In a sign that coal-fired power plants are in a weaker position to compete in the Texas electricity generation market, Vistra Energy said on Friday that it would close two coal-fueled power plants in Central Texas, taking offline some 2,300 MW of nameplate power early next year.
Vistra Energy's subsidiary Luminant would shut down its two-unit Sandow Power Plant in Milam County, as well as and its two-unit Big Brown Power Plant in Freestone County.
"These two plants are economically challenged in the competitive ERCOT market. Sustained low wholesale power prices, an oversupplied renewable generation market, and low natural gas prices, along with other factors, have contributed to this decision," Vistra Energy said.
"Though the long-term economic viability of these plants has been in question for some time, our year-long analysis indicates this announcement is now necessary," Vistra Energy's president and CEO Curt Morgan said.
A total of 450 workers at Sandow and another 200 employees at Big Brown will lose their jobs. The company has notified the Electric Reliability Council of Texas (ERCOT) which now has to issue a reliability review. If ERCOT determines that Sandow and Big Brown power is not needed for reliability, the plants are expected to stop operations in January and February, respectively.
Just last week, Vistra Energy announced plans to retire another coal-fired plant in Texas, Monticello Power Plant in Titus County, in a sign that coal-fired power is struggling to compete with natural gas and renewables.
So far this year, U.S. coal production has actually increased compared to last year, EIA data shows, but this has been mostly attributed to higher natural gas prices this year compared to last year.
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Coal and coal-fired capacity issues and debates have taken center stage in news flows again, after Donald Trump-one of whose campaign slogans was "Trump digs coal"-was elected U.S. President. Experts and analysts think that a genuine coal revival is unlikely.
Just last month, a U.S. appeals court upheld a lawsuit from environmentalists - saying that any leasing of coal projects on federal land must consider climate effects from the eventual burning of that coal. This week's EPA proposal to withdraw the Clean Power Plan (CPP) is not expected to lead to a coal resurgence either.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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