Utilities with aging power plants are asking: Do I upgrade and retrofit or do I retire and replace? “When the price of natural gas is as low as it’s been, and for the foreseeable future looks to be very low, that decision becomes very easy,” said analyst Kenneth Medlock III. Credit: Volker Hartmann/Getty Images
The U.S. is on course for more coal plant closings as utilities shift to cheaper renewables and natural gas. Analysts say the administration can do little about it.
Dan Gearino reports for Inside Climate News:
The Trump administration’s proposal for rolling back federal power plant regulations could affect the short-term fate of some plants, but utility companies appear likely to maintain their long-term course in a market where coal power can no longer compete with natural gas and renewables.
And even if the Trump proposal—which only addresses existing power plants—is made final after a period of public comments, it will still face legal challenges from states and environmental groups. It is unlikely to go into force until well after 2020.
Energy analysts say the administration and coal interests can do little to change the industry’s trajectory.
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The market points inexorably toward continued closing of coal plants in favor of renewables and natural gas. Gyrations in U.S. energy policy are making companies less likely to make investment decisions that assume the latest policy will endure. And some big states, especially California and the Northeastern states, are moving in the opposite direction from Trump with cap and trade carbon regulations on all power plants or laws demanding a steady shift to renewables.
And even if the Trump proposal—which only addresses existing power plants—is made final after a period of public comments, it will still face legal challenges from states and environmental groups. It is unlikely to go into force until well after 2020.
Here’s What Utilities Are Saying
Where utilities come down on the Trump administration’s “Affordable Clean Energy plan,” proposed last week as a replacement for the Clean Power Plan, depends largely on how much they rely on coal.
On one side are those like Pacific Gas & Electric, which has no coal-fired power plants. It was one of 10 utility companies that had argued for retaining the Clean Power Plan in a case before U.S. District Court for the District of Columbia that’s currently on hold.
“We are disappointed by the EPA’s proposal, and will continue to advocate for decarbonizing the U.S. economy through public policy that recognizes the changing dynamics of the electric power sector, including new sources of low-carbon energy,” PG&E spokesman James Noonan said in an email. He said the Clean Power Plan “achieved a thoughtful, balanced approach that gave companies and states considerable flexibility on how best to pursue that goal.”
Dean Seavers, president of National Grid U.S., which also supported the Clean Power Plan in court, said in a statement: “National Grid believes significant and urgent action is needed to combat climate change and has long supported reasonable decarbonization policies and strategies—including the Clean Power Plan and the Paris climate accord.”
“As one of the nation’s largest investor-owned energy companies, the impacts of climate change are central to our business and infrastructure planning,” Seavers said. “We view this matter as one of the greatest challenges of our time.”
Among companies that wanted to see the Obama-era plan repealed or revised, the statements have been much more subdued in tone.
