by Adam James
A new paper from Dr. Susan Tierney at the Analysis Group confirms that Americans do not have to choose between clean air, a liveable climate, and reliable electricity.
The coal industry has been lobbying intensely against new clean air standards and regulations for carbon dioxide emissions. There are two important takeaways from the report that debunk the coal lobby’s arguments against EPA regulations:
- Despite coal plant closures, PJM (the largest grid operator in the country) actually exceeded its targeted reserve margin — capacity above peak levels — following its annual auction.
- Wholesale electricity rates have decreased in since 2009 and are projected to drop 10 percent from 2011 levels by 2015.
The people who operate our grid are doing it reliably and with less coal. Last week, the Energy Information Administration found that coal’s share of electricity generation had dropped from 44.6 percent in Q1 of 2011 to 36 percent in Q1 of 2012. Yet the lights stayed on.
Why It Matters
There are two things consumers want from a utility: to turn on the lights cheaply and to do it without harming public health or the environment.
The idea that we can’t have both is a fallacy. Proponents of coal have conducted a very aggressive (albeit, incorrect) messaging campaign that goes something like this:
- Coal is cheap
- Cheap coal makes cheap electricity
- Therefore, reducing reliance on cheap coal means more expensive and/or less reliable electricity
This argument has come up repeatedly as a reason to reject EPA air quality regulations to limit coal pollution, including the Mercury and Air Toxics Standard (MATS) and the Carbon Pollution Rule. Now, most folks believe that these regulations are important — even if they do lead to slightly higher costs, since public health is a serious concern.
But we don’t have to choose between higher costs and less pollution, as Dr. Tierney explains.
Tierney looks at recent results from PJM’s capacity auction to see the impact of coal plant closures. PJM holds an annual auction where it “procure[s] resources needed to guarantee reliability three years into the future.” These auctions allow companies to competitively bid into the market to secure contracts for future generation.
For coal plants affected by regulation, this will theoretically make their operating costs higher and impact their ability to bid. Other resources like nuclear, renewables, and natural gas would then have the opportunity to step up their market share if they can provide a better deal and reliable delivery. In the auction process, PJM shoots to have 15 percent reserve margin, which is the ability to deliver power over peak demand.
If the coal lobby’s argument against regulation were correct, one of two things should have happened: Either electricity should be more expensive, or it should be less reliable to deliver.
But neither of those scenarios came to be. In fact, it’s quite the opposite: electricity prices based on contracts secured at the auction will actually be 10 percent below 2011 prices, and PJM overshot its capacity margin by 5 percent.
Once again, the scare tactics from the coal industry and its allies have been proven false.
Adam James is a Special Assistant for Energy Policy at the Center for American Progress.
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Im not so sure that these are scare tactics as they are voiced concerns about what happens to those who work within the industry and rely on coal as a cheaper source of energy. As it is now, Coal still provides over 35% of electricity to homes and small businesses (http://bit.ly/K4z5gc). It is also still a cornerstone of the American Economy. The transition from one source to another doesn’t necessarily take into account the jobs lost nor the direct impact of removing coal altogether as there is zero replacement for what’s being taken away. I’d like to see more of what the alternative plans are for these guys before we shut down their arguments as, “completely false”
That is certainly true in a scenario with ‘zero replacements,’ but the idea is that reduced reliance on coal will drive investment into other alternatives (wind, solar, nat gas, hydro). That’s the point that PJM’s auction illustrates, they are finding ways to keep the lights on 3 years on form now while reducing reliance on coal. You are right that this analysis doesn’t take the jobs question into account, but studies show these investments in renewables would yield 3 times as many jobs as investments in fossil fuels (http://bit.ly/cYdpW) and that the resulting jobs are better quality (http://bit.ly/K0e062)all in addition to the obvious benefit of avoiding harmful emissions- so that transition looks promising from that angle as well.
As to ratcheting down to 0% coal, there are certainly lot’s of implications to that which are up in the air (although some would argue they are mild in comparison to the threats from climate change). But solar and wind (widely dispersed, with forecasting and better storage) plus nat gas and nuclear can cover our baseload power needs. Add in efficiency to cut back peak demand, and that future looks pretty good. Not easy, but certainly a possible alternative plan.
Thanks for reading!
-A
For the few who might lose work and those who profit from coal this is bad news. For the rest of us it is good news. Our air will be cleaner. There will be lower stress on the oceans PH level and , in time, it may become safe to eat large fish again (though that will take a long while) Any thinking person realizes that we will eventually deplete our fossil solar reserves (yes, coal and oil are solar energy) at which time we will be forced to live on our income rather than drawing down reserves.{the good news here is that our annual income is more than we can spend} As we move to renewables we will be able to save coal and petroleum to use for the myriad other applications that we need them for. We have the technical knowledge to enable us to move to zero coal burning and the sooner we get there the better.
Just my take on the issue.