The City of Los Angeles has announced that it plans to replace coal power with renewables, efficiency and natural gas starting immediately. Craig Morris wonders how doomed coal is in the rest of the US – and in Germany.
Recently, the City of Los Angeles has drawn quite a lot of attention for its support for photovoltaics, which I was quite critical of in a previous article. But the news this month leaves us with precious little to criticize – when it comes to phasing out coal, it’s Los Angeles 1, Germany 0.
According to a report in Bloomberg, Los Angeles has been moving away from coal power for quite some time. The city got nearly 50 percent coal as recently as 2005, but the figure is already down to 37 percent.
Now, LA is to stop purchasing power from a coal plant in Arizona by 2015, with purchases from a second coal plant in Utah being replaced by a natural gas facility by 2025.
The campaign is a major success story for the Sierra Club, which spearheaded a Beyond Coal campaign – ironically, largely with funding from Mr. Bloomberg himself, the Mayor of New York City, who reportedly donated a whopping 50 million dollars to the campaign. That’s the bad news – you apparently need Big Money to get things done in the US.
Overall, however, US coal production is actually up, not down. Last year, US coal exports were greater than ever before, and since the United States is the “Saudi Arabia of coal” that trend will not change anytime soon due to a lack of resources. According to a recent report by our colleagues at Think Progress, the biggest buyers of coal are the Netherlands and the UK, both of which import more than twice as much coal from the US as Germany does.
Furthermore, despite all of the hype about shale gas, the US is expected to shift slightly this year and next year from gas to coal according to recent estimates, which have the share of coal dropping by 2.7 percentage points, with coal rising by 1.7.
Meanwhile, Germany – which has a nuclear phaseout, but no official coal phaseout – faces fierce criticism this year for its plan to build five new coal plants. Increasingly, critics charge that Germany is switching from nuclear to coal.
But a study published last November by German economic research institute DIW finds that investments in new coal will not be profitable. Stricter carbon emission standards will increasingly make coal power uncompetitive with low-carbon energy sources. Furthermore, the “capacity factor” of coal plants will drop; essentially, solar and wind power will continually cut into the baseload, forcing coal plants to ramp down. DIW estimates that a coal plant that goes into operation in 2015 will probably produce a loss of around 426 million euros over 40 years of service.
The coal plants going online this year in Germany were planned several years before the sudden nuclear phaseout of 2011. Nonetheless, they will be ready to run for 40 years. For the German energy transition to be credible worldwide, the country needs to work to make gas turbines a more profitable option. At the moment, LA is more of a model for the world than Germany in this respect.