Major Coal Plant Closures Show How Coal Industry Is Dying Faster Than Expected
Several of the largest coal-fired power plants in the United States are scheduled to shut down this year, representing some of the largest emitters of greenhouse gases, as the cost from building new power-generating facilities using renewables or natural gas continues to fall relative to coal.
Several of the Largest Coal Plants in the United States to Close in 2019
As coal-fired power plants become increasingly unsustainable in the face of the growing savings from alternatives energy sources like solar and natural gas, plant operators have been quickly shutting down the smaller and most inefficient coal-burning plants in an effort to shift resources to larger, more profitable plants that contribute to the overwhelming bulk of the nation's greenhouse gas emissions. Now, a new report in Scientific American reveals the extent to which even these larger plants are becoming loss-leaders for coal plant operators and are having to be shut down.
The Navajo Generating Station (NGS) in the state of Arizona is slated to cease operations by the end of 2019, making it one of the largest carbon-emitting generators in the country to ever be taken offline. Between 2010 and 2017, NGS pumped 135 million metric tons of CO2 into the atmosphere, with an average annual emission during those years equal to the total emissions produced by 3.3 million passenger vehicles in a year. According to Scientific American, "[o]f all the coal plants to be retired in the United States in recent years, none has emitted more" than NGS.
While NGS is the largest carbon-emitting coal-fired power plant slated to be shut down this year, other major coal-fired plants around the country are facing the same existential problem as NGS and are major emitters in their own right. Pennsylvania's Bruce Mansfield coal plant, which produced 123 million tons of emissions between 2010 to 2017, is scheduled to be shut down for good by the end of the year.
Kentucky's Paradise coal plant generated 102 million tons of emissions from 2010 to 2017, the year that the Tennessee Valley Authority began shutting down the plant by closing two of its three units. The remaining unit will be taken offline at the end of this year.
About a decade ago, the smaller, more inefficient coal-fired plants around the country started being taken offline as the growth in renewables, and the abundance of cheap natural gas began to increase the costs of operating these plants relative to switching to alternatives. Soon, it was becoming cheaper to build entirely new alternative energy generating facilities from scratch than continuing to operate these smaller coal plants. Unable to compete, they needed to be shut down so resources could be diverted to the larger coal-fired plants whose economies of scale allowed them to be still competitive.
Those economies of scale appear to be increasingly unable to save a growing number of larger coal plants that only a few years earlier were believed to be able to hold on, even if they wouldn't dominate the energy production sector the way they had for a century.
“It’s just the economics keep moving in a direction that favors natural gas and renewables," said Dan Bakal, the senior director of electric power at Ceres, which consults with companies looking to transition to cleaner and increasingly cheaper energy sources. "Five years ago, it was about the older coal plants becoming uneconomic. Now, it’s becoming about every coal unit, and it’s a question of how long they can survive.”
How Will Latest Round of Coal Plant Closures Cut Down US Carbon Emission Levels?
The first coal-fired plants to be shut down were smaller and poorly-utilized plants that didn't add significantly to US carbon emissions, so their shutdown did little to arrest the rise in US carbon emissions. The Scientific American report reveals that in 2015, 15 GW of coal-generated capacity was shut down, cutting the total number of coal-fired plants in the US by 5%, a record number of closures for a single year.
The reduction in emissions wasn't comparably large, however. Those plants accounted for 261 million tons of emissions over the six years preceding the closures with an annualized average emission of 43 million tons.
For comparison, total closures of 14 GW of coal-fired capacity represented 511 million tons of emissions over a comparable period, with an annualized average emission of 83 million tons. When counting all of the closures slated for 2019, which represents 8 GW of coal-fired capacity and so just about half the capacity lost in 2015, these plants produced 328 million tons of emissions between 2010 and 2015 for an annualized average emission of 55 million tons.
“You notice the average size of retired plants going up over time. There are not a lot of small plants left, period,” said John Larsen, head of power-sector analysis at the economic consulting company Rhodium Group. “Once you’ve cleared out all the old inefficient stuff, it’s logical the next wave would be bigger and have more implications for the climate.”
There are a lot of factors that can give a false sense of the trends in the industry, however. Take the emissions figures cited for the final years of plant operations before their closing. In the final years of their operation, they would have been operating at a reduced capacity as the plant progressively took itself offline, so those numbers can't be taken as representative for those plants, historically, much less for the industry overall.
What's more, the most heavily emitting plants in the US have no anticipated retirement dates. Because these plants are even larger than the ones being closed this year, they can burn coal and emit carbon pollutants all day and all night long, every day of the year because the economies of scale drive down the costs of burning coal in these plants as opposed to smaller less efficient ones.
But there are reasons to give credence to the data reported on in Scientific American. Other economic data point to the unsustainability of an increasing number of coal plant operators. Several major coal mine operators have declared bankruptcy in the last 12 months, even as President Donald Trump has made saving the coal industry a major priority for his administration.
The situation is becoming so desperate for the industry that memos from the US Energy Department were leaked to Bloomberg last year, revealing that the administration was considering direct intervention to force power utilities to purchase energy from coal-fired plants. The justification for such an unprecedented intervention into the private energy sector was the argument that national security required 'always-on' power capacity and that without coal and nuclear power, this capacity in the electrical grid could be threatened.
While that argument is highly debatable, what isn't is that coal is increasingly approaching a total collapse of the coal industry, from mine operators to power generators. Research indicates that regions that depend on coal as their main if not only economic driver could face regional depressions in the years ahead. The collapse of coal will not be without consequences for a substantial number of people.
But just as it makes economic sense to simply build an entirely new renewable or natural gas generator than to continue to use an existing coal-fired plant, the costs of propping up coal plants that will never make money in the future with the compelled sale of coal-generated energy to utilities will be greater than it would cost to direct massive government and private investment into coal-reliant communities to build entirely new--and hopefully diverse--industries that can replace the coal jobs that are going to be lost.
For now, the largest coal plants may be operating on the assumption that they can weather the hurricane-force headwinds for the coal industry, but the NGS, Bruce Mansfield, and Paradise plants thought they could hold out too. Now they're the inefficient dead weight in the industry that is getting cut. How long until no coal-fired plant in the country can sustain itself in competition with alternatives whose most innovative days lay ahead while coal's glory days were decades ago?
With the climate crisis accelerating at the rate that it is and the economics in the energy industry trending further and faster away from coal than anyone imaged two decades ago, the only sane policy for the planet--and for the communities who rely on coal for their existence--is to take action now rather than bide for time that will never be given. By taking the industry out behind the barn and putting it out of its misery through public policy in an orderly way rather than wholesale and sudden collapse, we can then be empowered to invest resources into new industries to give the old coal communities the economic support they'll need to make the transition. Any other policy at this point is simply madness.
There has been a lot of talk about China and a new Sputnik moment for America, but such talk ignores why the original Sputnik moment was so traumatizing.