Close most fossil fuel plants by 2035? No problem, study says

Source: By Miranda Willson, E&E News reporter • Posted: Sunday, December 6, 2020

If the United States follows through with President-elect Joe Biden’s plan to reach 100% carbon-free electricity by 2035, most power plants will need to stop burning fossil fuels.

While some experts have questioned whether that’s feasible, a new analysis finds that nearly three-quarters of all coal, natural gas and oil facilities nationwide are expected to close anyway by then due to their age.

Just 27% of fossil fuel generators have an estimated life span that extends beyond 2035, Emily Grubert, an assistant professor of civil and environmental engineering at Georgia Tech, said in the paper, published yesterday in Science. She based her estimate on the average life span of now-shuttered facilities with comparable fuel types and technologies in place.

When Grubert adjusted for the size and life span of all fossil fuel facilities, the projected stranded assets were even smaller, the paper said: Only 15% of the remaining life span of today’s fossil generator fleet would be considered “stranded assets” — valuable resources forced to close prematurely — with a 2035 power-sector decarbonization date.

“Requiring fossil generators to close by 2035 would result in limited, although sometimes locally impactful, asset stranding relative to typical life spans,” Grubert concluded.

While members of some communities that have benefited from fossil fuels might oppose Biden’s plan for carbon-free electricity by 2035, the specific goal could help them prepare for an equitable energy transition, she wrote.

“By establishing a deadline, a 2035 electricity decarbonization target represents a major opportunity to facilitate a just transition,” Grubert wrote.

A just transition refers to a variety of policies and programs, such as workforce training and funding for local governments, that could help communities affected by the shift from fossil fuels to a carbon-free economy. The term can also be used to refer to supports for a broader array of affected people, including those harmed or displaced by climate change, said Grubert.

In addition to illustrating the relatively small percentage of fossil fuel generators and jobs that would be phased out sooner than expected under a 2035 decarbonization goal, the paper provides a framework for facilitating a just transition. The best way to begin that process is to set firm deadlines for when generators must close, Grubert said.

While there are multiple ways to determine when to close fossil fuel generators, one option for policymakers is to require power plants to shut down after the typical or historical end-of-life date for that type of facility, or by 2035, whichever is sooner, the paper said.

Regardless of the specific date, establishing a timeline would allow communities to determine ways to carry out a just and equitable transition, said Daniel Bresette, executive director of the nonprofit Environmental and Energy Study Institute, who was not involved in the paper.

“It will take time, and the earlier we get started the more time we will have to ensure that it is just and equitable,” Bresette said in an email. “This analysis is something we need more of so we understand the implications of what we need to do and make the right decisions.”

Although a just transition might include public funding for communities that will lose tax revenue when generation facilities close, potential policies need not always involve money, Grubert said.

“Having advanced planning is a huge component of that, and that doesn’t necessarily even cost anything,” Grubert said. “If you give people the opportunity to look for another job … you can save a lot of pain without buying out the [power] plant.”

Politically impossible?

The paper speaks to a growing interest among environmentalists, labor groups and some regulators in helping communities and workers who might be harmed by the transition to a cleaner energy economy, said Jeremy Richardson, a senior energy analyst with the Union of Concerned Scientists. In many cases, helping communities doesn’t require prohibitively expensive investments, Richardson said.

“This is an important contribution,” he said. “It connects the Biden goal of 100% clean energy by 2035 to the need to address the impacts on communities that are dependent on fossil fuels.”

While the paper makes a compelling case for setting deadlines for fossil fuel retirements and for helping fossil-dependent communities, it relies on some assumptions that could be flawed, said Robert Godby, an energy economics professor at the University of Wyoming.

Some utility chiefs also have questioned whether Biden’s targets are achievable. This week, Vistra Corp. CEO Curt Morgan told E&E News that Biden’s plan for 100% clean electricity could threaten grid reliability and have “prohibitively high” costs (Energywire, Dec. 2). Other critics have said technology like carbon capture and energy storage is not at the level it might need to be to achieve a huge jump in low-carbon power critical to reach the Biden target.

The paper estimates facilities’ retirement dates based on the historical life spans of similar generation facilities. But some power plants today are retiring sooner than ever because of the changing economics of energy generation, including the low cost of natural gas and the fact that solar and wind are becoming cost-competitive with fossil fuels, Godby said.

“What’s driving these retirements that we see these days is not the age of the plants. It’s the alternative energy sources around,” he said.

Another issue is that retirement dates could be subject to change depending on the political leanings of those in power, Godby said. While Colorado lawmakers have created a just transition office to assist fossil-dependent communities, Wyoming lawmakers, for example, want to prolong the life of fossil fuel plants for as long as possible, he said.

A future president could also decide not to pursue Biden’s 100% carbon-free electricity plan, which could change facility generation retirement dates, Godby said.

“I’m not sure setting a date reduces uncertainty, unless the government commits to it, and I don’t know that that’s possible in our political world,” he said.