WASHINGTON (Reuters) - Dynegy Inc will shut down three coal-fired units at two Illinois power plants because they are no longer economical in the Midwestern U.S. power market, the Houston-based electric utility said on Wednesday.
Dynegy said it had decided to close more than 1,800 megawatts at the coal-fired units of the Newton and Baldwin power plants because they failed to recover their basic operating costs at the Midwestern U.S. power grid’s most recent capacity auction.
“This is a difficult decision, and we don’t take it lightly,” Dynegy Chief Executive Officer Robert Flexon said in a statement. “For 40 years, the employees of the Baldwin and Newton Power Stations have generated reliable and affordable power for the people of Illinois.”
Dynegy said southern Illinois will lose about 30 percent of generating capacity.
The announcement comes just months after Dynegy said it would retire a 465 MW Illinois coal plant in June. Later this year it will decide whether to shut an additional 500 MW of coal capacity.
Environmental group the Sierra Club said Dynegy’s announcement on Wednesday pushed the United States to a milestone of shuttering more than 100,000 megawatts of coal-fired generation since 2010.
The group, which runs a campaign called “Beyond Coal” to phase out the fuel’s use in the electricity sector over the next 15 years, said the announcement showed the “quickening speed” at which the United States is abandoning coal for renewable energy.
“It’s a clear sign that we are winning,” Sierra Club Executive Director Michael Brune said in a statement.
The campaign focuses on reaching legal settlements with utilities to push them to shut their oldest and dirtiest coal-fired plants, and mobilizes local activists to advocate for retiring the facilities.
But Dynegy spokesman Micah Hirschfield said the Sierra Club was not involved in the decision to shut the three Illinois units.
“It was all about economics, not environmental reasons,” he said.
Bruce Nilles, senior director of the Beyond Coal campaign, said Dynegy wanted to delay installing air pollution controls on those coal units and that the Sierra Club collected thousands of comments from citizens to oppose that delay.
“This is (the result of) years of advocacy to make the coal industry internalize all of its costs,” he said. “And today they announced they can’t compete.”
Reporting by Valerie Volcovici; Editing by Lisa Von Ahn