America’s coal plants closing despite Trump

by L. Michael Buchsbaum
25 Jun 2018

US utilities will take 11.4 GW of coal-fired power plant capacity offline in 2018, in spite of Trump’s orders. Why? Simple economics, explains Michael Buchsbaum.

Trump holds a sign "Trump digs coal" surrounded by people taking pictures (U.S. Air National Guard Photo by Master Sgt. Culeen Shaffer/Released)

Trump digs coal – but operaters don’t! They want to move towards renewable energy (Public Domain)

His statement swept swiftly through the audience like a breeze of clean spring air.

“I will tell you it is not a matter of if we are going to retire our coal fleet in this nation, it’s just a matter of when,” said Ben Fowke, utility Xcel Energy Inc.’s chief executive officer, on stage at the Edison Electric Industry Group’s Annual Convention in San Diego, California on June 6th.

The company announced later that day in an electric resource plan that it wanted to retire two coal-fired units that produce a combined 660 megawatts (MW) of energy in Colorado and add 1,800 MW of capacity from renewable power, 275 MW of battery storage and another 383 MW of existing gas power.

Fowke was speaking just days after President Trump had ordered his Department of Energy to enact a legally dubious plan to halt the continued shuttering of more coal and nuclear plants in the name of national security. Indeed, a little over a decade ago, coal produced more than half of the electricity in the United States. But an unprecedented rate of plant retirements have cut that share to just 30.1% in 2017, and that number is swiftly spiraling downwards.

While coal producers, including major campaign contributor (and alleged co-author of the order) Murray Energy, cheered Trump’s directive, many within the industry remained skeptical. Despite the Republican Party’s rhetoric, producing energy from coal has become both increasingly unprofitable as well as technologically inefficient.

According to a report from S&P Global Market Intelligence, US power producers plan to take at least 11.4 GW of coal-fired power plant capacity offline in 2018, more than has been retired in a single year since 2015 (when 14.7 GW of coal capacity was retired). Another 19.8 GW of coal-fired power plant capacity is scheduled to go offline between 2018 and 2022. Moody’s Investors Service also calculates that some 35 gigawatts of capacity from coal and nuclear plants are now scheduled to be shut down over the next five years.

Indeed, since 2010, according to the industry-friendly American Coalition for Clean Coal Electricity, nearly 40% of the capacity of the nation’s fleet of coal-fired power plants has either been shut down or designated for closure. Additionally, more than a quarter of US nuclear power plants don’t make enough money to cover their operating costs, raising the threat of early retirements, according to Bloomberg New Energy Finance.

Once a massive burner of coal, Ohio-based American Electric Power Company Inc has retired some 7,200 MW of coal fired power since 2011. Even after Trump’s announcement, a spokesperson said the company was still likely to seek approval from regulators to shut its three-unit, 1,600MW coal-fired power plant in Conesville, Ohio if it doesn’t qualify for subsidies or “there are not other changes in the market,” company spokeswoman Tammy Ridout said in phone interview with Bloomberg.

“I think from our perspective we will continue moving toward a clean energy economy,” AEP Chairman Nicholas Akins related to Bloomberg. “When you look at the future and the investment potential and the risk associated with these investments by far the best approach is with natural gas, renewables and in fact technology.”

Why are all these utilities, despite Trump’s persistent pro-coal blather, bent on moving away from it? Economics. With the construction of 88% of the U.S. coal fleet dating back to before 1990, the plants are hitting or past their 40-50 year service life. And let’s face it: in order to fire a coal (or gas fired plant), you have to both buy and ship the resource to your plant. Neither the sun nor the wind sends you a bill for using it, and you don’t need trainloads of renewables to power your plant either.

“Certainly I think right now utilities are considering going forward with retirement plans as is,” Richard Glick, a member of the Federal Energy Regulatory Commission said told Bloomberg. “It’s pure economics. Gas prices are way down, renewable projects are getting much less expensive and they are beating other older technologies out in the markets.”

Renewable energy, while certainly not without overhead and maintenance costs, also simply doesn’t suffer from the same level of required tinkering. As Xcel wrote, while they could keep their coal plants in Colorado running, the clean energy proposal is more compelling because “it delivers lower costs along with substantial environmental and renewable energy gains.”

Moreover, the more renewable energy comes on line, the cheaper the costs. In January, Xcel released the results of a solicitation that returned a median price bid of $21 per megawatt-hour for wind-plus-storage projects and a median bid of $36 per megawatt-hour for solar-plus-storage. But in June the bids highlighted in Xcel’s new electric resource filing are even lower. Projecting “unprecedented low pricing”, it shows wind producing “at levelized pricing between $11-$18 per megawatt-hour, solar between $23-$27 per megawatt-hour, and solar-plus-storage between $30-$32 per megawatt-hour” according to the filing.

“We are making an enormous transition and renewables will play a big role in that,” said Xcel’s Fowke. “But to me, it’s not just renewables. The endgame is carbon reduction in the most affordable, pragmatic way possible.”

by

L. Michael Buchsbaum is an energy and mining journalist and industrial photographer based in Germany. Since the mid-1990s, he has covered the social, environmental, economic and political impacts of the transition from fossil fuels towards renewables for dozens of industry magazines, journals, institutions and corporate clients. Born in the U.S., he emigrated to Germany and Europe to better document the Energiewende. He is also the host of The Global Energy Transition Podcast.

18 Comments

  1. Tammy Corbett says

    Besides the fact that renewable energy sources are cleaner and as stated in this article as “increasingly unprofitable as well as technologically inefficient” the health risks are reason enough to do away with pollution from coal and oil power plants. A new study found that pollution from coal and oil power plants is linked to higher rates of premature birth. Resource: Closing Coal Plants is Reducing Premature Births – Immediately http://www.birthdefects.org/coal-plants/

    Reply
  8. News Satellite - News Setellite says

    […] office in January 2017. Coal production is still on the decline. Coal-fired power plants are still closing. And Trump’s own Department of Energy doesn’t see these trends reversing anytime […]

    Reply
  17. Spotlight on green news & views: Baboon killer booted; surviving bad eco-appointees | Direct Path News says

    […] Mark Sumner writes—Trump–Perry Plan to force utilities to burn coal can’t even find support in the Trump White House: “In November 2017, the Donald Trump administration announced a plan to employ emergency powers that had gone untouched since the Korean War in order to distort the energy marketplace in favor of coal. But as early as January of this year, Trump and designated point man Rick Perry found that even Trump-appointed regulators were unwilling to go for the plan that would force utilities to produce more power from coal and nuclear—even if it caused higher prices for their customers and generated more environmental damage. After 10 more months of trying to make this thing happen, including multiple announcements and schemes for its implementation, the proposal has lost so much momentum that Politico reports Trump and Energy Secretary Perry can’t even find enthusiasm for the plan among Trump’s White House staff. The White House has shelved the plan amid opposition from the president’s own advisers on the National Security Council and National Economic Council, according to four people with knowledge of the discussions. The scheme required utilities to make a portion of the electrical grid “safer” by keeping 90 days worth of fuel on site. Since windmills and solar plants can’t stockpile the wind or sun, they were left out. And since natural gas power plants generally get their fuel from pipelines with only a small amount of on-site storage, even they were left out. Truthfully, the whole thing was a transparent scheme to slow the closing of coal plants. But it hasn’t worked.” […]

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  18. David M Norris says

    Today, natural gas is over $4/MM BTU. Coal is around half that. Are people really ready to have their electric rates doubled for environmental reasons? I moved away from California. And, part of the reason is that electricity in California is twice that of Texas. Of course, California power is politically correct but I got tired of writing that check

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