Is converting coal to gas the right move?
What’s the bottom line?
According to the US Energy Information Administration (EIA), utilities are expecting to retire 175 coal-fired plants between 2012 and 2016.
To date, fewer than 10 of those plants are being considered for coal-to-gas conversion.
As coal costs continue to rise and federal, state and regional regulations seek to limit carbon emissions from coal-fired plants, there is no better time to consider converting aging coal-fired plants to gas.
As fuel price dynamics play out, it will be vital to have a long-term view on the mix of fuels (e.g., coal, gas, nuclear, renewables) present in the generation asset portfolio.
If utilities set to retire coal-fired plants are seeking to maximize value for ratepayers, shareholders and their own organization, they should leverage a robust, well-structured, risk-informed decision process to determine whether coal-to-gas conversion is a viable alternative.