Economic factors and existing policies have done a pretty good job of stopping the construction of new coal plants around the world, but what is needed to push existing plants off the grid? Our guest in this episode has been working to phase out coal from a variety of angles for the past 13 years, and believes the only approach that might still work is to just buy out existing plants and shut them down. But how? Where will the money come from? And if the money is public, how can we make sure that coal buyouts benefit the public, and not the big banks? How will we obtain the lowest price for the plants? How quickly can we execute the buyouts and retirements? How can we make sure that the power is replaced by clean power plants and not by natural gas-fired plants?
And what about the important related questions, like: What role should US government agencies like the Federal Reserve and the Commodity Futures Trading Commission play in implementing climate policy? What responsibility do major media organizations have to support the energy transition? And what about the so-called “just transition” away from coal? Is it real, or just a comforting talking point?
Join us in this discussion for some fresh new ideas and strategies that could help the world shut down the coal industry faster and more equitably, while delivering the best outcomes for the public.
Owners of uneconomic coal plants in the US have tried many ways to keep operating, even when it is not profitable to do so, such as out-of-market subsidies and re-regulation (as we discussed in Episode #41), bailouts and wholesale market controls (as we discussed in Episode #70), and seeking capacity payments or other novel payments for alleged reliability (as we discussed in our trilogy of shows on decarbonizing power markets, Episodes #90, #97, and #105).
But there’s another tactic, variously known as “self-committing” or “self-scheduling,” and it happens when a utility that owns a coal-fired power plant elects to operate the plant no matter what the going rate for power is, even if that price is below its operating costs. Fully regulated utilities oftentimes can pass the costs of operation onto their customers even when they’re electing to run at a loss, without having to go to the trouble of asking for additional cost recovery from a regulator, or getting a legislator or wholesale market operator to give them a handout in one form or another. And it all happens more or less invisibly to customers and regulators. Only a researcher with a sharp eye and expert knowledge of what to look for would even detect these uneconomic operations, such as our guest in this episode.
New energy modeling on the U.S. states of Colorado and Minnesota offers some exciting and even startling insights: It can save everyone money to transition our power generation off of fossil fuels and onto wind, solar, and storage. And moving space and domestic hot water heating onto the power grid by switching to heat pumps, and moving transportation onto the power grid by switching to electric vehicles, will only increase the savings for all consumers—even those who don’t own a car will benefit from transitioning our fleets to EVs. In fact, the more we decarbonize, the more money it will save everyone, the more jobs will be created, and the closer we will get to addressing the climate challenge. Tune into this discussion with energy modeler extraordinaire Christopher Clack for all the exciting details in this special Christmas Day episode.
South Africa is one of the most coal-dependent countries in the world, with abundant (if low-grade) coal resources, a grid that is almost entirely powered by coal, an industrial base that is powered by coal, and a huge fiscal dependence on coal exports. And it’s debt-laden state-owned power company is not only in need of repeated bailouts, but is also now ruining the country’s credit rating. But South Africa also has excellent wind and solar resources, enabling renewable projects to easily beat coal on price. So one would think that energy transition there is a no-brainer. But the picture is actually much more complex, having more to do with politics than technology or economics.
So we turned to Jesse Burton, an energy policy researcher in the Energy Systems Research group at the University of Cape Town and a senior associate at the London-based think tank E3G to help us understand the current reality, and the future potential, of energy in South Africa. Join us as she leads us on a fascinating tour of a country that has one of the highest proportional carbon footprints today, but could be the poster child of energy transition in the future.
The coal power sector in the US is continuing to shrink due to poor economics, but this doesn’t mean we’re retiring coal fired power plants quickly enough to reduce carbon emissions at a rate that achieves our climate goals. So what’s the best way to get rid of coal plants before they reach the end of their expected lifespans, particularly while the Trump administration and the Republican party continue trying to find ways to keep coal plants open? Democratic state Representative Chris Hansen of Colorado has proposed a solution: Refinancing the debt that utilities still owe on their coal-fired plants with cheaper, public bonds, and then shutting down the plants. It’s an idea that would retire coal plants and reduce carbon emissions, save utility customers money, create better investment opportunities for the utilities, and replace that power with cheaper, clean, solar and wind power. Everybody wins! It’s a powerful idea whose time may have come in Colorado, where fossil fuels still make up 78% of the state’s electricity mix, and major utilities in the state, like Xcel Energy, have declared their intention to transition to 100% clean power in the coming decades. Will Hansen’s bill have the right approach to help achieve those goals? We dive into all the important details in this episode and find out!