Category Archives: Coal industry

Major Coal Plant Closures Show How Coal Industry Is Dying Faster Than Expected

Several of the Largest Coal Plants in the United States to Close in 2019

Coal plant closings are increasing in the United States, but this year will see some of the country’s heaviest emitters of greenhouse gases shut down as alternative sources like renewables continue to drop in price relative to coal.
Major Coal Plant Closures Show How Coal Industry Is Dying Faster Than Expected
Navajo Generating Station, set to close in 2019 | Myrabella/Wikimedia Commons
Several of the largest coal-fired power plants in the United States are scheduled to shut down this year, representing some of the largest emitters of greenhouse gases, as the cost from building new power-generating facilities using renewables or natural gas continues to fall relative to coal.
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Coal-Fired Power Plant
Source: Pixabay

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As coal-fired power plants become increasingly unsustainable in the face of the growing savings from alternatives energy sources like solar and natural gas, plant operators have been quickly shutting down the smaller and most inefficient coal-burning plants in an effort to shift resources to larger, more profitable plants that contribute to the overwhelming bulk of the nation’s greenhouse gas emissions. Now, a new report in Scientific American reveals the extent to which even these larger plants are becoming loss-leaders for coal plant operators and are having to be shut down.

RELATED: REPORT FINDS COAL POWER INVESTMENT PLUMMETING 75% SINCE 2015

The Navajo Generating Station (NGS) in the state of Arizona is slated to cease operations by the end of 2019, making it one of the largest carbon-emitting generators in the country to ever be taken offline. Between 2010 and 2017, NGS pumped 135 million metric tons of CO2 into the atmosphere, with an average annual emission during those years equal to the total emissions produced by 3.3 million passenger vehicles in a year. According to Scientific American, “[o]f all the coal plants to be retired in the United States in recent years, none has emitted more” than NGS.

While NGS is the largest carbon-emitting coal-fired power plant slated to be shut down this year, other major coal-fired plants around the country are facing the same existential problem as NGS and are major emitters in their own right. Pennsylvania’s Bruce Mansfield coal plant, which produced 123 million tons of emissions between 2010 to 2017, is scheduled to be shut down for good by the end of the year.

Kentucky’s Paradise coal plant generated 102 million tons of emissions from 2010 to 2017, the year that the Tennessee Valley Authority began shutting down the plant by closing two of its three units. The remaining unit will be taken offline at the end of this year.

About a decade ago, the smaller, more inefficient coal-fired plants around the country started being taken offline as the growth in renewables, and the abundance of cheap natural gas began to increase the costs of operating these plants relative to switching to alternatives. Soon, it was becoming cheaper to build entirely new alternative energy generating facilities from scratch than continuing to operate these smaller coal plants. Unable to compete, they needed to be shut down so resources could be diverted to the larger coal-fired plants whose economies of scale allowed them to be still competitive.

Those economies of scale appear to be increasingly unable to save a growing number of larger coal plants that only a few years earlier were believed to be able to hold on, even if they wouldn’t dominate the energy production sector the way they had for a century.

“It’s just the economics keep moving in a direction that favors natural gas and renewables,” said Dan Bakal, the senior director of electric power at Ceres, which consults with companies looking to transition to cleaner and increasingly cheaper energy sources. “Five years ago, it was about the older coal plants becoming uneconomic. Now, it’s becoming about every coal unit, and it’s a question of how long they can survive.”

How Will Latest Round of Coal Plant Closures Cut Down US Carbon Emission Levels?

Climate Change Crisis
Source: NASA/GISS

The first coal-fired plants to be shut down were smaller and poorly-utilized plants that didn’t add significantly to US carbon emissions, so their shutdown did little to arrest the rise in US carbon emissions. The Scientific Americanreport reveals that in 2015, 15 GW of coal-generated capacity was shut down, cutting the total number of coal-fired plants in the US by 5%, a record number of closures for a single year.

The reduction in emissions wasn’t comparably large, however. Those plants accounted for 261 million tons of emissions over the six years preceding the closures with an annualized average emission of 43 million tons.

For comparison, total closures of 14 GW of coal-fired capacity represented 511 million tons of emissions over a comparable period, with an annualized average emission of 83 million tons. When counting all of the closures slated for 2019, which represents 8 GW of coal-fired capacity and so just about half the capacity lost in 2015, these plants produced 328 million tons of emissions between 2010 and 2015 for an annualized average emission of 55 million tons.

“You notice the average size of retired plants going up over time. There are not a lot of small plants left, period,” said John Larsen, head of power-sector analysis at the economic consulting company Rhodium Group. “Once you’ve cleared out all the old inefficient stuff, it’s logical the next wave would be bigger and have more implications for the climate.”

There are a lot of factors that can give a false sense of the trends in the industry, however. Take the emissions figures cited for the final years of plant operations before their closing. In the final years of their operation, they would have been operating at a reduced capacity as the plant progressively took itself offline, so those numbers can’t be taken as representative for those plants, historically, much less for the industry overall.

What’s more, the most heavily emitting plants in the US have no anticipated retirement dates. Because these plants are even larger than the ones being closed this year, they can burn coal and emit carbon pollutants all day and all night long, every day of the year because the economies of scale drive down the costs of burning coal in these plants as opposed to smaller less efficient ones.

But there are reasons to give credence to the data reported on in Scientific American. Other economic data point to the unsustainability of an increasing number of coal plant operators. Several major coal mine operators have declared bankruptcy in the last 12 months, even as President Donald Trump has made saving the coal industry a major priority for his administration.

The situation is becoming so desperate for the industry that memos from the US Energy Department were leakedto Bloomberg last year, revealing that the administration was considering direct intervention to force power utilities to purchase energy from coal-fired plants. The justification for such an unprecedented intervention into the private energy sector was the argument that national security required ‘always-on’ power capacity and that without coal and nuclear power, this capacity in the electrical grid could be threatened.

While that argument is highly debatable, what isn’t is that coal is increasingly approaching a total collapse of the coal industry, from mine operators to power generators. Research indicates that regions that depend on coal as their main if not only economic driver could face regional depressions in the years ahead. The collapse of coal will not be without consequences for a substantial number of people.

But just as it makes economic sense to simply build an entirely new renewable or natural gas generator than to continue to use an existing coal-fired plant, the costs of propping up coal plants that will never make money in the future with the compelled sale of coal-generated energy to utilities will be greater than it would cost to direct massive government and private investment into coal-reliant communities to build entirely new–and hopefully diverse–industries that can replace the coal jobs that are going to be lost.

For now, the largest coal plants may be operating on the assumption that they can weather the hurricane-force headwinds for the coal industry, but the NGS, Bruce Mansfield, and Paradise plants thought they could hold out too. Now they’re the inefficient dead weight in the industry that is getting cut. How long until no coal-fired plant in the country can sustain itself in competition with alternatives whose most innovative days lay ahead while coal’s glory days were decades ago?

With the climate crisis accelerating at the rate that it is and the economics in the energy industry trending further and faster away from coal than anyone imaged two decades ago, the only sane policy for the planet–and for the communities who rely on coal for their existence–is to take action now rather than bide for time that will never be given. By taking the industry out behind the barn and putting it out of its misery through public policy in an orderly way rather than wholesale and sudden collapse, we can then be empowered to invest resources into new industries to give the old coal communities the economic support they’ll need to make the transition. Any other policy at this point is simply madness.

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    And Now, the Really Big Coal Plants Begin to Close

    Old, small plants were the early retirees, but several of the biggest U.S. coal burners—and CO2 emitters-will be shuttered by year’s end

    Scientific American, by Benjamin Storrow, E&E News, 16 Aug 2019
    And Now, the Really Big Coal Plants Begin to Close
    The Navajo Generating Station, near Page, Ariz., is scheduled to close this year. It’s one of the largest greenhouse gas emitters in the U.S. power sector. Credit: David Wall Getty Images

    When the Navajo Generating Station in Arizona shuts down later this year, it will be one of the largest carbon emitters to ever close in American history.

    The giant coal plant on Arizona’s high desert emitted almost 135 million metric tons of carbon dioxide between 2010 and 2017, according to an E&E News review of federal figures.

    Its average annual emissions over that period are roughly equivalent to what 3.3 million passenger cars would pump into the atmosphere in a single year. Of all the coal plants to be retired in the United States in recent years, none has emitted more.

    The Navajo Generating Station isn’t alone. It’s among a new wave of super-polluters headed for the scrap heap. Bruce Mansfield, a massive coal plant in Pennsylvania, emitted nearly 123 million tons between 2010 and 2017. It, too, will be retired by year’s end (Energywire, Aug. 12).

    And in western Kentucky, the Paradise plant emitted some 102 million tons of carbon over that period. The Tennessee Valley Authority closed two of Paradise’s three units in 2017. It will close the last one next year (Greenwire, Feb. 14).

    “It’s just the economics keep moving in a direction that favors natural gas and renewables. Five years ago, it was about the older coal plants becoming uneconomic,” said Dan Bakal, senior director of electric power at Ceres, which works with businesses to transition to clean energy. “Now, it’s becoming about every coal unit, and it’s a question of how long they can survive.”

    Coal plant closures have been a feature of U.S. power markets for the better part of a decade, as stagnant demand, low natural gas prices and increasing competition from renewables have battered the coal fleet.

    In previous years, most retirements were made up of smaller and lesser-used units (Climatewire, April 27, 2017). That means the emissions reductions were less substantial.

    In 2015, the United States closed 15 gigawatts of coal capacity, or roughly 5% of the coal fleet. That still stands as a record amount of coal capacity retired in one year.

    Yet the emissions reductions were modest by today’s standards. The units retired in 2015 emitted a combined 261 million tons in the six years prior to their retirement, according to an E&E News review of EPA emissions data. On average, they annually emitted about 43 million tons over that period.

    Contrast that to 2018, when almost 14 GW of coal was retired. Those units emitted 511 million tons of carbon between 2010 and 2015. Their combined average annual emissions rate was 83 million tons.

    The trend figures to be even more dramatic this year.

    SMALL PLANTS ARE GONE

    The U.S. Energy Information Administration expects almost 8 GW of coal to retire in 2019, or a little more than half the capacity retired in 2015. Yet the units retired this year emitted more than their 2015 counterparts. Between 2010 and 2015, their combined emissions were 328 million tons, giving them an annual emissions average of 55 million tons.

    Other factors are also at play in the retirement of coal’s behemoths. In some cases, federal air quality regulations or an exodus of customers may have contributed to the closure, said John Larsen, who leads power-sector analysis at the Rhodium Group, an economic consulting firm.

    The Navajo Generating Station is a case in point. The plant had already planned to shut down a unit to comply with federal smog regulations. Two utilities with a stake in the facility had either divested from the plant or plan to do so. And the plant’s largest customer announced it could buy power on the wholesale market for less.

    “You notice the average size of retired plants going up over time. There are not a lot of small plants left, period,” Larsen said. “Once you’ve cleared out all the old inefficient stuff, it’s logical the next wave would be bigger and have more implications for the climate.”

    There are several caveats to consider. Units scheduled for retirement generally produce less in the years running up to their closure, meaning the plants that closed in 2015 once emitted more than they did near the end of their lives.

    There’s also this: The vast majority of super-polluters have no closure date in sight. That’s because massive coal plants generally benefit from large economies of scale. Because they crank out power around the clock, their cost of generating electricity is relatively cheap.

    “The coal plants remaining have generally installed all the environmental controls,” Larsen said. “There are no additional regulatory threats, or they are cost-effective in a world where gas is $2.50 per MMBtu.”

    Another caveat: Coal plant closures don’t guarantee power-sector emissions reductions on their own. In 2018, power-sector emissions increased for the first time in many years because electricity demand rose, prompting natural gas generation to spike (Climatewire, Jan. 14).

    But if there is a notable trend with the current round of plant closures, it is this: The large coal plants closing today are in places like Arizona, Pennsylvania and Kentucky.

    “You’re not seeing climate policy close these plants,” said Mike O’Boyle, director of electricity policy for Energy Innovation, a nonprofit that advocates for a transition to clean energy. “Coal plants are becoming more expensive to operate over time.”

    Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.
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      Scientists’ Climate Accountability Scorecard – Insufficient Progress from Major Fossil Fuel Companies

      Repost from Union of Concerned Scientists
      [Editor: This detailed 24-page Union of Concerned Scientists report should be required reading for every oil executive, refinery employee and oil industry supporter.  It would have been VERY interesting to see Valero included in the industry sample.  Our neighbors in Richmond (Chevron) and Rodeo/Hercules (Phillips66) will be especially interested in this report.  – R.S.]

      The 2018 Climate Accountability Scorecard – Insufficient Progress from Major Fossil Fuel Companies

       

      An in-depth analysis of eight major fossil fuel companies finds they continue to spread climate disinformation and have failed to adequately plan their businesses for a low-carbon world.

       

      Fossil fuel companies are facing increasing shareholder, legal and political pressure to stop spreading climate disinformation and to fix their business plans to achieve dramatic reductions in global warming emissions. While some companies are responding to this pressure, overall their efforts remain insufficient to prevent the worst impacts of climate change.

      In 2016, when we first analyzed the actions of 8 major oil, gas, and coal companies, we found that none had made a clean break with disinformation on climate science and policy or planned adequately for a world free from carbon pollution.

      In 2018, although some companies have publicly supported the Paris climate agreement to limit harmful warming, none of these companies has set company-wide emissions reduction targets consistent with this goal. Many continue to downplay or misrepresent climate science and the dangers of carbon emissions, and all continue to support trade groups that spread climate disinformation and work to stymie needed climate policies.

      We evaluated eight companies on 28 metrics, organized in four broad areas:

      • Disinformation: Have these companies stopped spreading disinformation about climate science and policies?
      • Business Planning:  Do these companies’ business plans align with a world free from carbon pollution?
      • Policies:  Do these companies support fair and effective climate policies?
      • Disclosure:  Are these companies fully disclosing the financial and physical risks of climate change to their business operations?

      Findings

      While every company improved its score on at least one metric and saw a score decline on one or more other metrics, there was no across-the-board improvement on any specific metric, and no single company improved in every area.

      Explore each company’s score per metric in the table below. Colors indicate scores. Arrows indicate changes in each company’s performance compared to the 2016 Climate Accountability Scorecard. 

      Methodology > 

      Highlights

      • Following engagement with Barnard College over its divestment evaluation and with UCS over our 2018 scorecard findings, BP removes from the company’s website a statement that misrepresented climate science and backslid from its 2016 position.
      • Arch Coal, Chevron, ConocoPhillips and ExxonMobil include subtle “hedging” words on their websites and/or in SEC filings, falsely suggesting the (scientific) jury is still out on the connections between global warming gases and climate change and between the burning of fossil fuels and climate impacts such as sea level rise.
      • Facing growing pressure from major shareholders, ExxonMobil and Chevron release climate risk disclosure reports. However, the reports lack commitments to reduce global warming emissions in line with the Paris climate agreement’s goal of keeping global temperature increase well below 2 degrees Celsius and striving to limit it to 1.5°C.
      • BP, Chevron, and ExxonMobil fail to mention climate liability litigation explicitly in their financial filings. More than a dozen U.S. communities have filed lawsuits to hold these fossil fuel companies, and others, accountable for climate damages and preparedness. Company shareholders need to be informed about this risk to their investments.
      • In July 2018, ExxonMobil becomes the latest oil and gas company to leave the corporate lobbying group American Legislative Exchange Council (ALEC) after successfully pressuring the group to drop a resolution against the U.S. Environmental Protection Agency’s 2009 finding that global warming gases are endangering the planet. ALEC has notoriously fought climate policies and drafted sample legislation that sought to hamper the development and use of low-carbon energy. Chevron and Peabody Energy maintain leadership positions in the group.
      • Shareholder pressure leads ConocoPhillips in 2018 to expand its disclosures of lobbying and other public policy advocacy. 

      Recommendations

      Major fossil fuel companies—including those studied in this 2018 scorecard—are substantial contributors to climate change, and therefore must take responsibility for their actions. Science now makes it possible to calculate that the eight companies in this study have contributed about 14 percent of global energy-related carbon dioxide and methane emissions driving disruptive climate change.

      These eight leading fossil fuel companies have failed to fix their business models to reduce global warming emissions from their operations and the use of their products.  At the same time, many of them have deliberately sowed public confusion about climate science and the dangers of climate change, while lobbying against needed climate policies that would help us transition to a low-carbon energy system.

      These fossil fuel companies should:

      • Renounce disinformation on climate science and policy
      • Plan for a world free from carbon pollution, developing business models that are consistent with keeping global warming well below 2°C above pre-industrial levels, as agreed by world leaders
      • Support sensible climate policies to reduce emissions of heat-trapping gases
      • Fully disclose climate-related risks to their business
      • Pay their fair share of the costs of climate-related damages and climate change adaptation

      As a first step toward meeting emerging societal expectations, each company in this study should:

      • If it is not yet doing so, consistently acknowledge the scientific evidence of human-caused climate change and affirm the consequent need for swift and deep reductions in emissions from the burning of fossil fuels
      • Set company-wide, net-zero emissions targets consistent with the Paris climate agreement’s global temperature goal
      • Disavow positions and actions taken by affiliated third parties—including trade associations and lobby groups—that are inconsistent with companies’ stated positions on climate science and policy
      • Publicly and consistently advocate for specific policies and/or regulations to implement the Paris climate agreement
      • Fully disclose climate-related risks they face and how they are managing them—including physical risks to their operations and financial risks related to climate liability lawsuits

      UCS and our experts, partners, and supporters are watching. We will continue to keep a close eye on major fossil fuel companies to assess their actions and words, recognize progress where it occurs, and turn up the heat on companies lagging behind.

      Appendices:

      Appendix A: Methodology > 

      Appendix B: Renouncing Disinformation on Climate Science and Policy > 

      Appendix C: Planning for a World Free of Carbon Pollution > 

      Appendix D: Supporting Fair and Effective Climate Policies > 

      Appendix E: Fully Disclosing Climate Risks > 

       

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        Local renewables in the US ‘make more financial sense than coal’

        Repost from EnergyLive News

        A new report suggests three-quarters of US coal-fired generation could be replaced with local wind or solar power at cheaper cost to the consumer

        By Jonny Bairstow, 26 March 2019
        Renewables vs fossil fuels
        Renewables vs fossil fuels | Image: Shutterstock

        Local renewables in the US now make more financial sense than coal.

        That’s according to a new report from renewable analysis firm Energy Innovation, which suggests in 2018, three-quarters of existing US coal-fired generation could have been replaced with wind or solar power within a 35-mile radius at an immediate saving to customers.

        It predicts by 2025, this figure will grow to 86% of the coal fleet as fossil fuel generation becomes increasingly uneconomical and the cost of renewable power continues to fall.

        The report suggests this is happening as the ‘all-in’ costs of new wind or solar projects become cheaper than the combined fuel, maintenance and other ongoing costs of coal-fired power.

        In 2018, 94GW of existing US coal capacity was deemed ‘substantially at risk’ from new local wind and solar – by 2025, the study expects ‘substantially at risk’ coal to increase to 140GW, almost half the national fleet.

        It recommends local decision-makers should consider plans for a smooth shut-down of these old plants, replacing them with technologies such as wind, solar, transmission, storage and demand response.

        It notes replacement infrastructure must be reliable and affordable for communities dependent on existing coal plants.

        The report reads: “The purpose of this report is to act as a conversation primer for stakeholders and policymakers where the math points to cheaper options that could replace coal plants at a savings to customers.

        “Regardless, any coal plant failing the cost crossover test should be a wake-up call for policymakers and local stakeholders that an opportunity for productive change exists in the immediate vicinity of that plant.”

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