by Andrew Grandahl
If hearing news of Secretary of Energy Perry’s proposed coal and nuclear subsidies made you furious, you’re not alone. Perry is a climate-denying, pro-fossil fuel, former Texas governor, who was launched into political infamy for forgetting one of his three main campaign promises during a Republican presidential debate in 2012. In keeping consistent with appointing simply disastrous candidates to cabinet positions, the Trump administration has made this man the person in charge of U.S. energy policies, and consequently environmental policies, along with the likes of Scott Pruitt and Ryan Zinke. These men have proven time and time again that they are no allies of the environment or of clean, sustainable energy, but rather champions of corporate desires and environmentally deleterious policies.
Secretary Perry proved his allegiance to big coal a few weeks ago by introducing a proposal that essentially asks ratepayers to subsidize coal and nuclear plants by requiring these facilities to stockpile at least 90 days of fuel on site to promote “grid reliability.” This comes after Perry commissioned a DOE study in April to investigate grid reliability in the U.S. in light of the coal industry’s rather rapid retirement. An early draft of the study stated that “the power system is more reliable today due to better planning, market discipline, and better operating rules and standards.” This summary statement was later removed, but the final report still said nothing about coal retirements harming the reliability of the grid.
In brazen defiance of this empirical data that he himself requested, Perry went ahead and rolled out ratepayer-funded coal and nuclear subsidies, citing grid reliability as the main reason for doing so. This attempt to prop up the zombie coal industry is a slap in the face to healthy market competition and good economics, and of course artificially supports the dirtiest form of energy known to humankind.
So yes, this proposal is frustrating, incomprehensible, and a further threat to our environment. But let’s take a moment to see a more overarching view of U.S. coal.
An Industry In Irreversible Decline
Let’s review some important statistics for a moment. According to the Sierra Club, since 2010, over half of U.S. coal plants have either shut down or committed to retirement (261, to be exact). Coal generation in the United States is at its lowest levels today since 1982. And electric sector emissions are at their lowest point since 1992 and continuing to go down. All of this while our economy continues to grow, and grid reliability continues to improve. This doesn’t exactly describe this post-coal energy dystopia Secretary Perry seems to be so convinced of.
And the reasons for this decline are not what Perry and his ilk often describe as a politically charged “war on coal.” The low cost of natural gas, alongside major advancements in renewables technology and affordability, has simply made coal obsolete. Its decline has been rapid, and has been expedited by market forces and technological advancements, not political ideology.
Weeks after Perry’s proposal was made public, and days after the Trump administration announced they were beginning the process of repealing the Obama-era Clean Power Plan, Texas utility company Luminant announced the early-2018 closure of two large coal-fired power plants. The reason? The company issued a statement saying the coal plants are economically challenged because of wholesale power prices, the expansion of renewable electricity, and the low cost of natural gas.
As far as utility companies go, grid reliability is at the top of the list of their priorities. Clearly if coal was so integral to consistently meeting demand, these coal-fired plants would be economically viable and indispensable. Yet this is simply not the case according to the very department Rick Perry serves, and ample real-world evidence. The bottom line? Despite the desires of certain politicians and business people, coal plants are too costly to maintain and run, and if this proposal is approved, it will be supporting the industry through extreme market intervention and massive subsidies. It’s a last ditch effort to save something that is simply no longer competitive.
At the end of the day, the market is the arbiter of which industries die out and which ones flourish. In the past ten years, 42,000 megawatts of coal capacity have been retired in the U.S., and counting. 88,000 MW of renewable capacity has been added in that same period, more than doubling retired coal capacity. The economics are there, and big business in 2017 is all in favor of combatting the negative impacts of climate change. They will continue to support reducing emissions and creating a more sustainable electrical grid, regardless of the wishes of out of touch politicians. We’re looking forward to a clean and bright future.