Eroding Diversity in U.S. Power Grid Will Mean Greater Price Fluctuations, Higher Bills and Negative Impacts to Economy
New York (September 19, 2017) – The U.S. power grid is on track to lose cost effective power supply diversity, a trend that will raise the cost and variability of power bills and create negative macroeconomic impacts that would ripple out through the broader U.S. economy, a new study by IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions says.
The new study, titled Ensuring Resilient and Efficient Electricity Generation: The Value of the Current Diverse U.S. Power Supply Portfolio says that current policy-driven market distortions will precipitate a less efficient diversity portfolio where some U.S. power systems could have no meaningful contributions from coal or nuclear resources and a smaller contribution from hydroelectric resources. They will rely on a tripling of the current 7 percent reliance on wind, solar and other intermittent resources, and on natural gas-fired resources to supply the majority of generation.
To illustrate what is at stake if nothing is done to arrest the erosion in the cost-effectiveness, resilience and reliability of the current U.S. power supply mix, the study compares the actual industry performance of recent years (2014 to 2016) with that of a less efficient diversity portfolio case over the same time period.
Bishop told participants at the American Coal Council conference in Park City, Utah, yesterday that so far this session Congress has focused primarily on undoing regulations put in place by former president Barack Obama’s administration that were “simply unfair and inappropriate.”
Bishop pointed to the Stream Protection Rule, which governs how companies can mine within 100ft of intermittent waterways, as an example of a rule Bishop deems overreach by the previous administration.Bishop says now he is eager to “come up with legislation that can be permanent, that can be long-standing, and can set the standard well beyond the end of this particular administration.”
Bishop wants to see Congress pass bills that speed up permitting for projects like Millennium Bulk Terminals, improve the abandoned mine lands fund, and make it easier for third parties to assist in coal mine reclamation.
He is also interested in legislation sponsored by representative Liz Cheney (R-Wyoming) that would require lawmakers to approve any future federal coal leasing moratoriums and a measure proposed by representative Evan Jenkins (R – West Virginia) that would prohibit the use of “ambiguous metrics” such as the social cost of carbon in environmental rulemaking.
But Republican control of both houses of Congress and the presidency does not guarantee success, Bishop warned. The same was true when Bishop first came into office in 2003, but “we be basically screwed it (up),” he said. “This time we cannot afford to do that.”
The Senate, with rules that require a 60-vote majority to push forward most legislation, is the biggest potential roadblock, Bishop said. President Donald Trump has urged the Senate to drop the 60-vote rule, but Senate majority leader Mitch McConnell (R-Kentucky) has refused.
Bishop said he has meetings set up with key senators when lawmakers return to Washington next month to try to find a strategy to move forward. “We want energy to be the focal point as we come back in September,” he said.
But lawmakers already have some key legislative priorities awaiting them, including funding the federal government for fiscal year 2018 beginning 1 October, raising the federal debt limit and overhauling the US tax code. That may make squeezing in energy legislation extremely difficult.
The new administration of President Donald Trump “provides us with a unique opportunity,” Kellow said today at the American Coal Council Coal Market Strategies conference in Park City, Utah.
“This is an an administration, this is a president, these are cabinet secretaries who get it.”
The US is midway through a record pace of power plant retirements that was mostly tied to tightened air pollution standards implemented earlier this decade. About 36.3GW of capacity came off line in 2015 and 2016, and the US Energy Information Administration expects another 16.8GW of capacity to close between 2017 and 2021. Peabody expects 50GW of coal-fired capacity to be retired through 2021, which is “far too many,” Kellow said.
Let us have the industry focus on cutting that in half and running the fleet harder,” he said.
The US Department of Energy is in the process of completing a reliability study ordered by secretary Rick Perry in April. That likely will confirm what members of the coal industry have been arguing: increasing reliance on renewables is putting electricity supply at risk, Kellow said.
The Trump administration “has taken a number of positive steps” to support coal, Kellow said. That includes revoking the stream protection rule that may have limited coal mine development and suspending the Clean Power Plan, which requires power plants to cut CO2 emissions. But the coal industry is still suffering from years of over-regulation, cheap natural gas and a push toward renewable generation that have resulted in a “major imbalance in the power supply,” Kellow said.
But the Peabody executive recognizes that concerns about carbon emissions are not going away, even with Trump in office. He wants to see more carbon capture projects like NRG’s Petra Nova plant in Texas successfully reach commercial scale.
Kellow is also hopeful that new high-efficiency low-emissions (HELE) coal plants could be built in the US. HELE coal plants that will be able to produce 800GW of power are on line or under construction globally, with countries like Japan and China leading the way, Kellow said.
“This is going to be the future for coal,” said Danny Gray, executive vice president for governmental affairs at Charah, which markets coal combustion residuals. Gray pointed to the Longview plant in West Virginia which is one of the highest efficiency electricity producers in the US. He believes that the US should subsidize the construction of HELE plants, to keep the US competitive with global players.
But Dennis Rackers, director of fuels and materials management at Northern Indiana Public Service, was skeptical that commercial scale use of so-called advanced coal technologies would gain traction in the US. HELE plants are three times more expensive to build than natural gas facilities even before fuel costs are considered.
And carbon capture and storage “could be double the cost of coal, increasing that incremental cost of generation by another 100pc.”
NEW YORK (Aug. 9, 2017) — Paringa Resources Limited has now begun excavation and site development works at the Poplar Grove mine site area and remains on track for first coal production 12 months from the start of construction. The 2.8 million tons per year Poplar Grove Mine is located immediately south of the fully permitted 3.8 Mtpa Cypress mine which both will have low cost barge access to the Green River and utilities located within the Ohio River Market.
Paringa’s Managing Director and CEO, Mr. Grant Quasha, said: “The Paringa team has done an impressive job in completing all technical studies, permitting, and financing to begin construction of the Poplar Grove mine less than 18 months from the release of the Scoping Study results and announcing the decision to build the lower capex Poplar Grove mine first, followed by the permitted Cypress Mine.
“We are very excited to have now begun construction of the low capex and high return Poplar Grove Mine which has a low construction and execution risk given the mine’s location in the heartland of the western Kentucky coal industry and the CHPP has been designed to standard industry configuration for the Western Kentucky No.9 and No.11 seams. The local presence and experience of our contractors and service providers offers additional and readily accessible expertise and we continue to make excellent additions to our construction and operations team.
“I believe this is going to be a very exciting 12-months ahead as we progress through the construction phase and towards first coal production, advance negotiations with utilities located within the Ohio River and South-East markets potentially leading to additional sales contracts, continue discussions with advisers for a potential listing on major US stock exchange and begin to roll-out our public relations and digital marketing campaign throughout North America.”
By DANIEL ACKER
WASHINGTON — The Trump administration on Wednesday released a major report urging actions to protect the Coal-fired plants employed 86,035 people in the U.S. last year. That may not seem like a huge amount in a country of some 150 million workers but it’s 16 percent more than the number employed at mines, according to the U.S. government. It’s also a younger and more diverse workforce, with women making up more than a third of it, and ethnic minorities about a quarter.
Curiously, they haven’t gotten nearly as much attention as the miners — even though their numbers are shrinking fast. And coal comebacks like the one Trump hailed in Pennsylvania won’t help them. Corsa Coal Corp.’s venture there is digging up metallurgical coal, which is used in steelmaking and often exported.
Under Trump, the Environmental Protection Agency is making efforts to save some of the coal-plant jobs by scaling back emissions regulations. But most experts expect more plants to shutter as new gas-fired units come online and costs keep plunging for solar and wind power. Some coal plants are being converted to gas, which still involves layoffs because gas generators typically employ about half as many people.
By BRAD PLUMMER
New York Times
WASHINGTON — The Trump administration on Wednesday released a major report urging actions to protect the “reliability and resilience” of the nation’s electric grid, a move that could lay the groundwork for future support of America’s ailing coal and nuclear industries.
The 187-page study, commissioned by Energy Secretary Rick Perry in April, recommends that federal regulators make changes to wholesale electricity markets that could potentially benefit existing coal and nuclear plants. Revenues for many of these facilities have slumped in recent years as electricity prices have declined, mostly because of cheap natural gas, the study said, but also as a result of low electricity demand growth and the rise of wind and solar power.
More than 200 coal plants and five nuclear reactors have closed across the United States since 2010, and President Trump has vowed to revitalize both industries, though doing so would require resisting powerful market forces reshaping the energy landscape.
The Energy Department report concedes that the nation’s electricity system remains reliable today, even with a sharp rise in intermittent wind and solar power, in part because natural gas generators and existing hydropower can easily fill any gaps in renewable generation.
But the study raises concerns that a future grid with fewer “baseload” coal and nuclear plants, which are capable of producing electricity around the clock, could pose challenges to grid operators trying to keep the lights on.
WASHINGTON, D.C. – The U.S. Department of Energy (DOE) today announced the availability of a $50 million funding opportunity through the Office of Fossil Energy to design, construct, and operate two large-scale pilots for transformational coal technologies that improve coal-powered systems’ performance, efficiency, emission reduction, and cost of electricity.
DOE has supported a range of potentially transformational coal technologies aimed at enabling step-change improvements in coal-powered systems. Some of these technologies are now ready to proceed to the large-scale pilot stage of development. Applicants to this new FOA should have already demonstrated technical success at a small-scale pilot stage, and a 20 percent minimum cost share on total award values is required.
The FOA will involve three phases, with down-selections made between phases:
- Phase I(Feasibility) will support efforts to secure team commitments; update the preliminary cost estimate and schedule for design, construction, and operation; secure construction/operation cost-share funding; and complete an environmental information volume.
- Phase II(Design) selected projects will complete a front-end engineering design study, and complete the National Environmental Policy Act process.
- Phase III (Construction/Operation)will ultimately be the two, final projects selected to support construction and operation of the large-scale pilot facilities.
More details and information about this funding opportunity can be found HERE.
To learn more about the programs within DOE’s Office of Fossil Energy, visit their website HERE. For more information about the National Energy Technology Laboratory visit their website HERE
Stakeholder sessions will be held weekly between September and November – “Mining” date is October 31
WASHINGTON (08/25/2017) –The U.S. Environmental Protection Agency (EPA) and U.S. Department of the Army (the agencies) will hold 11 sessions to give stakeholders an opportunity to provide recommendations on a revised definition of “waters of the United States.” The agencies will hold nine two-hour long teleconferences that will be tailored for specific sectors, plus one that will be open to the general public. The agencies will also hold one in-person session for small entities.
These sessions follow the February 28, 2017, Presidential Executive Order on “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule.” The February Order states that it is in the national interest to ensure that the Nation’s navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of Congress and the States under the Constitution.
The stakeholder sessions will be held on a weekly basis beginning September 19 and will continue each Tuesday thereafter for ten weeks. Each will run from 1:00 p.m. to 3:00 p.m. eastern time. Information on how to register for each of these meetings is available on the EPA website. Registration for each webinar will close a week prior. Those wishing to provide verbal recommendations during the teleconference will be selected on a first-come, first-serve basis. Due to the expected volume of participants, individuals will be asked to limit their oral presentation to three minutes.
Stakeholder Sessions Schedule
- September 19, 2017 – small entities (small businesses, small organizations and small governmental jurisdictions)
- September 26, 2017 – environment and public advocacy
- October 3, 2017 – conservation, g., hunters and anglers
- October 10, 2017 – construction and transportation
- October 17, 2017 – agriculture
- October 24, 2017 – industry
- October 31, 2017 – mining
- November 7, 2017 – scientific organizations and academia
- November 14, 2017 – stormwater, wastewater management and drinking water agencies
- November 21, 2017 – general public
The agencies are also planning an in-person meeting with small entities, which will be held on Monday, October 23, 2017, from 9:00 to 11:00 a.m. Eastern Time at the U.S. EPA’s Headquarters.
The agencies will also be accepting written recommendations on the step two rulemaking effort through a non-regulatory docket (EPA-HQ-OW-2017-0480), which will be available when the notice is published in the Federal Register. The agencies ask that this information be submitted on or before November 28, 2017.
Additional information: www.epa.gov/wotus-rule
Contact Us to ask a question, provide feedback, or report a problem
WASHINGTON, DC (August 24, 2017) – The Department of Energy staff report to Secretary Rick Perry provides a comprehensive view of the evolution and current status of the U.S. electricity marketplace and offers some important policy considerations to support grid operations in the future.
The report points to the Polar Vortex as demonstrating “the critical need for improved system resilience”. While finding that electricity markets now recognize and provide for reliability, more work is needed to recognize and compensate for resilience, including resources with fuel assurance.
Coal is a key fuel resource, and the ability to store it onsite at a power plant is an important attribute.
The report recognizes that market factors, federal and state regulations and mandates, the impact of variable resources, and flat electric load growth have accelerated closure of baseload generation and may harm grid reliability and resilience without market and policy changes.
Wholesale electricity markets are discussed extensively and the report notes that questions about revenue sufficiency and resilience “must be addressed quickly, before the fast-moving evolution of our power system outpaces our ability to understand and manage it responsibly.”
The American Coal Council concurs – time is of the essence.
Another area the report addresses is infrastructure, with a recommendation for EPA to provide a regulatory environment that allows existing coal plants to improve efficiency and reliability without triggering new regulatory approvals (New Source Review). Recognition of this issue and the need to resolve it is important. This has been a barrier for many years and has contributed to decisions to retire rather than retrofit coal plants.
The American Coal Council appreciates Secretary Perry’s attention to the issues of our dynamic power sector marketplace. FERC, NERC, RTOs/ISO’s, federal and state agencies and other stakeholders must now expedite addressing the DOE report recommendations.
By H. Sterling Burnett
One of the main reasons President Trump pulled the United States out of the Paris climate agreement is the treaty is a “bad deal for America.” Among many other problems, it would cost a significant number of jobs. In support of his claim, Mr. Trump cited a study by NERA Economic Consulting that estimates if the United States were to meet its carbon-dioxide emissions reduction obligations under the Paris climate agreement, it would cost the economy nearly $3 trillion and the United States would lose 6.5 million industrial jobs by 2040, including 3.1 million in the manufacturing sector.
Since Mr. Trump’s announcement, many advocates for staying in the treaty have either questioned the president’s claim about job losses or said green-energy technologies, especially solar, are engines of job creation that would benefit if the United States were to stay in the Paris agreement. They have argued there are now more jobs in the solar segments of the electric power industry than in the coal, natural gas and oil segments combined.
This claim is true — at least, in a limited sense. In absolute numbers, the U.S. Department of Energy reports solar power employed 43 percent of the electric power generation sector’s workforce in 2016, employing more than 374,000 workers who construct, assemble, sell or install solar panels. Fossil fuels combined accounted for just 22 percent (187,000) of the jobs directly tied to generating electric power.
Although there are a significant number of solar-related jobs, the often-repeated figures above are very misleading for numerous reasons….