Published on August 29th, 2018 | by Tina Casey0
New “Affordable Clean Energy” Plan Lands With A Thud
August 29th, 2018 by Tina Casey
The Trump* administration announced its new “Affordable Clean Energy” rules for power plants last week, and while coal stakeholders may be excited, the verdict is already in from utilities: meh.
On top of that, just last night the world’s 6th-largest economy (ranked by GDP) effectively thumbed its nose at the Affordable Clean Energy plan and the White House, too. That would be the state of California, which took another step toward legislating a 100% emission-free goal for itself.
It’s a little premature for renewable energy fans to pop the bubbly over California just yet, so let’s take a look at a couple of the developments that have occurred among utilities since the Affordable Clean Energy Plan was announced.
No, Shuttered Coal Power Plants Will Not Rise Again
Coal accounted for roughly 50% of US power generation until just a few years ago, but coal power plants began falling like dominoes when cheap natural gas flooded the power generation market. More recently, cost-competitive wind and solar have added to the pressure on coal.
As of last year, coal’s share of US electricity generation was down to 30%. That trend is not likely to reverse, Affordable Clean Energy rules or not.
That’s partly because building a new coal power plant or re-starting a closed coal power plant is not as cheap or easy as it may seem.
Take a look at the coal power plant in Logansport, Indiana, for example. The plant closed in January 2016, when city officials determined that it would be too expensive to meet the Obama administration’s emissions goals.
Shortly after the Affordable Clean Energy plan was announced, the local paper asked plant and city officials about the likelihood of re-opening (follow the link to support local journalism at the Pharo-Tribune!). The bottom line is no.
If the Affordable Clean Energy rules go into effect, it would take a lot more than the flick of a switch to make the plant run again. The long idle period is one major factor working against a simple restart. Pharo-Tribune reporter Mitchell Kirk also teased out several others.
Replacing the plant’s expired federal operating permits is another headache, as is replacing all of the equipment that has already been sold off.
The biggest obstacle is an obvious one: Logansport has already found other sources of electricity to make up for the lost power plant. The plant provided 30% of the utility’s capacity before it went down. That was replaced by a contract with Duke Energy Indiana, and there is already another contract under way with NextEra Energy Power Marketing covering next year, and all the way through to 2024.
Finally, the city of Logansport is already eyeballing the idea of clawing back the site for use as housing.
That land use issue is going to loom large for cities that are struggling for room to grow, and/or that have aging coal power plants occupying desirable waterfront property.
More Power Plant Closures In Store
The other shoe dropped last week, when the Tennessee Valley Authority announced it was looking into the pros and cons of closing two of its coal power plants, the Paradise Unit 3 in Kentucky and the Bull Run Steam Plant in Tennessee.
That would add two more to the growing list of TVA coal plant closures. At its peak TVA operated 59 coal units, and if the two plants shutter that would bring the number down to just 25 (each of the two plants slated for closure has one coal unit).
Times Free Press reporter Dave Flessner explains:
TVA President Bill Johnson told TVA directors last week. “With the decline in that demand, and the change in the shape of our demand (with bigger peaks but less constant demand for power), we find ourselves a little bit long in our generation and we have a mismatch between generating assets and power load shape.”
That’s quite a fall for the two power plants, which were the largest facilities of their kind in the world when they first opened in the 1960s.
Flessner’s reporting adds yet another angle to the obstacles listed by Kirk: vintage coal power plants were not designed to meet the flexible demand schedule of today’s electricity market. As Johnson puts it, “they were built to run all the time, flat out.”
The TVA news is especially bad news for coal, because TVA’s record on coal plant closures has been a close reflection of the broader national trend. According to Flessner’s figures, coal gobbled up a 66% share of TVA generating capacity in the 1980s. The figure stands at just 27% currently, and another 5-7% drop is projected over the next 10 years.
Affordable Clean Energy Rules Won’t Stop Natural Gas
Natural gas stakeholders have already seized on the flexibility advantage to make the case that their fuel enables a more effective integration of wind and solar energy into the grid.
That’s a tough argument for coal to win. Just yesterday Indiana’s Tribune Star took note of a recent study, commissioned by the mining industry, that looks at the cost of building new gas power plants compared to maintaining existing coal power plants.
The basic argument is that natural gas power plants can’t keep up with the increased demand when energy use spikes in chilly weather. Dual-fuel plants can switch to petroleum to ramp up output, but that’s more expensive.
The problem is that the argument doesn’t apply to the vast areas of the US that don’t have particularly chilly winters.
Other areas of the US that are chilly, are already counting on renewable energy to fill in the gaps. For example, New England is eyeballing a major new hydroelectric source from Canada as well as offshore wind.
Over in the Pacific Northwest, the city of Spokane just became the fourth local government in the state to commit to 100% renewables. Further into the heartland, Idaho and Colorado are both trimming down their coal profiles with the help of wind power from Wyoming. That’s an interesting twist for Wyoming, which is transitioning from a top coal exporter to a top wind exporter.
The other problem is that natural gas stakeholders can point to Texas as a good example of how an integrated grid can adjust to handle temperature extremes. The state powered its way through another abnormally hot summer this year, without experiencing any major power outages.
More to the point, Texas has also been concerned about blackouts in the past, when it used more coal. Rolling blackouts were anticipated in the abnormally hot summer of 2011, a year during which 39% of the state’s electricity came from coal. Now it’s down to 29%.
So much for the Affordable Clean Energy plan. Meanwhile, in consideration of the growth of cities CleanTechnica is intrigued by the idea of reclaiming urban power plant properties for other uses, so we’ll be checking in with Logansport for more details.
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Photo: Navajo Generating Station coal power plant by Matthew Dillon, flickr.com/creative commons license.
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