America's Coal Fleet Is Essential to Its Recovery

America's Coal Fleet Is Essential to Its Recovery
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As Covid-19 slammed the nation, Congress, the Administration, governors, and each of us personally took unprecedented steps to save jobs, paychecks and lives. Despite these steps, we have seen more than 44 million Americans file for unemployment protection since those first shutdown orders in early March. In addition, the stock market has been on an unsettling ride since the beginning of March that has taken the Dow Jones as low as 18,602 and as high as 27,564.

Along with the financial trauma, business shutdowns and changes to our normal routines have lowered electricity demand in most parts of the country. Electricity demand across the 28 states that comprise some of the largest electricity markets in the country has declined by more than eight percent. However, electricity demand will increase as the economy recovers, and policymakers must be mindful that reliable and affordable electricity is essential to support the recovery. Our own polling shows that reliability is first and affordability is second when it comes to concerns about electricity.

Most people take for granted the nation’s fleet of coal-fueled power plants, even though 47 states rely on coal for electricity. The coal fleet provides roughly 20 percent of our electricity nationwide but a lot more in many states. The coal fleet is essential for delivering both reliable and affordable energy that can help us return to a new normal, whatever that turns out to be.

In fact, the coal fleet is one of the two most reliable and fuel-secure sources of electricity our nation has (Nuclear is the other one). Coal-fueled power plants maintain, on average, more than a two-month supply of coal stockpiled on-site, which means they can operate for long periods in the unlikely event that coal deliveries are interrupted. On-site coal stockpiles also provide fuel security (aka fuel assurance) for the same reason. 

Fuel security helps maintain reliability, and it has become increasingly important because of extreme weather and other threats, such as cybersecurity attacks, that can cut off fuel deliveries. 

Other electricity sources contribute in their own way to the electricity grid but provide little or no fuel security. Ironically, the electricity grid is becoming less fuel secure at the same time concerns are being raised about the need for fuel security.  Two decades ago, fuel-secure electricity sources comprised 70 percent of our electricity supply, but the percentage has fallen to half of that today, in large part because retiring coal-fueled and nuclear power plants are being replaced by natural gas-fueled power plants and renewable electricity sources. 

In addition to being reliable, the coal fleet provides affordable electricity when it’s needed the most. In a sense, all of the electricity sources – coal, natural gas, nuclear and renewables – compete with each other throughout the day as electricity demand rises and falls.  Right now, natural gas is unusually cheap (lowest price in two decades), which generally means that power plants burning natural gas will be called on to run more than coal-fueled power plants. However, the factors that have made natural gas so cheap right now are by no means permanent.

If past is prologue, remember that natural gas prices spiked to $135 per MMBtu in some parts of the country in 2014 as homes used more gas to stay warm during an episode of extremely cold weather (For perspective, gas prices for electricity generation are slightly more than $2.00 per MMBtu right now). In 2018, another abnormally cold winter sent electricity demand and natural gas prices through the roof again, with gas prices hitting $175 per MMBtu in some places.

According to the National Energy Technology Laboratory, the coal fleet was called on to satisfy almost 75 percent of the increased demand for electricity in a heavily populated 13-state region during this period, ensuring that electricity customers stayed warm while supplies of natural gas were not only expensive but also constrained. Another reason coal had to save the day is that the amount of wind-generated electricity fell during this critical period. Just think for a moment what would have happened without the coal fleet.

Wind and solar have an important role to play, but they cannot provide many of the attributes the coal fleet provides. These include reliability, fuel security and “essential reliability services,” which are necessary to keep the electricity grid stable. 

The economy will recover and, hopefully, most of us will remain healthy and return to our jobs. While it’s uncertain just how long the recovery will take, it is certain that we need the coal fleet, in addition to other electricity sources, to support the recovery.

 

Michelle Bloodworth is the president and chief executive officer of America’s Power.  America’s Power is the only national trade association whose sole mission is to advocate at the federal and state levels on behalf of coal-fueled electricity and the coal fleet.

 



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