Navigant: There’s money to be made on shutting coal plants

Navigant Research said Aug. 6 that with so many coal plants having to close around the country over the next few years, a booming market will be created in plant decommissioning and demolition.

Driven by tightening environmental regulations, competition from natural gas plants, and public pressure for cleaner sources of electricity, utilities will retire record numbers of coal plants between 2013 and 2020, Navigant said. According to a new report from Navigant, worldwide revenue from coal plant decommissioning services will total $5.3bn from 2013 to 2020.

“Utilities and other plant owners face a series of complex decisions in retiring aging coal plants,” said Richard Martin, editorial director with Navigant Research. “Developing a strategic plan, in consultation with a company that has experience in these major plant decommissioning projects, will be a critical element of the process of retiring these facilities and remediating the associated environmental issues.”

Actual demolition of the plant is not likely to be the most costly part of the decommissioning process, according to the report, and the value of the scrap metal from the plant on the open market could fully offset the cost of demolition. Environmental remediation will be the most expensive phase of many of these decommissioning projects, Navigant noted. In particular, disposing of coal ash, typically stored in ponds onsite, will present a major challenge in closing out a plant site.

The report includes forecasts for North America and Western Europe for both the number of coal plant retirements and the revenue from coal plant decommissioning, through 2020.

Navigant Research, the dedicated research arm of Navigant, provides market research and benchmarking services for rapidly changing and often highly regulated industries. Navigant (NYSE: NCI) is a specialized, global expert services firm dedicated to assisting clients in creating and protecting value in the face of critical business risks and opportunities.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.