As Renewables Soar, More Bad News for Coal
May 10, 2015
The coal mining sector was hit with another blow yesterday when one of the largest global banks, Bank of America, committed to curb lending to global coal mining companies.
Bank of America has been reducing its credit exposure to coal extraction companies over several years but said it will apply the policy going forward, according to an updated coal policy discussed at the company’s annual shareholder meeting yesterday. The policy was released on the company’s website late last week.
“This commitment applies globally, to companies focused on coal extraction and to divisions of diversified mining companies that are focused on coal,” the policy says.
The company said the policy fits into its corporate social responsibility strategy to conduct business while limiting impact to the environment and surrounding communities. Its policy still permits funding for advanced technologies such as fossil fuel plants with carbon, capture and storage technology.
The policy adds to a global trend to limit the financing of carbon-intensive sectors because of concerns from the investment community about perceived risks.
Employment in the nation’s energy sector is undergoing a major transformation, with double-digit percentage declines in jobs associated with coal-fired power generation and equally strong gains in the natural gas, solar and wind power sectors, according to new findings from Duke University.
Scholars at Duke’s Nicholas School of the Environment, using an economic input-output model, estimated that the coal industry lost more than 49,000 jobs between 2008 and 2012, or 12 percent of its base, while the gas, solar and wind industries gained nearly 175,000 jobs, a 21 percent jump.
“The reasons for these ongoing shifts are varied and complex,” researchers wrote in “Employment Trends in the U.S. Electricity Sector, 2008-2102,” published in the journal Energy Policy. They include upward price pressure on coal associated with mining, as well as the dramatic expansion of hydraulic fracturing in the United States that created a glut of inexpensive natural gas.
At the same time, regulatory pressure on coal plant emissions began solidifying under the Obama administration after 2010, while a host of new programs to encourage the development and adoption of renewable energy emerged from the federal stimulus bill aimed at moving the economy out of the Great Recession.
“The production tax credit for renewable energy was also extended, bolstering investment in large-scale wind and solar plants,” the researchers said. “And as expansion of state renewable portfolio standards lowered the cost of smaller-scale investment in solar, the growth of third-party power production agreements made it possible for homeowners to shoulder little if any up front capital costs in return for solar energy at fixed, competitive electricity rates.”
The findings from Nicholas School researchers Drew Haerer and Lincoln Pratson are largely consistent with other findings from government agencies and research institutions that track energy-sector employment.
In an interview, Haerer said the analysis goes beyond earlier studies by applying data at the county level to identify regions that have seen the greatest employment shifts. While not uniform, Haerer said the research shows deep job losses in traditional coal regions such as Appalachia and the Powder River Basin, while gains are seen across the country due to the growth of gas-fired generation and renewables.
Utility-scale solar power now accounts for 1% of total US electricity generation capacity, small-scale solar an estimated 0.7%, and wind 5.6%. Of course, hydro is still the largest source among all renewables, accounting for 8.5% of all US electricity generation capacity.
While the trends in recent months and years are quite positive, we’re still adding a lot of natural gas, and the total installed capacity of coal (27.6%) + natural gas (41.8%) + oil (3.9%) = a depressing 73.3% of the total US power capacity pie.
Let’s rejoice in the 84% split for renewables so far in 2015, but let’s remember that we need to work hard to speed up this transition and the closure of fossil fuel power plants that harm our health, threaten a livable climate, and cause innumerable premature deaths every year.