POWER January 2020 - 15

O&M
Well-Planned Retirement:
Keys to Successful Coal
Plant Decommissioning
Hundreds of coal-fired power plants are
now retired or facing retirement in the
near future, and utilities face a number
of decisions. Are there commercial
reuse options for the plant or the site
itself? Are there unforeseen environmental
issues? Should the plant site be
mothballed for future restart, or retrofit
to burn natural gas?
These are only a few of the questions
plant owners must address during decommissioning.
Answering them correctly requires
starting with the end goal in mind.
If we were to retire from our careers
tomorrow, we might leave the office with
leftover cake, balloons, and a sense of
relief. However, if we were one of those
folks who had not explored or planned
for options about what comes next, that
good feeling might not last.
This scenario has parallels for utilities
looking to sunset their coal units. Though
each coal plant retirement has unique
variables (Figure 1), success almost always
depends on planning, analysis, and
setting aside financial reserves to cover
most if not all of the costs.
The coal plant retirement wave is
being driven primarily by the cost of
complying with new environmental regulations,
and the increasingly unfavorable
economics of running coal plants. Most
plants that have been retired or will soon
be closed were built decades ago with
few air or water pollution controls. With
many of these older plants generating
300 MW or less, it is often not feasible
to justify the costs of retrofitting air and
water pollution control equipment.
According to the U.S. Energy Information
Administration (EIA), more than
100 GW of fossil-fueled capacity has
been retired in the past decade, thanks
to the double whammy of expensive
environmental retrofits and unfavorable
economics for dispatching these smaller
and less-efficient plants. The EIA reports
more than 30 GW of additional
announced retirements in the next five
years, with total coal-fired U.S. generating
capacity dropping to about 200 GW
by 2024.
The power industry has changed dramatically
in recent years and more disruptions
are on the way. The process of
January 2020 | POWER
1. Each retirement and decommissioning of a coal-fired power plant will have unique variables.
A successful demolition project requires analysis and planning, and operators will want
to set aside financial reserves to cover the costs, while also looking at ways to offset expenses
through re-use of materials and infrastructure. Courtesy: Burns & McDonnell
retirement planning for coal units must
be done holistically within the context
of an overall resource plan. But certain
principles will always apply, and a utility
can best prepare by analyzing what may
be needed to succeed in the future and
creating a plan.
Risks, Costs, and Who Is on the
Hook
Like personal retirement decisions, coal
plant retirements often boil down to
unique circumstances involving risks,
costs of continued operation, and who
may be responsible for decommissioning
costs. Some circumstances can be
anticipated and planned for, while others
cannot.
The best first step is to analyze whether
the plant is a candidate for retrofitting
the existing generating equipment to
natural gas or another fuel source, or
repowering the site with newer natural
gas-fired generation technology. The economic
feasibility can depend on many
variables but usually hinges on proximity
to natural gas pipelines, overall condition
of equipment, and efficiency of the current
generating facilities. Though many
coal plants have existing substations
and transmission interconnections, the
costs of constructing miles of new gas
pipeline, combined with a total retrofit,
could be more expensive than going to
a greenfield site with immediately adjawww.powermag.com
cent
infrastructure.
If a retrofit is unfeasible, the next option
is to consider whether commercial
reuse is possible for any part of the physical
plant structure. Though this is location-dependent,
some older plants have
been designated as historically significant
structures and thus eligible for tax
incentives. One such project to rehabilitate
and restore the 100-year-old Cannon
Street Power Station in New Bedford,
Massachusetts, recently resulted in a
new five-story commercial structure being
added to the real estate inventory on
the town's waterfront.
Assuming, however, your coal facility
is not a good candidate for retrofit or
commercial reuse, the next step is to
commission a study that examines all
the key cost drivers of decommissioning.
In nearly every case, environmental
remediation will be the largest expense.
Studies should identify:
■ Location and quantity of asbestos.
■ Presence of polychlorinated biphenyls
(PCBs).
■ Likely areas of soil or groundwater
contamination.
■ Mercury, even though this material is
usually found in small quantities.
■ Lead paint (this can be accounted for
in steel demo costs).
■ Site-specific issues, such as ash
ponds and landfills.
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POWER January 2020

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