What killed coal? Technology and cheaper alternatives

Coal is dying because of dirt-cheap natural gas. The rise of renewable energy isn't helping.The Envir...

Posted: Aug 22, 2018 3:23 AM
Updated: Aug 22, 2018 3:23 AM

Coal is dying because of dirt-cheap natural gas. The rise of renewable energy isn't helping.

The Environmental Protection Agency announced Tuesday an effort to prop up coal by replacing Obama-era carbon emission policies known as the Clean Power Plan.

But the regulatory reversal is unlikely to spark a coal comeback. Coal's true nemeses are innovation and economics. Fracking has made natural gas abundant and cheap. Breakthroughs in windmills, solar and other renewable technologies are making them affordable alternatives.

"Coal is just failing to compete with natural gas," said Katie Bays, an energy analyst at Height Capital Markets and a former analyst at the US Energy Information Administration.

The administration's efforts to cut red tape could help coal on the margins, according to analysts. However, fierce competition from cheap natural gas is still expected to force the industry to pull the plug on even more coal-fired power plants.

A dozen coal power plants are slated for retirement by the end of 2019, according to energy consulting firm BTU Analytics.

Natural gas, on the other hand, is clearly on the rise thanks to the shale boom, which made gas cheap and abundant. BTU anticipates 56 new or converted natural gas plants to come online by the end of next year.

Unless the federal government decides to subsidize coal plants, "the economics really dictate that this trend continues," said Matt Hoza, senior energy analyst at BTU Analytics. "It's really hard for coal to keep up with cheap natural gas."

President Donald Trump has announced a series of rollbacks of environmental regulations, including promising last year to withdraw the United States from the Paris climate agreement — a move the coal industry cheered.

Now, the EPA plans to introduce less stringent rules on carbon emissions that could ease the burden on coal power plants.

Murray Energy, the largest private US coal mining company, declined to comment on Trump's proposal, but in a statement reiterated its opposition to Obama's Clean Power Plan. Murray Energy said that the regulation was "very illegal, and, by their own admission, would immeasurably affect global temperatures, even if all coal-fired plants were closed."

Coal slump continues under Trump

Despite Trump's efforts to cut regulation, coal has declined further on his watch.

Power generation from coal dropped nearly 6% from January to May this year compared to the same time period in 2017, according to US government stats. Coal's biggest rivals are all gaining ground. Natural gas power generation is up 17% this year, while solar has soared 31% and wind has increased 9%.

Meanwhile, coal companies continue to struggle. In April, the coal and nuclear divisions of Ohio power company FirstEnergy filed for Chapter 11 bankruptcy and requested a bailout from the Trump administration.

"If natural gas remains cheap and renewables keep falling, which seems likely, coal's steep decline will continue even without government regulation," said Jason Bordoff, a former energy adviser for President Barack Obama and the founding director of Columbia University's Center on Global Energy Policy.

Despite the pressure on the industry, industry observers don't see coal outright disappearing.

Coal is very competitive in certain parts of the United States, including in the coal hotbeds of Appalachia and the Powder River Basin in Montana and Wyoming.

"It won't go away completely within our lifetime," said BTU's Hoza.

'Coal is not able to compete'

In 2016, natural gas overtook coal for the first time as America's leading source of power generation. Coal fell to an all-time low of 30% of the electricity market last year, down from roughly half a decade ago and nearly 60% three decades ago, according to government statistics.

Renewable energy has made inroads thanks to technological advancements and a wave of investment. Solar and wind are increasingly becoming competitive with fossil fuels — a trend that's expected to continue.

Clean energy, unlike coal, is also benefiting from the support of environmentally conscious consumers, mayors, governors and CEOs. More than two dozen US states have adopted standards that require utilities to use a certain amount of renewable energy, according to the National Conference of State Legislatures.

Renewable energy has doubled its foothold in US power generation over the past decade and now contributes as much electricity as nuclear, according to Bloomberg New Energy Finance. BP predicted earlier this year that renewable energy will account for about half of the global increase in power generation through 2040.

"Renewable technologies continue to come down in cost. Coal is not able to compete," said Jeff McDermott, managing partner at Greentech Capital Advisors, a sustainable energy investment firm.

"We should be supporting 21st Century technologies that employ far more Americans instead of trying to prop up a failing 20th Century energy technology," McDermott added.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 313166

Reported Deaths: 7228
CountyCasesDeaths
DeSoto21496257
Hinds20294414
Harrison17814309
Rankin13573278
Jackson13411246
Madison10066217
Lee9962173
Jones8364163
Forrest7649152
Lauderdale7181240
Lowndes6370145
Lamar621686
Lafayette6171118
Washington5323133
Bolivar4797132
Oktibbeha461498
Panola4561105
Pearl River4499145
Marshall4397103
Warren4380121
Pontotoc419572
Monroe4100133
Union409076
Neshoba4026176
Lincoln3950110
Hancock377786
Leflore3487125
Sunflower335790
Tate332484
Pike3301105
Scott315373
Alcorn311968
Yazoo310769
Itawamba299477
Copiah296465
Simpson294788
Coahoma294379
Tippah287768
Prentiss279560
Adams269582
Marion268880
Leake266273
Wayne262341
Grenada260386
Covington256381
George246848
Newton246061
Winston226881
Tishomingo225967
Jasper220848
Attala214173
Chickasaw207157
Holmes188673
Clay184754
Stone182033
Tallahatchie178140
Clarke177879
Calhoun170132
Yalobusha163337
Smith162234
Walthall133845
Greene130333
Lawrence128323
Montgomery126742
Noxubee126734
Perry125938
Amite122842
Carroll121728
Webster114532
Jefferson Davis106932
Tunica104826
Claiborne102230
Benton99125
Humphreys96133
Kemper95428
Franklin83623
Quitman80216
Choctaw76118
Wilkinson66930
Jefferson65428
Sharkey50317
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 530325

Reported Deaths: 10966
CountyCasesDeaths
Jefferson763971520
Mobile40908804
Madison34717503
Tuscaloosa25730452
Montgomery24314588
Shelby23401249
Baldwin21107307
Lee15856171
Calhoun14488314
Morgan14282279
Etowah13819353
Marshall12210223
Houston10557280
Elmore10044205
Limestone9954150
Cullman9649193
St. Clair9644242
Lauderdale9419241
DeKalb8825185
Talladega8214175
Walker7223277
Autauga6918108
Jackson6804112
Blount6651137
Colbert6292134
Coffee5506119
Dale4828111
Russell440638
Chilton4279112
Franklin425582
Covington4118118
Tallapoosa4019152
Escambia393276
Chambers3559123
Dallas3547151
Clarke350861
Marion3113100
Pike310577
Lawrence299898
Winston274072
Bibb260464
Marengo249264
Geneva249077
Pickens234160
Barbour230757
Hale222677
Butler215969
Fayette212062
Henry188744
Cherokee184445
Randolph179941
Monroe177340
Washington167039
Macon158750
Clay156156
Crenshaw152057
Cleburne148741
Lamar141934
Lowndes138653
Wilcox127030
Bullock123041
Conecuh110129
Perry107526
Coosa107128
Sumter104332
Greene92334
Choctaw60424
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