Note the heavy concentration of coal plants in the Ohio River valley

From an Article by Dan Gearino, Inside Climate News, March 25, 2019

Nearly three-fourths of the country’s coal-fired power plants already cost more to operate than if wind and solar capacity were built in the same areas to replace them, a new analysis says.

Coal-fired power plants in the Southeast and Ohio Valley stand out. In all, 74% of coal plants cost more to run than building new wind or solar, analysts found.

Not a single coal-fired power plant along the Ohio River will be able to compete on price with new wind and solar power by 2025, according to a new report by energy analysts.

The same is true for every coal plant in a swath of the South that includes the Carolinas, Georgia, Alabama and Mississippi. They’re part of the 86 percent of coal plants nationwide that are projected to be on the losing end of this cost comparison, the analysis found.

The findings are part of a report issued Monday by Energy Innovation and Vibrant Clean Energy that shows where the shifting economics of electricity generation may force utilities and regulators to ask difficult questions about what to do with assets that are losing their value.

The report takes a point that has been well-established by other studies—that coal power, in addition to contributing to air pollution and climate change, is often a money-loser—and shows how it applies at the state level and plant level when compared with local wind and solar power capacity.

“My big takeaway is the breadth and universality of this trend across the continental U.S. and the speed with which things are changing,” said Mike O’Boyle, a co-author of the report and director of energy policy for Energy Innovation, a research firm focused on clean energy.

The report is not saying that all of those coal plants could or should be immediately replaced by renewable sources. That kind of transition requires careful planning to make sure that the electricity system has the resources it needs. It also doesn’t consider the role of competition from natural gas.

The key point is a simpler one: Building new wind and solar power capacity locally, defined as within 35 miles for the report, is often less expensive than people in those markets realize, and this is indicative of a price trend that is making coal less competitive.

This shift shows how market forces are helping the country move away from fossil fuels. At the same time, coal interests have been trying to obscure or cast doubt on this trend, while seeking more government subsidies to slow their industry’s decline.

Coal Concerns in the Solar-Rich Southeast

Nearly three-fourths of the country’s coal-fired power plants already cost more to operate than if wind and solar power were built in the same areas to replace them, the report says.

By 2025, with the costs of building wind and solar power expected to continue to decline, the analysts project that 86 percent of coal-fired power plants will be more expensive than local renewable energy. Notably, the 2025 wind and solar estimates assume that expiring federal tax credits will not be extended, so any price advantage is without federal credits.

In parts of the country where power plants compete on open markets, such as most of Texas, companies may be more quick to shut down money-losing plants because plant owners are the ones bearing the losses. It’s different in places where plants are fully regulated, as plant owners can pass extra costs on to consumers.

The Southeast, which is almost entirely regulated markets, has some of the costliest coal plants and is rich with solar resources. “Consumer advocates and regulators there should be asking harder questions about integrating renewables,” said Eric Gimon, an energy analyst and co-author of the report.

In North Carolina, for example, a state second only to Indiana in total coal plant capacity, every one of those coal-fired power plants is “substantially at risk,” meaning the existing plants have operational costs that are at least 25 percent more than what it would cost to build wind or solar capacity, the report says.

The state’s largest utility, Duke Energy, has invested in solar. The report shows that there is room for more of this development, and that the state remains heavily dependent on coal power that is not cost-competitive.

Political Opposition in the Ohio Valley

In the Ohio Valley, some of the sunniest parts of Ohio are near the river in the southern and southwest parts of the state, areas that now have almost no solar power development. American Electric Power, a Columbus-based utility, has proposed solar arrays there, but the plans are running into fierce opposition before state regulators and it is far from clear that the projects will get approved.

The Ohio Valley is a hub for coal-fired power, with plants that were built because of proximity to coal mines and the ability to deliver coal on river barges. And yet, the report shows that most of those plants cost more to operate than building new wind and solar capacity.

One of the exceptions is the Gavin Power Plant, the largest in Ohio and one of the largest in the country at 2,600 megawatts, which is operating at a large enough scale to remain competitive. But by 2025, even Gavin won’t be able to keep up with the declining costs of wind and solar, according to the report. This doesn’t mean the plant will be unprofitable, but it signals a shift in the market that will put increasing pressure on the plant.

Some Utilities Are Factoring in Climate Impact

Colorado and the St. Louis metro area are two of the few places were coal plants would retain a cost advantage over new renewable energy in 2025, according to the analysis. The authors say that is because of a lack of available land to build cost-effective wind or solar within 35 miles and because the plants are close to coal mines, which reduces fuel costs.

But a purely cost-based analysis leaves out other reasons to shut down coal plants and build wind and solar, as shown by the largest utility in Colorado, Xcel Energy, which is doing just that.

The company’s executives said they were responding to reports about the acceleration of climate change. They have found that they can build new wind and solar capacity for little or no extra cost, which is a less precise comparison than in the new report.

And, they are preparing for the possibility that Colorado will pass a law requiring utilities to shift to 100 percent renewable energy, which is a priority of new Democratic Gov. Jared Polis.

Distance can also make a difference in cost calculations. If new resources are built far from the ones they are replacing, grid operators and utilities need to make sure they have enough power line capacity to transport the electricity. Also, there are local economic considerations. Utilities sometimes put new projects in the same metro areas as ones that are closing to help the local community. This has been part of Excel’s planning process in Pueblo, Colorado, where it is closing a coal plant and developing new solar.

Natural Gas Competition Also Plays a Role

The report’s findings about the declining viability of coal plants are in line with previous studies, including one from March 2018 from BloombergNEF with the headline “Half of U.S. Coal Fleet on Shaky Economic Footing.”

But there is a key difference. The BloombergNEF report looked at the finances of coal plants in the context of competition from all fuels, including natural gas.

William Nelson, a co-author of the BloombergNEF report, says he is leery of comparing the costs of building new wind and solar to the costs of operating existing coal plants because a coal plant is capable of running around the clock, which makes it a different type of resource than wind and solar unless there is large-scale battery storage.

And, he thinks that natural gas prices are an essential part of the conversation in places such as the Ohio Valley, where gas is plentiful and inexpensive.

Gimon of Energy Innovation says he agrees that the role of natural gas in the market is an important element, but he says the report intentionally narrowed the focus to look at the deteriorating finances of coal and the improving competitiveness of wind and solar, rather than at the electricity market as a whole.

Daniel Cohan, a Rice University engineering professor who is not involved in the new report, says “gas is more of a gamble” for power plant owners than wind or solar because of uncertainty about future gas prices.

He thinks there is more certainty that wind and solar will continue to get less expensive and that their prices can serve as a useful comparison for coal.

The decreasing costs of wind and solar will lead to a growing gap compared to the costs of operating coal plants, one that coal plant owners and regulators would be wise to prepare for, Gimon said. “You really can’t hang tight,” he said. “It’s just going to get worse.”

Energy policy at US-DOE is disjointed

From the Union of Concerned Scientists (UCS), Press Release, January 8, 2018

WASHINGTON – The Federal Energy Regulatory Commission (FERC) unanimously rejected the U.S. Department of Energy (DOE) proposal to force energy markets to provide failing coal-fired power plants and nuclear plants guaranteed profits—at the cost of consumers. DOE Secretary Rick Perry asked FERC last September to essentially bailout these plants to counter the competitive wholesale electricity markets, in a move that would have benefited the owners of coal and nuclear power plants, rather than consumers, and jeopardized competitive wholesale electricity markets.

Below is a statement by Mike Jacobs, senior energy analyst at the Union of Concerned Scientists:

“Federal regulators were right to reject a proposal that would have amounted to nothing more than giving coal and nuclear power plants billions of dollars in guaranteed profits at the expense of consumers. We don’t need to prop up plants that are closing due to market forces. Grid operators are having no problems keeping the lights on as more of the nation’s energy comes from clean, renewable sources.

“Energy regulators must follow the law and act on the best available science, and not pick winners and losers based on political alliances. Secretary Perry’s attempts to tip the scale in favor of uneconomic coal and nuclear power plants to provide a “resilience” benefit that doesn’t exist would have increased carbon emissions, raised costs to consumers, and distorted competitive markets.

“The question for FERC was: are you pro-markets and pro-solutions, or do you support old technology? It’s crucial to maintain market competition to generate solutions that fit unique energy demands. FERC’s decision is a step in the right direction in forward-looking improvements for a cleaner, more resilient and reliable electricity grid.

“If we’re going to adjust prices to value resilience, let’s be smart and get public benefits out of the changes. Rather than limiting contributions from certain energy sources, such as renewables, FERC must continue to consider what is best for consumers, drives private investment and protects the environment.”

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The Union of Concerned Scientists is the leading science-based nonprofit working for a healthy environment and a safer world. UCS combines independent scientific research and citizen action to develop innovative, practical solutions and to secure responsible changes in government policy, corporate practices, and consumer choices.

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FERC Rejects Perry’s Power Plan

From the Friends of the Earth, Press Release, January 8, 2018

WASHINGTON – The Federal Energy Regulatory Commission today rejected a Department of Energy proposal to change electricity market rules that would have bailed out failing nuclear and coal plants projects.

In response, Damon Moglen, Senior Strategic Advisor for Friends of the Earth, issued the following statement:

Tens of thousands of people wrote to FERC demanding the rejection of Secretary Perry’s ludicrous proposal to bailout failing nuclear and coal projects.

No matter how forceful industry lobbying, the market factors simply dictate that nuclear and coal power plants should be replaced by cheaper, cleaner, and safer solar and wind power.

This is a good day for the public and a good day for the cause of addressing catastrophic climate change.

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Friends of the Earth is the U.S. voice of the world’s largest grassroots environmental network, with member groups in 77 countries. Since 1969, Friends of the Earth has fought to create a more healthy, just world.

Mary Anne Hitt and Michael Bloomberg ask for support of the Clean Power Plan (CPP)

Today Michael Bloomberg visited Sierra Club’s office in Washington, D.C. and announced an increased commitment to retire America’s coal plants and transition the U.S. economy to a clean energy future. With the generosity of Bloomberg Philanthropies and others, we will amplify our existing success to achieve ever more ambitious goals — building a healthier, cleaner, more prosperous world.

This follows the Trump administration’s announcement of their plan to repeal the Clean Power Plan (CPP), Obama’s landmark regulation on carbon pollution for power plants.

“The Trump administration has yet to realize that the war on coal was never led by Washington — and Washington cannot end it,” said Bloomberg. “It was started and continues to be led by communities in both red and blue states who are tired of having their air and water poisoned when there are cleaner and cheaper alternatives available… Without any federal regulations on carbon emissions, those groups have combined with market forces to close half the nation’s coal-fired power plants over the past six years — and with this new grant, we aim to reach 60 percent by the end of 2020.”

Add your voice to Michael Bloomberg’s! Tell the EPA you support limits on carbon pollution and oppose their “Dirty Power Plan.”

Bloomberg Philanthropies’ generosity comes at a great time, adding to our existing momentum as we fight for clean air, water, and the climate and allowing us to build on our existing achievements:
This year, AEP and Xcel both announced the two largest clean energy projects in US history. Retiring coal plants have opened up new market opportunities for renewable energy, which has raced to fill them and is now cheaper than coal in most parts of the country.

Along with dozens of allies, the Beyond Coal Campaign has helped secured retirement commitments for 11 coal plants since Trump’s inauguration — that’s one plant every 24 days. We are now just a handful of plants away from securing retirement commitments from half of America’s coal fleet.

Additionally, because of work from Beyond Coal and allied groups, the largest coal export terminal in North America is dead, the last of six Northwest proposed coal export terminals to be defeated by tribal and community leaders.

And just this week, in the 48 hours since EPA Administrator Scott Pruitt announced a repeal of the Clean Power Plan, nearly 60,000 Sierra Club members and supporters have submitted a comment to EPA opposing this.

We know Michael Bloomberg has our back. Do you? Take thirty seconds and submit your comment to EPA now to save the Clean Power Plan!

Carbon pollution from coal power plants sickens our families and makes climate change worse. Previously, the EPA estimated that the Clean Power Plan would prevent 90,000 asthma attacks, 300,000 missed work and school days, and 3,600 premature deaths annually by 2030. These health impacts of climate change disproportionately affect communities of color and low-income families. This means that any attempt to dismantle the Clean Power Plan is an added assault on the most vulnerable populations among us.

For the health of our families and safety of our future, as monster storms and wildfires pummel our nation, we must keep the Clean Power Plan in place. But Trump’s EPA wants to repeal the Clean Power Plan completely.

Now that the EPA has announced its plan, we must fight back. Let’s flood the comment inbox with thousands of messages of support for strong climate action like the Clean Power Plan. If enough of us speak up, we may be able to keep the Clean Power Plan in place. Will you add your voice?

As the EPA takes this drastic action, let’s speak up to defend the Clean Power Plan — and the health and safety of our communities.

To defending strong climate action,

Mary Anne Hitt
Director, Beyond Coal Campaign
Sierra Club