The natural gas boom and clean energy have been the primary drivers of coal power plant closures during the last several years, according to a long-awaited report from the Department of Energy.
Most of the country’s coal plants are closing because they are unable to compete with cheap natural gas and, to a lesser extent, subsidized green energy technology in a low electricity demand environment, the DOE noted Wednesday in the study. The agency billed the study as monumental in scope, but the findings dovetail with what most analysts have been saying for several years.
Most of the coal and oil retirements from 2011 to 2015 happened because plant owners chose to shut down rather than invest in expensive instruments required to comply with EPA’s final Clean Power Plan rule, which was finalized during the Obama administration.
The grid is a lot more complex today than it was 15 and 20 years ago, one researcher involved in the report said Wednesday during panel discussion about the agency’s findings. The Daily Caller News Foundation was present at the talk, which took place at DOE headquarters.
If the grid was dominated by coal like it was in previous decades, then it would be far more resilient, the researcher said on the condition of anonymity because of the sensitive nature of the study. Solar and wind power, alongside natural gas, have made the grid much more complex and less resilient.
DOE’s study also hashed out recommendations to help strengthen the hodgepodge nature of today’s electric gird. It suggests, for example, policies that develop new technologies helping the electrical grid become more resilient to the intermittency of solar and wind power.
The agency’s report also encourages the Environmental Protection Agency to allow coal-fired power plants to improve efficiency without new regulatory approvals and associated costs weighing down their business models.
DOE Secretary Rick Perry and President Donald Trump were notified of the report’s findings prior to the study’s publication.
“The industry has experienced massive change in recent years, and government has failed to keep pace. This report examines the evolution of markets that has occurred over the last fifteen years,” Perry, a former Republican governor from Texas, said in a press statement following the report’s publication.
“Policy makers and regulators should be making decisions based on what the markets look like today, not what they looked like years ago,” he added. Perry, who ran against Trump during the Republican presidential primaries, has continually noted how important baseload energy supplies like coal are to the country’s electrical grid.
The agency’s findings run contrary to a report from unnamed sources earlier this month that suggested green energy industries do not pose a significant threat to the U.S. electrical grid.
Perry’s pushed for the study in April based on the idea that coal provides a base-load level of support for the grid, which helps defray the risks that solar and wind power posed to the grid. The final study appears to support at least part of Perry’s contention: coal has historically provided a consistent level of energy, whereas natural gas exists in a more volatile market and clean energy lacks consistency.
Analysts maintain that former President Barack Obama’s so-called war against the coal industry was the catalyst that led to the boom in natural gas. Excessive regulations during the Obama-era, they say, created an uptick in automation and a switch to natural gas.
The DOE’s study comes after Perry said in early April that he and international counterparts discussed the need for a diverse supply of electricity during a G-7 Energy Ministerial meeting in Rome. He implied at the time that the U.S. needed a comprehensive grid study to prevent the kind of energy disruptions happening in Europe.
Germany’s subsidies for green energy, for instance, have sharply increased power prices in the country, with the average German paying 39 cents per kilowatt-hour for electricity. The average U.S. citizen, meanwhile, spends 10.4 cents per kilowatt-hour by comparison.
Wind and solar power plants in the European country under-performed in January because of cloudy weather with little or no wind, which nearly collapsed the country’s entire grid. Germany’s power grid was strained to the limit and could have gone offline entirely.
The problems in Australia have been especially acute. The country’s energy providers failed to adequately fill a vacuum left by retired coal plants, which has made it difficult for them to provide enough energy for the Australians during the hot summer months.
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