called capacity factor, of nearly 90 percent, according to the press release.
“Homer City based its decision on several factors, including the low price of natural gas, a dramatic increase in the cost of its ongoing coal supply, unusually warm winters and increasingly stringent environmental regulations,” said Director General of Homer City Generation, William Wexler, in a written statement. previously obtained by the Allegheny Front.
Homer City said the new emissions limits imposed by the Environmental Protection Agency to meet federal Clean Air Act limits on nitrogen oxides place an “excessive financial and operational burden” on the plant, according to the statement.
The EIA said new emissions standards for power plants under the Clean Air Act required the plant to install FGD scrubbers in Unit 3 in 2001 and in Units 1 and 2 in 2014. The upgrades pollution control measures in 2014 cost the plant owners about $750 million. according to the press release.
Switch to Gas
Recently, coal-fired plants have struggled to compete effectively in U.S. electricity markets against newer, more efficient, natural gas-fired combined-cycle power plants, the EIA said. As new natural gas plants were built, the Homer City plant was dispatched more intermittently to follow load instead of base load, the agency said. The Homer City plant operated at an annual capacity factor of 82 percent in 2005. The capacity factor was reduced to 20 percent in 2022, contributing to the decision to retire the plant, according to the EIA.
The EIA said the Homer City plant was sold for $1.8 billion in 1999, at a time when Pennsylvania was deregulating its electricity market. In that period, coal-fired generation accounted for about 53 percent of US electricity supply, while natural gas accounted for only about 12 percent. Since then, those roles have nearly reversed, according to the agency: Natural gas is now the source of 40 percent of the nation’s electricity, while coal has dropped to 20 percent. In Pennsylvania, the same trend is happening, where the state saw coal-fired generation fall from 57% in 2001 to 12% in 2021, compared to a 2% jump in gas generation in 2001 to 52% by 2021, the agency said.
Natural gas production has grown significantly in Pennsylvania over the past two decades, from 0.1 trillion cubic feet (Tcf) in 2001 to 7.6 Tcf in 2021, the EIA said. Pennsylvania’s gas production is second only to Texas in the US, the agency said.
Pennsylvania sits at the top of the Marcellus shale, and the parts of the Marcellus beneath Pennsylvania and West Virginia make up the largest natural gas field in the US, the EIA said. Although natural gas has been produced in the Marcellus for a long time, production from the Marcellus became much more economical after the development of fracking and horizontal drilling. According to the agency, the first Marcellus shale natural gas well using these techniques was drilled in Pennsylvania in 2004. As natural gas production in Pennsylvania increased, coal production was declining, falling 40 percent percent from 74.1 million tons in 2001 to 42.5 million tons in 2001. 2021, according to the agency.
Increased production in Pennsylvania and elsewhere in the US made natural gas abundant and relatively cheap. With access to low-cost natural gas, utilities and power plant operators began closing old coal-fired power plants in Pennsylvania, many of which were built in the 1970s and 1980s, and replacing them with for new combined cycle plants fed with natural gas. said the EIA. Modern combined-cycle plants are more efficient than the typical coal-fired power plant and don’t have the same costs to meet emissions regulations, he explained. As Pennsylvania’s coal plants were retired and the remaining coal plants were used less, the share of Pennsylvania’s generation supplied by coal fell, the agency said.
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