July 27, 2018 at 5:00 am ET
These are exciting times for energy production in the United States.
Almost every week, we hear about new developments in renewable energy, electric vehicles and natural gas production. Much will hinge, though, on the storage capacity needed for wind and solar installations. And there’s also a question mark hanging over the availability of cobalt for new lithium-ion batteries.
Amidst such high-tech talk, however, there’s still a certain old-school reality to consider: Can America’s power grid continue to meet the ongoing needs of its consumers? And how will coal fit into the nation’s future energy mix?
In recent years, it has become fashionable to assume that coal is antiquated and that the United States can simply move on from coal-fired electricity. But the sheer logistics of maintaining a reliable nationwide power grid actually argue otherwise.
For starters, it’s important to recognize that America’s coal plants have long since gone high-tech. Thanks to scrubbing systems and advanced filtering equipment, modern U.S. coal plants have reduced emissions by 92 percent per kilowatt-hour. All of this comes from more than $127 billion in investments to trap exhaust products. U.S. coal plants now run much cleaner while still supplying a hefty 30 percent of America’s electricity needs.
Since coal is well-entrenched in providing some of the most affordable, reliable electricity in the nation, what happens if states start pulling the plug on existing coal plants?
According to a new study by Energy Ventures Analysis, the cost to consumers of prematurely retiring coal plants would vastly outweigh the expense of continued operations. This matters at a time when Americans are continuing to rely on affordable electricity for both residential and business needs.
The EVA study found that, for the Midwest and Mid-Atlantic states receiving electricity from PJM Interconnection, the additional cost of continued coal operations would run to $130 million annually. However, shutting down the same coal plants would cost consumers an additional $2 billion annually. And while many favor natural gas, the capital costs of replacing these coal plants with combined cycle gas operations would amount to $5.7 billion.
Essentially, it would cost 15 times as much to prematurely retire the coal plants that currently support baseload power needs.
Why is this the case? Because coal plants have proven to be uniquely durable and dependable when the going gets tough. During the 2014 “polar vortex,” 23 percent of power outages in the PJM states were caused by interruptions in natural gas supplies. And when consumers experienced a brutal winter in early 2018, the grid again became particularly strained. On Jan. 7, for example, almost half of PJM’s natural gas capacity was unavailable to supply electricity: 30 percent of PJM natural gas power was offline, and 20 percent of plants were forced to burn oil instead. This happened because critical natural gas supplies had to be diverted to home heating and industrial use.
Coal still provides the most sturdy means of undergirding America’s baseload power needs. Yes, there are idealistic reasons to hope for advances in renewable power. But wind and solar are limited by weather conditions, and natural gas is prioritized for home heating during peak winter periods. That leaves coal as the unglamorous source of primary resilience for electricity generation.
These are important considerations at a time when Americans are looking to make ends meet. Hastily retiring coal plants would significantly increase costs for consumers and also risk the reliability of America’s power grid. That’s simply too high a price to pay for energy security.
Terry Jarrett has served on both the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission.
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