Progress to Shut Coal-Fired Plants

By REBECCA SMITH
Bowing to rising environmental pressures, Progress Energy Inc. said it will shut 11 coal-fired power plants at four sites in North Carolina by 2017 and replace the capacity with gas-burning units.
The action is part of a trend in which utilities are shuttering older, smaller coal-burning units and embracing cheap natural gas as a "bridge fuel" to fill the gap until the 2020-to-2030 time frame, when nuclear power and renewable energy are expected to be larger sources of low-carbon electricity.
The power plants facing retirement in North Carolina were built between 1952 and 1972 and thus will be of retirement age by 2017. They constitute 30% of the utility's North Carolina coal capacity and, in an earlier era, might have been refurbished. But Progress has concluded that it would cost too much money to add scrubbers to reduce controlled pollutants like sulfur dioxide and it also suspects that it will cost too much, in coming years, to purchase the emission allowances that likely will be required for carbon dioxide emissions.
Bill Johnson, Progress chief executive, said the coal-to-gas strategy will reduce the utility's total carbon-dioxide emissions significantly, although not by the goal set by President Obama, to cut emissions 17 percent by 2020. "It's still a single-digit number for us, but it's moving in the right direction," Mr. Johnson said in an interview Tuesday. "I think others will follow."
North Carolina Gov. Bev Perdue, applauded the announcement, saying that it was "important for North Carolina's air quality" and "is good for the environment and the economy."
The announcement wasn't good news for the coal industry. One coal publication estimated that the news will reduce Progress' consumption of Central Appalachian coal by about 25%.
Other utilities have said they will shut coal-fired power plants in coming years, too. Duke Energy Corp., for example, said it will shut down 18 coal plants totaling 1,600 megawatts by 2020 and replace them with a mix of resources.
Progress Energy hopes to build two nuclear power plants in the next decade at an expected cost of $16.5 billion to $17 billion.
After 2017, Progress would continue to operate three coal-fired plants in North Carolina, totaling 3,542 megawatts, in which it has invested more than $2 billion for pollution control equipment. That equipment curbs nitrogen oxide and sulfur dioxide emissions but does nothing to control carbon dioxide, regarded as the leading greenhouse gas.
Mr. Johnson said the utility was asked by North Carolina utility regulators to come up with a plan for meeting the state's energy needs in coming years, after it sought permission to build a big gas-fired power plant.
Write to Rebecca Smith at rebecca.smith@wsj.com