February 13, 2013 / 5:51 PM / in 5 years

Duke to retire older U.S. coal power plants as new units start

* Duke, Progress have invested $7 bln in control equipment

* Duke CEO wants Congress to put price on carbon emissions

* Three North Carolina power plants entered service in 2012

By Scott DiSavino

Feb 13 (Reuters) - Duke Energy Corp, the biggest U.S. power company, will retire up to 6,800 megawatts (MW) of coal-fired generating capacity by 2015 as part of the company’s multiyear $9 billion fleet modernization program, the company’s CEO said Wednesday.

“This program has put us ahead of the curve in our industry in terms of preparing for compliance with stricter environmental regulations,” Jim Rogers, Duke CEO, said on the company’s fourth-quarter earnings call.

The modernization program includes construction of the Edwardsport coal plant in Indiana and the Sutton natural gas plant in North Carolina, and three plants in North Carolina that already entered service in 2012, Rogers said.

“By building several new natural gas plants, we are increasing our fuel diversity and giving our customers the benefits of low natural gas prices,” Rogers said.

The three North Carolina plants that entered service in 2012 were the 920-MW H.F. Lee gas plant, the 620-MW Dan River gas plant and the 825-MW Cliffside 6 coal-fired unit.

Rogers said the 618-MW Edwardsport coal gasification plant in Indiana will enter service by midyear. The $3.3 billion plant has already produced electricity in test mode.

And, he said, the 625-MW Sutton combined-cycle gas plant would enter service by the end of the year.

“These new plants will allow us to retire up to 6,800 MW of older, less-efficient coal-fired units by 2015 and, by the end of this year, we expect to have retired more than 3,800 MW of this capacity,” he said.

Rogers said Duke and Progress Energy, which merged with Duke in 2012, have “already invested around $7 billion in control equipment for our existing coal plants, positioning them for compliance with more stringent air emission regulations.”

But he estimated the company will spend an additional $5 billion to $6 billion over the next decade to comply with pending environmental regulations on air, water, and coal ash.


President Barack Obama in his State of the Union address gave Congress an ultimatum on climate change: craft a plan to slash greenhouse gas emissions and adapt to global warming, or the White House will go it alone.

“I continue to believe that the (U.S. Environmental Protection Agency (EPA)) is not equipped to put a price on carbon. That is going to take legislation,” Rogers said in answer to a question on Obama’s global warming comments.

Rogers was one of the first energy executives to support cap-and-trade programs to reduce carbon dioxide (CO2) and other greenhouse gas emissions.

To reduce the CO2 emissions, Rogers said shale gas has already been “transformative in terms of the carbon footprint” of the power industry.

“We have made tremendous progress at reducing the burden of coal and have increased dramatically the burn of natural gas, which has about 50 percent of the carbon footprint of coal,” Rogers said.

He said the United States was already at the same place in terms of CO2 emissions as in 1992.

“At the end of the day, they will have to put a price on carbon. That can’t be done by the EPA. That can only be done by Congress, and they need to act,” Rogers said.

He said now was a good time for Congress to act because the cost of solar power is dropping and natural gas is cheap due to record shale production.

“We are in a period where you could start with a low price on carbon and let it escalates over a much longer period of time, thus minimizing the impact on the economy,” he said.

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