Summary:
In the last presidential election
it was debated that Obama’s administration and his Environmental Protection
Agency would put a grid lock on the growth of coal companies. However, due to
recent research it turns out the case for the lack of growth in the coal
companies is due to the companies themselves. Due to a detailed analysis of
coal plant finances and economics, coal is losing its battle with other power sources
mostly on its merits. Even though coal has been the leading source for electricity
in the United States it has dropped from 50% to 38% in the last 6 years. Plans
for more than 150 new coal-fired power plants have been canceled since the
mid-2000s, plants that already exist are being shut down, and only one new
coal-fired power plant went online in the United Stated in 2012. David
Schlissel, an energy economist and founder of the Institute for Energy
Economics and Financial Analysis, decided to investigate the reasons for the
decline. He took a look at the economics of the industry and the detailed
finances of individual power plants. Schlissel and his team found several
reasons for coal’s decline. He says that construction costs have risen sharply
in the past decade. The cost of natural gas has plummeted since the mid-2000s
and if coal-power fired power has to compete with natural gas on its economic
merits then it struggles. In 2006 there was an electric generating plant in
Mississippi that had two coal-fired generators and two natural-gas-powered
generators. The coal-fired generators produced 80% of the power which is where
the plant got most of its power. While the two natural-gas-fired generators
produced just 30% of the power they were capable of. By 2012, those percentages
were reversed: the coal generators produced just 25%, while the natural-gas
generators produced 84%. These trends indicate that the company profited by
burning natural gas more and coal less. Another reason coal is struggling is
because many power plants that burn it are aging to the point that more parts
break and it is becoming very expensive to maintain says Schlissel. Sixty
percent of the nation’s coal plants are more than 40 years old and the retiring
age of coal plants is 53 years. It’s hard to justify installing expensive
scrubbers to plants that aren’t going to produce electricity for long. The cost
for shipping coal by train, barge and truck are large and rising, which adds
significantly to the fuel’s cost. Lastly utilities have incentives to move to
natural gas if they can.
Correlation:
In class we have been speaking
about other alternative fuels and coming up with new ways to get power. This
really emphasizes the need for new forms of energy. It also shows that coal is
on the up and out which means working towards a new form of energy is going to
become a big project here in the near future.
Personal Reaction:
This article made me a little happy
because it puts the pressure on scientists to come up with new forms of energy
and quickly. Coal is no longer a viable source because it is becoming too
expensive to keep it around. 
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