By Tom Kleckner
Vistra Energy announced Friday it will close two additional coal-fired plants, taking another 2,300 MW of capacity offline and slashing its coal portfolio by more than half.
The retirements of Big Brown, north of Houston, and Sandow, northeast of Austin, will leave Vistra’s Luminant generating subsidiary with just two operational coal plants rated at a combined 3,850 MW. Vistra announced Oct. 6 it would be retiring its three-unit, 1,800-MW Monticello plant in East Texas. (See First Shoe to Drop? Vistra to Retire 3 Texas Coal Units.)
CEO Curt Morgan again blamed the “economically challenged” environment the plants face in the ERCOT market. The company said sustained low wholesale power prices, an oversupply of renewable generation and low natural gas prices contributed to the decision.
“Though the long-term economic viability of these plants has been in question for some time, our yearlong analysis indicates this announcement is now necessary,” Morgan said.
The retirements include the 600-MW Sandow Unit 5, which went online in 2009 and has a 75% capacity factor. Only Luminant’s Oak Grove plant, which began operations in 2010, is newer.
Sandow was built to serve a nearby Alcoa smelter, which was closed in 2008. Vistra earlier this week agreed to an early settlement that terminates a long-standing power and mining agreement with the aluminum company.
A Luminant spokesperson said once the contract was terminated, it became clear the Sandow units were not economical in the ERCOT market.
“The contract has helped shield Sandow from significant exposure to the downturn in the wholesale power market,” the company said in a press release.
The Three Oaks mine, which supports the plant, will also be closed.
Luminant has filed a 90-day notice of suspension of operations with ERCOT. The plant will cease operating Jan. 11 if the ISO’s reliability review shows the units are not needed.
Big Brown is the oldest coal plant in Luminant’s fleet, with its two units having begun operations in 1971 and 1972. The units are together capable of generating 1,150 MW and have a combined capacity factor of 59%. Both units burn lignite supplemented by Powder River Basin coal. A nearby Turlington mine that supplies the plant was already scheduled to wind down operations by the end of this year.
Vistra said it would explore a sales process for the site during ERCOT’s notification period. The company filed a 120-day suspension noticed with the ISO to allow for a “more complete sales process.” With ERCOT’s approval, the plant will cease operations on Feb. 12 if it has not been sold.
Luminant said about 650 employees will be affected by the plant and mine closures.
The company’s plants are currently capable of generating 18,000 MW of energy, including 2,300 of nuclear and 7,500 of natural gas capacity.