Published in Energy
The Grand Haven Board of Light & Power is exploring its options after burning the last of its coal at the J.B. Sims power plant last week. The utility currently buys most of its power off the market, but is considering adding a small natural gas plant to power its snow melt system and serve as a backup in peak periods The Grand Haven Board of Light & Power is exploring its options after burning the last of its coal at the J.B. Sims power plant last week. The utility currently buys most of its power off the market, but is considering adding a small natural gas plant to power its snow melt system and serve as a backup in peak periods PHOTO: MARK SANCHEZ

Grand Haven weighs energy options after Sims coal plant closure

BY Sunday, February 16, 2020 07:40pm

GRAND HAVEN — The J.B. Sims power plant in Grand Haven burned its last supply of coal this month, but local officials are still debating plans for the city’s long-term energy portfolio.

With the 70.4-megawatt Sims plant out of the picture, the city is working through demolition plans and whether it will add natural gas generation to primarily power its sidewalk snow melt system. A small portion of the natural gas power could also be used during peak usage periods like hot summer days.

David Walters, general manager of the Grand Haven Board of Light & Power (GHBLP), said the city will continue to rely on market purchases for its power in the near term and likely purchase gas-powered water heaters for the snow-melt system.

“When Sims goes down, we’re going to find a diversified power supply portfolio, most of which will come from outside of our service territory,” Walters said. “It’s a big switch from what Grand Haven has done in the past.” 

However, the city continues to weigh its options for a small natural gas plant to power the snow melt system and act as a backup during high-demand periods. In 2018, the city considered building a 36 MW natural gas plant on Harbor Island where the Sims plant is located.

However, the price of that plan “came in very high,” Walters said. It also faced pushback from environmental advocates, including the Sierra Club

Now Grand Haven utility officials are considering several small modular, reciprocating natural gas engines totaling around 20 MW of capacity. Grand Haven has a peak capacity need of 68 MW in the summer, meaning a replacement plant would only generate electricity for a small portion of the time.

“We’re pretty optimistic some smaller project will make more sense than a 36 MW plant,” Walters said. Additionally, a combined heat and power plant could provide waste heat for the snow melt system.

However, environmental groups remain concerned about a natural gas option. The Sierra Club led a public campaign in 2017 around closing Sims, calling on the utility to explore efficiency and market purchases of renewable energy instead. While the Sierra Club is celebrating the Sims closure, it is warning about building a new natural gas plant on Harbor Island.

“Replacing coal with another fossil fuel gas plant is an economic and environmental mistake that harms the future of this lakeshore community,” Jan O’Connell, development director for Sierra Club’s Michigan chapter, said in a statement. “Analysis has shown again and again that there are viable and more affordable clean energy options along with energy efficiency measures available to limit and meet the city’s energy needs. For the health of our community and natural resources, Grand Haven should be looking at options to remediate this polluted riverfront site, instead of placing another fossil fueled barrier in Grand Haven’s beautiful Harbor. The last thing we need is for Grand Haven Board of Light and Power and its customers to be stuck paying for another expensive and polluting fossil fuel investment that could cost upwards of $55 million.” 

Walters said planning around whether to build a small gas plant will continue over the next six months, and will weigh the cost against continuing to buy power on the market.

“We need to evaluate the cost of building it ourselves or essentially renting it from someone else,” he said. “Right now, we can rent cheaper than we can buy, but at some point, it’s going to be more expensive to rent than to buy. It involves financial projections we haven’t done.”

Gerry Witherell, vice chairperson of the GHBLP board of directors, called natural gas units “our best option at this time.” He said planning around Sims’ retirement has spanned nearly a decade.

“The city and the people who live here want some form of backup in the event something happens on the grid,” Witherell said. “It’s something that’s being (discussed) throughout the country as coal plants close.”

Local assets

The first two coal units at the Sims plant were built in 1961, followed by a third unit in 1983. Units I and II shut down in 1986, and the utility has relied on Unit III since. The GHBLP also operates a 6.5 MW diesel engine, which is scheduled to close this year.

In recent years, the remaining Sims unit began to deteriorate, with upgrades pegged in the tens of millions of dollars. The timeline follows similar coal plant closures across the state, including the B.C. Cobb plant in Muskegon and the James DeYoung plant in Holland. Consumers Energy plans to close its J.H. Campbell coal plant in neaby Port Sheldon in 2031, or potentially sooner. 

GHBLP first identified a 2020 closing date for Sims in 2012.

Across the country, coal plants have grown increasingly expensive because of cheap natural gas and renewables, along with the high cost of air pollution controls. Utilities are weighing the displacement of coal with natural gas and renewables, as well as reducing demand with energy efficiency.

GHBLP buys power on the market through the joint-action Michigan Public Power Agency (MPPA), which purchases power from a variety of fossil fuel and renewable energy plants. “Financial transactions” aren’t tied to a particular generating source, Walters said, while longer-term contracts can be for a particular type of generation, such as wind or solar. 

Over the next few years, GHBLP expects to get about 20 percent of its power through renewable sources. This will be done through the MPPA rather than the city building its own generation, which Walters said isn’t economically feasible.

Witherell called renewables a “partial solution but not a full solution.”

“Our local transactions, or building something, is not going to include a significant portion of renewables,” Walters said, since the city wouldn’t qualify for the federal tax breaks that private developers do. “Customers ask: ‘Why aren’t we looking at renewables?’ We are, we’re just going to obtain them a different way.”

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