New renewables cheaper than existing coal plants. Spain to shut coalmines

An American electricity utility recently reported it could build new projects to harness renewable energy resources for cheaper than keeping existing coal plants open in the state of Indiana. The Northern Indiana Public Service Co. (NIPSCO) presented analysis for its 2018 Integrated Resource Plan (IRP), finding it can save customers more than $4 billion over 30 years by moving from 65% coal today to 15% coal in 2023 and eliminating the resource by 2028.

The youngest generating units at NIPSCO's 1900 MW Schahfer coal-burning plant were built in the mid 1980s, and the utility's analysis found that keeping them on the system would be more expensive than replacing them with new wind, solar and batteries. To replace the retiring coal, NIPSCO proposes a mix of 1,500 MW of solar and storage, 150 MW of wind, 125 MW of efficiency and demand-side management and 50 MW of market purchases by 2028.

Coal's inability to compete persisted even when NIPSCO modeled scenarios friendly to the resource. At the request of the Indiana Coal Council, a trade group, the utility analysed a situation with high natural gas prices, no price on carbon, and a flat fee of $45/ton for delivered coal. In this scenario, retiring coal faster was still cheaper than keeping it around, and the least cost plan was still more expensive to consumers than NIPSCO's preferred scenario of replacing coal with renewables.

Meanwhile, Spain’s new leftwing administration headed by Pedro Sánchez has moved quickly on environmental policy, by planning to close the majority of operating coal mines by the end of this year, abolishing a controversial “sunshine tax” on the solar industry, and announcing the launch of Spain’s long-delayed national climate plan next month.

The €250 million agreement to shut down most of operating coalmines was struck with unions, which will see the money invested in mining regions over the next decade and mixes early retirement schemes for miners over 48, with environmental restoration work in pit communities and re-skilling schemes for cutting-edge green industries. The agreements are being terms “Just Transition” contracts, with the aim of helping the regions to consolidate the employment of the future. Montserrat Mir, the Spanish confederal secretary for the European Trades Union Congress, said the “just transition” model could be applied elsewhere. “Spain can export this deal as an example of good practice,” she said. “We have shown that it’s possible to follow the Paris agreement without damage [to people’s livelihoods]. We don’t need to choose between a job and protecting the environment. It is possible to have both.”

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