In 25 years, Kentucky’s energy landscape will look dramatically different than it does now. As Energy and Environment Secretary Len Peters told a legislative committee last week, Kentucky is already facing the loss of the majority of its coal fleet over the next 25 years, and that’s without the EPA’s upcoming greenhouse gas regulations.
More than 58 percent of Kentucky’s coal fired power plants have already made plans to close by 2020, or will likely retire by 2030 or 2040 due to their ages.
The first wave of power plant closings has already been set into motion by another EPA rule: the Mercury and Air Toxics Standard. About a quarter of the state’s coal fleet will shut down or convert to natural gas, rather than install pollution controls to comply with the regulation.
In addition to those closures, the state is predicting about 33 percent of Kentucky’s coal capacity won’t be around by 2040. And that’s not because of regulations—it’s because of age. Coal-fired power plants have an average lifespan of 65 years, and Kentucky’s coal fleet is aging. The state estimates that 5,830 coal-fired megawatts will be taken offline by 2040 simply because the plants will be old and inefficient by then.
The EPA is expected to finalize its carbon dioxide regulations later this summer, and many lawmakers have expressed concern and frustration that the rules will burden Kentucky ratepayers. Electricity rates in Kentucky may inevitably rise as coal plants retire, but that’s not directly related to the carbon dioxide rules. Regulators expect that Kentucky won’t have to do very much to comply with the EPA’s upcoming greenhouse gas regulations, because so many plants are going offline anyway.
New coal-fired power plants are unlikely to be built, because EPA rules finalized last year put limits on the greenhouse gas emissions those plants can emit. The EPA’s limit would mean that any new coal plant would need to incorporate some type of carbon capture technology; this may not be a deal breaker in the future, but right now, carbon capture equipment is prohibitively expensive.
Peters also told the committee that Kentucky’s demand for electricity has nearly flattened. That’s partly because one of the state’s major electricity users—the Paducah Gaseous Diffusion plant—has shut down. Increased energy efficiency has played a role, too. All of these factors mean that not all of the retiring coal units will have to be replaced to power the state.