
Coal piles are managed at a West Virginia power plant. Advocates supporting coal say such plants deserve special payments that value certain attributes the plants bring to the nation's grid to stop or slow an ongoing trend of coal retirements. |
A push to support baseload power resources, including coal-fired plants, continues, though some experts say the term is outdated for a number of reasons including trends driving utilities away from running coal plants at full power.
Advocates for the coal industry insist coal plants are necessary for a reliable grid and that ongoing retirements threaten the U.S. power system. As coal plant owners seek money to keep assets running, opponents of such policies say the market should be allowed to push those coal plants off a system they believe will be fine without them.
When U.S. Rep. Larry Bucshon, R-Ind., introduced the Electricity Reliability and Fuel Security Act on March 14, he stressed the need for "reliable baseload power provided by coal-fired generation" to justify a tax credit for coal-fired power plants. The National Mining Association referred to the bill as the "coal baseload electricity generation tax credit" in a press release praising the bill.
However, numerous organizations have suggested the idea that a modern grid needs a certain amount of always-on, highly utilized "baseload power" is a myth.
Free-market think tank R Street Institute released a report in 2017 concluding baseload retirements do not necessarily lead to less reliable electricity. The concern over baseload retirements, the author of the study said, just "masks an underlying preference for certain fuel types." A report prepared by The Brattle Group for the Natural Resources Defense Council, or NRDC, came to a similar conclusion.
"At this point, it really is just a political propaganda term," Miles Farmer, a clean energy attorney with the NRDC, said in an interview.
Farmer said the term no longer makes any sense as used to defend reliability. He said an interconnected system of power plants allows grid operators to be statistically sure they can meet demand for electricity, even if they cannot be sure of exactly which power plants may provide it. Use of the term baseload comes from a time when it could be assumed coal and nuclear plants would offer the cheapest electricity, which is increasingly no longer the case, he said.
Some generators with coal assets have been candid about no longer relying on coal assets to serve as baseload plants.
Detroit-based DTE Energy Co. recently told investors its resource plan includes retiring its coal fleet over time so it can "replace that baseload with combined-cycle plants, gas plants and renewables." Adding new natural gas-fired capacity will ensure reliability as DTE replaces its aging coal facilities, DTE President and COO Gerardo Norcia said on a November 2017 call.
General Electric Co.'s Senior Vice President Russell Stokes has said he expects gas will continue to be a "baseload option" to balance out intermittent renewable energy sources as coal plants leave the grid. The company manufactures products for coal plants and later wrote in public comments to the federal government that while 90% of the U.S. coal fleet ran at "baseload operation" levels 10 years ago, that figure had dropped to below 60%, with coal plants increasingly being used to meet flexible or seasonal operational needs.
Ameren Corp., a power company based in Saint Louis, expressed a similar concern in comments to the U.S. Environmental Protection Agency, adding that "baseload operations will become less likely in the future with higher levels of renewable penetrations." North Carolina-based electric provider Duke Energy Corp. said it expects natural gas prices and expanding renewables to continue to result in coal plants being operated as load-following instead of baseload power sources.
After the U.S. Department of Energy proposed to prop up financially struggling baseload generation, a coal sector that had already expressed hope the department's study on resiliency would justify extending the life of such plants cheered. The proposal was ultimately rejected by the Federal Energy Regulatory Commission after many in the power industry, including some with coal and nuclear assets, condemned the plan.
Peabody Energy Corp., the largest coal miner in the U.S., has praised the notion of maintaining coal for baseload power, and Peabody President and CEO Glenn Kellow even suggested the U.S. impose a two-year moratorium on coal plant retirements. Illinois Basin coal producer Foresight Energy LP's CEO Robert Moore recently said he was hopeful the administration would advance work to "properly price" power from baseload generating stations, possibly stimulating an increase in low coal prices.
The American Coalition for Clean Coal Electricity, or ACCCE, says baseload coal-fired generation facilities should be able to recover their full costs in a market that does not value certain attributes of coal plants essential to the grid. The group has been working with various entities to change how grid operators value those attributes in an effort to stymie a wave of coal plant retirements.
"What we're trying to do is to educate policymakers why the coal fleet is needed if we're going to have a reliable and resilient grid and to explain more at a higher level what attributes the coal fleet does have," said Michelle Bloodworth, COO of ACCCE. She said there are plenty of coal plants that can continue to operate in wholesale electricity markets if those markets change how they value certain attributes.
PJM Interconnection, for example, has done a study of its evolving resource mix and found that as it moved away from coal, reliability attributes such as frequency response, reactive capability and fuel assurance have decreased, although flexibility and ramping attributes have increased. The grid system recently proposed a change to its energy markets that could benefit more expensive and inflexible units such as coal and nuclear.
