December 7, 2018 Read More →

Analysts skeptical of Trump’s latest play to save coal

Bloomberg:

The Trump administration is trying to remove a key barrier to constructing new coal-fired power plants in the U.S. — but don’t expect any utilities to actually build them.

The Environmental Protection Agency on Thursday proposed easing Obama-era limits on carbon dioxide emissions from new and modified coal power plants, including a change that would remove a de facto requirement to use expensive carbon-capture technology at the sites. The carbon-capture requirement EPA is proposing to eliminate is one obstacle to building coal power plants, though economic and market realities have created much higher hurdles that analysts say will endure no matter what the Trump administration does.

“We don’t see the EPA’s rollback of carbon capture technology and storage requirements sparking any new coal plant openings in the foreseeable future,” said Toby Shea, vice president at Moody’s Investors Service. “Existing coal plants are being challenged by low-cost natural gas and renewables, and an easing of regulations won’t change that.”

The Trump administration appears to agree. In an economic analysis of its proposal, the EPA asserts that the move isn’t expected to result in significantly more carbon dioxide emissions — largely because it expects “few new” coal-fired electric generating units “due to expected economic conditions. The technology of choice for new generation is not expected to be coal-fired units due to current and projected market conditions,” the analysis said.

Under President Donald Trump, the U.S. government has already advanced policy changes designed to make coal cheaper to mine and more attractive to burn for electricity. But coal use has continued to fall as other environmental regulations and economics have encouraged utilities to embrace less expensive natural gas, wind and solar. Since 2010, power plant owners have either closed or announced plans to close at least 630 coal plants in 43 states — nearly 40 percent of the U.S. coal fleet, according to data by the American Coalition for Clean Coal Electricity, a trade group representing utility Southern Co., miner Peabody Energy Corp., and other companies.

“It’s doubtful the proposed policy change will make much of a difference to any potential coal power plant developers,” said Rob Barnett, an analyst with Bloomberg Intelligence. “The economics of building a new coal plant just don’t make sense given the availability of abundant and cheap natural gas” that’s helped make new coal plants “among the most expensive electricity options at this point.”

More: Trump lifting hurdle to coal plants no one wants to clear

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