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Forbes: Conservative Indiana Chooses Renewables Over Gas as It Retires Coal Early

Posted by Jeff McMahon on Jul 2, 2019

Forbes columnist Jeff McMahon summarizes take-away's from AEE's June 25 webinar, "What Happens When Wind and Solar Compete on Price." He focuses on the experience of panelist Mike Hooper, NIPSCO. See excerpts below and read the entire Forbes piece here. McMahon's second piece in this series is here.

Los Angeles just announced the largest and cheapest solar+storage project in the world, but that's the golden land of dreamers and subsidies. About 1,800 miles to the right, conservative Indiana—with no renewable-portfolio standard—is making similar choices.

Renewables are so cheap, said Mike Hooper, the senior vice president of the Northern Indiana Service Company (NIPSCO), that the utility can close its coal plants early and return $4 billion to its customers over the next 30 years.

"It ends up being a really big number, somewhere in the neighborhood of $4 billion for our customers, and clearly a lot of that comes from the fact that there’s hundreds of millions of dollars in fuel every year from a marginal standpoint that you're not spending, that the customer gets the advantage of through the check they write us every month..."

" we ran this RFP and got our results back, we were surprised to see that wind—especially early wind in service in 2020 and 2021—and then solar, on a levelized-cost-of-energy-basis, were significantly less expensive than new gas-fired generation."

Empowered by the low price of renewables, NIPSCO decided to double the number of coal plants it will retire in 2023—four instead of two—and to retire its 12 Michigan City units ahead of schedule in 2028... NIPSCO could theoretically abandon coal in five years, saving even more money, Hooper added, but it needs time to develop transmission and ensure a reliable transition.

"It gets us out of coal in ten years, and it’s really driven by economics," Hooper said last week in a webinar hosted by Advanced Energy Economy.

"Particularly a state like Indiana, it’s a fairly conservative state, but also Indiana is a state that has a reputation for being open for business and letting economics do a lot of the decision making..." 

Read the entire Forbes piece here. McMahon's second piece in this series is here.

Topics: AEE In The News