Coal Continues Calamitous Crash

November 17, 2020

New from Engineering firm Black & Veatch, as well as Standard & Poors.
H/T to Taylor Kuykendall on Twitter.

Trends continue to reinforce what I covered in my recent Yale Climate Connections video above – Midwest Utilities pivoting to clean energy.

Black & Veatch Strategic Directions Report:

From a survey of more than 600 utility stakeholders:

  • utilities are finding that reducing emissions through renewables doesn’t necessarily compromise resiliency and reliability.
  • Coal- fired power production, which last year plunged to its lowest level in more than four decades, is anticipated to continue its decade- long slide, dropping by an additional 13 percent in 2020.
  • natural gas is expected to remain a key part in the power generation equation — most likely as a backup, covering for the intermittency of solar and wind energy — as coal usage continues to decline.
  • 83.7% said there would be less capacity investment in coal over the next five years,, including 60.1% saying it would be “much less.

According to the report – “Battery storage appears to hold the key, given its utilitarian role as a veritable Swiss army knife capable of consuming, supplying, conditioning and storing electric energy. Such storage allows typically non-dispatchable resources like wind and solar energy
to be used precisely when the systems need them most, helping balance load and generation across time and space.”

• “..power plant decision-makers are discussing how to best have their operations work collaboratively with renewables and, more deeply, pairing things like hydrogen and renewables with storage.”

• Of the respondents, 45% said they would maintain spending on local renewable resources, with 34.5% spending “somewhat more” and 11.4% “much more”.

• 42.7% will spend “much more” on land based solar, with 39.1% spending “somewhat more”.

• Onshore wind has 17.9% spending “much more”, and 41.2% “somewhat more”

• Offshore wind: 16.9% “much more”. 32.9% “somewhat more”.

• Grid storage: 36.6% “much more”. 41.9% “somewhat more”.

More at the link. Pretty enlightening from a solid source.

S&P Global (Standard & Poors):

Building a coal-fired power plant comes with regulatory and policy risks managed over multiyear permitting and construction timelines for plants where it may take decades to recoup the investment. Meanwhile, banks and other capital sources are limiting exposure to coal, and any project would likely face legal challenges.

“I think it’s unlikely any utility will build a large-scale coal plant in the next five years and possibly ever,” said Travis Miller, an energy and utility strategist for Morningstar.

Emily Medine, a principal at Energy Ventures Analysis who also sits on the board of coal producer Contura Energy Inc., agreed that no new coal plant is likely to emerge in the U.S. in the next five years. Medine said the future of coal would depend on the success of retrofitted and new installations of carbon capture technology.

Medine said that while she sees no new coal units coming online under Trump, a Biden presidency could lead to increased electric vehicle deployment. The spur in electricity demand that move would create, combined with a push for carbon capture technology as planned by Biden, could open opportunities for new coal-fired power plants.

However, attempts to pair carbon capture technology with coal have proven costly so far. Southern Co. abandoned its plans to build the Kemper coal-fired power plant after it spent $7.5 billion through April 2017 on a project expected to demonstrate carbon capture’s viability.

Meanwhile, fossil gas faces increasing headwinds.

Rocky Mountain Institute:

As of mid-2020, power plant projects planned for construction in two of the most competitive US electricity markets (ERCOT in Texas and PJM in the Northeast) have shown a remarkable shift from gas to clean energy. Gas generation is now attracting only a small fraction of investor interest compared to clean energy and will soon likely see its market share decline accordingly.

Though COVID-19 may be contributing to some recent decline in planned gas additions, it’s not the only driver. The trend has been building for years and investors more broadly are now waking up to the implications. For example, just five years ago in ERCOT, the interconnection queue contained an even split between proposed gas and renewables generation capacity. However, gas capacity in the queue started falling steadily in 2015, well before the COVID-19 pandemic and associated economic downturn (Exhibit 2). Meanwhile, renewable energy and storage projects in the queue have continued to grow even during the pandemic.

5 Responses to “Coal Continues Calamitous Crash”

  1. jimbills Says:

    Two articles, recent news in the political world:

    The ‘war on coal’ is over. The next climate battle has just begun
    https://www.yahoo.com/news/war-coal-over-next-climate-130053172.html

    “Moniz later joined the board of Atlanta-based Southern Co., whose power plants are among the most polluting of any major U.S. energy firm.”

    • rhymeswithgoalie Says:

      Here’s hoping that much of Big Oil infrastructure support pivots to other growing technologies that depend on major structures and industrial “plumbing”, like geothermal and energy storage.

  2. John Oneill Says:

    In fairness to Moniz -‘Southern Company has seen a rapid transition in its generation fleet. The company said its carbon emissions have decreased by 44% through 2019, and it now expects to achieve the 50% reduction goal well in advance of 2030—possibly as early as 2025…During Southern Company’s first quarter earnings call on April 30, Fanning sounded confident that the Vogtle project would be completed in accordance with the most-recent regulatory-approved in-service dates: November 2021 for Unit 3 and November 2022 for Unit 4. Furthermore, he said site managers continue to believe they can hit target dates set in the company’s “Aggressive Site Workplan,” which are May 2021 and May 2022, respectively…About 50% of Southern Company’s annual energy mix came from natural gas in 2019, with 22% from coal, 16% from nuclear, and 12% from renewables including wind, solar, hydro, biomass and landfill gas.
    https://www.powermag.com/with-vogtle-completion-in-sight-southern-company-targets-net-zero-carbon-emissions/

    • jimbills Says:

      “About 50% of Southern Company’s annual energy mix came from natural gas in 2019, with 22% from coal, 16% from nuclear, and 12% from renewables including wind, solar, hydro, biomass and landfill gas.”

      Which is about what Moniz’s energy philosophy is. It will be a sign which direction the Biden administration is headed if he’s chosen.

      • greenman3610 Says:

        there is no path forward that does not require constant, constructive engagement by citizens to push aggressive climate action.
        Key thing is that having elected Biden, we now at least have a chance to save democracy itself, an absolute prerequisite for any solutions going forward.
        Additionally, activists should work to elect Georgia Senatorial candidates Ossoff and Warnock – to give Mr Biden a workable majority.


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