Solar, geothermal led new US capacity in January 2014

Solar and geothermal resources led the new utility-scale electric generating capacity installed in the U.S. in January 2014, according to a report by the staff of the Federal Energy Regulatory Commission.  In all, the report identified 325 megawatts of new generation placed in service in January, substantially all of which is powered by renewable resources.

Old Faithful Geyser erupts in Yellowstone National Park -- a natural geothermal feature.

Solar power contributed the largest share of new generating capacity installed in January, with 287 megawatts of solar projects placed in service.  The largest project, Exelon Corp.'s Antelope Valley Solar Phase II expansion project in Los Angeles County, California, added 130 megawatts of capacity to an existing 230 megawatt project.  The power generated is sold to Pacific Gas and Electric under long-term contract.  Other large new solar projects include MidAmerican Solar’s 61 MW Topaz Solar Farm Phase III expansion project in San Luis Obispo County, California, and two 20 MW projects (Duke Energy Corp.’s Dogwood Solar Power project in Halifax County, North Carolina, and NextEra Energy Inc.’s Mountain View Solar project in Clark County, Nevada).  All of these projects rely on long-term power purchase agreements with utilities.

Geothermal steam power was the second largest category of new electric generating capacity placed in service in January 2014, in the form of Gradient Resources Inc.’s 30 MW Patua Hot Springs Geothermal project in Lyon County, Nevada.  As with the solar projects described above, the power generated by the Patua Hot Springs project is sold to a utility -- in this case, Sacramento Municipal Utility District, under a long-term contract.

Rounding out the new capacity installations in January were 3 small biomass units with a combined capacity of 3 megawatts, and one wind project with an installed capacity of 4 megawatts -- Consolidated Edison Inc.’s 4 MW Russell Point Wind Farm project in Logan County, Ohio.

Despite this growth in solar and geothermal power resources, together these resources account for just over 1% of the nation's total installed operating generating capacity.  Yet the relative growth in solar and geothermal power over the past years has been striking, and is expected to continue for the near term.  Will these resources soon play a larger role in the nation's energy portfolio?

Utility coal plants closing, natural gas to replace

A North Carolina utility closed one of its coal-fired power plants this past weekend, to be replaced with a natural gas-fueled combined cycle combustion turbine facility.  Duke Energy subsidiary Carolina Power & Light, which does business as Progress Energy Carolinas, announced on Friday that it would close its coal-fired H.F. Lee facility on September 15.  The Lee Plant closure is part of a broader shift away from utility and non-utility "merchant" use of coal to generate electricity, in favor of natural gas and other fuels.

Progress Energy Carolinas provides electricity to about 1.5 million customers in both North Carolina and South Carolina.  The utility owns more than 12,200 megawatts in generation capacity, and serves a 34,000 square mile territory, including the cities of Raleigh, Wilmington and Asheville in North Carolina and Florence and Sumter in South Carolina.

The Lee Plant's story resembles that of a number of other coal plants across the country.  Built in 1951 on the Neuse River near the town of Goldsboro, the plant was gradually expanded over time.  By the 1960s, the Lee Plant hosted three coal-fired units with a total generating capacity of 382 megawatts.  Four oil-fueled combustion turbine units were also added to the plant, adding another 75 MW of generating capacity, will be retired Oct. 1, 2012.

U.S. energy markets and environmental regulations continued to develop over the ensuing decades.  Most recently, tighter federal air emissions regulations and an abundant supply of low-cost natural gas have made older and smaller coal-fueled power plants uneconomic to operate.  As a result, owners are retiring these plants, and converting others to alternative fuels.  For example, last week utility Dominion Virginia Power announced plans to convert its Bremo Power Station in Virginia from coal to natural gas. 

Progress Energy Carolinas is following this trend.  The utility closed its coal-fired W.H. Weatherspoon power plant near Lumberton, N.C. last year.  It also plans to retire the remainder of its coal-fired plants without advanced environmental controls by the end of 2013: the Cape Fear Plant near Moncure, N.C., the Robinson coal-fired unit near Hartsville, S.C., and the L.V. Sutton Plant near Wilmington, N.C.  These coal-fired unit retirements will represent about a third of the utility's coal-powered fleet, or about 1,600 MW of generating capacity.

To replace the power produced from these closing plants, Progress Energy Carolinas is building new natural gas-fueled combined-cycle units.  Adjacent to the Lee Plant site, the utility is extending an existing natural gas pipeline and building a new, 920-MW natural gas-fueled combined-cycle facility.  This plant, along with the five dual-fueled combustion turbines at the existing Wayne County Energy Complex, will be called the H.F. Lee Energy Complex when complete.

Projections suggest that natural gas will remain available at a relatively low cost for the next twenty years.  At the same time, environmental regulations tend to grow tighter over time.  These two factors suggest that the current trend of utilities switching from coal to natural gas to fuel electric generation may continue for the foreseeable future.