Tuesday, March 16, 2021

A Second Life

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With coal plant retirements at an historic high, EPRI works with power companies to find productive new uses

Commissioned in 1948, the 100-megawatt Seaholm Power Plant was an economic engine for Austin, Texas, providing electricity for all the city’s residents in the 1950s. As Austin grew, new power plants were built to supplement Seaholm, which stopped operating in the late 1980s. By 1992, the plant’s 8-acre site was overgrown with weeds, and, in the late 1990s, there was serious talk of demolishing the deteriorating building.

Today the Seaholm Plant has emerged as a hub for redevelopment in one of the country’s most dynamic cities. Taking advantage of its location near Lady Bird Lake and Austin’s thriving entertainment district, Seaholm has been redeveloped into a mixture of 280 apartments and condos, 1.5 acres of green space for events and performances, and 130,000 square feet of commercial space occupied by local businesses, a Trader Joe’s grocery store, and the healthcare company, Athenahealth.

Though redevelopment required significant upgrades and modifications to serve 21st century urban residents and businesses, the Art Moderne power plant retains its aesthetic—earning a prestigious Driehaus award from the National Trust for Historic Preservation.

More Plants to Repurpose

Among power plants, Seaholm is one of many examples of innovative repurposing. South Street Station, a Classical Revival–style coal plant that provided electricity to Providence, Rhode Island, is now home to administrative offices for Brown University and a nursing school operated by the University of Rhode Island and Rhode Island College. The Ottawa Power Station, which operated for more than 50 years in Lansing, Michigan, is now the corporate headquarters of the Accident Fund Insurance Company of America. The redesigned and modernized Art Deco plant earned a place on the National Register of Historic Places as well as LEED (Leadership in Energy and Environmental Design) certification.

The redeveloped site of the Seaholm Plant in Austin, Texas. Photo courtesy of Southwest Strategies Group.

As the pace quickens for closing coal power plants, the need grows to find new uses for these facilities. The U.S. Energy Information Agency expected coal use in 2018 to fall to its lowest level since 1979—44% below its peak in 2007. In total, 200 coal plants totaling 102 gigawatts ceased operations between 2000 and 2016. S&P Global Market Intelligence projects an additional 28 gigawatts of U.S. coal plants to retire between 2019 and 2023.

Sharing Knowledge and Experiences

Utilities face complex decisions regarding the buildings, extensive infrastructure, and land that make up a typical coal plant. As part of a new EPRI initiative, utilities are sharing their experience and exploring various options for their retiring coal plants. A recent EPRI white paper describes a comprehensive process for moving such efforts forward.

“The closures are coming at a rate nobody has seen before, and collaboration is a necessity,” said EPRI Senior Technical Leader Lea Millet, who is leading the initiative. “We facilitate collaboration and make sure people are aware of the options.”

Millet is uniquely suited to lead this work. Before joining EPRI, she spent more than 12 years working in environmental permitting and compliance, site remediation, and plant decommissioning at a southern U.S. electric and gas utility. Millet recently took over EPRI’s power plant decommissioning program, which provides power companies with a forum for sharing information through webinars and workshops. As the result of member input, the program is now focusing more on plant redevelopment.

In February 2020, an EPRI workshop on power plant redevelopment provided an update on Seaholm and other projects. Utility staff attending the event learned about approaches to planning and implementing decommissioning and redevelopment. They indicated interest in future work, such as the development of a database of information on how utilities have repurposed plants.

“EPRI provides a valuable networking resource for utilities across the country that are anticipating or working through the decommissioning process,” said Jeff Battaglia, decommissioning manager at Consumers Energy.

Attractive Assets

The repurposed sites in Austin, Providence, and Lansing point to the significant potential of retired plants in desirable urban locations—and with historically significant structures. Rural plants also offer potential, though the most viable uses may differ from those in urban areas. The best path forward varies from site to site.

There are some attributes common among coal plants that make them attractive for industrial and commercial reuse. Most are located on navigable waterways. Many are outfitted with railway lines and equipment used for unloading coal—infrastructure that future manufacturing facilities can use for receiving raw materials and shipping finished goods to market.

Coal plants have already been through the rigorous permitting process required to load, unload, and ship materials and goods on waterways. “It’s a major undertaking to find a new property and go through the whole permitting process with the Army Corps of Engineers,” said Millet.

Coal plants have significant power infrastructure. “There is typically a substation on-site or nearby, and the transformers on-site are heavy duty and reliable,” said Houston Roberts, a partner with North Carolina–based Forsite Development, a company that acquires and redevelops large industrial plants and has redeveloped five coal plants. “Groups needing a lot of power such as data centers, aluminum smelters, and other big manufacturers could take advantage of the strong interconnection.”

Support from Public Agencies

Utilities exploring new uses for coal plants can take advantage of expertise and support from government agencies. “There are a lot of economic development agencies and funding streams, both federal and state, available to help with the planning,” said Millet. For example, the Pennsylvania Department of Community and Economic Development (DCED) received a federal grant to identify new uses for the state’s retiring coal plants.

The first beneficiary of DCED’s assistance was FirstEnergy’s Mitchell Power Station, a 370-megawatt coal plant near Pittsburgh that closed in 2013. DCED staff worked with FirstEnergy and other stakeholders to develop a redevelopment “playbook.” This analyzed market demand, the site’s physical and environmental assets, repurposing alternatives, the financial feasibility of the alternatives, and implementation.

Because of the site’s rail, river, and road infrastructure, the playbook pinpointed plastics, chemical, and other large manufacturers as ideal new owners—an insight used to focus outreach.

The Challenges of Repurposing

Redevelopment is not a straightforward process. Forsite’s Houston Roberts says that just getting a site ready for a second life is difficult. He has steered the change of former North Carolina coal plants to a biomass plant burning wood pellets and a power plant fueled by chicken waste. “These are challenging sites, particularly for demolition and environmental remediation,” he said.

Remediation can include addressing asbestos (particularly in plants built before 1970), heavy metals, and coal ash. This work is expensive, and it can be difficult to determine who will pay for it: the utility or the new owner.

For many communities, closing a plant means the loss of jobs and tax revenue that have been counted on for decades. “Our coal plants are highly valued, and closing one might reduce local tax revenue by 40% to 70%,” said Lynn Wilson, the stakeholder engagement manager for Consumers Energy, which has closed several coal plants. The power company recently received approval from Michigan regulators to phase out coal generation entirely by 2040.

Coal plant redevelopment may also come with psychological challenges. “This is an emotional topic,” said Wilson. “Some people have devoted their entire careers to a facility. Sometimes this spans multiple generations.”

Recognizing this emotional aspect, Wilson and her colleagues at Consumers Energy prioritize communication. “We make sure that our major stakeholders in an area never learn about major project developments from the newspaper. If there’s big news, they hear it personally from us first,” said Wilson. “It’s important to keep communication lines open and talk about the plans and timeline for the property.”

To support productive engagement with communities, Consumers Energy has funded studies on future economic uses for sites that are closing. “Those studies come up with recommendations on which industries would be well-suited for particular sites and communities,” said Wilson.

A study that points to specific, tangible uses for retired coal plants can inform those who may believe that power plants are suitable only for generating electricity.

Another potential challenge for repurposing coal plants is the internal dynamics at many utilities. Often, one utility department is responsible for environmental remediation and building demolition, while another is charged with considering redevelopment. “Utilities have people who operate plants while they are in power generation mode and other people who decide that it is going to get closed,” said Millet. “As closure approaches, plant management is transferred to a decommissioning group. A separate real estate or asset management group handles redevelopment.”

Another approach, Millet says, is for senior leadership to establish and fund a repurposing initiative with a mandate to work with all departments across the utility. “Every facility is going to close at some point,” she said. “It’s best to start these conversations early as part of long-term planning, and it’s best to include stakeholders from across the organization. A comprehensive approach is likely to have the most success.”

Photo at top of article is the redeveloped site of South Street Station in Providence, Rhode Island. ©Tsoi Kobus Design.

Key EPRI Technical Experts:

Lea Millet
For more information, contact techexpert@eprijournal.com.