Like “The War on Christmas” – “The War on Coal” is also a Fox News Fable
December 25, 2013
We in the US are now in a de facto moratorium on new coal construction. What few projects may be currently underway will most likely be the last ever build in this country.
Coal-fired power plants are shutting their doors at a record pace — and for the most part, nobody’s building new ones.
The latest round in the war on coal? Not exactly. The reality is that Americans’ lights will stay on just fine even as coal plants continue to close, thanks to a quiet revolution in energy efficiency and a boom time for cheap natural gas. Throw in some stricter rules for older plants, and the result is a sharp drop in the economic viability of coal-fired power.
Since 2008, coal has dropped from nearly half the U.S. power market to about 37 percent. In the next several years, industry analysts say, hundreds of older coal-fired units will power down for good.
The coal industry and its supporters have blamed these trends on a “war on coal” by President Barack Obama, but the facts on the ground don’t entirely support the political rhetoric. True, Environmental Protection Agency regulations are forcing older plants to reduce pollution and upgrade their equipment, helping drive the wave of shutdowns. But increasingly efficient homes, office buildings and factories and a fall in demand for electricity are big reasons why power companies don’t need to build replacements right away — possibly for another two decades.
Even in coal-heavy Kentucky, utilities have decided that at times, closing a big coal plant is the least costly option. And many customers won’t even notice that the plants are gone.
“While many coal plants are expected to close, for a variety of reasons we are unlikely to feel it at the light switch,” said Jennifer Macedonia, a senior adviser at the Bipartisan Policy Center.
A new report warns that Wisconsin’s economic competitiveness could be at risk if the state doesn’t diversify its electricity sources.
The Badger State is already burdened by the second highest electricity prices in the Midwest, with only Michigan customers paying more on average.
Those rates are likely to climb faster than inflation and prices in surrounding states in the next decade due to Wisconsin’s dependance on coal-burning power plants, according to Gary Radloff, director of Midwest policy analysis at the University of Wisconsin-Madison’s Wisconsin Energy Institute.
His recent paper, “How to Keep Wisconsin and the U.S. Competitive in a Changing Energy World,” says better planning and more investment are needed to shield the state’s economy from fossil fuels’ risk and volatility.
“Wisconsin will fall behind in global and domestic economic competitiveness unless it moves towards a balanced energy portfolio with less reliance on high-cost coal and more reliance on clean energy technology solutions,” Radloff writes. “That is not the case today in Wisconsin, and in fact, there are troubling signs Wisconsin has slipped behind other states in the path to long-term energy innovation and economic success.”
Wisconsin may be locked into higher energy prices because of “misguided energy planning in the past” that made long-term commitments to coal plants that are increasingly expensive to operate, Radloff writes.
The report says concerns about electricity supply and reliability in the 1990s and early 2000s led to over-building of coal plants in the state, and customers will be stuck paying for them for the next 20 to 30 years.
They include the We Energies Oak Creek Power Plant, the largest construction project in state history. The $2.2 billion project came in 8 percent over budget. Wisconsin regulators last year approved a rate increase passing most of that overrun on to customers.
Radloff cites a Sierra Club forecast that coal prices will increase about 6 percent per year or 2 percent above inflation over the next decade because of growing transportation, operational, and regulatory expenses.