New Projects - Gas

AES Indiana gets approval to convert its last remaining coal units to gas

Repowering is estimated to save customers about $281 million over 20 years by cutting O&M costs of operating Petersburg as a coal-fired resource.
AES Indiana gets approval to convert its last remaining coal units to gas
Petersburg plant (Credit: AES Indiana)

AES Indiana received approval from the Indiana Utility Regulatory Commission (IURC) to repower Petersburg Units 3 & 4 from coal to natural gas, paving the way for AES Indiana to be the first Indiana investor-owned utility out of coal by 2026.

Repowering is estimated to save customers approximately $281 million over a 20-year period by eliminating the additional O&M costs associated with operating Petersburg as a coal-fired resource, AES said. The repowering is also meant to maintain reliability and reduce carbon intensity by an estimated 70% by 2030 compared to 2018 levels, and repowering to natural gas could reduce hourly CO2 emissions by half.

Repowering Petersburg Units 3 & 4 aligns with AES Indiana’s 2022 Integrated Resource Plan (IRP) and the 2024 IRP updated analysis, which included a third-party reliability analysis confirming that repowering to natural gas is as reliable as coal, AES said. Additionally, AES Indiana is adding 1,300 megawatts (MW) of wind, solar and battery storage through competitive projects.

“For more than a decade, AES Indiana has taken significant steps toward reducing our carbon footprint by planning for a future that includes generation investments focused on cleaner, more efficient energy options,” said Brandi Davis-Handy, AES Indiana President. “We’ve transitioned to a more balanced energy portfolio that aligns with the state’s all-of-the-above energy policy while also maintaining affordability and reliability for our customers. With this approval, we can continue reliably serving central Indiana and meet the growing and evolving energy demands of tomorrow.”

AES Indiana originally filed the request in March of this year. Petersburg Units 3 and 4 each have a nameplate capacity of 690 MW and came online in 1977 and 1986, respectively. AES Indiana retired the 230 MW Petersburg Unit 1 in May 2021 and the 415 MW Petersburg Unit 2 in June 2023.

AES Indiana recently announced plans to invest $1.1 billion in the future of Pike County from 2024-2026. In addition to the repowering of Petersburg Units 3 & 4, the Pike County Battery Energy Storage System and the Petersburg Energy Center will add 250 MW of solar and 180 MW of battery storage to AES Indiana’s portfolio. AES Indiana plans to start construction by the end of 2025 and anticipates completing the project by the end of 2026.