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AES Will Convert Remaining Coal Units to Burn Natural Gas

A major Indiana utility said it’s preparing to switch its remaining coal-fired power plant to burn natural gas. AES Indiana on March 12 said the two coal-burning units at its Petersburg Generating Station, in Pike County in southwestern Indiana about 100 miles west of Louisville, Kentucky, would stop using coal and start using natural gas in 2026.

AES Indiana, formerly known as Indianapolis Power & Light, filed a request for the change with the Indiana Utility Regulatory Commission (IURC). The utility also said it wants to triple its use of renewable energy by 2027.

Officials with the utility said the plan would “deliver cleaner, more efficient and cost-effective energy solutions,” and would save customers $280 million over 20 years by avoiding costs related to upgrading technology at coal-fired units. The utility said ending the use of coal at Petersburg would reduce emissions of carbon dioxide by 70% by 2030, compared to 2018 levels.

“Over the past decade, how we serve our customers has evolved due to factors like new technology, the aging of our current facilities, environmental regulations and economic conditions,” said Brandi Davis-Handy, president of AES Indiana, in a news release. “Repowering our Petersburg Generating Station aligns with our state’s all-of-the-above energy policy while allowing us to continue our 50-plus-year commitment to Pike County.”

Aligns with IRP

The utility said that converting Petersburg Units 3 and 4 to burn natural gas “aligns with AES Indiana’s 2022 Integrated Resource Plan (IRP), which outlines the most reliable and least-cost portfolio for AES Indiana’s customers.” The company said its “least-cost portfolio” strategy “includes adding approximately 1,300 megawatts (MW) of wind, solar and battery energy storage through competitively bid projects.”

Units 3 and 4, which came online in 1977 and 1986, respectively, each have 670 MW of generation capacity. Two other coal-fired units at Petersburg were retired in 2021 and 2023.

The company said the first new gas-fired unit at Petersburg is expected to begin commercial operation in June 2026. The second would likely start commercial operation in December 2026.

AES Indiana earlier this month said it had acquired the Hoosier Wind project, a 106-MW wind farm in Benton County, Indiana. The utility earlier this year received IURC approval for a 200-MW, 4-hour standalone battery energy storage system (BESS). The group said the BESS project would be the largest to date in the Midcontinent Independent System Operator (MISO) region. MISO is the grid operator that serves much of the Midwest and also parts of the U.S. South.

The utility also previously received approval for solar power projects in Pike and Clinton counties in Indiana.

The utility in its regulatory filing said it currently generates 31% of its electricity from coal, with 51% from natural gas. The group said it expects its natural gas-fired generation will encompass about 70% of its portfolio after the Petersburg conversion.

The utility in its filing said Babcock & Wilcox Co. will lead the coal-to-gas conversion project. A one-mile-long natural gas lateral pipeline, to be built by Midwestern Gas Transmission Co., will provide feedstock to the new units.

Source: POWERmagazine

The Coal Trader Note:

The AES Petersburg Power Station is primarily supplied by Peabody’s Bear Run Coal Mine and Alliance’s Gibson Coal Mine

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