“It was unanimous.”
By Nick Cunningham, Oilprice.com:
Trump’s bailout for coal and nuclear plants was unanimously rejected by regulators on Monday, undermining the administration’s effort to prop up the ailing industries.
The Federal Energy Regulatory Commission (FERC), which regulates the U.S. electricity market, shot down a proposal from the Department of Energy that would have essentially subsidized aging coal and nuclear power plants.
The effort, pushed by Secretary of Energy Rick Perry, was billed as move to shore up the electric grid and improve “resilience” by rewarding power plants that held a 90-day supply of fuel on site. Only coal and nuclear met that definition. The idea was that coal and nuclear provide the backbone for the nation’s electricity supply, so the market should subsidize them to keep them from going out of business.
FERC unanimously rejected the proposal, despite President Trump having appointed four of the five members on the commission. The panel concluded that under the proposal, coal and nuclear plants would be compensated “regardless of need or cost to the system,” an idea that would not be “just or reasonable.”
“There’s agreement at the commission that the DOE proposal wasn’t sufficient,” Richard Glick, one of the FERC commissioners, told Bloomberg. “It was unanimous.”
Still, FERC acknowledged the importance of grid “resilience,” and instead asked regional wholesale power market operators to come up with some recommendations within 60 days on how to improve grid security.
While it may seem arcane, the decision from FERC is a huge blow to the coal and nuclear industries, which hoped to receive an economic lifeline from the move by compensating economically distressed power plants. A November 2017 Resources for the Future study found that the DOE proposal would keep 25 GW of coal capacity from shutting down, and delay the retirement of 20 GW of nuclear capacity.
But the proposal from DOE sparked a strong and widespread backlash, uniting some unlikely allies. Opposition came from the wind and solar industries as well as the oil and gas industry. The plan “upsets the very foundations of the competitive wholesale electricity markets,” wrote the American Petroleum Institute.
Free market proponents and former FERC officials also criticized the idea because it would distort electricity markets. Consumer groups objected to the fact that ratepayers would have to foot the bill paid to aging coal and nuclear plants that are struggling for economic relevance.
Meanwhile, the decision was notable because it came just after a rather extreme bout of cold weather that left much of the East Coast in a deep freeze. Spot natural gas prices in New York and New England spiked to extreme levels. That led to some rather bizarre developments in the energy trade, with the U.S. importing LNG from Europe and burning oil for electricity.
However, the high prices for natural gas were always going to be temporary, and they are an outgrowth of midstream bottlenecks into the northeast, not the result of a shortage of gas supply. In any event, the grid held up despite the massive wave of coal plant retirements in recent years. “There is no evidence in the record to suggest that temporarily delaying the retirement of uncompetitive coal and nuclear generators would meaningfully improve the resilience of the grid,” wrote Commissioner Richard Glick.
Moreover, FERC noted that outages mostly occur to transmission lines, not because there isn’t enough generation capacity. “[T]he record demonstrates that, if a threat to grid resilience exists, the threat lies mostly with the transmission and distribution systems, where virtually all significant disruptions occur.”
The upshot is that the Trump administration has little to show for its persistent effort to bail out the coal industry. Coal has received a temporary reprieve in the past year, with production up a bit, but that has more to do with international demand than it did with policies from Washington. Most analysts view the slight uptick in coal’s fortunes as a brief hiatus in the long-term structural decline of the industry. In other words, Trump and extreme weather notwithstanding, natural gas and renewable energy will continue to eat into the market share for coal. By Nick Cunningham, Oilprice.com
Here’s how the original deal went down. Read… US DOE Wants to Subsidize Coal Plants though Back Door
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Coal should compete like any other product or service. I didn’t support the shutdown of coal mining because it was done on an ideological basis by the liberals. If coal dies on its own that’s fine with me.
However, with all the crypto mining going on in China, coal probably has a market for the immediate future.
Exactly. Whenever a government official says something like “kill” or “subsidize” any industry, you know you have a problem.
Coal looks like it is in a natural decline. If natural, market forces are causing it, that’s fine.
No such thing as ‘natural market forces’. The renewable industry in the US employs nearly three times as many people as the entire coal industry – and will only continue to grow year on year. Wind and solar projects are now coming in cheaper than natural gas plants – without subsidies. It’s about innovation, market forces, and smart governance getting ahead of the curve to secure a modern infrastructure for the 21st century.
Carbon trading will play an increasingly large role in assisting this transition. China and other large players are getting in on that action. Trump’s America risks falling behind.
” Wind and solar projects are now coming in cheaper than natural gas plants – without subsidies.”
Evidence, please?
Carbon trading is a Wall St. scam to enrich them at the expense of everybody else. Natural market forces are the only “permission” needed to trade energy.
And trading carbon credits is not just a financial transaction, it is a very political action. Only those who can afford the chit can transact in the business world. It is a freedom and wealth curtailing mechanism. The cornerstone of the globalist agenda.
Evidence is pretty easy to find. This is the first google result:
https://cleantechnica.com/2016/12/25/cost-of-solar-power-vs-cost-of-wind-power-coal-nuclear-natural-gas/
What if the sun isn’t shining and the wind isn’t blowing?
Here in West Coast BC we can go weeks in the winter without significant sunlight, and there is only 8 hours of it when it does shine. But we are lucky in having a lot of power from hydro-electric dams (in BC ‘hydro’ is a synonym for electricity)
In Alberta, however. there are still coal fired plants even though the place is awash in nat gas.
There is no practical large- scale method of storing electricity,and for all the perennial talk about battery breakthroughs, no one is talking about one that would store enough power to provide days of supply to the energy gluttons that are North American cities. (The giga battery in Australia is good for about 20 minutes. Its function is to give operators time to juggle loads if there is sudden outage, so breakers don’t trip all the way up the line)
Sure there is a role for wind and solar, but there is no replacement for peak plants that can deliver lots of power on short notice.
‘The perfect is the enemy of the good’
Job one is not lumping nat gas in with coal, it is using it to replace coal.
It is good to see this absurd ’90 day supply’ political invention falling on its face.
Renewable employs more people, and that’s a good thing?
So you are saying the more people we have to pay per MW/hr generated, the better?
If a 1,000MW coal plant can operate with 50 employees, a 100MW wind farm that also employees 50 people is better?
Wouldn’t it be best if we only needed 100 people to operate the entire electric grid? Then the rest of us could go do all sorts of other wonderful things.
Petuina
Carbon trading would arise naturally from market forces. Buying oil futures is trading carbon as well.
Carbon credits can actually create business (the demand is to reduce co2 and create locked carbon) so for instance tree growing or limestone creation.
It’s like how the electric grid pays facility’s to use electric when their is an excess of generation (if is cheaper than storage to shift demand then paying for it makes sense.
Nick Kelly
This is where geothermal in particular comes in as a conrinual renewable source. Although not enough. Re no battery, the trick is usually not to store electricity. We now have pe pumped storage which is basically water free by. All you need is mountains.
Torrified biofuel processed from woody biomass is also an excellent energy storage medium comparable to coal.
A conversion of a coal power plant to TBF would be a worthwhile test of renewables capability.
Of course if peak is needed then coal and nuclear make no sense as they are not good at peak, oil is not quite so bad, but you need more nat gas in the grid
Carbon trading is CRAP and stupid. It’s based on the assumption that CO2 is a pollutant. Unbelievably idiotic, stunted thinking and push by those that think we’re headed into more global warming when the evidence overwhelming points toward the opposite.
Increase in CO2 is responsible for the greening of China. Higher levels of CO2 assist plants in surviving during drought.
You think coal is dead? Think again. As we WASTE or precious natural gas resources due to over fracking – made possible by the Feds policy of low interest rates keeping the frackers on life support far longer than they should have – there will be a day of reckoning and the ONLY thing we have that will save us will be our vast coal resources. Write that down and read it 10 -15 years from now!
If you want to blame the doom of coal (for now) on someone, BLAME THE FEDERAL RESERVE. Otherwise, higher interest rates for borrowing would have been far higher causing the price point for fracking to be much higher, thus curtailing its adoption. Which in turn would have been far more market driven than it is now.
Coal is not a curse, it is by far the one blessing for which we should thanking our lucky stars.
‘Natural’ market forces? Under Free Market capitalist neo-feudal oligarchy? Where every ‘market’ is rigged to favour the rich? You’d call that ‘magical thinking’ if the word ‘thinking’ was not so ludicrously inappropriate. If you want a reality that actually follows intractable and ineluctable rules, try the laws of physics and thermodynamics and the climate science that flows from them, which tell us that continued fossil fuel combustion will end our civilization, and probably our species, this century.
Well Said.
“Coal should compete like any other product or service. I didn’t support the shutdown of coal mining because it was done on an ideological basis by the liberals.”
Coal costs the country between $300-500 billion annually in health and environmental costs that are not borne by the coal industry.
If those costs were included in the price, coal would go from one of the cheapest to one of the most expensive energies per kWh.
@ Smingles
What is the cost to the country if the electricity generated by coal plants was not there?
Ever done that “net” calculation?
My guess is it would start with something like:
“250 million dead…”
As pointed out by many others, it will be when the oceans are dead and the land barren that it will be finally realized…,’you can’t eat money’. Factoring just the cost is horribly short sighted. Germany is a good example of what can be done on the back of renewable energy.
Climate destabilisation science is NOT ‘ideology’.
The country’s energy infrastructure is aging. Many of the nuclear and coal power plants are approaching their end of life. According to the EIA, Coal makes up 30% of U.S. electricity input and nuclear makes up almost 20%. If we don’t replace these power plants soon they will start to fail on their own. According the American Society of Civil Engineers our electrical infrastructure received a D+ grade. If all the future power plants start using natural gas then the price of natural gas will increase because of increasing demand. There isn’t a lot of elasticity in supply. We need a good mix of energy inputs to keep our overall energy costs low and our energy infrastructure resilient. Without cheap energy we can’t have a growing economy. In my opinion this was a short sighted decision by the FERC. We will pay for this in the long run.
“If all the future power plants used natural gas..”, actually with new technology and fracking, natural gas is abundant now more than ever. Actual US yearly consumption is only about 30% more today than it was in 1970, so there may be lots of room to grow for usage without worrying about elasticity in supply of natural gas.
I agree with you on the grid. It’s in bad shape.
But in terms of power generators … they’re retiring massively the old inefficient coal power plants (often 50 years old) and replacing them with gas and renewables.
This just came out about the power plants that have been retired over the past decade (mostly coal but also some other older fossil fuel plants) – with interesting charts:
https://www.eia.gov/todayinenergy/detail.php?id=34452
The current mix is
34% natural gas
30% coal
20% nuclear
15% renewable most of which is hydro and wind
In today’s world nuclear plants are non-starters. They are not economically feasible. South Carolina abandoned their 14 Billion Dollar nuclear power plants and now Georgia is considering doing the same. Nuclear plants were mostly built in the 70s and 80s. The average plant is 37 years old with an initial operating license of 40 years. They can apply for extensions after that.
Coal is going offline due to environmental perception issues and because existing plants are older and need to be retired.
Renewables won’t be growing much beyond their existing footprint. Most of the hydroelectric systems have already been built and the EIA doesn’t see many more being added. Wind has so many issues that it would be too much to cover here. Solar isn’t a contributor to grid infrastructure for a variety of reasons. Solar makes up less then 1% of grid infrastructure.
My point is that based on similar decisions against coal A large percentage of our energy infrastructure Will be sourced from natural gas over the next decade. I have a problem with having our energy basket with only one fuel source. It’s too easy for financial predators to manipulate the market. We are all assuming that increased demand won’t increase prices to the consumer. If we create an environment where several large companies control the energy flow in America we become more susceptible to monopolies and price rigging. If we consolidate to one fuel then our energy security could be at risk. Fracking destroys the environment and there are many questions about its future viability. Fracking requires a lot of energy, chemicals, and creates a huge amount of waste. The wells don’t last that many years so fracking must continue at an accelerated pace to make up for depleted wells. We are talking about decades of future energy requirements. The decision to standardize on one type of fuel puts the U.S. at risk.
Wind and solar is the future. For example, the UK now produces twice as much electricity from wind as coal.
Nicko, Norway only gets 98% of its electricity from hydro, thermal, and wind. It still needs 2% from fossil fuels to get it over the top, but we’re told it’s too late to save the birds. At least they’re not using solar panels to bleed the sun, so there’s that.
If you put turbines around the Beltway the US could become a net exporter of wind energy, wiping out the Mexican and Canadian oil industries and ruining their economies. Balanced geniuses put the welfare of other countries into their policy considerations.
“Fracking destroys the environment and there are many questions about its future viability. Fracking requires a lot of energy, chemicals, and creates a huge amount of waste.”
Lambast fracking (or insert your favorite source of energy here) for the environmental costs while championing coal? Interesting strategy– don’t think I’ve seen that one yet, even from very stable geniuses.
“Renewables won’t be growing much beyond their existing footprint. Most of the hydroelectric systems have already been built and the EIA doesn’t see many more being added. Wind has so many issues that it would be too much to cover here. Solar isn’t a contributor to grid infrastructure for a variety of reasons. Solar makes up less then 1% of grid infrastructure.”
This is a problem of planning and will. Multiple studies have shown the grid could be supplied 99% by renewable sources by 2030, using current technology (assuming no technologic advancement), at a similar cost to traditional sources.
If you’re willing to only require 90% of the grid to be supplied by renewables, the economics become even more favorable.
“We are talking about decades of future energy requirements.”
Exactly. That means looking ahead to the future, which is the opposite of what you think you are doing.
My guess is that the future will show a mix of energy sources, which is generally a desirable economic situation- diversification. During windy and sunny times, those technologies can supply the grid. Other times, the more traditional ones will supply.
As long as the subsidies are minimal, that’s a good situation.
If the demand for gas was real they wouldn’t be flaring it off at the wellhead.Such a waste.
They flare gas when there is no gas pipeline that goes to that well. An oil well that also produces gases would need two pipelines going to it, one for liquids and one for gases. That is more and more the case, but still not often enough.
And if there is no pipeline at all, you can haul oil off by truck, but you cannot haul gases off by truck (well, you could but it would be very very expensive).
An ever ‘growing economy’ is the ideal of the cancer. And, in the neo-liberal West, all that neoplastic, metastatic, ‘growth’ does is further enrich the parasitic elites, while the populace sinks into the mire, and awaits its destruction in the ecological Holocaust that precious ‘growth’ is delivering.
Does this mean the nation’s coal reserves, as expressed in years’ supply, goes up?
Trumpt’s appointees are dealing coke to … coal industry?
Cool, I guess!
From the POV of trying to make the national electrical generating capacity more resilient, it can be argued that replacing huge centralized 1,000 Megawatt range nuclear and coal plants with multiple smaller-scale natural gas, solar, and wind generation will decrease the risk of a massive outage from a single gigawatt-scale plant suddenly going offline.
https://www.eia.gov/tools/faqs/faq.php?id=104&t=3
The loss of the nuclear plants in Japan, which were mostly turned off after the earthquake and tsunami and the meltdowns, significantly impacted their energy supply for years.
One of the lessons of the early 21st century is that the late 20th century made things too centralized (government, banking, industry, even electricity) and that decentralized systems are often more competitive and more resilient.
Solar is not a viable grid technology. You can’t control sunlight. You need to store the energy in batteries that don’t exist so you can turn on the lights at night or during winter months where the sun doesn’t shine for very long. Solar makes up less then 1% of the grid for a reason. It’s a non-starter. Wind is a non-starter for the same reason. It also has to be replaced every 30years. Wind turbines are restricted to a limited numbers of areas that have steady wind. I think many board members need to go to the EIA website and get educated. Grid energy is a problem that if not solved soon will effect America for decades. Believing in fantasy technology won’t fix the problem. We have coal. We have a viable technology that should be added to our energy mix. It would be a shame to watch America spiral down because we bet on a never ending supply of natural gas controlled by a monopoly of corporations.
I Guess the ” WAR on the WAR on COAL” is over and Kentucky has no reason to keep Trump or McConnell” unless they come up with a new FAKE WAR to fight for our benefit and lie again to get Kentucky votes.
What, you mean The Kingfish didn’t give all y’all 40 acres and a mule?
We have to stick with coal and nuclear because wind turbines are killing off the birds and solar panels are using up the sun.
I read that somewhere. They wouldn’t lie about it.
Giving up fossil fuels would disrespect the sacrifices made by our heroic coal miners and oil rig workers. That makes this an issue of patriotism and national pride.
The entire coal industry in the US is now under 50,000….half of those people could probably be replaced by automation and robots. It’s a dying industry…at least as far as employment for humans goes.
How green was my valley. You could probably replace the other half with the right innovations. No more coal mine deaths. Isn’t progerse wonderful?
“I read that somewhere. They wouldn’t lie about it.”
Sadly, that one is actually true.
Residents in Woodland, NC rejected adding additional solar panels (a number had already been built) based on a number of concerns.
One resident, a retired science teacher, claimed that solar panels would prevent photosynthesis and therefore kill off the local vegetation. She also said solar panels cause cancer. Her husband said the solar panes would suck up all the energy from the sun and businesses would not want to come to the city.
There were also legitimate reasons to oppose the panels, but they’re far less interesting.
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I usually don’t comment twice on an article. Please do not dismiss comments regardless how ridiculed or infantile they might seem, have an open mind.
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I like alternative energy sources, but I follow the principle “Data rules!”
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Solar panel materials considered toxic : cadmium telluride, copper indium selenide, cadmium gallium (di)selenide, copper indium gallium (di)selenide, hexafluoroethane, lead, polyvinyl fluoride and crystalline silicon. Additionally, silicon tetrachloride… We are unaware of toxicologic long terms studies, but we know that during the manufacturing and disposition of solar panels the risk of exposure is highest. Do these material diffuse out of the solar panel…time will tell. The designs are made so that they dont.
(https://www.greentechmedia.com/articles/read/how-safe-is-first-solars-cdte-thin-film#gs.fUwvbGM)
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Tropical vegetation grows in indirect sunlight, whereas the some other plants require direct sunlight. Hence the existing vegetation could be impeded giving preference to other indirect light species. Of course this would only be valid for the area covered. The carbon cycle studies are underway, so photosynthesis is affected.
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“Average annual temperature was 22.7 + 0.5 °C in the PV installation, while the nearby desert ecosystem was only 20.3 + 0.5 °C, indicating a PVHI effect.” The effects of Solar panel farms can affect the environment thermally as well, please read. (https://www.nature.com/articles/srep35070)
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How about the “heroic” buggy-whip manufacturers ? They were patriotic too- They wanted to ban cars …..
re: Most analysts view the slight uptick in coal’s fortunes as a brief hiatus in the long-term structural decline of the industry.
Ya think? Then, when the reserves of Petroleum continues to decline and renewables cannot scale up, coal will be once again a last resort….just before we start burning the furniture.
The inescapable fact is: we are burning petroleum at 10X the rate of new discoveries.
If you’re worried about running out of fossil fuels, there are centuries of Methane hydrate trapped on the ocean floor….of course, it would be environmentally calamitous to exploit them (that isn’t stopping countries like Japan and Russia working on it). On the other hand, innovation, efficiencies, and price reductions in the renewable energy sector will continue for decades.
The methane hydrates are already being destabilised, by warming high latitude seas, and will deliver the climate destabilisation coup de grace to the uptight apes.
Exactly. That’s why we need to open up luxury golf resorts to exploration and drilling.
I’m not familiar with US nat gas except that there is lots but Alberta has huge reserves. You pretty much can’t drill without hitting it.
Petroleum is much harder to find.
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Coal is a necessary evil of today’s energy hungry society.
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Think of Coal as a battery. It stores energy, and when needed is used AT ANY TIME (not shouting just emphasizing)! Very important to understand is that solar and wind are preferable, and in terms of environment you are correct, but these are seasonal sources of energy!
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Coal requires no complex storage systems (just complex logistics) adn provide a consistent power output, whereas wind and water need to be balanced into the system. Balanced = mixed in with other sources to provide a constant output.
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Transferring energy long distance can cause large energy losses (critical technological bottleneck – no superconducting room temperature solidstate material has been found). The closer the generator to the load (load=consumer) the better. I have read estimates that for 4000 miles up to 40% of energy is lost.
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Have in mind wind and solar have to outplay, not just the coal cost of generating electricity, but also the transport of the same. Wind turbines are especially tricky as they are in remote regions, causing large line losses. Also in most cases each of these “solar fields” or “wind farms” need additional infrastructure built to transfer and potentially store the energy, stressing the investor even more.
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Substituting Coal is no laughing matter, and is a very complex problem that…chances are, cannot be solved…unless everyone buys expensive storage batteries, and is willing to do so every 10 years.
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“expensive storage batteries, and is willing to do so every 10 years.”
Never does ANYONE discuss how globalism impacts Global Climate Change, wonder why?
‘I have read estimates that for 4000 miles up to 40% of energy is lost.’
No doubt. But who sends it 4000 miles? Quebec sends hydro power to NY state I think at most 1500 miles.
This is an unusual distance. Usually the transmission is not direct, it is sold to the grid and then resold down the line like a bucket chain. This is how BC has sold power to California.
Whatever happened to clean coal, did it go the way of the electric car?
Maybe they figured out it was an oxymoron?