If President Trump is to revive coal, America will need to build coal plants again.
Power companies have plans to shutter roughly 13,500 megawatts of coal capacity this year. A single 17-MW plant being built in Alaska is all the industry can point to as a replacement.
Now enter EPA’s move to relax greenhouse gas standards for new and modified coal plants. The agency said in a court filing this week that it expects to send its proposal for revamping the Obama-era rules to the Office of Budget and Management in August for review (Greenwire, July 25).
The standards for new facilities are the lesser-known sibling of the Clean Power Plan, which governs greenhouse gas emissions from existing power plants. But the overlooked rule on new plants might be more important. Industry argues that it effectively prohibits the building of new coal plants because they require costly carbon capture systems to reduce greenhouse gas emissions.
Michelle Bloodworth, president of the American Coalition for Clean Coal Electricity, welcomed the news, saying it would remove a major impediment for new coal facilities.
“For the future of the coal fleet, and especially if it’s needed from a national security standpoint, we’re going to need to see some new coal plants built given the significant number that have already retired,” she said.
But even coal supporters concede that an industry-friendly rule is unlikely to prompt a wave of new construction. Permitting coal facilities is a headache, and cheaper alternatives are available to power companies. Combined-cycle natural gas plants and federally subsidized renewables are cheaper to build.
In 2016, the last time the U.S. Energy Information Administration calculated coal plant costs without carbon capture, the cost of building a new coal-fired facility was estimated at $3,636 per kilowatt-hour. (Capture 30 percent of the plant’s emissions, and that figure rises to $4,641 per kWh.)
The price tag on a combined-cycle natural gas plant was an estimated $978 per kWh in 2016 and $935 per kWh in 2018. Wind was $1,877 per kWh in 2016, and it fell to $1,548 per kWh in 2018.
“The only reason you would go down that route is if you were convinced natural gas wasn’t going to be available, and I’m not sure anyone thinks that anymore,” said Matt Preston, an analyst who tracks the coal industry at Wood Mackenzie.
Although Trump might be friendly to the coal industry, the prospect of future carbon regulation hangs as a liability over utilities pondering new construction.
Rep. Carlos Curbelo’s (R-Fla.) proposed $24-per-ton carbon tax offers a preview of what power companies would see if America were to impose a price on carbon.
Coal production would fall 50 percent by 2030, according to a Columbia University analysis of Curbelo’s plan.
“We’re starting to witness the first tangible risk of that playing out that we haven’t seen in a while,” said John Larsen, an analyst at the Rhodium Group and a former Energy Department official in the Obama administration. “And so, that’s always been front and center in utility executives’ minds.”
Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.