long live king coal?

James Fallows at the Atlantic has a piece up this week about the impossibility of weaning ourselves off of coal:

To environmentalists, “clean coal” is an insulting oxymoron. But for now, the only way to meet the world’s energy needs, and to arrest climate change before it produces irreversible cataclysm, is to use coal—dirty, sooty, toxic coal—in more-sustainable ways. The good news is that new technologies are making this possible. China is now the leader in this area, the Google and Intel of the energy world. If we are serious about global warming, America needs to work with China to build a greener future on a foundation of coal. Otherwise, the clean-energy revolution will leave us behind, with grave costs for the world’s climate and our economy.

Fallows’ argument is based primarily on two points: (1) coal is cheap and (2) coal is abundant. From those two points, he concludes that continued reliance on coal for large percentages of our power supply are “inevitable.” He talks about the fact that while the amount of electricity that the US gets from renewable sources (wind, solar, etc.) is growing rapidly in percentage terms, the amount of electricity from coal is increasing faster in absolute terms:

The journalist Robert Bryce has drawn on U.S. government figures to show that between 1995 and 2008, ‘the absolute increase in total electricity produced by coal was about 5.8 times as great as the increase from wind and 823 times as great as the increase from solar.’ – and this during the dawn of the green-energy era in America.

That’s a pretty troubling indictment. Despite all of our efforts to deploy renewables, we still can’t match the rate at which coal is growing? But wait . . . it’s 2010 now. What has happened since 2008?

Coal generation has gone down. Significantly.

According to the Energy Information Administration (part of the U.S. Department of Energy which provides “official energy statistics from the US government“), coal generation not only fell 1.5% between 2007 and 2008 (a fact which Bryce and Fallows conveniently leave out), it also fell over 11% from 2008 to 2009 (XLS file with energy statistics from 1949 – 2009 is here, the period from 1996 to July 2010 can be found on this site). Include 2009 and Bryce’s quote would tell a much different story. Coal generation increased 55,060 GWh (3.2%) from 1995 to 2009, while wind increased 67,597 GWh (2136%) and solar increased 311 GWh (63%). So rather than the absolute increase in coal being 5.8 times that of wind, the increase in wind is 1.2 times that of coal. Coal generation through July 2010 is on pace for an even lower annual total than in 2009.

Despite this, however, Julio Friedmann of Lawrence Livermore National Laboratory is right when Fallows quotes him on the limits to wind and solar:

Solar and wind power are going to be important, but it is really hard to get them beyond 10 percent of total power supply.

I may not agree with Friedmann’s 10% number (the DoE released a study in 2008 detailing how the US could get to 20% by 2030), but he has a point. Solar and wind are non-dispatchable resources, which means that we can’t control when they’ll be generating power. This limits the share of the total electricity market that they can serve because you need to be able to increase or decrease the output from dispatchable resources to account for sudden increases or decreases in output in solar and wind generation. These problems can be limited by geographic diversity (spreading turbines over a large area decreases the chance that they will all shut down at the same time), and wind and solar are not the only renewable resources available to us (there is also biomass, biogas, geothermal, etc.). But if you talk to a system operator at pretty much any utility, they’re unlikely to be excited about the operational challenges posed by high wind and solar penetration on their system.

But while Fallows takes this difficulty to drastically expand the amount of energy we get from intermittent wind and solar sources to mean that coal must be the answer, I would argue it’s not that simple. Fallows alludes to the elephant in the room, though he doesn’t spend much time on it:

Coal will be with us because it is abundant: any projected “peak coal” stage would come many decades after the world reaches “peak oil.” It will be with us because of where it’s located: the top four coal-reserve countries are the United States, Russia, China, and India, which together have about 40 percent of the world’s population and more than 60 percent of its coal. It will be with us because its direct costs are in most circumstances far lower than those of the alternatives – that’s why so much is used. . . It will be with us because its indirect costs, in miner deaths, environmental destruction, and carbon burden on the atmosphere are unregulated and “externalized.” Power companies that answer to shareholders or ratepayers have a hard time justifying a more expensive choice. (emphasis added)

Coal’s direct costs are much lower than alternatives, and its indirect costs do not affect the bottom line of the power companies that choose the resource mix in the US. But what if they did? Would coal be nearly so “inevitable” if there was a carbon tax in the US?

Recent evidence argues maybe not. Those who have followed energy issues over the last few years (a group that includes me, as that’s how I spend my weekdays) will likely recall the controversy over the Sunflower coal plants in Kansas during 2008, when then-Governor Kathleen Sebelius repeatedly vetoed a bill that would have allowed the expansion of a coal plant in Kansas. Potential coal plant investors were scared away by rising construction costs and the potential for national climate legislation. There was a distinct shift away from coal and towards natural gas for dispatchable generation, given the relatively low emissions rate of natural gas-fired generation. Since 2008, however, coal plant construction has picked up again, coinciding with the declining chances of energy legislation as the Democrats were preoccupied with the economy and health care legislation.

(By the way, natural gas generation increased from 496,058 GWh in 1995 to 882,981 GWh in 2008 [1.4x coal’s increase over that period] and 920,378 GWh in 2009 [7.7x coal’s increase]. Natural gas has grown from 14.8% of the total generation mix in 1995 to 23.3% in 2008, while coal has fallen from 51% to 44.6%. So maybe we should be talking about the “inevitability of natural gas”?)

If coal were no longer the cheapest option due to climate legislation, there’s no reason to think that we wouldn’t see a continuation of the trend of 2008. As Fallows put it himself, “[p]ower companies that answer to shareholders or ratepayers have a hard time justifying a more expensive choice.”

Fallows, however, does not even consider the possibility of climate legislation that would change the relative costs of coal. Instead, he argues that we must focus our efforts on improving coal technology to reduce its environmental impact. “A breakthrough is what it would take to move beyond reliance on coal.” But a breakthrough is also what it would take to continue relying on coal. Carbon Capture and Sequestration (CCS) has a lot of potential, but has yet to be deployed commercially in the electricity sector. The World Coal Institute itself admits that “[t]he integration of CCS into commercial-scale power plants still remains costly at current electricity and carbon prices and these plants have not yet been constructed. A concerted effort is needed to commercialise CCS at large scale [sic] in the power sector”. The World Coal Institute’s “concerted effort” could very well be interpreted to mean “breakthrough.”

Yes, we will need a breakthrough in baseload/dispatchable resources to significantly change the generation mix in the United States, but I fail to see the “inevitability of coal” that Fallows sees. I think that for now, given the regulatory and political climate, cleaner coal is looking like one of the more likely solutions. But at the same time, there are a number of competitors. We could focus on developing a lot of geographically dispersed wind farms, and couple them with natural gas plants (though that runs into problems with transmission). We could hope for breakthroughs in thermal storage capabilities, enabling solar thermal generators to act more like baseload resources. We could solve the problems with nuclear waste disposal and go the way of France, which got 76.4% of its electricity generation from nuclear in 2008. All of these things will require breakthroughs, and I would say its pretty hard to tell right now which breakthrough is the most likely.

This doesn’t mean that we have to stop working with China on clean energy issues. One of the major barriers to renewable development in the US these days is access to transmission. Fallows again, quoting Duke Energy’s Chief Technology Officer David Mohler:

“We learned that China is preparing, by 2025, for 350 million people to live in cities that don’t exist now,” he told me. “They have to build the equivalent of the U.S. electrical system” – that is, almost as much added capacity as the entire U.S. grid – “by 2025. It took us 120 years.”

This is a perfect chance for leapfrogging. We can and should continue to help China develop clean coal technologies. But we should also use some of the lessons that we have learned over our 120 years to plan a smarter grid, one that enables renewable projects rather than hinders them, and can incorporate advanced energy technologies like electric vehicles (which, if deployed on a large enough scale, could eventually prove very valuable for incorporating intermittent resources like solar and wind).

Fallows is right that coal is a major part of our electricity sector these days. Without energy legislation that takes real steps towards internalizing the external costs of coal generation, it will be a major player for a long time to come. But am I willing to give in to the “inevitability” of that? No way.

UPDATE: I’ve posted a short article about the magnitude of the omission and why it bothers me so much. Read it here.

The opinions are mine and mine alone.

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5 Responses to long live king coal?

  1. AndrewW says:

    “Clean-coal” generation is too expensive. We need a clean, affordable breakthrough. I am following one in San Francisco called http://www.2020b.com It is one of three breakthrough ideas they are launching. Their claim is “clean AFFORDABLE electricity.” Wind and solar don’t make that claim and certainly “clean-coal” can’t.

    • frouglas says:

      I’d be much more excited about 2020b if their site or the youTube video that they link to contained a single specific, verifiable claim.

      The problem with demanding “clean AFFORDABLE energy” is that right now it’s kind of like demanding lower deficits and tax cuts for all. Sure it’d be great if we could come up with a way to make both a reality… but they seem to be fundamentally opposed. Coal is cheap because the harmful effects of it’s use in the electricity sector (on both a local and global scale) are not reflected in its cost.

      If 2020b pans out, I will be a happy camper. But given the website and youtube video, I’m not holding my breath.

      • AndrewW says:

        I have been corresponding with them and I saw a webcast. I’m not saying they have the “breakthrough,” but they are smart enough (it seems) to understand that we have to beat coal economically. Wind and solar have been largely a waste of money (I know, I lost a lot) and they are not affordable. I think it will be decades before they make sense.

        The group in SF is making a very big claim. We’ll see. I don’t see government taxing polluters in the near term, so I think we need clean electricity that costs the same or less than coal and is reliable. We can hope.

  2. frouglas says:

    @AndrewW

    Agree, on pretty much everything. I would only add that the only way that I see for the US and other countries to actually make progress on this issue is to shift the benchmark for affordable… historically, that has meant coal power, but largely because of the externalities associated with said coal power.

    From my experience in the energy industry, everyone out there is aware of the cost challenges posed by renewables and their relationship to coal, and they’re all trying desperately to get their costs down. 2020B is hardly unique in that respect. They might be unique in how reasonable their goal of clean AND competitive is, but their website is too generic for me to make any sort of assessment of that at all. (I’m not even sure what their energy source for their technology would be…)

    I’m not sure I’d agree with your statement that “wind and solar have been largely a waste of money”, but we may be coming at that statement from different perspectives, so I’d be interested to hear a little more on that.

    • AndrewW says:

      First, I said that I was “hopeful” about 2020b because I like their approach. I can’t tell you that I know what their “breakthrough” is, but I agree with their position that it need to be “affordable.”

      As far as my statement about “wind and solar” being “largely a waste of money,” let me explain. The typical wind turbine is over-rated (capacity) and they have never performed reliably, not to mention the storage problem. Many wind-farms were completed based on soft loans and other government incentives. The DEVELOPERS made some money, but they are not performing well. One farm in Texas has had trouble selling the small amount of energy it produces, at one point PAYING for the utility to take their power.

      Solar is much worse. Recently the DOE announced the grant of more than $1 billion for a “solar collection” facility in California. This project will cost more than $1.4 billion, but only generate $200 million a year (rated capacity). Spain tried a similar scheme and is no longer funding it. the California deal has 350,000 mirrors. The budget for that deal didn’t include a provision for cleaning those mirrors.

      Earlier this year Obama and the DOE gave an MIT Professor $23 million for an off-shore wind turbine scheme that had “two hours” of storage. It was designed as enough wind power to provide “electricity for one-third of New England.” During the presentation the professor explained to our President that these wind turbines would be “shut down for two to three months of the year because of bird migrations.” One-third of New England would be without power for tow to three months?

      DOE has also wasted plenty of money of “clean coal technologies.” The electricity produce would be twice that of existing coal plants. That’s a deal breaker.

      I do not mean to diminish all efforts because I recognize that they are (mostly) sincere. The objection I have is the lack of due-diligence by our government and the spending of money on half-baked ideas that have little or no merit.

      I believe we should offer prize money for solutions and incentives for “results.” We’re not going to punish coal-power in the near term. Instead, we should offer $.02-$.05 per kWh for clean electricity. If someone has a solution to “clean, affordable electricity” our government should offer a huge “reward.”

      I appreciate your perspective. I remain hopeful that some crazy entrepreneurs will solve this problem – just like the old days. I have little faith in government or even institutions like MIT. I think there is a solution out there – we need to find it.

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