AES to spend $1.1B as it converts Petersburg plant from coal to natural gas
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AES Indiana said Thursday it plans to invest about $1.1 billion in Pike County as part of its transition from coal to natural gas at its massive Petersburg Generating Station.
The Indianapolis-based electric utility was set to announce the plan at a luncheon for employees and community officials at the generating station, the largest in its fleet, and the only one to still use coal as a fuel source.
The investment would make AES Indiana the first utility in Indiana to abandon the use of coal as a fuel source, if state regulators agree, the company said.
The news comes about five months after the utility announced plans to stop using coal by 2026 at Petersburg and triple its renewables portfolio by 2027.
The Petersburg power plant, about 120 miles southwest of Indianapolis on the White River, has been called a “super polluter” by environmental groups and even by the Indianapolis City-County Council, which passed a resolution in 2017 calling for AES to cut back on burning coal.
The plant, the largest in AES Indiana’s fleet, has racked up dozens of environmental violations for emitting excess sulfur dioxide, nitrous oxide particulate matter and sulfuric mist. The coal-fired units have been active since the 1960s.
The new investments include “repowering” Petersburg’s two remaining coal-fired units to natural gas, pending approval from state regulators, and the addition of two new projects, including solar and battery storage.
The new projects, called the Pike County Battery Energy Storage System and the Petersburg Energy Center, will add 180 megawatt-hours of battery storage and 250 megawatts of solar to AES Indiana’s portfolio.
The Petersburg Energy Center is under construction and is expected to be operational by the end of 2025.
The battery storage facility is designed to deliver electricity for four hours, which can help meet energy demand during peak hours. The utility did not provide a timetable for its construction.
The utility said they would create about 300 jobs during construction and generate approximately $40 million in taxes and benefits for Pike County over the next 20 years. Petersburg, with a population of about 2,300, is the largest city and the county seat of Pike County.
AES Indiana officials said the projects would provide grid reliability, flexibility and sustainability.
The project aligns with AES Indiana’s 2022 Integrated Resource Plan, which includes transitioning coal-powered units to natural gas and adding wind, solar and battery storage over the next five years.
Testimony from the company filed in December 2022 indicates the utility generates 31% of its energy from coal and 51% from natural gas. AES Indiana expects that natural gas will account for approximately 70% of its resource mix once the Petersburg conversion is complete.
AES Indiana provides electricity to about 500,000 customers in central Indiana. It is a subsidiary of Arlington, Virginia-based AES Corp.