US says goodbye to 200th coal plant as gas edges ahead in energy mix

Creative Commons: Joshua Doubek, 2011.

Creative Commons: Joshua Doubek, 2011.

As environmentalists celebrate the 200th coal plant phase out in the United States, for the first time in history natural gas is overtaking coal as the country’s largest power sources.

Alliant Energy, a major Iowa utility, this week committed to phase out coal use at six of its plants in the state, marking the 200th coal plant to shut down in the country.

This represents the phase out of nearly 40% of the 523 US coal plants in operation just five year ago, and has been seen as a major victory for activists who have been fighting dirty energy in the country.

Michael Brune, Executive Director of the Sierra Club said:

The days of coal-fired power plants putting Americans at risk are coming to an end. In Iowa and across the country, people are demanding clean air and clean water—and they are winning. Iowa is a leader in America’s transition from coal to renewable energy, and is providing a model for other communities as they demand and realize a 100 percent clean energy future.

The latest closure comes as figures released by the government’s Energy Information Administration (EIA) show natural gas produced 31.5% and coal 30.2% of the country’s electricity this April.

With the coal market showing growing fragility around the globe, and with the international renewables industry going from strength to strength, this downward trend in the US adds further weight to the argument that coal is a “sick dragon” and that the dirty energy source has no future in a carbon-constrained world.

Globally coal projects are stranding faster than commodity prices tumble, and companies are getting desperate as the effects of continued use of this dirty power source are clearer than ever.

In 2009, the pollution from the 200 coal plants now slated for retirement in the US caused 6,000 heart attacks, 60,000 asthma attacks and 3,600 deaths each year. The plants emitted more than 188 million metric tons of carbon pollution, equivalent to the annual emissions of more than 39 million passenger vehicles.

The coal plants also emitted more than 7,600 pounds of mercury each year –  a potent neurotoxin, linked to birth defects and neurological disorders, putting communities surrounding coal plants at higher risk.

Michael R. Bloomberg, U.N. Secretary-General’s Special Envoy for Cities and Climate Change and founder of Bloomberg Philanthropies said:

Every step we take to reduce coal use helps Americans breathe easier, and the 200th coal plant to announce its retirement since the launch of the Beyond Coal Campaign is a great milestone for public health and for the environment. Everyone who has worked hard to help the campaign succeed deserves a lot of credit. Less reliance on coal is the reason why the U.S. has reduced its carbon footprint more than any other country since 2006.

The rise of natural gas

In the US much of the phased out coal has been displaced by power plants switching to natural gas. This trend that looks set to continue as environmental restrictions kick in, with analysts predict Obama’s proposed Clean Power Plan will establish gas as the main US energy source by 2020.

And while some expect coal to fight back a little in coming months – with production expected to provide an average 35.6% of electricity over the course of the year – only a decade ago, Americans got half their electricity from coal, and just a fifth from natural gas.

The EIA predicts that coal power plants generating a total of 60GW, roughly a fifth of total capacity, will retire between 2012 and 2020.

In 2015, 12.9GW will be shut down, compared to 3.3GW last year.

And while the EIA’s current assessment is that coal will remain – although only barely – the US’s largest source of electricity until at least 2040, those projections do not factor in Obama’s proposed climate change regulations, the Clean Power Plan (CPP), which aims to cut carbon emissions from power plants by 30%, and is due to come into force this summer.

Betsy Monseu, chief executive of the American Coal Council, said the industry had abandoned any plans to replace the retiring fleet saying: “Regulations, and the threat of new regulations, mean that no new coal plants are on the drawing board.”

A recent report by energy thinktank Carbon Tracker found that meeting EPA rules added 16% to the cost of building a new coal plant and 51% to its running costs.

Luke Sussams, senior analyst and co-author of the Carbon Tracker report, said:

We see no signs that this trend from coal power to gas and renewable alternatives will change. The rise of cheap natural gas and increasingly stringent environmental regulations have crushed coal’s share of power generation in the US. The share price of Peabody Energy, the largest coal producer, has fallen by over 95% in four years as a result.

One cause for the surge in gas production in April was a glut of fracked gas from new shale regions, driving the price of gas down to just US$2.50/million Btu (British thermal unit, a widely-used measure of energy), a 35% drop since February. 10 years ago, the price of natural gas was close to $15/m Btu.

However, the rise of shale gas has caused huge concern amongst environmentalists across the country, over its environmental impacts, the threat of water contamination and fugitive methane emissions released during the fracking process.

A much more intensive greenhouse gas than carbon dioxide, a 2012 study estimated that if the industry lost 3.2% of the gas produced, it could be worse for the climate than coal.

Michael Obeiter, a senior associate in the World Resources Institute’s climate programme said:

The transition away from coal is a net win for the climate, but we can’t get complacent. Methane emissions from natural gas development undercut the climate advantage natural gas has over coal, and need to be addressed at the state or federal level. And if we are to successfully transition to a low-carbon economy, natural gas must make way for renewable energy to play a dominant role in the US electricity mix.

Another Carbon Tracker report concerned with the gas cost curve shows that while there is some space for natural gas in the short term, up to US$283 billion in Liquefied Natural Gas (LNG) projects are likely to be surplus to requirements in a world industry committed to limit global warming to 2C.

Likewise, the report finds that unconventional gas, such as shale gas, has no place in a transition to a low carbon world, since questions remain surrounding its environmental side effects, particularly the significance of fugitive emissions, which needs resolving for all gas.

Renewables boom in the US and worldwide

As coal plants are retiring at record rates, many states are also making major investments in wind and solar power, fueling the transition to a clean energy economy.

Iowa, for example, already generates more than a quarter of the energy powering homes and businesses from wind farms, ranking first in the nation in power generated by wind.

Nearly 7,000 Iowans are now employed in the fast-growing wind energy sector, more than any other state, and Iowa has the potential to generate 100 times its current wind energy output.

The rising popularity of community solar projects has been further accelerating this transition, with research showing, shared solar projects are expected to total 115 megawatts in capacity this year, a jump of nearly 75 percent compared to 2014’s additions.

This month, the Obama administration unveiled a plan to help bridge the cost gap for low- and middle-income Americans to install solar panels of their roofs, including a low-cost loan program for homeowners as well as a nationwide initiative for renters.

Meanwhile, globally, renewables are booming.

According to a report from the International Energy Agency (IEA), renewables are set to become the world’s number one electricity source in the next fifteen years, providing a third of the world’s energy supply, if countries stick to their proposed targets in the run-up to the UN climate talks in Paris.

The report says global emissions could peak by 2020 at no net cost if inefficient coal power plants and fossil fuel subsidies are eliminated, renewables investment jumps from $270 billion to $400 billion in 2030, and methane emissions are reduced.

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