What’s the Real Story on the Future of Coal?

October 10, 2017 | 8:32 am
Jeremy Richardson
Former Contributor

With everything going on in the world, and our current political environment here in the United States, doesn’t it feel like we’re all talking past each other these days? It feels particularly poignant to me as the brother, son, and grandson of West Virginia coal miners—and as a scientist working on clean energy policy, and I’m not alone. If you’ve been following news around energy and climate change, or last year’s presidential election, you’ve probably heard a lot about coal and coal miners. Here I’ll try to cut through some of the rhetoric and offer some clear fact-based insights, drawing on a new analysis (and podcast) that the Union of Concerned Scientists just released called, A Dwindling Role for Coal: Tracking the Electricity Sector Transition and What It Means for the Nation. It’s a national analysis of the economic viability of coal-fired power plants in the United States, along with a series of four community snapshots to illustrate a few aspects of how that complex transition (which simultaneously benefits people through improved public health and potentially threatens people’s livelihoods) has played out or may play out on the ground.

It’s all about economics

The analysis tracks the changes in the nation’s fleet of 1,256 coal-fired electric generating units from 2008 to 2016, and, building on previous UCS work, identifies which of the 706 currently operating units are more expensive to run than cleaner alternatives. We conclude that 57 GW of coal capacity are uneconomic compared to existing natural gas, on top of another 51 GW of coal capacity that are already slated for retirement or conversion to another fuel (mostly natural gas). All told, that amount of capacity (108 GW) represents 38 percent of the nation’s coal generating capacity that was operating at the end of 2016.

Read that again: more than one-third of the nation’s coal-fired electricity is either already slated to go offline or is more expensive to operate than existing natural gas plants.

What’s driving this fundamental shift in the electricity sector since 2008? In a word: economics. Market forces are the main driver—in the form of low natural gas prices, flattening electricity demand, and rapidly declining costs of renewable energy. All those environmental regulations you hear politicians talk about? They’re playing a minor role compared to market trends in the power sector. In fact, our determination of uneconomic coal units didn’t even consider the cost of installing missing pollution control equipment.

Check out the interactive map below that shows the operating coal fleet in 2016 and what might happen to it in the future. The results are summarized in a short fact sheet, and our methodology and assumptions are detailed in a technical appendix.

Wait, how much?

More than a third of the coal fleet sounds like a lot, right? Looking at the slider map above, two things jump out at you: there are a lot of green dots (units that are uneconomic compared to existing natural gas) and many of those green dots are in the Southeast.

The first thing to know is that there’s no danger of the lights going out any time soon. The planned retirements will occur over a number of years, and the people whose job it is to think about this stuff don’t foresee any issues with reliable electricity at least through 2021, even in light of these planned retirements. And secondly, for those units that we find to be uneconomic, decisions about their ultimate fate will be made by states and utilities—hopefully in consultation with affected communities and workers—and any decisions to close down plants would occur over years and be done in such a way as to avoid blackouts. How do we know that? Because 452 coal generating units—totaling almost 60 GW—closed from 2008 to 2016 without any risk to reliability.

So, what are the cleaner, cheaper options to replace coal?

Coal is one of the most polluting ways to generate electricity, so a shift away from coal is a tremendous benefit to public health. What comes online to replace the lost coal generation really matters for our health and our climate.

Given the widespread availability of cheap natural gas, it’s no surprise that we found the highest number of coal units to be uneconomic compared to existing natural gas facilities. But even though it produces much less air pollution and somewhat lower global warming emissions than coal, natural gas is still a fossil fuel, and a complete shift from coal to natural gas would make it nearly impossible to meet our long-term carbon emissions reduction goals to address the very real threat of climate change (to say nothing of the very real impacts happening today with very real implications for people). That’s why at UCS we have frequently raised concerns about a risk of an overreliance on natural gas for electricity.

Our analysis therefore also identifies which coal units are uneconomic compared to new wind and solar facilities (see Figure A3 from the technical appendix). As the cost of these renewable resources continues its dramatic decline, we can expect many more coal units to face increasing competition from renewables. Our colleagues at the Southern Alliance for Clean Energy took a look at our numbers and found that there is a compelling case to be made for renewables to replace some uneconomic coal plants in the Southeast.

What about the impacts on people living near and downwind from these coal plants?

As part of our national analysis, we gathered information on the population and demographics of people living within a three-mile radius of each coal-fired generating unit that we identified as operating in 2008.  What we found was striking: this transition away from coal has led to a dramatic reduction in the total number of people living near an operating coal plant. Between 2008 and 2016, the number of people living within three miles of an operating coal plant fell from about 8.5 million to about 3.3 million. That number could fall further to around 1.5 million if all the uneconomic units we identified plus the units that are already slated for retirement or conversion also stop burning coal.

It’s important to emphasize that this transition away from coal dramatically improves public health and well-being. The people living closest to coal plants experience the most harmful effects from pollution—and they are often minority and low-income communities. Our snapshot from Chicago highlights how one community fought back and won—but continues to fight for environmental justice.

We have made available a downloadable spreadsheet containing plant-level data, the results of our economic stress test, and information on the number of low-income and minority residents living nearby each plant. This demographic screening can help guide community engagement and identify analysis needs that can help with transition planning.

The benefits of reducing pollution from coal extend well beyond that three-mile radius. We calculated that the reduction in air pollutants like sulfur dioxide, nitrogen oxides, and carbon dioxide from the coal units studied here has already led to $250 billion (yes, with a “b”) in national public health benefits from reduced air pollution and global warming impacts from 2008 to 2016. As a result, millions of Americans are now breathing cleaner air and hundreds of thousands fewer are dying or becoming sick from coal-related ailments.

Finally, the negative impacts of coal often continue even after the plant shuts down—and this legacy must be considered in planning for a plant closure. Our snapshot from North Carolina illustrates one community’s struggle with coal ash—from a plant that’s still operating.

What about the people working at those coal plants?

This analysis did not look at the jobs implications of plant closures, for a simple reason—there’s no national database of the number of people working at individual coal plants. But if you’re one of those utility workers, you certainly don’t see this as good news. And these large facilities are also large sources of local tax revenue, meaning that while a community might be suffering from health impacts due to air pollution, it may simultaneously rely on that plant for jobs and money for schools and services.

My point is, the transition is complex—and collectively we must solve all aspects of it, not just reducing carbon emissions and air pollution, but also finding new jobs and opportunities for affected workers and investing in economic development in struggling communities.

The voices of local leaders from the communities highlighted in our community snapshots illustrate different aspects of what transition means—and offer insights into what can be done to help ensure that the shift away from coal is well-planned and more equitable, taking into account local needs and concerns. One positive story can be found in our snapshot from Lansing, which transformed a former coal plant into a LEED-certified office building.

Finally, although our analysis focuses on coal-fired power plants, the implication of the transition away from coal in the electricity sector is lower coal production, meaning that mining communities are also impacted by the transition. But alternative energy jobs have reached coal country, and our snapshot from West Virginia highlights an innovative solution to creating new jobs.

Where’s the political leadership?

Despite the economic writing on the wall, and the urgent need to limit global warming emissions and other harmful pollutants, the Trump administration continues to roll back as many environmental regulations as it can get its hands on. Its campaign promise to bring back coal jobs rings hollow and is ultimately a cynical strategy to protect the profits of coal companies rather than protect the interests of coal workers. But the economic reality is that, even without modern pollution controls, many coal units are simply more expensive to run than the alternatives, with market forces decidedly driving the electricity sector away from coal.

Yet the assault on those environmental protections continues. Today EPA Administrator Scott Pruitt will announce a revised proposal for the Clean Power Plan—our nation’s first-ever limits on global warming emissions—in an effort to roll back progress despite widespread public support nationally.

Coming from a coal mining family, I fear that folks back home are buying into a false promise. If the administration were serious about helping coal mining communities, it would be championing federal programs that invest in those communities, instead of proposing to eliminate them altogether. It would be looking at innovative ways to spur economic development and diversify local economies that are dependent on coal.

Instead, in perhaps the administration’s most egregious idea yet, Energy Secretary Perry proposed new rules to bail out economically struggling coal and nuclear power plants that would leave electricity ratepayers on the hook to subsidize those costs, to the tune of billions dollars annually.

It starts with truth telling

We need to be honest about the complexity of transitioning away from coal and we must demand thoughtful solutions, not cheap political rhetoric. There are no easy answers. We must create policies to ensure a just transition away from coal, both to reduce the heavy toll on the health of those who live downwind from coal-fired power plants and to address the climate crisis. And we must build on the significant economic opportunities of renewable energy and work to ensure these lead to family-sustaining jobs, especially in the places where coal jobs are being lost.

For me, the biggest takeaway of this research is the need for policymakers and utility planners to engage early with affected stakeholders: coal-dependent communities, affected coal plant workers, coal miners, and low-income and minority residents living near coal plants who have long suffered a disproportionate burden of health impacts from pollution. With adequate time and resources, plans can be developed to remediate and redevelop former sites, to address lost tax revenues, and to help diversify local economies and create new well-paying jobs. It won’t be easy, but it’s what’s necessary.

We call on Congress and the administration to grapple with these complex issues and put forth real solutions. Let’s get to work.