Coal under the Bus
The forces arrayed against coal right now are like an armada at the coast line. That’s alarming, given that coal is, on balance, our least expensive source of baseload electricity. Climate change is only part of the story; the rest of it pertains to new regulations focused on coal combustion by-products and reuse, particulate matter 2.5, mercury and the other hazardous air pollutants, ozone, water use and the Clean Water Act, the Clean Air Interstate Rule, and additional regulations around SO2 and NOx. All of these rules are likely to force existing coal plants off the grid and prevent new ones from being installed.
The way in which the panel addressed a question from the audience related to carbon capture and sequestration (CCS)—coal’s technological knight in shining armor—didn’t seem to make the bus chassis look any farther away. Trent noted that commercializing CCS would probably happen first in China. (See the section on CCS in China in this issue’s special report.) He also stated that coal looks “really difficult without CCS,” silently posing the question, “What happens if CCS fails or doesn’t prove to be economic?” Connaughton, who was previously chairman of President George W. Bush’s Council on Environmental Quality, said that “we can get to the policy goals [of climate change] without CCS” by installing twice as much nuclear and gas as we have today. Later, he asked, “How much coal can we really use in the future?”
Ten years ago, my last editorial for POWER magazine when I was its editor-in-chief, which was for the first issue of the new millennium, was entitled “Bet on Nuclear for the Next Century.” As with the Calpine executive, my prediction might be right 20 years from now. Brighter prospects for nuclear, the other baseload option, dampen long-term prospects for coal.
Responding to a question from the audience, McMahon said that the “outlook for nuclear was extremely positive,” but he acknowledged that it is the most capital-intensive option. Peltier noted that such projects represent a “bet the farm” strategy, but Trent countered that the risk can be mitigated through regional partnerships. Murphy’s firm, NRG, is building two new units at the South Texas Project nuclear plant. Constellation is also exploring the nuke option and, according to Connaughton, is “hoping to be next on the loan guarantees.”
The one positive note on coal came when Trent reported that Duke Energy’s integrated gasification combined-cycle (IGCC) plant in Indiana at its Edwardsport power station was under construction, although he acknowledged that it was supported as much by policy as economics. “Coal is important to Indiana,” he said, and “rates go up significantly because of the IGCC.”
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