5 April 2017, Reuters, ANALYSIS-Trump declares end to “war on coal,” but utilities aren’t listening. Most U.S. power companies have no plans to alter their years-long shift away from coal. When President Donald Trump signed an executive order last week to sweep away Obama-era climate change regulations, he said it would end America’s “war on coal”, usher in a new era of energy production and put miners back to work. But the biggest consumers of U.S. coal – power generating companies – remain unconvinced. Reuters surveyed 32 utilities with operations in the 26 states that sued former President Barack Obama’s administration to block its Clean Power Plan, the main target of Trump’s executive order. The bulk of them have no plans to alter their multi-billion dollar, years-long shift away from coal, suggesting demand for the fuel will keep falling despite Trump’s efforts. The utilities gave many reasons, mainly economic: Natural gas – coal’s top competitor – is cheap and abundant; solar and wind power costs are falling; state environmental laws remain in place; and Trump’s regulatory rollback may not survive legal challenges. Meanwhile, big investors aligned with the global push to fight climate change – such as the Norwegian Sovereign Wealth Fund – have been pressuring U.S. utilities in which they own stakes to cut coal use. “I’m not going to build new coal plants in today’s environment,” said Ben Fowke, CEO of Xcel Energy, which operates in eight states and uses coal for about 36 percent of its electricity production. “And if I’m not going to build new ones, eventually there won’t be any.” Of the 32 utilities contacted by Reuters, 20 said Trump’s order would have no impact on their investment plans; five said they were reviewing the implications of the order; six gave no response. Just one said it would prolong the life of some of its older coal-fired power units. North Dakota’s Basin Electric Power Cooperative was the sole utility to identify an immediate positive impact of Trump’s order on the outlook for coal. “We’re in the situation where the executive order takes a lot of pressure off the decisions we had to make in the near term, such as whether to retrofit and retire older coal plants,” said Dale Niezwaag, a spokesman for Basin Electric. “But Trump can be a one-termer, so the reprieve out there is short.” Trump’s executive order triggered a review aimed at killing the Clean Power Plan. The Obama-era law would have required states, by 2030, to collectively cut carbon emissions from existing power plants by 30 percent from 2005 levels. It was designed as a primary strategy in U.S. efforts to fight global climate change. The U.S. coal industry, without increases in domestic demand, would need to rely on export markets for growth. Shipments of U.S. metallurgical coal, used in the production of steel, have recently shown up in China following a two-year hiatus – in part to offset banned shipments from North Korea and temporary delays from cyclone-hit Australian producers.RETIRING AND RETROFITTING Coal had been the primary fuel source for U.S. power plants for the last century, but its use has fallen more than a third since 2008 after advancements in drilling technology unlocked new reserves of natural gas. Hundreds of aging coal-fired power plants have been retired or retrofitted. Huge coal mining companies like Peabody Energy Corp and Arch Coal fell into bankruptcy, and production last year hit its lowest point since 1978. Read More here
Tag Archives: Renewables
17 March 2017, Energy & Climate Unit UK; Tilting at windmills: The energy debate down under. Battlelines have been firmly drawn in Australia’s power debate, with politicians backing their favoured energy sources like a die-hard footy fan his team. Against a backdrop of record temperatures, blackouts and high prices for consumers, the greatest casualty has been good policy. As a breezy sun-baked country with plenty of space, Australia is in many ways the perfect environment for renewable energy. Its steady growth over the past decade in particular has cut deeply into the business model of coal-fired power stations, which have previously been the mainstay of energy generation, but are largely coming to the end of their working lives. The coal industry is fighting for its existence, and the onslaught against the inevitable advance of renewable energy has been fierce. Cost and reliability Maximum temperature anomalies (difference from long-term average) for Australia from 31 January to 13 February 2017. Image: Australian Bureau of Meteorology The main lines of attack on renewables are two-fold: cost and reliability. Neither of these has much basis in reality. In terms of cost, the fact of the matter is that retail electricity prices in Australia have more than doubled in the last 10 years. Many people are struggling to pay bills, and disconnections have particularly hit the poor. The rise of renewable energy has frequently been blamed for the increased prices. However, analysis from the Australian National University comparing electricity prices across the states shows this is simply not the case. The ANU study shows absolutely no correlation between increased renewable energy penetration and rising cost. In fact, Queensland, the state with the highest proportion of coal and gas generation, also faced the highest growth in electricity bills. The state with the lowest increase in bills, Tasmania, also has the lowest levels of thermal power generation. Of course, price rises are not just related to generation, whether that be coal, gas or renewables. In sparsely populated Australia, network costs – the transmission towers and poles and wires – account for over 50% of bills. To a large extent, the gold-plating of network infrastructure has driven increases in cost. Read More here
29 March 2017, The Conversation, Hazelwood closure: what it means for electricity prices and blackouts. Victoria’s Hazelwood power station will be shut down this week after nearly 50 years of supplying electricity. The imminent closure has led to concerns about blackouts, raised most recently by Deputy Prime Minister Barnaby Joyce, and rising electricity prices. So what does the evidence suggest? Blackouts ahead? Last week The Age reported that Victoria is facing “72 days of possible power supply shortfalls over the next two years”. While that sounds bad, it does not mean the state is facing imminent blackouts. This was based on a report from the Australian Energy Market Operator (AEMO), which is in charge of making sure that Australia’s energy markets work. Every week, AEMO produces something called the Medium Term Projected Assessment of System Adequacy. This report assesses the expected supply and demand of electricity for the next two years. In a recent report, AEMO did indeed forecast a “reserve shortfall” for 72 days in Victoria in the coming two years. AEMO has actually been forecasting many days of reserve shortfall, since early November last year when Engie announced the closure of Hazelwood. AEMO has also been forecasting an even greater number of days of reserve shortfalls in South Australia for well over a year. The shortfall forecast is based on a combination of factors. This includes the amount of local energy supply, the import and export of electricity from other states, the maximum daily demand for electricity, and the “reserve requirement”. The reserve requirement is essentially “spare” capacity that can be used to maintain a reliable supply if something goes wrong. If there is not enough supply to meet this requirement, there is a reserve shortfall. Forecasting maximum demand is incredibly challenging and uncertain. AEMO does it by using probabilities. This gives us a measure of the probability of a particular demand forecast being exceeded in a year. For example, a 10% chance would be expected to be exceeded one year in ten. A 50% chance would be expected to be exceeded one year in two. To illustrate the point, AEMO forecast that demand over the past summer in Victoria had a 10% chance of exceeding 9,900 megawatts. In reality, the maximum demand was only 8,747MW. That’s not to say the forecast was wrong, but rather that it was not an exceptional (one year in ten) summer. Read More here
29 March 2017, Renew Economy, How AEMO’s new boss will reform Australia’s energy vision. Audrey Zibelman, the new chief executive of the Australian Energy Market Operator, has been in the job for little over a week, but is already making her mark, signalling the biggest shift in energy management philosophy in a generation. If Australia’s fossil fuel industry had hoped that last September’s state-wide blackout would lead to a u-turn on the shift to cleaner and decentralised energy system, then the release of the Australian Energy Market Operator’s final report in the event would leave them bitterly disappointed. And if they had any thoughts that the new CEO of AEMO, Audrey Zibelman, was going to afford them the indulgences that they had gotten used to over the last few decades, then they are going to be disappointed on that too. Several hundred energy market participants converged on Adelaide’s Hilton Hotel on Wednesday to hear the findings from the final report into the now notorious system black and, more crucially, to hear the first public insights from the new AEMO boss. “Thank god you’re here,” said the Grattan Institute’s Tony Wood, referring to a former TV program, but echoing the mood of most. And while many in mainstream media chose to focus on the role of wind farms in South Australia’s “system black,” and wonder why the shuttered Northern coal fired station is not being fired up again, both AEMO and its new boss were looking to the future, and with a sense of urgency. Zibelman is the former head of New York’s Public Service Commission, charged with implementing that state’s ambitious Reforming the Energy Vision program, and its target of 50 per cent renewable energy by 2030, which is going to focus a lot on decentralised generation. “When I arrived on the scene in New York, it was just after Hurricane Sandy,” she said in her opening comments on Wednesday. “After seeing New York city witout electricity for a number of days and people living in 40-storey buildings walking down to get water and cell phones charged – these were not young people, these were grandmas and granddads – it was clear that this industry was going to have to fundamentally change.” And Australia, she says, is actually going to lead the world on this, both on the breadth and the scale of what she, chief scientist Alan Finkel and many others describes as the inevitable and unstoppable energy transition. “We built systems in the 20th century around large centralised power plants,” Zibelman said. “That made a lot of sense. Now the industry is changing, cutomer preferences are changing, choices are changing, so we are creating what lot of people are calling the internet of things. “The idea is that you need to create a very flexible network that can respond in real time, and truly real time, to a lot of different events and a lot different sequences. “That is going to need a whole different approach … and my excitement about Australia is that, quite frankly, Australian is going to be leading the world on this.” Read More here