Bloomberg Government has published The Twilight of Coal Power?, an assessment of how EPA’s new greenhouse gas rules might affect coal-fired power plants. The report concludes that although coal will remain in the energy mix for decades due to existing plants, the EPA’s new rule will effectively ban new coal plants. The new rules require that fossil plants not exceed 1,000 lbs. of CO2/MWh.
Scott Segal, executive director of the Electric Reliability Coordinating Council, which represents utility interests, warns that EPA’s rule will disrupt utility hedging by eliminating coal from the fuel mix and “depriving the market of its flexibility.” [E&E News]
The Bloomberg report argues that coal had already largely lost its price advantage, and that even without the new rule natural gas, which accounts for 77% of power capacity additions since 1990, currently enjoys a compelling price advantage over coal. According to the report, power plants that incorporate carbon capture and sequestration technology – which may allow oil and coal plants to meet EPA’s standards – are unlikely to be built without government subsidies due to their high costs, which are about 50% greater than conventional coal and almost twice as expensive as natural gas.
But while U.S. coal plants may struggle due to new competition and regulation, the report suggests that U.S. coal mining will continue to meet growing demand from coal-hungry markets like China and India.
What’s the upshot of coal’s declining prominence? Should federal regulation be blamed for this decline? Will exports be enough to keep the U.S. coal mining industry afloat?