5:21pm

Fri January 11, 2013
Energy

Coal Loses Crown As King Of Power Generation

Originally published on Fri January 11, 2013 5:31 pm

Just a few years ago, Georgia Power generated nearly three-fourths of its electricity with coal. Last year, for the first time, natural gas edged out coal, and just this week the company announced plans to close 10 coal-fired power generators within the next few years.

"We do recognize this is a historic event for our company. We've never announced this many closings at one time," says Mark Williams, a company spokesperson.

If all goes as planned, within a few years only a third of the company's power plants will run on coal. The company has already built three new natural gas plants. It's expanding a nuclear plant and going bigger into solar and wind, Williams says.

The dramatic and swift shift away from coal at Georgia Power is part of a nationwide trend: After decades in which coal was king of electricity generation, natural gas is making a bid for the title. And it's scoring big, unexpected wins in places like Georgia, where coal was especially dominant.

"We're seeing that across the board, regardless of the size of the companies," says Quin Shea, vice president for environment at the Edison Electric Institute, the industry's trade group.

The development already has shrunk the electricity industry's environmental footprint and reduced prices on wholesale power.

In board rooms across the country, electric companies are deciding that many coal plants, especially small, older ones, just don't make economic sense any more. One factor is the expectation that low prices for natural gas will continue because of the shale gas boom across the country.

Another is that new federal rules require coal plants to clean up the mercury and other toxic chemicals in their exhausts. Installing those pollution controls makes no sense when gas is so cheap.

The shift has come faster than many electricity companies expected. Every year, utilities tell the government which plants they plan to close over the coming decade. Over the course of one year, their estimates of how much coal generation they would retire nearly tripled.

"A year ago those plans only included retirements of about 10- or 11,000 megawatts; now it's approaching 30,000 megawatts," said Alan Beamon, director of the federal Energy Information Agency's office of electricity, coal, nuclear, and renewables analysis.

Shea, from the Edison Electric Institute, thinks even more coal generation will actually close over the next five years. He says whether the trend continues after 2018 depends on several factors:

  • how much the economy and demand for electricity pick up
  • whether natural gas prices stay low
  • if the federal government comes up with new regulations to limit greenhouse gases and clean up solid wastes from existing power plants

Shea predicts coal will not be the only loser in what he calls electric companies' "dash to gas."

"We're not seeing any new coal built," he says. "But we're also are not seeing much occurring in the nuclear sphere. And importantly, the price of gas right now is starting to freeze out the demand for renewables."

Still, natural gas is cleaner than coal, so the shift from coal already has decreased overall greenhouse gas emissions from electricity generation.

Michael Brune, the executive director of the Sierra Club, predicts this good news will get even better as more coal plants close in the coming years.

"So what that means is that those reductions will actually steepen over the next couple years," he says. And he says it's fascinating to see this happening in the absence of a climate bill. Congress tried but failed to pass legislation to curb greenhouse gas emissions.

But Brune cautions that we can't rely on natural gas to stabilize the climate and stop the catastrophic effects of global warming that we got a taste of last year.

"We're not even close to the pace of reductions that we need to see," he says. "If we really want to stop the droughts, wildfires and superstorms, we're going to have to accelerate the pace that we move off of all fossil fuels."

It's not just environmentalists who say this. Climate scientists agree.

Brune says that means the country has to figure out a way to make the shift to natural gas a temporary one.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block. And now, we'll check in on two of the big trends in energy production these days: first, the boom in natural gas and later the business of new oil exploration in the Arctic and some problems there. For decades, coal has been the king of electricity generation in the U.S. These days, natural gas is making a play for that title. And as NPR's Elizabeth Shogren reports, it's already scoring big wins in some unexpected places.

ELIZABETH SHOGREN, BYLINE: Just a few years ago, Georgia Power generated nearly three-quarters of its electricity with coal. Spokesman Mark Williams says those days are gone. Official data for 2012 isn't out yet.

MARK WILLIAMS: But we actually are going to see that we had more electricity produced from natural gas than from coal, which is a change for us.

SHOGREN: A big change, he says, brought about, largely, by low natural gas prices. This week, Georgia Power announced it wants to shut down 10 of its coal generators in the next few years. After that, coal plants would make up only a third of its fleet.

WILLIAMS: We do recognize this is a historic event for our company. We've never announced this many closings at one time.

SHOGREN: The company has already built three new natural gas plants. It's expanding a nuclear plant and going bigger into solar and wind. Industry experts say the switch from coal is a nationwide trend.

QUIN SHEA: We're seeing that across the board, regardless of the size of the companies.

SHOGREN: Quin Shea is vice president for environment at the Edison Electric Institute, the industry's trade group. He says in boardrooms across the country, electric companies are deciding that many coal plants, especially small, older ones, just don't make economic sense any more. Low price gas is only one factor. New federal rules require coal plants to clean up the mercury and other toxic chemicals in their exhausts. Installing those pollution controls makes no sense when gas is so cheap.

The shift has come faster than many electricity companies expected. Alan Beamon is an expert at the federal government's Energy Information Agency. He says, every year, utilities tell the government what their plans are for closing plants over the next decade.

ALAN BEAMON: A year ago those plans only included retirements of about 10- or 11,000 megawatts and now it's approaching 30,000 megawatts.

SHOGREN: That's nearly three times more plant closings than the companies predicted just a year earlier. Quin Shea, from the Edison Electric Institute, thinks even more coal plants will actually close over the next five years. He says whether the trend continues after 2018 depends on several factors: how much the economy and demand for electricity pick up, whether natural gas prices stay low, and if the federal government comes up with new regulations to limit greenhouse gases and clean up solid wastes from existing coal power plants.

Shea predicts there will be other losers in what he calls electric companies' dash to gas.

SHEA: We're not seeing any new coal built, we've talked about that. But we're also not seeing much occurring in the nuclear sphere. And importantly, the price of gas right now is really starting to freeze out demand for renewables.

SHOGREN: Still, natural gas is cleaner than coal, so greenhouse gas emissions from electricity generation are already decreasing. The Sierra Club's executive director, Michael Brune, predicts this good news will get even better as more coal plants close in the coming years.

MICHAEL BRUNE: So what that means is that those reductions will actually steepen over the next couple years. And it's happening in the absence of an overarching climate bill.

SHOGREN: But Brune says we can't rely on natural gas to stabilize the climate and stop the catastrophic effects of global warming that we got a taste of last year.

BRUNE: We're not even close to the pace of reductions that we need to see. If we really want to stop these droughts, wildfires and superstorms, we're going to have to accelerate the pace in which we move off of all fossil fuels.

SHOGREN: It's not just environmentalists who say this. Climate scientists agree. Brune says that means the country has to figure out a way to make the shift to natural gas a temporary one. Elizabeth Shogren, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

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