In order to meet the 2050 greenhouse gas (GHG) emissions-reduction target of net-zero emissions established by SB 254, as well as realize SB 358’s 2050 goal of producing energy from zero- emissions resources, the energy sector will ultimately have to transition away from coal and natural gas-fired power generation. Today, there are two coal-fired power plants and nine natural gas plants operating in the state. Key steps toward shifting entirely to non-fossil power sources include the systematic retirement of fossil-fueled power generation and replacing that capacity with clean energy sources.
In 2013, the Nevada Legislature passed SB 123 that required Nevada Power Company (NPC), NV Energy’s Southern Nevada utility, to retire or eliminate at least 800 MW of coal-fired electric generation in Clark County under an Emission Reduction and Capacity Replacement (ERCR) Plan. More specifically, SB 123 required the utility to include a plan for the retirement or elimination of at least 300 MW of coal-fired generation capacity on or before December 31, 2014; an additional 250 MW by December 31, 2017; and an additional 250 MW by December 31, 2019. The last coal retirement was NPC’s share of the Navajo Generating Station (Arizona) in 2019.
The ERCR plan also addressed replacement resources for the coal-plant retirements. NPC was required to issue requests for proposals (RFPs) for electric generating capacity from new renewable energy facilities. The utility was granted enhanced ratemaking treatment for all power plants constructed or acquired pursuant to an ERCR plan.
While all of the required retirements and eliminations of coal-fired generating capacity have occurred pursuant to SB 123, not all of the replacement capacity has been filled. As such, NPC is still authorized to construct or acquire an additional 35 MW of utility-owned electric generating capacity from new renewable energy facilities upon a determination that the utility has satisfactorily demonstrated a need for such capacity (Docket No. 14-05003, PUCN Order).
It is important to note that SB 123 did not apply to the coal plants operated by Sierra Pacific Power Company (SPPC), NV Energy’s Northern Nevada utility. Two coal-fired power plants are still in operation in the region: the North Valmy Generating Station and the TS Power Plant. SPPC, in conjunction with Idaho Power, owns the North Valmy Generating Station. Valmy Units 1 and 2 are slated for retirement at the end of 2021 and 2025, respectively (Docket No. 20-07023, Volume 3). Newmont Gold Mines owns the TS Power Plant.
Nevada Gold Mines recently announced that it has begun the conversion of the TS Power Plant to a dual-fuel facility, allowing it to also generate power from natural gas. Additionally, Nevada Gold Energy also filed with the Nevada Public Utilities Commission (PUCN) an application under the provisions of the Utility Environmental Protection Act for three permits to construct the TS Solar Project. This project is a 200 MW solar PV electric generating facility, a 120 kV on-site substation, a 120 kV generation-tie line, and an optional battery storage system. These solar facilities will be located adjacent to the TS Power Plant. The PUCN granted the application subject to several conditions on August 28, 2020 (Docket No. 20-06014, PUCN Order).
There are no applications pending with the PUCN for new fossil-fueled generation. More-aggressive policies to ensure a transition to 100% clean energy production, implicit in a net-zero GHG emissions target by 2050, will need to be considered moving forward. Already, NV Energy has filed a study regarding achieving full decarbonization in response to a request from the PUCN.
Nevada’s experience with SB 123 and long-term commitment to a strong renewable portfolio standard (RPS) demonstrate the state is well on its way replacing remaining fossil generating capacity with clean energy resources. What is needed now is a long-term transition from the remaining fossil generation to clean energy, prioritizing retirement of old, inefficient gas plants located in population centers. With the 2050 100% RPS goal as the guide post, policy mechanisms such as a clean energy standard, securitization (allowing customer-backed bonds to pay off stranded asset costs), and alternative ratemaking should be considered.
Transmission upgrades facilitating better market integration and expanded access to diverse resources will be needed for this transition and will promote reliability and cost containment for customers. As battery and other storage systems evolve and deployment expands, these technologies will assist with load following and ramping, services currently provided by the natural gas fleet.