Category Archives: Environment

Another Bad Week,
 Make That Month,
 For The Coal Industry

It’s been a bad week for the U.S. coal industry. On Monday, Michigan-based Consumers Energy announced that it planned to close all its remaining coal-fired generation by 2040; the company already had closed seven of its 12 coal plants in 2016. Then, on Tuesday, Vectren, an electric and gas utility serving parts of Indiana and Ohio, said it planned to retire three of its coal-fired plants and sell its ownership stake in a fourth by 2023; this from a company that just two years ago was dependent on coal for 90 percent of its generation.

But this week is hardly unique. Just last Friday, FirstEnergy said it was going to close or sell the 1,300 megawatt coal-fired Pleasants plant in West Virginia by Jan. 1, 2019 after being unable to convince federal regulators to approve a deal between two of the Akron, Ohio-based holding company’s subsidiaries that effectively would have moved the facility from the open market into rate base, forcing consumers to pay for the plant even if it was no longer economic.

Not to be forgotten, earlier this month, AEP announced plans to slash its carbon dioxide emissions 60 percent by 2030 and 80 percent by 2050 (based on a 2000 baseline, see my story here). And finally, on Jan. 30, PPL announced plans to reduce its CO2 emissions by 70 percent by 2050 (based on a 2010 baseline).

So, in reality, it’s been a bad month, and similar months are likely moving forward.

Continue reading Another Bad Week,
 Make That Month,
 For The Coal Industry

Trump’s Coal Revival Nothing More Than Talk According to EIA Data

More facts showed up this week telling the same story about coal—the revival isn’t coming.

These new facts (see here for an earlier post about ‘stubborn facts’), courtesy again of the independent Energy Information Administration, show that coal production in the United States totaled 773 million short tons in 2017. This was up 6 percent from 2016, but better keep the champagne corked. The increase was due entirely to exports, a volatile market that is not conducive to long-term growth. To wit, in the five years from 2012-2016, exports swung from a high of 125.7 million short tons to a low of 60.3 million short tons.

In the vastly more important domestic market, particularly the electric power sector, which accounts for 85-90 percent of overall annual coal consumption, demand dropped, falling by a little more than 12 million tons in 2017. And those tons are never coming back: EIA’s latest Short-Term Energy Outlook (available here), its first to include projections through 2019, projects that electric power demand for coal will continue falling, dropping to 629.5 million tons that year, down from 666.4 million tons in 2017.

Continue reading Trump’s Coal Revival Nothing More Than Talk According to EIA Data

The Facts Tell The Story: Coal Comeback Is Nothing But A Trump Delusion

“Facts are stubborn things.”

John Adams, our second president, generally gets credit for this wonderful aphorism, but regardless of who was the first to say it, the observation itself is what matters: You simply cannot wish away facts. This came to mind earlier this week when I looked at the Energy Information Administration’s monthly electric power overview (which can be found here); it’s a publication that only the geekiest of energy wonks would ever read, particularly on a regular basis. However, dry as it may be, it does one thing exceedingly well: It presents facts, just as they are—not as people may want them to be.

One of the many such facts that caught my eye this month concerns electricity generation from coal, that shiny black rock that seems to be the moving force behind all the Trump administration’s energy and environmental policies. ‘The war on coal is over,’ his minions mouth repeatedly. ‘We are going to bring the jobs back,’ the president assures miners at every opportunity.

Problem is, facts are stubborn things. In the EIA review, which covers the first nine months of 2017, coal-fired electricity generation fell compared to the comparable year-earlier period. To be fair, it didn’t drop by much, sliding 1.5 percent to 919,805 thousand megawatt-hours from 934,267 thousand mwh a year ago. However, if the war is over and the jobs are coming back, then there should have been no slide at all; indeed, there should have been an increase.

The slide in coal-fired generation also pushed coal production for the sector, which accounts for the vast majority of U.S. coal consumption, down during the first nine months. Overall, just over 504 million tons of coal were used to generate electricity, down from 509 million in 2016—which was the lowest production year for the industry since 1979. Hardly the turnaround the Trump administration repeatedly trumpets.

What the administration definitely doesn’t trumpet in its incessant tweets and coal-dominated decision-making, is that during this same nine-month period, generation from non-emitting wind and solar jumped 13.6 percent, climbing to 284,584 mwh from 250,482 mwh in 2016. Combined with hydro, renewables generated just over 525,000 mwh of electricity annually for the first nine months of the year, within hailing distance of the nation’s nuclear sector, which has generated just under 600,000 mwh so far this year.

And while the administration clearly is not a fan of renewables, more growth in this sector is just around the corner. The American Wind Energy Association says 84,000 MW of wind capacity are installed across the United States, with another 25,000 MW under construction. Similarly, the Solar Energy Industries Association reports that 47,000 MW of solar capacity has been installed in the U.S., with another 21,000 MW of utility-scale solar generation currently in the construction pipeline.

As much as Trump and his backers like to blame renewables and the environmental community for the downfall of coal, the stubborn little fact is that the war, such as it was, against coal was waged, and won, by natural gas. From an expensive afterthought used largely just as a peaking resource during periods of high demand in the early 2000s, natural gas has taken ever-larger chunks of the electric generation market since then. From less than 20 percent of the total in 2001 (when coal’s share was roughly 50 percent), natural gas’ share of the market has climbed steadily, reaching 34 percent in 2016 and topping coal as the largest single source of electricity in the United States (see graphic below).

This transition, in turn, was due to another simple, stubborn fact: Huge quantities of formerly uneconomic gas supplies in the Mid-Atlantic and surrounding regions became accessible at affordable prices due to the commercialization of horizontal drilling and fracking technologies. As EIA noted earlier this year in one of its Today in Energy news stories (available here): “The increase in natural gas generation since 2005 is primarily a result of the continued cost-competitiveness of natural gas relative to coal.”

No war, no hidden agendas, just stubborn economic facts—obvious for anyone to see, provided, that is, they are willing to look.

–Dennis Wamsted

 

Latest DOE LED Report
 Illustrates Transition
 In Electric Power Sector

I was at Home Depot this weekend (so many tools, so little time) and they had a special on LED lights that caught my attention—a four pack of dimmable 60-watt replacement LEDs was selling for $9.88, or just under $2.50 a bulb. I’m not the type to track day-to-day pricing for much of anything, but the display caught my attention because I had just finished reading the Energy Department’s latest report on the status of the LED market—which found that the typical dimmable 60W replacement bulb in 2016 cost roughly $8 apiece.

This is important for two reasons. First, DOE assumes that LEDs are steadily going to account for an ever-larger percentage of the installed lighting stock in the United States, estimating that by 2035 86 percent of all the lighting in the country will be LEDs of one type or another and that these vastly more efficient lights will cut primary energy use by 3.7 quadrillion British thermal units (Btus)—that’s a lot of electricity that will no longer be needed, about 10 percent from the 2016 level, in fact, when roughly 37.5 quads were used to generate electricity in the U.S. (Paying attention out there in utility land?) But those DOE forecasts rely heavily on pricing assumptions, and if the current price of the most commonly used LED has already tumbled below $2.50, down roughly 70 percent from just a year ago, that means the nationwide take-up of LEDs almost certainly will be faster than DOE currently estimates.

Second, the sharply declining price of this lowly light bulb is a symbol of the massive changes under way in the energy industry, such as the steep declines in solar and windpower costs, the surge in corporate interest in cleaner energy and the plateauing of electricity demand. These changes are largely market-driven and, thankfully from my perspective, outside the reach of politicians on either side of the aisle.

Continue reading Latest DOE LED Report
 Illustrates Transition
 In Electric Power Sector

Trump Paris About-Face Likely To Hurt, Not Help Nuclear, Coal Sectors

President Trump, with his fossil fuel fantasists in tow, made it official Thursday, announcing that he would pull the United States from the Paris climate change accord in order to “make America great again.” The administration’s inability, as well as that of most of the Republican Party in general, to come to grips with climate change is sad, but that will have to wait for a future post. The issue at hand is the decision’s likely negative impact on the U.S.’ already-battered nuclear and coal industries.

For years the nuclear industry has been making the case that it was vital to the country’s climate change mitigation efforts because of its emissions-free generation profile. While accounting for just 20 percent of the nation’s annual electric generation, the industry noted ad infinitum, it was responsible for 60 percent of the carbon dioxide-free emissions (see chart below). In a carbon-constrained world, that would be a valuable attribute. But the Trump administration has now made it clear that it places no value on CO2-free generation sources.

That, in turn, could be a major problem for the industry, as the effort to secure nuclear subsidies—successful so far in Illinois and New York (although now tied up in court), still pending in Ohio, Connecticut and now Pennsylvania—has relied in large part on the sector’s glowing greenhouse gas attributes. In an interesting twist, just before the administration’s head-in-the-sand announcement, Chicago-based Exelon said it would close the 837-megawatt Three Mile Island nuclear reactor in late 2019 because the facility couldn’t compete in the PJM electricity market, which sprawls across 13 states and the District of Columbia. The company largely blamed the market’s structure, including its failure to reward the plant for its emissions-free generation, for its decision to shutter the plant.

Continue reading Trump Paris About-Face Likely To Hurt, Not Help Nuclear, Coal Sectors