Rocky Year for Coal Industry: 26 Power Plant Plans Shelved in 2009

'There Is a Shift Going on Across America'

Dec 22, 2009

Despite a lack of substantive action on climate change in Copenhagen or, yet, in Washington, environmental groups are celebrating a year of victories over one of climate change's biggest culprits.

Coal releases more carbon dioxide emissions per unit of energy produced than any other fossil fuel, but it also provides more than half the United States' electricity supply. It is possible, however, that 2009 marked a turning point away from that reliance on coal.

Seminole Electric dropped plans to build a new coal-fired power plant in Florida late last week, in part because of the likelihood of future regulation of greenhouse gases. That canceled plant was one of more than two dozen this year. The Sierra Club announced Monday that 26 coal-fired plants in all were "defeated or abandoned" in 2009 — the largest number since 2001, it says, when the number of proposed coal plants spiked at 150.

Plans for a coal plant in South Carolina were suspended in August. A plan to ship coal from Wyoming's Powder River Basin to South Dakota and Minnesota was put on hold later that month — after a decade-long fight, the Sierra Club points out. And plans for a coal-fired power plant on the Ohio River were scrapped in favor of a smaller, gas-fired plant. Just days into office, the Obama administration revoked the air permits for the Big Stone II plant that would have shipped its power to Minnesota but would have avoided the state's tougher regulations by being located just across the border in South Dakota. In November, the project was shelved.

It remains to be seen whether this year's trends will stick or simply represent a dip for coal, but what is clear is that 2009 has been a rocky year for the industry.

The Energy Information Agency projects in its monthly report that coal consumption by the electric power sector will have fallen nearly 10 percent by the end of the year. It says electric sector coal consumption should rise a bit next year, but will remain below 2008 levels. The amount of coal for coke production and for "retail and industry sectors" also declined by significant amounts.

The EIA also estimated carbon dioxide emissions from fossil fuels fell 6.1 percent, a drop that was led by a reduction in emissions from coal, which fell more than 10 percent.

"There is a shift going on across America as companies realign away from old dirty practices involving coal and toward cleaner energy options, including wind, solar and becoming more efficient," said Bruce Niles, director of the Sierra Club's Beyond Coal Campaign.

Changing Climate of Regulation

Niles' organization sees campaigns to raise awareness about the impacts of coal and the alternatives to the power source as key to this shift.

"Communities across America have become aware about the danger of coal and have organized to stop these projects from moving forward," Niles said. "The public is rising up, demanding cleaner energy, and developers and investors are taking note."

But 2009 has also been characterized by an economic recession that touched nearly every sector to some degree. It also saw, as the EIA's outlook notes, an increase in coal prices relative to natural gas.

"The Sierra Club is like the crowing rooster taking credit for the sunrise. A very soft economy and very low prices for natural gas were also big factors that slowed the growth in coal-based generation as they were factors slowing the growth in power generation in general," Luke Popovich, a spokesman for the National Mining Association, told SolveClimate.

Since coal is one of the dirtiest energy sources in terms of greenhouse gas emissions, however, power companies are keeping an eye on possible regulations from Washington. It is likely no accident that proposals for new coal plants shot up in 2001, the first year of the Bush administration, and dropped in this first year of the Obama administration.

"The Obama administration is starting to do something the Bush administration refused to do — regulate carbon emissions," Niles told SolveClimate.

The White House has pushed Congress to pass legislation limiting greenhouse gas emissions; the House passed the American Clean Energy and Security (ACES) bill in June; and the Senate is expected to pass its version in the spring. In the event those bills do not result in actual legislation, the U.S. Environmental Protection Agency is poised to regulate emissions itself. Following through on a court decision that was ignored during the last two years of the Bush administration, the EPA two weeks ago declared greenhouse gases a danger to public health and welfare.

These, in addition to decisions on smog, mercury and mountaintop-removal mining, all point to a tougher regulatory climate for coal-fired plants in coming years, and power companies seem to be taking notice.

Though Niles says none of these regulations "are actually pinching the coal industry yet," they will lead to companies "internalizing the cost of coal."

"Developers are looking at these numbers and saying these plants are too expensive," he says.

Alternatives

This is the effect regulations like cap-and-trade are supposed to have — to make greenhouse gas-emitting power sources like coal more expensive and thus less widely used. The way this effect is supposed to play out, though, is that, as fossil fuels' share of the energy market decreases, renewables' shares increase.

Groups like the Sierra Club are hopeful this will occur, but so far most of the decreases in energy production from coal have been replaced with that from natural gas.

The EIA reports that "low natural gas prices relative to coal caused substantial switching to natural gas for baseload electric power generation throughout most of 2009." While not a renewable resource like wind or solar, natural gas at least has a carbon intensity that is almost half that of coal and 75 percent that of petroleum, according to the EIA.

Some companies, like Seminole Electric, have also said they will look to nuclear as a lower-greenhouse gas emitting source of electricity.

Still, less coal does open the door for more renewable sources. After seeing the Florida Public Service Commission reject its plan to build the country's largest coal-fired power plant near the Everglades, Florida Power & Light announced in April that it would build the world's biggest solar facility there instead. The PSC had based its rejection on fears of the cost-effective of such a plan under future regulations.

The EIA also predicts that wind's share of the electricity mix will increase over the next year.

While it is unlikely that the end of coal is imminent, the shifts seen over the past year may add up to increased reliance on coal alternatives.

The fight to end dependence on the polluting fossil fuel source goes on, however. Another front in the battle involves a byproduct of coal combustion — fly ash. A year ago today, a flood of waterlogged ash from the Tennessee Valley Authority's Kingston power plant broke through a dam, pouring into the Emory River and contaminated the water and 85 acres of surrounding land. The TVA is still cleaning up.

Many groups are citing that environmental disaster in renewing their call to move on from coal. Coal ash has been blamed for health problems from Tennessee to the Dominican Republic.

The EPA was set to decide on federal regulations for coal ash by Dec. 31, but has said it will not meet that deadline. Regulations are currently set at the state level.

 

See also:

Sierra Club Chalks Up 100th Victory in Fight to Stop New Coal-Fired Power Plants

Only 2 New Coal Plants Needed in 2013-2025 – If That

The Year in Coal 2008: 24 New Plants Killed in the U.S.

How Congress Threatens to Undermine the Clean Energy Future: Protecting Coal

TVA's Coal Ash Dumping Plan Sparks Health Concerns

2 More Utilities Retiring Aging Coal Plants in Wake of Health Report

EPA Investigating Aging Coal Plants, Like N.H.'s Merrimack

 

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