DNR for Old Coal Plants

By William S. Becker

Donald Trump is having a tough time keeping his campaign promise to save the coal industry. More than 20 coal-fired power plants have closed during his presidency so far. His problem is pretty obvious: He is fighting against very strong market forces. And despite his claims to the contrary, his efforts to promote coal and fossil fuels in general will make the United States weaker and more vulnerable.

Trump is anachronistic when it comes to energy, At a time when the world must turn away from fossil fuels because of global climate change — and every nation except the United States has promised to do so — the president wants the U.S. to become the planet’s leading producer of oil, coal and natural gas. He is trying to push us back into last century’s fossil energy economy by relaxing pollution standards and opening new lands and coastal waters for oil and gas production.

He seems to have a special interest in coal. He and Energy Secretary Rick Perry are contriving ways to keep this dirtiest of fossil fuels in the nation’s energy mix. Their latest strategy is revealed in a confidential 40-page paper leaked to the press. In a nutshell, it says that nuclear and coal-fired power plants scheduled for retirement should remain in operation to provide electricity in the event a cyber attack or weather disasters create outages in the electric system.

In fact, taking these old or uneconomical plants off-line is a threat to national security, the leaked paper says. Therefore, the U.S. Department of Energy (DOE) should use its various legal authorities to mandate that electric system operators, the people responsible for keeping the system running smoothly, must buy electricity from aging, money-losing and in the case of coal, power plants that emit carbon dioxide, the gas most responsible for climate change.

The Status of Electric Generation

To understand why Trump’s fossil-energy advocacy is setting us back, it might help to understand the profound changes underway in the U.S. energy economy, as well as the energy economies of many industrial countries. Last year in the U.S., fossil fuels generated 63% of our electricity, with roughly equal amounts coming from natural gas and coal. Nuclear power plants produced 20% of our electricity and renewable energy resources produced 17%. While renewables produced the least amount of power, they provided about half the growth in electric generation last year, equal to ab out 46 average-sized coal plants.

Coal has been king in power markets for a very long time. More than 90% of the coal burned in the U.S. today is for electric generation. But the fleet of coal-fired power plants is aging. Nearly 90% of our coal generation capacity was built prior to 1990. The average age of coal plants is now 40 years. They are designed to be in service 35 to 50 years.

Because of improved extraction methods, natural gas is now cheaper than coal. Renewable resources such as wind and sunlight are less expensive, too. Energy production from coal peaked in 2007. It has been declining since and no plants have been built to supply U.S. consumers with power since 2014.

DOE reports that 531 coal generating units were retired between 2002 and 2016. The Department predicts that retirements of coal plants will continue in the years ahead, especially between now and 2022, in large part because they cannot compete natural gas and renewable. Most of the power plants being retired, however, will be nuclear due to “market conditions and uncertainties.”

DOE projects that power generated by variable renewable resources such as solar and wind will double between now and 2030, with most of the growth by 2024. Federal incentives are one of the reasons, but technical advances in wind and solar technologies along with economies of scale are big factors, too.

The bottom line is that the nation’s energy economy is being transformed. Abundant and cheap natural gas along with renewable energy technologies are pushing coal-fired generation into obsolescence, economically and environmentally. Clean, inexhaustible and ubiquitous renewable resources are disrupting how the electric grid is operated. Because solar and wind power are variable, power plants now must be able to ramp up and down quickly to adjust to the amount of wind and solar energy coming on or going off line. Modern natural gas power plants can make the adjustments, but coal plants are less flexible. They make money by running continuously and all-out.

The system is having to adjust, too, to the fact that wind and solar energy are free fuels. It’s difficult for other energy resources to compete with that. And in addition, the grid has to be more nimble. Grid operators must be able to move wind and solar power from where it is being generated to where it is needed.

Then there’s the fact that about 1 million buildings now generate electricity on their rooftops in the United States. Micro-grids are becoming more common, the small-scale electric systems that power neighbors, factories, communities and military bases, allowing them to continue producing power when the rest of the grid goes down. The more that power generation becomes decentralized, the harder it is for bad actors to disrupt the economy.

The bottom line is that renewable power is now a player in the marketplace. It will become the major source of energy as the world moves toward zero carbon pollution. It’s here to stay.

A Wrong-Headed Plan

On its face, the idea that we need to keep old coal plants around for national security may seem reasonable, but there are many things wrong with it. First, it’s not necessary to keep the old plants operating. A report that DOE issued just last year concluded that all regions of the country already have more than sufficient energy reserves to handle emergencies, even with coal-plant retirements. Second, the plan is the kind heavy-handed big-government move that so many of Trump’s supporters despise. Third, with cleaner, less expensive and more advanced energy technologies available to generate electricity, keeping obsolete coal plants on line for national security is like ordering the military to keep slingshots and arrows on hand in case its modern weapons systems fail.

What’s most objectionable, however, is Trump’s and Perry’s larger effort to push the nation’s energy economy back into the last century. Energy experts, including those at DOE who were freer to speak before Trump came to power, point out that the United States’ energy economy has entered a historic inflection point. Our energy systems are being transformed by new technologies on the one hand, and new threats on the other. In actuality, a clean and more secure energy economy has already arrived in the U.S. It just hasn’t reached scale. Insofar as government should be involved, it should help, not hinder, the transition.

What Does Real Security Look Like?

Let’s take a closer look at the Administration’s national security argument. How do we make the nation’s vital electric system more resilient, reliable and secure? The Pentagon asked that question nearly 30 years ago after power systems were attacked in at least 40 countries and 24 U.S. states. To find the answer, the Pentagon commissioned two of America’s leading energy experts, Amory and Hunter Lovins, then at the Rocky Mountain Institute. They issued their conclusions in 1982.

“The United States has for decades been undermining the foundations of its own strength,” they told the Pentagon. “It has gradually built up an energy system prone to sudden, massive failures with catastrophic consequences. The energy that runs America is brittle—easily shattered by accident or malice…It is not a threat imposed on us by enemies abroad. It is a threat we have heedlessly—and needlessly—imposed on ourselves.”

The Lovins were referring to an electric system that today consists of 7,700 power plants fueled by coal, natural gas and nuclear energy; more than 700,000 miles of high-voltage transmission lines; 55,800 substations; 6.5 million miles of local distribution lines; and 3,354 electric utilities. It is impossible to protect so vast, interconnected and complex a system.

Then there is the age issue. Many of the power lines in use today were built in the 1950s and 1960s. They are well past their life expectancy of 50 years. Most coal-fired plants were built before 1990, well past their expected service life of 35 to 50 years. The need to update the system is a once-in-a-lifetime opportunity to modernize it, not only to withstand new threats, but also to accommodate our new generation of energy technologies. The Lovins told the Pentagon what a secure system would be:

“The foundation of a secure energy system is to need less energy in the first place, then to get it from sources that are inherently invulnerable because they’re diverse, dispersed, renewable, and mainly local.”

The New Energy Economy

Now after all these years, market forces supplemented by some smart public policies are finally pushing us into that scenario — a system in which electricity is generated in many places besides big power plants, including on the rooftops of buildings and with micro-grids providing power to factories, communities and military facilities. The fastest-growing sources of new electricity today are solar and wind power – clean, inexhaustible and ubiquitous. Because of technical advances and economies of scale, unsubsidized solar and wind energy now are less expensive than electricity from coal, natural gas and nuclear power in many parts of the country. They are joining existing clean power production from hydroelectric, biomass and geothermal facilities.

The Trump Administration will argue that the forced purchases of coal would continue for only two years, giving DOE time to conduct a new study of our energy vulnerabilities. But there already have been many such studies by DOE, the Department of Defense and others. We can expect a new DOE study to support Trump’s climate change denial and his fossilized energy views.

No National Plan, But the Path is Clear

If the United States had a forward-looking and consistent national energy plan – which it does not – the threats of cyberattack and weather disasters could have been addressed long ago. The transition to clean energy would be much farther along. National energy policies would be stable so that investors would feel safe in financing the transition. Our air and water would be cleaner, our children healthier, our vital power system more secure. Our economy would have climbed exited the oil-price roller coaster it has been on since the 1970s. Our electricity would be generated by renewable resources at decentralized solar and wind farms and rooftops.

That is where we are headed. Propping up obsolete coal-fired power plants is not the way to get there.

Despite the lack of a sensible national strategy, the formula for energy security is clear. We should a) invest heavily in energy efficiency and renewable energy and equip the electric system with energy storage and digitalization to accommodate distributed power generation; b) we should tax carbon pollution; c) we should stop spending tens of billions of taxpayer dollars every year to subsidize fossil fuels; and d) we should spend the new and retained revenues to help build the new energy economy.

In the meantime, we need a national “do not resuscitate” order for the coal-fired power plants built in the 20th century. Much better alternatives have arrived.