Wind power set to overtake coal generation capacity in Montana

Montana has long been an energy exporter, sending power generated with Montana-based resources to markets in other states. Between its snowmelt-fed rivers, plentiful coal reserves and abundant wind, the state has ample energy resources to power utilities here and elsewhere.

Since Units 3 and 4 of the Colstrip power plant came online in the mid-1980s, coal has comfortably claimed the state’s No. 2 spot behind hydroelectric power for generating capacity. But in recent years, wind has been on the rise as coal-fired facilities shutter and investment in Montana’s sizable wind resource — the state is ranked the No. 2 in the nation for wind potential — accelerates.

According to an MTFP analysis of data from the U.S. Department of Energy’s Energy Information Administration, “nameplate” wind generation capacity is likely to outstrip “nameplate” coal capacity when the Clearwater Wind East and Clearwater Wind II projects under construction east of Billings are complete.

Glenn McGrath, a senior analyst with the EIA, said in an interview that the rise of wind and decline of coal nationally are largely a function of economics. Coal plants are “getting chased out of the market” by cheaper resources, he said — namely combined-cycle natural gas plants and renewable energy sources like solar and wind.

“It’s either a problem or not a problem, depending on your perspective,” McGrath said. “If I was a coal plant, I probably wouldn’t be happy about it.”

According to preliminary data from the EIA, conventional steam coal plants provided 1,631 megawatts of “nameplate capacity” in October. Nameplate capacity refers to the amount of power a plant can produce under ideal conditions, i.e., when the water, steam or wind spinning a turbine is running at an optimal level.

During the same period, wind capacity in Montana clocked in at 1,479 megawatts. The Clearwater projects, owned by Florida-based NextEra Energy, are slated to add another 311 megawatts when they come fully online, for a total of 1,790 megawatts. 

The additional generation capacity and NextEra wind turbines that are already online will deliver up to 775 megawatts of power, according to a spokesperson. Much of that power will go to utilities like Portland General Electric and Western Washington’s Puget Sound Energy, out-of-state utilities that are planning to exit the Colstrip coal plant by the end of the decade but retain an ownership stake in the high-voltage transmission lines leading out of it. 

Climate-oriented laws in Washington and Oregon directing utilities to divest from coal have played a large role in Montana’s transition from fossil fuel energy sources to wind-generated power, as have the retirements of Colstrip’s first two units in 2020. 

Montana Department of Environmental Quality spokesperson Moira Davin noted that nameplate capacity is a helpful metric, but it’s not the only one worth highlighting. In an email to Montana Free Press, Davin wrote that coal has a higher “capacity factor,” meaning coal plants can hit their maximum generating capacity more reliably.  ­

“The actual energy output of coal fired power plants remains significantly higher than wind output, given that coal plants generally operate at a higher capacity factor than wind farms,” Davin wrote. “In 2022, coal fired generators produced approximately 43% of the electricity generated in-state, whereas wind generated approximately 15% of the total energy.”

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Still, energy developers have big plans for Montana wind. Nearly all of the Montana-based projects included on EIA’s planning list are wind-based. That includes Beaver Creek Wind, a four-phase Stillwater County project that pairs wind turbines with batteries. The first phase of that project is under construction and is expected to come online in 2025, delivering up to 248 megawatts of energy to Puget Sound Energy and an estimated $150 million to Stillwater County’s tax rolls. The Jawbone wind project, an 80-megawatt wind farm under construction near Harlowton, is also on EIA’s list of planned projects.

McGrath, the EIA analyst, added that although onshore wind projects are very competitive price-wise, they face challenges related to a mismatch between supply, demand and transmission. In situations where there is more wind-generated power than demand for it — or transmission available to move it — wind farm managers can be asked to “curtail” their generation. That comes to the detriment of their bottom line, McGrath said. 

Max Greene with renewable advocacy organization Renewable Northwest said in an interview the whole region is transmission-constrained, and that will have a bearing on a variety of power projects moving forward. 

Greene added that many utilities in Washington and Oregon are in “constant procurement mode.” Between its low cost relative to other power sources and financial incentives for carbon-free projects incorporated into the Inflation Reduction Act, Greene said he anticipates there will be continued interest in Montana wind projects, provided that the transmission to move the resulting electricity falls into place.

“Most of that east-to-west transmission is pretty well subscribed at this point,” he said. “We’re going to have to look at what opportunities will be out there for other ways to develop this important resource.”