Expensive, Deadly, and 50 Years Old: It’s Time to Retire the Gavin Coal Plant

Private equity giant Blackstone is invested in one of the largest and dirtiest coal plants in the United States, the General J Gavin Coal Plant in Ohio. Despite Blackstone’s commitments to reducing carbon emissions in new assets, various investments in renovating and constructing energy efficient buildings, and a $100 million investment in businesses that support the energy transition, the firm remains invested in this aging, polluting coal plant. As the Gavin Coal Plant celebrates its 50th birthday this year, it’s time for Blackstone to start planning the plant’s retirement.

Contradicting their corporate commitments to emissions reduction, Blackstone’s Gavin coal plant has emitted 106 million metric tons of CO2 into the atmosphere since the firm acquired the plant in 2016. These emissions impact communities well beyond Cheshire, Ohio. Because of its location, the Gavin Coal Plant is upwind of several major areas across the Eastern Seaboard such as Pittsburgh, Buffalo, and Baltimore, meaning the health impacts stretch across the country as well in a widespread plume of toxins. Sierra Club modeling found Gavin to be the nation’s deadliest coal plant as of February 2023, causing an estimated 244 premature deaths each year from particulate emissions.

Not only is Gavin deadly, it’s old and expensive. As the plant turns 50 this year, Gavin is an outlier among other coal plants slated for closure. Since 2000, the average age of retirement for coal-fired generating units has been 50 years. And, as coal plants age, operations and maintenance costs increase while performance decreases. In 2020, 46% of global coal plants were running at a loss, and Carbon Tracker estimates this rising to 52% by 2030 . Yet, Blackstone has not announced a retirement date for this old, inefficient asset.

Blackstone is in danger of missing this brief opportunity to leverage this program to repurpose an old, dirty, and inefficient coal plant while delivering returns for investors.

Blackstone has the opportunity to cement itself as a leader in the green transition by continuing to invest in clean energy solutions and closing the General J Gavin Coal Plant in Ohio. There’s extra funding for that green transition through the Inflation Reduction Act (IRA,) but the window of opportunity for that financingis closing. Blackstone should close the Gavin Coal Plant and repurpose the site for the renewable energy transition, and the IRA funding provides a unique financial opportunity for the firm to do just that.

Blackstone executives are well aware of the investment opportunities that exist in the clean energy transition. In fact, in Blackstone’s 2023 Q2 earnings call, President and Chief Operating Officer Jon Gray stated that the IRA would be helpful in spurring investments in the energy transition. Gray said:

The IRA in the U.S. has made a big difference. I mean, there was $250 billion of large-scale renewable projects announced in the last seven years. And there was an equal amount announced in the last year basically since the IRA passing. So, we would say very large scale opportunity and should result in a new area for us to grow and generate incremental fees and returns for investors.

By Blackstone’s own calculus, the IRA is a critical tool for spurring investments and generating returns for investors. Blackstone should get an application in for the Energy Infrastructure Reinvestment Program by the end of the year to ensure the firm is in the running for favorable financing terms to retool, repurpose, or replace the Gavin Coal Plant.

As of March 2024, there were 203 active applications in the Department of Energy’s Loan Programs Office which oversees the Energy Infrastructure Reinvestment Program. Over $262.2 billion in loans have been requested, and the program budget is only $250 billion. Blackstone is in danger of missing this brief opportunity to leverage this program to repurpose an old, dirty, and inefficient coal plant while delivering returns for investors. Blackstone must act now and retire the Gavin Coal Plant.