It probably flies over the heads of most people when world leaders gather to chart plans for reducing greenhouse gas emissions. After all, Joe and Jane Citizen aren’t sure what global pacts mean to them where they live. Less reliable energy? Higher energy costs? Or both?
It hits much closer to home when agreements are reached among often-competing entities with the announced goals being enhanced energy reliability, better-managed prices and a smaller carbon footprint.
That promises to be the long-term result of an agreement between Alliant Energy Corp. and We Energies over construction of a natural gas plant in Beloit. It could serve as a model for reducing Wisconsin’s reliance on coal-fired generation plants.
Alliant wants to build a $700-million, natural gas-fired plant at its existing Riverside Energy Center in Beloit. It would produce about 650-megawatts of electricity once completed and replace about 700 megawatts of “old coal.” That term describes inefficient coal-fired plants that are sources of carbon dioxide, sulfur dioxide, mercury, particulates and “NOx,” a generic term for nitrous oxide and nitrogen oxide.
The company could have built a $400-million scrubber on its coal-fired plant in Cassville, and rigged similar improvements at other aging plants, but opted for an efficient, gas-fired baseload facility. Five years ago, that choice would have seemed cost-prohibitive. Today, with 100 years of natural gas reserves in the United States alone, it makes economic and environmental sense to diversify.
At first, that wasn’t the view of We Energies. The Milwaukee-based utility told state regulators it preferred to sell Alliant electricity produced at its Port Washington plant, one of its two newest plants. Alliant declined, saying that approach wouldn’t help it to retire old coal plants or save money for customers, given We Energies’ rates.
After no small amount of give-and-take, the result is an agreement that turns We Energies and another Wisconsin utility, Wisconsin Public Service Corp., into partners instead of protagonists. The deal extends not only to plants such as the Beloit facility, but for joint renewable energy projects, as well.
The construction of the Beloit plant stands to help electricity customers across Wisconsin and beyond for several reasons:
- Natural gas burns cleaner than coal, producing about half the carbon dioxide, a prime greenhouse gas, per energy unit. Critics say natural gas isn’t the “bridge fuel” advocates tout because its use will delay adoption of renewables such as solar and wind. However, solar and wind are still intermittent power producers versus reliable baseload sources.
- The cost of natural gas has fallen as supplies have increased. Thermal coal is still plentiful and cheap, but natural gas has been creeping in plant-by-plant in recent years, taking away market share from coal producers as the fuel of choice. Plus, is coal really “cheap” once regulatory and environmental costs are calculated?
- The new Beloit plant is adjacent to competing natural gas lines, which will help to control prices and ensure supply. It’s also at an electricity transmission crossroads that will allow for efficient transmission through Midwestern grids.
- Natural gas is compatible with renewables such as solar and wind because gas plants take less time to power up or down. When solar or wind is readily available, a gas plant can be ramped down within two hours; the same goes for the “power-up” side when intermittent sources aren’t available.
The construction of the Beloit plant isn’t being driven by President Obama’s Clean Power Plan – which is being contested by many states, Wisconsin included. Nor is it related to the global climate change agreement just announced in Paris. Rather, it’s a response to existing rules regulating “old coal” and market opportunities created by a newly abundant and cleaner source, natural gas.
Wisconsin has historically ranked among the nation’s most coal-dependent states. How Wisconsin diversifies that portfolio over time is critical. A meeting of the Wisconsin Cleantech Network in Madison Jan. 20 will examine choices on the horizon; visit www.wisconsintechnologycouncil.com to learn more about that meeting.
Meanwhile, cooperative agreements such as the Beloit plant partnership offer “no-regrets” options that stand to help consumers and the environment.
Tom Still is the president of the Wisconsin Technology Council.
