Thursday, December 29, 2016

Coal-fired power plants will continue to close despite change at EPA, Brookings researchers say

Oklahoma Attorney General Scott Pruitt, administrator-designate of the Environmental Protection Agency, has threatened to dismantle EPA's Clean Power Plan to end the “war on coal,” but that phrase "is a false narrative that oversimplifies what is happening in the energy economy," write Devashree Saha and Sifan Liu of the Brookings Institution, a old-line liberal think tank.

Pruitt and President-elect Donald Trump "are ignoring fundamental market realities" that are buffeting the coal industry "in blaming environmental regulations under the Obama administration as the sole reason for the recent turmoil" in the industry, they write. "The natural gas glut has reshaped how we get electricity across the board, with natural gas-fired generation expected to surpass coal generation in the United States for the first time in 2016. At the same time, renewable energy is continuing to increase its market share aided by declining costs, increasing efficiency, and economies of scale."

The authors note that utilities retired 14.8 gigawatts of coal-fired electric generating capacity in 2015, and 6.5 gigawatts in the first half of 2016. For 2015, "The loss in coal energy represents 5 percent of the nation’s total coal-fired electrical generation capacity, a significant number in a single year," they write, along with a chart showing states Trump carried led the list of coal-plant retirements:
Click on chart to view a larger version
"The Energy Information Administration has identified an additional 14 gigawatts of coal capacity earmarked for retirement through 2028," the authors write. "The proposed coal plant retirements are geographically concentrated, with most closures in the mid-Atlantic, Southeast, and Midwest where most coal generation takes place. . . . Two generators in Kentucky are scheduled to close by 2017 that compose 9 percent of the state’s coal-fired capacity. . . . Few new coal plants are in the works to replace those that are being shut down."

The authors predict, "Market forces enabling natural gas and renewable energy penetration across the nation will continue to drive down coal use. Regardless of the fate of the CPP, the utility industry is likely to move forward with cleaner energy. The CEO of Michigan’s largest electric-power provider recently announced that his company is still planning to retire eight of its nine remaining coal plants by 2030, regardless of whether Trump tries to repeal President Obama’s climate policies. Other large electric utilities are also realigning their long-term investment strategies in favor of natural gas and no-carbon power sources."

The writers work in Brookings' Metropolitan Policy Program. Saha is a senior policy associate and an associate fellow, and Liu is a research assistant. Their article cites a recent paper by Saha and Mark Muro, "Growth, carbon, and Trump: State progress and drift on economic growth and emissions ‘decoupling’." On Dec. 6, Saha published an article titled "Five charts show why Trump can't deliver on his coal promises."


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