Governors' Wind Energy Coalition

The days of coal-fired power generation in the southeastern United States are numbered, according to a report released this week from the Institute for Energy Economics and Financial Analysis.

Coal use across nine states in the region has fallen 30% over the past decade, according to a review by the group, whose goal is to “accelerate transition to a diverse, sustainable and profitable energy economy.”

IEEFA analysts cited abundant natural gas supplies and increasing adoption of solar technology as the top causes for coal’s decline on the grid. Similar stories have played out in other parts of the United States as utilities continue to move up announced coal plant retirements amid market and regulatory pressures (Energywire, Sept. 17).

“Historically, the U.S. Southeast has been a stronghold for coal-fired electricity generation,” the report said. “That is no longer the case.”

In Florida, Mississippi and Virginia, coal-fired power plants provide less than 15% of overall generation, and in Alabama, Georgia, North Carolina, Tennessee and South Carolina, coal accounts for less than 30% of annual generation, analysts found. Even Kentucky — which still gets more than half its electricity from coal — saw the fossil fuel’s share of the total electricity mix plunge by roughly 36% over the last decade, the report said.

Dennis Wamsted, an IEEFA analyst, said “huge additions” in solar planned in the Southeast, on top of gas generation, will spell a continued decline for coal in the region.

“I think in a number of these states, it’s going to lead to the end of coal,” Wamsted said, citing Virginia, Mississippi and Florida as states to watch.

Forty-five utility-scale coal units in the Southeast posted an annual capacity factor of 25% or less in 2018, the report said, meaning they routinely operated well below their nameplate capacity.

Conor Bernstein, a National Mining Association spokesman, said the IEEFA report shows that electricity markets and regulators are failing to protect consumers by properly valuing baseload power, as well as fuel security and diversity. He warned about a possible overreliance on “just-in-time fuel delivery,” whether from renewables or an “overstretched” natural gas system.

“Consumers are being forced to pay twice to push less reliable power onto the grid in place of the sources of power that are the foundation for grid reliability,” Bernstein said in an email. “First, they’re paying in taxpayer-funded subsidies and then again with higher electricity rates due to state mandates.”

In 2017, roughly 26% of $17.8 billion in total federal tax incentives for energy supported fossil fuels, while 65% of that amount went toward renewables, according to the Congressional Research Service.

Wamsted said there are problems with any type of generation resource and that no fuel is 100% resilient.

Pointing to the Tennessee Valley Authority, Southern Co. and Duke Energy Corp. — which just announced a spate of coal plant closures — Wamsted said utilities are moving further away from coal than they have in the past (see related story).

‘Casualty’ of change

Michelle Bloodworth, president and CEO of the American Coalition for Clean Coal Electricity, said the coal fleet will remain an important part of the country’s electricity mix for decades and called IEEFA an environmental activist organization.

Bloodworth also said the report “glosses over” concerns about grid resilience resulting from the retirement of coal units across the country.

Earlier this week, utility commissioners from six coal-producing states urged the Federal Energy Regulatory Commission to conclude an inquiry into whether coal and nuclear plant retirements are endangering the electric grid.

“While reports like this may come across as captivating, it is important to remain realistic about the benefits and need of maintaining a diverse electric grid that includes coal among other sources like gas, nuclear and renewable generation,” Bloodworth said in an email.

David Rogers, Southeast deputy regional campaign director for the Sierra Club’s Beyond Coal initiative, said the IEEFA report underscores a point that power producers are still reluctant to admit — that “coal is too dirty and too expensive to keep in our energy mix.”

“Despite the writing on the wall, many utilities in the South are still clinging to coal, and we intend to hold them accountable for it,” he said.

Rogers said customers in most cases would save money if utilities retired coal plants and replaced them with alternative energy sources.

The IEEFA report concluded that corporations are another “major driver” in a transition to green energy as more businesses demand access to renewable power to meet climate and sustainability goals.

“This will be a source of consistent pressure on the region’s utilities to continue (and even speed up) their transition to cleaner generation resources, with coal being the first casualty,” the report said.