The Case for Closing America's Costliest Coal Plants
by Angela Garrone
Today the Union of Concerned Scientists (UCS) released the report Ripe for Retirement: The Case for Closing America’s Costliest Coal Plants, which highlights the financial uncertainty of many coal plants around the nation. It turns out that the Southeast is home to a staggering number of inefficient and uneconomic coal plants.
As of May 31, a total of 288 coal-fired generating units representing 41.2 gigawatts (GW) of capacity across the U.S. have been scheduled for closure. Many of the owners of these on-the-way-out coal-fired units based their decision to close up shop on economic grounds. Now that there are many cleaner, lower-cost alternatives for electric generation, coal plant owners are concluding that paying for costly upgrades to keep their outdated coal plants running is a bad investment.
UCS’ new report bolsters these ideas as they have identified up to 353 coal-fired electric utility generating units, many with multiple generating units and 121 of these in the Southeast, that are ripe for retirement, meaning that economically speaking they are uncompetitive compared with cleaner, more affordable sources of energy.
UCS’ report stresses the point that these ripe-for-retirement generators (or units) can be closed on top of the already announced 288 retiring generators without jeopardizing the reliability of America’s electricity system. The U.S. is projected to have 145 GW of excess capacity by 2014, in addition to reserve margins required to maintain reliability at the regional power grid level. Since burning coal for electricity is one of the leading sources of toxic air pollution including sulfur dioxide, nitrogen oxides, soot, mercury and carbon dioxide, retiring the units identified in UCS’ report would be a huge step toward cleaning up our region’s air and water resources.
Southeastern utilities are spotlighted in the report as those with the highest number of coal-fired units that are ripe for retirement. Southern Company, which operates in Alabama, Florida, Georgia and Mississippi, has by far the most generation capacity deemed ripe for retirement—15.6 GW—but has announced less than 1.4 GW of plant closures. Duke Energy, which operates plants in North Carolina, has a total of 17 generating units, representing 2,760 MW of capacity, identified as ripe for retirement.
So how do the Southeast states’ coal-fired units fair in UCS’ assessment? Let’s take a closer look. Ripe for Retirement ranks the states and utilities with the most coal-fired power capacity that should be considered for closure. (Note: Megawatt/MW is a unit of energy measurement, while Megawatt hour/MWh is a unit of measurement of the volume of energy used over the set time period. For example, 50 MW over a 24hr period would mean 1200MWh.)
#1 Georgia with 22 units at 7 plants representing 34.7 million MWhs of generation.
#2 Alabama with 24 units at 7 plants representing 23.4 million MWhs of generation.
#3 Tennessee with 22 units at 3 plants representing 9.6 million MWhs of generation.
#4 Florida with 11 units at 7 plants representing 15.6 million MWhs of generation.
#6 South Carolina with 11 units at 6 plants representing 11.2 million MWhs of generation.
#9 Mississippi with 8 units at 4 plants representing 9.7 million MWhs of generation.
#12 North Carolina with 13 units at 7 plants representing 7.4 million MWhs of generation.
#17 Kentucky with 10 units 5 plants representing 4.8 million MWhs of generation.
How did UCS arrive at such a large number of ripe-for-retirement coal plants in the Southeast? UCS compared the cost of electricity from individual coal-fired electricity generating units with the cost of alternative forms of electricity generation, including natural gas and wind generation. If a coal-fired generator after installing any needed pollution controls would be more expensive than these alternative forms of energy, then that coal generator is considered ripe for retirement.
The report authors actually carried out several varied economic comparisons, ultimately arriving at a low estimate and a high estimate of the number of coal units that are ripe for retirement. The low estimate was arrived at by comparing the operating costs of a coal generator upgraded with modern pollution controls to operating costs of a new natural gas combined cycle plant whose capital costs were not yet recovered. The high estimate came from the comparison of the same type of coal generator to the operating costs of an existing natural gas combined cycle plant whose capital costs were already largely recovered. The report also analyzed several alternative scenarios that could influence the economic competitiveness of America’s remaining operational coal fleet, including implementation of a price on carbon dioxide emissions and the availability of federal tax credits for wind power.
Any way you look at it, there are a significant number of coal units that need to pull the plug on their operations here in the Southeast: 121 with the high estimate and 47 by the low estimate.
The alternative analysis included in the report looked at how the economics of continued operation of coal-fired generating units stood up under several scenarios: low and high prices for natural gas, placing a price on carbon dioxide and wind powered generation with and without an extension of the federal tax credit. The report finds that low natural gas prices and a price on carbon dioxide have the greatest impact in expanding the pool of coal-fired generators deemed ripe for retirement.
For a more complete picture of all of the analyses and variables considered by the UCS team, check out the full text of the report. The report clearly gives us an important snapshot of the economic state of play as utilities actively make decisions on whether or not to extend the lives of their already woefully outdated coal-fired power plants. Ratepayers should be empowered by the information provided in this report to push their electricity service providers to conduct thorough and transparent least-cost planning and alternatives analysis in order to make informed decisions when it comes to the future of their energy portfolio—not just so that we can clean up our air and water—but also to make sure we, as a nation, are not wasting our money in these tight economic times.
Visit EcoWatch’s COAL page for more related news on this topic.
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theDOCK aims to innovate the Israeli maritime sector. Pexels<p>The UN hopes that new investments in ocean science and technology will help turn the tide for the oceans. As such, this year kicked off the <a href="https://www.oceandecade.org/" target="_blank" rel="noopener noreferrer">United Nations Decade of Ocean Science for Sustainable Development (2021-2030)</a> to galvanize massive support for the blue economy.</p><p>According to the World Bank, the blue economy is the "sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem," <a href="https://www.sciencedirect.com/science/article/pii/S0160412019338255#b0245" target="_blank" rel="noopener noreferrer">Science Direct</a> reported. It represents this new sector for investments and innovations that work in tandem with the oceans rather than in exploitation of them.</p><p>As recently as Aug. 2020, <a href="https://www.reutersevents.com/sustainability/esg-investors-slow-make-waves-25tn-ocean-economy" target="_blank" rel="noopener noreferrer">Reuters</a> noted that ESG Investors, those looking to invest in opportunities that have a positive impact in environmental, social and governance (ESG) issues, have been interested in "blue finance" but slow to invest.</p><p>"It is a hugely under-invested economic opportunity that is crucial to the way we have to address living on one planet," Simon Dent, director of blue investments at Mirova Natural Capital, told Reuters.</p><p>Even with slow investment, the blue economy is still expected to expand at twice the rate of the mainstream economy by 2030, Reuters reported. It already contributes $2.5tn a year in economic output, the report noted.</p><p>Current, upward <a href="https://www.ecowatch.com/-innovation-blue-economy-2646147405.html" target="_self">shifts in blue economy investments are being driven by innovation</a>, a trend the UN hopes will continue globally for the benefit of all oceans and people.</p><p>In Israel, this push has successfully translated into investment in and innovation of global ports, shipping, logistics and offshore sectors. The "Startup Nation," as Israel is often called, has seen its maritime tech ecosystem grow "significantly" in recent years and expects that growth to "accelerate dramatically," <a href="https://itrade.gov.il/belgium-english/how-israel-is-becoming-a-port-of-call-for-maritime-innovation/" target="_blank" rel="noopener noreferrer">iTrade</a> reported.</p><p>Driving this wave of momentum has been rising Israeli venture capital hub <a href="https://www.thedockinnovation.com/" target="_blank" rel="noopener noreferrer">theDOCK</a>. Founded by Israeli Navy veterans in 2017, theDOCK works with early-stage companies in the maritime space to bring their solutions to market. The hub's pioneering efforts ignited Israel's maritime technology sector, and now, with their new fund, theDOCK is motivating these high-tech solutions to also address ESG criteria.</p><p>"While ESG has always been on theDOCK's agenda, this theme has become even more of a priority," Nir Gartzman, theDOCK's managing partner, told EcoWatch. "80 percent of the startups in our portfolio (for theDOCK's Navigator II fund) will have a primary or secondary contribution to environmental, social and governance (ESG) criteria."</p><p>In a company presentation, theDOCK called contribution to the ESG agenda a "hot discussion topic" for traditional players in the space and their boards, many of whom are looking to adopt new technologies with a positive impact on the planet. The focus is on reducing carbon emissions and protecting the environment, the presentation outlines. As such, theDOCK also explicitly screens candidate investments by ESG criteria as well.</p><p>Within the maritime space, environmental innovations could include measures like increased fuel and energy efficiency, better monitoring of potential pollution sources, improved waste and air emissions management and processing of marine debris/trash into reusable materials, theDOCK's presentation noted.</p>
theDOCK team includes (left to right) Michal Hendel-Sufa, Head of Alliances, Noa Schuman, CMO, Nir Gartzman, Co-Founder & Managing Partner, and Hannan Carmeli, Co-Founder & Managing Partner. Dudu Koren<p>theDOCK's own portfolio includes companies like Orca AI, which uses an intelligent collision avoidance system to reduce the probability of oil or fuel spills, AiDock, which eliminates the use of paper by automating the customs clearance process, and DockTech, which uses depth "crowdsourcing" data to map riverbeds in real-time and optimize cargo loading, thereby reducing trips and fuel usage while also avoiding groundings.</p><p>"Oceans are a big opportunity primarily because they are just that – big!" theDOCK's Chief Marketing Officer Noa Schuman summarized. "As such, the magnitude of their criticality to the global ecosystem, the magnitude of pollution risk and the steps needed to overcome those challenges – are all huge."</p><p>There is hope that this wave of interest and investment in environmentally-positive maritime technologies will accelerate the blue economy and ESG investing even further, in Israel and beyond.</p>
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