Jun 12, 2020 1:03 PM

The Covid-19 Economic Slump Is Closing Down Coal Plants

This year, coal usage has dropped in the US, and renewables now generate more electricity. To some experts, the financial crisis is a clean energy opportunity.

Just outside the gates of the Dickerson Generating Station, kayakers paddle through a concrete sluiceway that channels cooling water from the massive coal-burning power plant through a series of specially-designed obstacles to the Potomac River. Dickerson’s power lights up Washington, DC, and its suburbs. But beginning in August, these kayakers will have to find somewhere else to practice, while 63 plant workers will be looking for new jobs.

The Texas-based utility that owns the Maryland plant just announced it will shut down Dickerson’s three power units after 60 years of operation, citing the high cost of operation. Like dozens of other coal plants across the country, Dickerson is a casualty of coal’s fast-moving demise. The industry has been squeezed between cheaper natural gas and expanding use of renewable energy for several years, but now the Covid-19-driven recession has jammed a stake through its economic heart.

“This is an earth-shaking moment in the energy sector,” says Robert Godby, director of the Center for Energy Economics at the University of Wyoming, about the rapid drop in demand for coal power. “This industry just doesn’t change this quickly.”

Godson says the amount of coal used for electricity has dropped 40 percent in 2020 compared to the same time last year, according to figures from the US Energy Information Agency. Before the pandemic hit, experts like him were expecting a 15 percent decline. Despite Covid-19-related federal bailout money for some coal companies and President Donald Trump’s efforts to roll back pollution rules, utilities have still announced that 13 generating stations will close in 2020.

For utility executives, “coal is the first thing you look to turn off, because it’s the most expensive to use,” Godby adds. “The pain we anticipated in the coal sector has been accelerated. Covid has brought the future much closer to the present.”

Stephen Stetson, senior representative for the Sierra Club’s Beyond Coal Campaign, notes that nationwide, renewables (wind, solar, and hydropower) have generated more electricity than coal every day in 2020. That’s been driven by a 40 percent drop in the cost of big wind farms in the past decade and a corresponding 80 percent drop in solar power systems, according to federal government studies. Renewables energy has become cheaper because of the falling price of solar panels made in China and installation of larger, more efficient wind turbines.

"We have the technology now. We can do this with what we got," he says of re-gearing the US energy mix to include more solar and wind power.

The decline of coal has given energy companies two options as they plan for the future. Some are building more natural gas plants, which burn cleaner than coal, but still emits tons of planet-warming methane during extraction and carbon dioxide during combustion. Others are investing in techniques to burn natural gas without creating carbon emissions, or technologies to store energy from wind and solar power for use later.

That’s what’s happening in the Midwest, where Minnesota’s Great River Energy co-op announced its coal plant will be replaced by wind turbines connected to a 1 megawatt battery that can deliver stored power to its 700,000 rural customers for 150 hours. In comparison, traditional lithium-ion batteries have about four hours of charge. The wind-battery combo will be supplemented by a cleaner gas plant as well.

By 2023, the company's mix of fuels will flip from about 60 percent coal to none, and from about 25 percent wind to about 60 percent. Instead of lithium-ion batteries found in cellphones and laptops, Great River hired MIT startup Form Energy to design an “aqueous air battery” that uses water as one of the main components to store large amounts of electricity. The startup is backed by Bill Gates and the project is still in the experimental stage.

Although small, one analyst thinks the Minnesota battery experiment could be an energy game-changer. “It’s one speculative option,” says Jesse Jenkins, assistant professor of mechanical and aerospace engineering at Princeton University, who studies the transition to zero-carbon energy. “It could totally fail, but it’s one example of a utility making a proactive bet.”

Meanwhile, Exelon, which operates six Mid-Atlantic and Midwest electric power utilities, is putting its green energy chips onto a new technology that recycles carbon dioxide to make natural gas plants burn cleaner. Where traditional gas-powered plants emit carbon dioxide as a byproduct of combustion, the NET Power plant outside Houston, Texas, recycles the excess carbon dioxide, turns it into a liquid or “supercritical” state, and then uses it to run the turbines that produce electricity. Any remaining liquid carbon dioxide can be stored underground or repurposed, such as being injected into carbonated beverages or used in chemical processes, rather than released into the atmosphere.

Others companies are taking a slower route to join the carbon-free bandwagon. Southern Company, which owns seven utilities in six southeastern states, joined North Carolina-based Duke Energy and Virginia-based Dominion Energy last month in announcing plans to become carbon-free by 2050. In addition to switching from coal to natural gas, Southern president and CEO Tom Fanning said the energy company would plant more trees and invest in a technology called direct-air capture to remove carbon dioxide from the atmosphere. “I continue to be confident that we are prepared and well-positioned to meet the needs of our customers, employees, communities and investors well into the future and will succeed in the transition to a net-zero carbon future,” stated Fanning in a May 27 press release.

Some green groups are skeptical of Southern’s announcement, mainly because the electric utilities in Georgia, Alabama and Mississippi that it operates have shown little interest in curbing climate-related carbon emissions until now. “It’s nice that they are talking about carbon like it matters, but that has not been the case for a long time,” says Stetson, of the Sierra Club

Stetson notes that Alabama regulators this week granted one of Southern’s utilities permission to build a new gas plant rather than investing in new wind or solar power, and the firm still operates nine coal-fired plants. Southern and its utilities are “not showing the ambition that the climate needs and the economics justify,” Stetson said.

But Southern spokesperson Schuyler Baeman says the company’s overall carbon emissions have decreased by 44 percent through 2019, as compared to 2007 levels. “We now expect to achieve the 50 percent reduction goal well in advance of our 2030 goal, and possibly as early as 2025,” Baeman said. “We pursue these goals with the support of our regulators because they are good for the customers and communities we are privileged to serve.”

Some energy experts believe the carbon-free energy goal can be achieved faster with a combination of new technologies and the right incentives from states and the federal government. A new report by researchers at the Center for Environmental Policy at the University of California, Berkeley, and two consulting firms outlines the steps needed to produce 90 percent clean, carbon-free electricity nationwide by 2035 without raising consumer bills or building new fossil fuel plants.

The buildout of additional wind, solar and storage would create $1.7 trillion of investment into the economy, the report states, and increase energy sector jobs by up to 530,000 per year through 2035, according to Sonia Aggarwal, vice president for policy at Energy Innovation, a San Francisco–based energy consultancy that contributed to the study released this week.

Aggarwal says the current recession might be the right time to think about how to do things differently in the future. The green energy technology sector will also need help from lawmakers to boost clean energy tax credits, set energy standards, and provide government-backed financing to retire the debts held by existing fossil fuel plants. “The idea behind this report is to look at the opportunity that we have in front of us,” Aggarwal says, “and connect it to this moment that we find ourselves in where we are going to need to know how to invest in our recovery. This opportunity is a fantastic one for America.”

Aggarwal says that as coal stumbles, there is now competition between new gas plants and renewables. “We are in this race between zero carbon forces and a bunch of new gas. We cannot run our plants and still reach our climate goals,” she says. “Because wind and solar and batteries have become so cheap, it doesn’t cost much more to get on the zero carbon trajectory. It can happen.”

Despite the political obstacles in some states and on Capitol Hill, Aggarwal is optimistic that market forces and some new thinking about energy policy in Washington might turn the corner. “It’s a crazy moment that we have reached,” Aggarwal said about the rise of renewables and decline of coal. “It’s one that we couldn’t talk about just a few years ago.”