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Report: Niche Business Awaits in Closing Coal Plants

Driven by more stringent environmental regulations and low-priced natural gas, many aging coal-fired generation plants will be closed during the next seven years, creating a business for decommissioning services that will exceed $5 billion, according to a report by Boulder, CO-based Navigant Research.

"The coming wave of retirements offers significant opportunities to the companies that will carry out the decommissioning processes," said Richard Martin, editorial director at Navigant, who added that coal plant owners will face a series of complex decisions in retiring aging facilities in the years ahead.

Navigant's report, "Coal Plant Decommissioning," estimated that worldwide revenue from coal plant closures will total $5.3 billion from now to 2020.

Concentrating on North American and Western Europe, Navigant looked at what it called the key players among the service providers and some key conclusions/recommendations for current owners of aging coal-fired generation plants.

Some of those conclusions as relayed by Martin are:

  • The forces driving coal plant closures are likely to accelerate over the next several years, and there is little benefit to delaying retirements if there are viable capacity substitutions available.
  • The days when coal plant operators could shut down boilers and walk away are gone.
  • Utilities facing major plant closures should consider full-service, turnkey solutions that involve a general contractor that can manage the overall project from planning to environmental remediation to documentation.

 

"It's critical [for plant owners] to work proactively with local and state officials and regulators and to anticipate any environmental liability issues in planning for coal plant closures," Martin said. Coal plant decommissioning is a classic "pay me now or pay me later" situation, he said.

The report concluded that demolition of the plants is not likely to be the most costly part of decommissioning because of the value of the scrap metal from each facility on today's open market in many cases could exceed the tear-down costs, Navigant's report said.

 "Environmental remediation will be the most expensive phase of many decommissioning projects. In particular, disposing of coal ash, typically stored in ponds onsite, will present a serious challenge in carrying out decommissioning projects."

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