Cheap natural gas is the main culprit for the demise of coal claims new report
Long-awaited federal research paper calls for more support for new coal power, despite data revealing cheap gas rather than regulatory action has sparked its demise
A long-awaited US federal research report into the stability of the American power grid has called for more incentives for coal and nuclear generation, despite conceding that regulatory measures were not responsible for the demise of coal-fired power in the US.
The paper, released on Wednesday, confirms the primary role of cheap natural gas in curtailing coal’s role in the electricity grid in many parts of the US, with policies to promote solar and wind, a flattening of electricity demand and regulatory signals playing a smaller role in the transition.
The review was commissioned earlier this year by Energy Secretary Rick Perry, who sought to evaluate whether the coal industry’s current woes were down to President Obama’s environmental agenda. He voiced concern that the reliability of the US grid may be threatened due to the retirement of large baseload power plants.
Although the research admits the grid has not suffered major reliability problems to date from the rollout of renewables, it calls for more baseload energy such as coal and nuclear to be brought on-stream to maintain the viability of the grid in the long-term.
“America is also fortunate to have a variety of fuel sources,” Perry wrote in his covering letter to the report. “We need to consider how to use each effectively while recognizing our differences and unique state and regional circumstances. We also need to recognize the relationship between resiliency and the price of energy. Customers should know that a resilient electric grid does come with a price.”
The long-awaited paper differed from an earlier draft, leaked in July, which found the grid could support large volumes of renewables capacity without become unreliable.
Meanwhile earlier this week a team of researchers from Stanford and University of California, Berkeley, suggested the US was one of 139 countries capable of powering all of its economy using only wind, water and solar power.
Coal groups praised the final report, which backs Donald Trump’s campaign platform to revitalise America’s ailing coal industry. “The US Department of Energy’s electric grid study reaffirms our view that nuclear energy is a key and necessary contributor to a clean, reliable and resilient electric grid, which is now more important than ever,” Nuclear Energy Institute president Maria Korsnick said in a statement.
The paper also called for infrastructure development, market reforms and a rollback to environmental and climate regulation to help boost the number of large baseload plants. Despite relief among some environmentalists that the report did not turn out to be an all-out attack on renewables, some argue the struggling coal industry is positioning itself for state support under the guise of providing crucial grid resilience.
“Coal and nuclear want resilience to be a code word to subsidise them when they can’t compete,” John Shelk, president of the Electric Power Supply Association, told Bloomberg. “That’s a warped view of resilience. All fuels, technologies and attributes should be considered together.”
Just a day after its publication the Department of Energy announced $50m of funding for two large-scale pilots for coal technologies. The programme aims to improve “coal-powered systems’ performance, efficiency, emission reduction, and cost of electricity,” according to the DoE.