Everything you need to know about recovering value from coal-burning power plant machinery & equipment

Article Written By: Clayton Arnold

As you have likely already heard,  coal-burning power plants are shutting down at a record pace across the USA due to several reasons, which include:

  • Federal rules to keep coal ash and toxic metals out of drinking water
  • The push for decarbonization with a target of net-zero emissions by 2050
  • The public demand for more renewable energy sources

According to S&P Global Market Intelligence, more than 23GW of Coal Capacity will be retired by 2028. This retirement rate will be the largest ever surpassing previous records set in 2015. This does not include the plans for more than 51 GW of coal power to retire between now and 2027. During the course of the next three decades, over 80 coal-burning power plants will be retired, leaving the operators with a lengthy list of initiatives they must complete before the shutdown. 

One of these initiatives includes figuring out a sound plan for all the industrial plant equipment, machinery, and inventory at these facilities. In this article, we will share insights on what coal-burning power plant Assets and Project Managers can do to maximize the value of these assets while adhering to strict internal deadlines, and complying with Environmental, Sustainability, and Governance (ESG)  policies, and reducing risk and project costs. 

Redeploy Usable Assets to Other Facilities

When looking to recover value from your surplus assets, the first step is to identify all assets within the facility. Once this is completed, your internal team can assess which useable assets can be redeployed to another facility. Redeployment refers to the reallocation of underused assets to another location within the company.  By redeploying these assets, you are able to recover the most value possible, as the asset stays in production within the organization. Additionally, by redeploying assets internally instead of demolishing or scrapping the equipment you are able to ensure you remain compliant with your internal ESG policies.

As part of the redeployment process, it is beneficial to examine the types of assets that other production lines could use. Generic equipment that can be used for multiple purposes is great for redeployment events. One of the simplest ways to start a redeployment event is to showcase all the available inventory to other facilities within the organization, in some cases, this can be done by using a simple spreadsheet, (albeit quite manual) or within an asset recovery platform. 

A redeployment event concludes once all the other facilities have had a chance to request or bid for assets. After the requested assets have been redeployed to the proper facilities, you can move the remaining assets and equipment to the next stage of the recovery process. 

Selling Used Equipment that Cannot be Redeployed

If you are still left with surplus assets after your redeployment event, there are still ways to generate financial value to offset or reduce the costs of the facility shut down. In our years of experience, we have seen that organizations do not fully understand the value of their assets or fear project delays due to complicated procedures when looking to sell their assets. Oftentimes, these organizations will pay to have their assets sent to scrapyards and landfills resulting in higher project costs and environmental challenges. 

However, given the right platform or solution, the remaining assets can be sold on the second market for a great return while meeting your internal timelines. The demand for used and surplus industrial assets on the second market has never been higher. With well-documented supply chain challenges all over the world, organizations are looking to the second market to help them source quality machinery and equipment. By selling the equipment, you are able to generate revenue back into the organization. In addition to helping offset costs, you are also able to comply with ESG policies as you are reducing or even eliminating the need for you your equipment to end g up in landfills and scrap yards across the country. 

Selecting the Right Asset Recovery Partner

Shutting down a coal-burning power plant is a massive undertaking, and oftentimes requires organizations to seek external vendors to assist with the process. It is best to identify areas in which you feel you are going to need the most assistance in your decommissioning plans. When selecting an asset recovery partner, you should ask yourself some of the following questions:

  • Does this organization have experience working within a coal-burning power plant facility closure?
  • Does this organization help us streamline our plans or do they complicate the entire process?
  • Will we need to work with multiple vendors in order to properly sell off the wide variety of assets from our facility or is there one vendor that can do it all?
  • How difficult will it be to integrate this vendor’s processes into our own recovery strategy?
  • Does this vendor provide me with the support and manpower required to complete this project on time and within budget?
  • What are the costs associated with this vendor?

Why Choose Aucto to Help Shut Down Your Coal-Burning Power Plant 

Aucto has expertise in coal plant closures and we have helped utilities like Cleco and Salt River Project recover capital from hard-to-sell coal plant assets. Our platform/team provides an end-to-end asset recovery solution, starting with onsite cataloging services, all the way through to providing an online solution to help sell your assets in as little as 17 days. You also get to maximize your recovery by keeping 100% of your asset sale price, all while in compliance with ESG policies. Throughout the entire process, get access to centralized and real-time reporting which provides you with better control and visibility.

Have more questions about how Aucto can help in your upcoming coal-burning power plant closure? Click the link below to schedule a brief meeting with one of our asset recovery experts.

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About the Author

Clayton Arnold

Clayton Arnold is the Marketing Manager at Aucto. Clayton has 10 years of experience working in traditional and digital marketing campaigns. A Mohawk College graduate, Clayton believes in leveraging the latest technology & analytics to foster long-term relationships with clients.