American Electric Power (AEP)(NYSE: AEP) updated its forecast for coal power generation to 51 percent in 2020, Platts reported. The Ohio-based company revised its projection up from an earlier forecast of 46 percent. AEP Spokesperson Tammy Ridout said in addition to coal generation not dropping as much as predicted originally, natural gas usage will also decrease compared to older projections.
"This balancing of our fuel resources and demand reduction efforts will move us forward on the path to continued carbon dioxide reductions, helping us achieve our voluntary 2020 goal to reduce GHG emissions by 10 percent from 2010 levels," the company said.
AEP expects to close 2,500 megawatts of coal-fired plant units, including three units that have a combined power generation capacity of 630 MW at West Virginia's Kammer plant. Many of the retirements are to comply with the U.S. Environmental Protection Agency's regulations that aim to curb greenhouse gas emissions. However, the company said coal will remain a key energy resource because it's less costly.
"Coal has to be part of the puzzle," Nick Akins, chairman and chief executive of power giant AEP, said at The Wall Street Journal's ECOnomics conference in Santa Barbara, Calif.