Largest North Dakota Coal Plant to Close in 2022

North Dakota’s largest coal-fired power plant, Coal Creek, is scheduled to close in 2022 after four decades of providing power. The power plant originally designed to operate as base load power had to change its operation during the past few years in a process known as “cycling”, which allows it to fluctuate between its full 1,146-megawatt capacity down to 300 megawatts or less when the wind is blowing and generating power from the area’s wind turbines. As a result, the power plant has had to operate at a financial loss. It has had to compete with low-cost natural gas and subsidized and mandated renewable energy. In March 2007, North Dakota enacted a voluntary objective that 10 percent of all retail electricity sold in the state be obtained from renewable energy (e.g. solar, wind, biomass, hydropower, geothermal) by 2015.

The current owner, Great River Energy, is looking for a buyer, but has had no offers. Great River Energy considered building wind farms in North Dakota near the Coal Creek plant that would use the existing transmission line that runs from the coal plant to Minnesota. However, because the county recently made zoning changes that prevent power lines connected to wind farms from coming within a mile of Lake Sakakawea, Lake Audubon and the Missouri River, the company had to change its plans.

Great River Energy now plans to add 1,100 megawatts of wind power to its portfolio by the end of 2023. Four projects will be sited in Minnesota and one in South Dakota that would effectively replace the capacity at Coal Creek. Unlike North and South Dakota, Minnesota has a mandatory renewable portfolio standard.

Minnesota requires at least 25 percent of retail electricity sales to be generated or procured using eligible renewable sources by 2025. Minnesota’s nuclear utility, Xcel Energy, has a 30 percent requirement. In additional, public utilities have a requirement that 1.5 percent of retail electricity sales be generated or procured using solar energy by 2020 and 10 percent of state retail electric sales must be from solar by 2030. This is despite the fact that in December, 2018, Minnesota’s solar panels only produced 5.6 percent of their stated capacity throughout the state.

Great River Energy’s Employees Look for Solutions

Great River Energy assembled teams of employees to find solutions to its financial challenges. Efforts have been made in the past to operate the plant more cleanly and efficiently by selling byproduct fly ash for use in concrete, developing a “DryFining” process that removes water from lignite to make it burn more efficiently and providing steam used by a nearby ethanol facility. Last year, Great River Energy completed upgrading a transmission line that runs from the plant for 436 miles east to Minnesota.

The co-operative had plans to pursue an $8.5 million carbon capture and storage project at Coal Creek that it began to study late last year. The technology, which is currently not economic, captures the carbon dioxide and injects it underground for permanent storage. Great River Energy was slated to receive a $4.2 million state grant for preliminary research, but it turned it down.

Employee Anxiety

The 2-unit Coal Creek plant employs 260 people, and it supports jobs at the adjacent Falkirk Coal Mine that employs 480 personnel. Unless the cooperative can find a buyer for the plant, many of these jobs will be lost. While Congress extended a federal tax credit for wind power late last year, lawmakers did not advance a bill that could have helped facilitate new coal projects such as power plants that capture carbon dioxide. The coronavirus pandemic has added an additional complexity, causing coal plants and mines to adjust their operations for worker safety.

Coal Plants in the United States

In the mid-2000s, the United States had over 300 gigawatts of coal-fired capacity and generated over 50 percent of its electricity from coal. That changed when states mandated specific levels of renewable energy to be built and federal and state governments provided subsidies to the renewable industry to encourage their deployment. Without those subsidies and mandates, renewable energy would not have survived. As Warren Buffet said: “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

As a result of the mandates and subsidies, coal power has been replaced by power generated from wind, solar, and low-cost natural gas. The United States now has 227 gigawatts of coal-fired capacity, and coal power generated just 23 percent of the nation’s electricity last year. Taxpayers have made the wind and solar industries viable, but the nation has forfeited reliable electricity for sources that can perform only when the wind is blowing or the sun is shining.

Conclusion

Another coal plant will be shuttered in North Dakota unless a buyer can be found to operate the plant without undergoing a financial loss. The current owner is replacing the plant’s capacity by building wind turbines in neighboring states. Of course, jobs will be lost at the coal plant and the adjacent coal mine with the plant’s closure.

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