Coal-fired power plant transition: why early planning changes every pathway 

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Many asset owners face a choice that looks simple: continue operating aging coal-fired generating stations or begin planning for retirement. The future of these assets is not defined by a single timeline. Facilities expected to retire years ago are still operating as electricity demand grows and replacement generation needs evolve, so system reliability remains the top priority. 

At the same time, owners are managing rising maintenance costs, constrained supply chains and increasing environmental obligations while continuing to deliver reliable power. The challenge is no longer deciding whether to plan for transition, but how to prepare for several possible futures at once without constraining future options. 

Planning for transition is not an alternative to continuing operation. The two can — and should — happen together. Understanding asset conditions, closure liability and future opportunities does not determine when a facility will retire. It provides the information needed to evaluate multiple pathways and make deliberate decisions when the time comes.  

Transition planning starts long before retirement 

Preparing for transition is a multi-year process that often starts five years or more before a facility stops operating. That time is needed not only to develop a closure strategy, but also to understand the asset conditions, future obligations and the range of pathways available as operating conditions continue to evolve. 

The challenge is that retirement rarely follows a fixed timeline. Facilities may remain in service longer than originally anticipated as electricity demand grows, replacement generation is developed and system reliability requirements evolve. Decisions about maintenance, capital investment and future operations continue throughout that period, making it essential to understand the implications of those decisions before they become urgent. 

That understanding is built over time. Engineering assessments, environmental investigations, infrastructure evaluations and integrated cost estimations establish the technical foundation needed to evaluate future pathways, understand long-term obligations and support investment decisions throughout the remaining life of the asset. 

Evaluating the right pathway 

Transition planning is about understanding the decisions ahead before they become urgent. No facility will follow the same path, so owners need a practical way to evaluate the different options available to them.  

Drawing on experience across North American coal transition programs, GHD’s recently  launched Coal to Clarity guide introduces the following four strategic pathways to help owners align planning with operational realities: 

1. Maintain and operate but spend smarter: reframes continued operation as a deliberate holding strategy. The focus is on maintaining system reliability while making disciplined capital decisions that preserve future options and avoid locking in unnecessary cost, risk or strategic inflexibility. 

2. Partial transition or hybrid model: recognizes that many assets cannot transition all at once. Early planning defines what remains in service, what can be retired and what should be protected, creating a realistic sequence that reduces cost and schedule risk while preserving future optionality. 

3. Alternative power integration: explores how existing sites can support new sources of generation. Early planning evaluates infrastructure reuse, site-specific constraints and future energy opportunities to determine the most practical transition pathway while avoiding assumptions that could limit future options. 

4. Planned closure: creates clarity and control long before operations end. By establishing a credible end-of-life pathway while facilities continue operating, owners can improve cost certainty, reduce long-term liabilities and preserve future options. 

These pathways are not mutually exclusive, and facilities move between them as operating conditions, market needs and long-term objectives evolve. This framework helps owners understand where an asset sits today, what options are available and what information is needed before making the next decision. 

Understanding the true cost of transition 

One of the biggest challenges in coal transition is understanding the true cost of an asset’s next phase. Many owners begin planning with conceptual estimates, but the full financial picture only becomes clear as site-specific conditions, environmental obligations and technical requirements are better understood. 

Every facility presents a different set of challenges. Coal combustion residuals, ash ponds, landfills, groundwater management systems and long-term monitoring requirements vary significantly from one site to another.  

These differences can significantly affect both project scope and cost. One of the biggest surprises for owners is how quickly the true cost of closure changes once detailed investigations begin. Understanding those costs requires more than applying historical averages or contractor allowances. It depends on developing a realistic picture of the asset through technical investigations, environmental studies and integrated cost estimating. 

Comprehensive engineering and environmental assessments have, in some programs, increased projected closure costs by as much as 200%. While this can be a difficult finding, identifying those costs early allows owners to evaluate alternatives, refine transition strategies and avoid far greater uncertainty later in the asset lifecycle. 

Planning beyond closure 

Transition planning extends beyond retiring a generating asset. It should also consider the long-term future of the site itself. Decisions made throughout the planning process influence what remains possible long after electricity generation has ended. 

Many coal-fired power plants occupy strategically valuable locations with existing transmission infrastructure, transportation access, water supply and industrial services. These assets represent significant long-term investment and, in many cases, may continue to support future power generation, industrial development or other regional priorities. 

Understanding that potential early allows future land use, infrastructure reuse and closure planning to inform one another before major infrastructure decisions have been made. It also helps owners identify which assets should be retained, repurposed or removed to support the site’s long-term objectives. 

Not every site will be redeveloped, and the right outcome will depend on site conditions, environmental constraints, market demand and community priorities. The objective is not to define a single end state, but to preserve future options while they remain available. 

From planning to implementation 

The four pathways are already helping asset owners navigate coal transition programs across North America. While every facility presents different technical, operational and regulatory challenges, the common thread is a planning process built on a clear understanding of the asset, its future obligations and the options available for its next phase. 

In one major North American utility program, GHD developed a comprehensive “Closure Cost Study and Estimating Methodology” to support the long-term transition of aging thermal generating assets. First applied at a single generating station, the methodology combined engineering, environmental and commercial considerations to develop practical decommissioning plans and realistic closure cost estimates. This method proved successful, with the pilot project completed approximately 20% under the allocated budget and minimal contractor claims during execution of the work. Based on the success of this pilot project, the use of this closure planning methodology was expanded across the client’s entire ​     ​thermal generation portfolio. Over the past 10 years, GHD has completed similar closure studies and cost estimates at seven additional facilities across the clients portfolio. 

On another ​​​​coal transition program, decommissioning and reclamation planning began​     ​ well before closure activities began. By integrating engineering, environmental and regulatory considerations early in the planning process, the work established a technically robust foundation for managing closure responsibly, improving certainty around future liabilities and supporting long-term environmental stewardship. 

Although the projects addressed different challenges, they demonstrate the same principle: whether the objective is continued operation, phased transition, alternative power integration or planned closure, informed decisions begin with a clear understanding of the asset and its long-term implications. 

The cost of waiting 

Coal-fired generation will continue to evolve as energy systems change. Some facilities will remain in service longer than originally anticipated, while others will move toward retirement over the coming years. The timing will differ from one asset to another, but the need for preparation does not. 

The decisions that have the greatest impact on an asset’s future are often made long before a closure date has been confirmed. The years leading up to transition provide the opportunity to understand future obligations, establish credible cost estimates and evaluate multiple pathways while the greatest number of options remain available. 

There is no single pathway that applies to every asset. The right approach will depend on the condition of the facility, operational requirements, future energy needs and long-term objectives. What matters is having the information needed to understand those options before decisions become urgent.  

Organizations that invest in early planning are better positioned to manage long-term risk, preserve flexibility and make deliberate decisions supported by evidence. Those that wait until retirement is imminent often discover that the greatest cost is not measured solely in dollars, but in the loss of options. 

Michael Gallahue is GHD’s team lead, decommissioning, closure and rehabilitation and asset transition service line, Americas, and contributor to Coal to Clarity guide on coal transition planning.