The beginning of the end for coal

first_img18 July 2007Citigroup downgrades the stocks of Peabody Energy, Arch Coal and Foundation Coal Holdings, prominent US coal companies. The decision reflects the growing uncertainty surrounding coal’s future in the US. 30 January 2008Citing escalating costs, the Bush administration pulls the plug on federal funding for FutureGen, a joint project with 13 utilities and coal companies to build a demonstration coal-fired power plant that captures and sequesters carbon. 18 August 2007After opposing new coal-fired power in Nevada, US Senate Majority Leader Harry Reid says that he is opposed to building coal-fired power plants anywhere. 4 February 2008Investment banks Morgan Stanley, Citi, and J.P. Morgan Chase announce that any future lending for coal-fired power plants will be contingent on the utilities demonstrating economic viability under future carbon costs. Demonstrating economic viability would require speculation of future costs, imposing a risk on the investment. 30 May 2007Progress Energy, an energy company serving approximately 3.1 million customers in the Southeast, announces a two-year moratorium on the construction of new coal-fired power plants. “What began as a few local ripples of resistance to coal-fired power plants is quickly evolving into a national tidal wave of opposition from environmental, health, farm, and community organisations as well as leading climate scientists and state governments. Growing concern over pending legislation to regulate carbon emissions is creating uncertainty in financial markets. Leading financial groups are now downgrading coal stocks and requiring utilities seeking funding for coal plants to include a cost for carbon emissions when proving economic viability.“On March 11, 2008, Representatives Henry Waxman of California and Edward Markey of Massachusetts introduced a bill to ban new coal-fired power plants without carbon emissions controls nationwide until federal regulations are put in place to address greenhouse gas emissions. If Congress passes this bill, it will deal a death blow to the future of US coal-fired power generation. Yet even without a legislative mandate for a moratorium, the contraction in financial support for new coal-fired power plants is escalating toward a de facto moratorium. The timeline that follows is witness to what may well be the beginning of the end of coal-fired power in the US. 2 April 2007The US Supreme Court rules that the US Environmental Protection Agency (EPA) has the authority to regulate carbon dioxide and that EPA’s current rationale for not regulating this gas is inadequate. 22 January 2008The Attorneys General of California, six eastern states, and the District of Columbia submit a letter to the South Carolina Department of Health and Environmental Control opposing the proposed 1,320-MW Pee Dee coal-fired power plant. They note that emissions from this plant would “seriously undermin[e] the concerted efforts being undertaken by multiple states to address global warming.” 13 July 2007Florida Governor Charlie Crist signs an Executive Order establishing “maximum allowable emission levels of greenhouse gases for electric utilities.” Under the emissions cap, building new coal-fired power plants in the state seems unlikely. 12 February 2008Bank of America announces that it will start factoring in a cost of $20-40/t of carbon emissions in its risk analysis when evaluating loan applications from utilities. 26 February 2007Under mounting pressure from environmental groups, TXU Corporation, a Dallas-based energy company, abandons plans for eight of 11 proposed coal-fired power plants, catalysing the shift from coal-based to renewable energy development in Texas. 18 October 2007The Kansas Department of Health and Environment denies Sunflower Electric Power Corporation air quality permits for two proposed 700-MW coal-fired generators on the basis that carbon dioxide is an air pollutant and should be regulated. 11 March 2008Representatives Henry Waxman (D-CA) and Edward Markey (D-MA) introduce a bill that would block the EPA and states from issuing permits to new coal-fired power plants that lack state-of-the-art carbon capture and storage technology. Since this technology is at least a decade away from commercial viability, if this bill passes it would essentially place a near-term moratorium on new coal-fired power plants. 8 February 2008The US Court of Appeals overturns two EPA mercury rules covering coal-fired power plants, thus requiring new coal-fired plants to implement the most stringent mercury controls available. Compliance is expected to raise the already considerable costs of 32 proposed coal plants, some already under construction. Source: Earth Policy Institute, http://www.earthpolicy.org/ 26 February 2007James Hansen, director of NASA’s Goddard Institute for Space Studies and a leading climate scientist, calls for a moratorium on the construction of coal-fired power plants that do not sequester carbon, saying that it makes no sense to build these plants when we will have to “bulldoze” them in a few years. 3 January 2008Merrill Lynch downgrades the investment ratings of Consol Energy and Peabody Energy, two leading US coal companies. Flying in the face of huge demand and great progress in clean coal technologies, The Earth Policy Institute is talking about an end to coal power generation in the US. It says: “With concerns about climate change mounting, the era of coal-fired electricity generation in the US may be coming to a close. In early 2007, a Department of Energy report listed 151 coal-fired power plants in the planning stages in the US. But during 2007, 59 proposed plants were either refused licenses by state governments or quietly abandoned. In addition, close to 50 coal plants are being contested in the courts, and the remaining plants will likely be challenged when they reach the permitting stage. 19 February 2008The federal government suspends a low-interest loan program for rural utilities seeking assistance for new coal-fired power plants. 2 July 2007The Florida Public Service Commission denies Florida Power & Light the permits needed to move forward with the massive 1,960-MW coal-fired Glades Power Park, citing uncertainty surrounding future carbon costs. 3 May 2007Washington Governor Christine Gregoire signs a bill that prevents new power plants from exceeding 1,100 pounds of carbon dioxide emissions per megawatt hour of electricity generated, creating a de facto moratorium on building new coal-fired power plants in the state.last_img read more