AEP Vice President McCullough highlights growing role of natural gas

Traditional coal burner American Electric Power (NYSE:AEP) is increasingly using less coal power and relying more on natural gas to generate electricity.

That was the message that AEP Executive Vice President Mark McCullough brought to PennWell’s half-day GenForum Aug. 23 in Columbus, Ohio, not far from AEP headquarters.

AEP owns 32,000 MW of its own generating capacity as well as more than 40,000 line miles of electric transmission lines. The generation capacity was much higher a few years ago prior to the retirement of a number of coal units, McCullough said.

AEP “represents the country in a lot of ways,” McCullough said.

As recently as 2005, AEP relied upon coal for 70% of its electric generating portfolio. In 2016, however, the coal share has dropped to 48%, according to AEP materials.

While coal has been declining, natural gas and intermittent renewable sources have been growing on the AEP system. Natural gas increased from 19% in 2005 to 30% in 2016.

While natural gas has a number of attributes, one of the biggest is its low-carbon footprint, the AEP executive suggested. No one knows what will happen with the legal challenge to the Environmental Protection Agency (EPA) Clean Power Plan, McCullough said.

But “EPA has the authority to regulate carbon and they are going to do it,” McCullough said.

Natural gas also emits far less SO2 and NOx than coal-fired power plants. Natural gas plants can be licensed and constructed quicker than coal plants and advances in natural gas power generation technology have also affected the market, McCullough said.

Nuclear power has held steady at about 6% between 2005 and 2016. Meanwhile wind, solar and hydro/pumped storage has grown from 4% in 2005 to 11% in 2016.

The amount of wind and solar generation either owned directly by AEP companies or contracted through power purchase agreements will continue to mushroom in coming years, the AEP official indicated.

The coal units that remain for AEP tend to be retrofitted with newer emission controls. AEP has invested a total of $8.5bn to reduce emissions between 2000 and 2016.

In addition to emissions like sulfur dioxide and nitrogen oxide, AEP has also decreased its carbon dioxide emissions an estimated 39% since 2000, according to materials presented by McCullough.

  

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.