POWER SHIFT: Changes are ahead for SAEC’s energy mix

POWER SHIFT: Changes are ahead for SAEC’s energy mix
Posted Feb 27th, 2020

Most of our members probably don’t spend much time thinking about where their power originates as long as it works when they need it. But at South Alabama Electric Cooperative, understanding the generation sources is key to our mission of providing reliable and affordable energy.

Just like our members are part of this cooperative, SAEC is a member of PowerSouth Energy Cooperative in Andalusia. PowerSouth invests in the large facilities required to generate safe, reliable, affordable and environmentally responsible electricity. We purchase wholesale energy from PowerSouth.

Today, PowerSouth’s energy mix consists of natural gas, 77.2%; coal, 18.9%; hydroelectricity, 3.6%; and renewable resources such as landfill gas and wind, 0.3%. But between technological advancements and environmental regulations, there are changes in store.

“PowerSouth is taking steps today to ensure a safe, reliable and affordable energy supply for the future,” says Ron Graham, PowerSouth’s vice president of power supply. “The long-term power supply plan includes implementing cutting-edge technology, construction of a new natural gas-generating plant and further diversification of energy resources.”

By 2026, PowerSouth projects its energy mix will consist of natural gas, 77.0%; nuclear, 10.7%; coal, 6.4%; hydroelectricity, 3.5%; and renewable energy, 2.4%. But while changes are in store, Graham is confident the quality of service will not change.

“PowerSouth will continue providing the most reliable and best-priced power for members’ future needs,” he says.

Aerial Photo of the Central Generation Facility in Gantt

The Central Generation facility in Gantt uses natural gas, steam power and hydroelectric generation.

End of an era

Coal will be the part of PowerSouth’s energy mix most impacted by the coming changes, in particular the Charles R. Lowman Plant near Leroy, Alabama. The plant has been a cornerstone of PowerSouth’s generation fleet since 1969.
However, in order to comply with regulations imposed by the Environmental Protection Agency, continued operation of the coal-fired facility would require an additional investment of more than $160 million. Due to those costs and the potential for additional future regulation, PowerSouth’s board of trustees voted to cease operations at the Lowman Plant by Oct. 31, 2020.

“When weighed against the costs and challenges of bringing the Lowman Plant into compliance with these regulations, building a combined-cycle natural gas plant on the Lowman site stood as the more cost-efficient and long-term solution,” says Graham.

This new natural gas facility, the Low-man Energy Center, is scheduled to go into service by 2023. It is designed to incorporate advanced generation technology that will produce electricity in the most efficient and environmentally friendly way possible.

Atomic age

In addition to natural gas, nuclear power will play a bigger role in the energy mix as reliance on coal decreases. PowerSouth views nuclear energy as a viable option for generating large amounts of power without air pollutants or greenhouse gas emissions.

PowerSouth will purchase nuclear power from the Municipal Electric Authority of Georgia. This energy will be generated from the Vogtle Nuclear Power Plant’s two new units, which are under construction. The addition of nuclear power will bring additional diversity to PowerSouth’s energy mix, keeping costs low and reliability high.

“A diverse power mix is vital to supplying uninterrupted power and for keeping costs stable,” says Graham. “Nuclear energy supports our strategic initiative of maintaining that diversity.”

While PowerSouth will not own the nuclear power plant that generates the electricity, this agreement will allow the cooperative to purchase a portion of the energy it produces. That purchase is scheduled to begin in November 2021.

“The nuclear power purchase will provide approximately 10% of our members’ energy needs by 2022,” says Graham. “The advantages of nuclear power include rate stability and diversity of our energy portfolio to help us meet our mission of providing reliable and affordable energy to the communities our members serve.”

Aerial Photo of the Vann Power Plant 

The Vann Power Plant generates enough electricity to power more than 500,000 homes.

A sunny future

As consumer interest in solar power increased in recent years, PowerSouth has kept a close eye on the costs of providing a utility-scale solar option to its distribution members. In 2022, PowerSouth plans to launch a solar project in partnership with those members.

“PowerSouth has monitored the cost of utility-scale solar as end-use consumers’ desire for renewables has grown,” says Graham. “Over the past several years, prices have decreased to the point that solar is a cost-effective choice for power supply in the near future.”

The project will add up to 80 megawatts of solar-generated energy to PowerSouth’s energy mix, enough to power a portion of the needs for more than 13,200 homes. However, it is important to remember that solar energy is not currently a solution for large-scale generation.

“Adding solar generation promotes diversity of our energy mix, but it also presents challenges because of its intermittent nature,” Graham says.

Solar energy only produces electricity when the sun shines. As a result, most solar customers will still need a connection to the electric grid to maintain reliable service. This can require additional fees as the electric distributor must continue paying to maintain its system, even while solar customers purchase less energy.

In order to keep providing affordable and reliable energy, PowerSouth will continue to rely on traditional generating sources like natural gas.