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Coal sector report to DOE: 'Assess, support, reform, renew' to optimize fleet


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Coal sector report to DOE: 'Assess, support, reform, renew' to optimize fleet

A report created by a coal industry-led council recommends the U.S. Energy Department take on a four-step strategy to assess and support the existing U.S. fleet of coal-fired power plants through reformed regulations and renewed investment in coal generation technology.

A draft version of the National Coal Council report, posted on the group's website Sept. 4, suggests assessing the value of the coal fleet, supporting the continued operation of the existing fleet with compensation for "all attributes" of coal-fired power plants, reforming the regulatory environment to allow permitted investments to recoup their costs, and developing a targeted research development and deployment program focused on increasing the efficiency, flexibility and competitiveness of the current fleet of coal plants. Energy Secretary Rick Perry directed the National Coal Council, a body that has advised the agency since 1984, to prepare the report in a letter written April 7.

"Although there are many challenges facing the existing U.S. coal fleet, it continues to play an important role in the current diverse energy mix. A wide range of policy mechanisms, market changes and technology solutions exist or could be developed that could enable this fleet to continue to play an important role in the U.S. electricity system well into the future," the report states. "DOE has the ability to take action and/or influence many of the key areas discussed throughout this section that would benefit the nation's coal fleet."

First, the report said, the value of the coal fleet must be assessed. This includes establishing a uniform definition of grid resilience and establishing qualitative metrics to assess and compensate for the value of attributes different energy resources offer a grid. While the DOE, under Perry, has already pushed for incentivizing baseload power plants using coal and nuclear fuels for resiliency attributes, coal supporters, coal opponents and others have debated the use of the term.

The report suggests offering economic and regulatory incentives to "stem the tide of plant retirements," valuing and compensating resource diversity, and implementing support mechanisms that would "immediately compensate the U.S. coal fleet for the essential services it provides." The authors encouraged an assessment of the fuel security of electricity providers in the U.S.

Advocates of coal have touted its ability to be stored on site as an attribute worthy of compensation because they say it is less susceptible to disruption from either natural or manmade threats.

"Coal-fired generating capacity is likely to continue to decrease barring a proactive initiative to assess and take action to compensate the existing coal fleet for the value it provides in maintaining the diversity and stability of the U.S. power grid," the report states.

Regulatory reforms that would support coal, the report states, include changes to the New Source Review permitting program, reforming the Public Utilities Regulatory Act of 1978, revising regulations on coal ash and making changes to effluent guidelines for power plants. The report also suggests the DOE advance laws to facilitate the storage of captured carbon dioxide on federal and tribal lands and engage the U.S. Environmental Protection Agency as it makes progress with the Affordable Clean Energy plan.

The report also calls for market and tax reforms that would support coal generation in the U.S. The government could support technology to lower the cost of fuel, increase coal quality, improve plant efficiency and flexibility, reduce the costs of environmental retrofits, advance carbon capture and the beneficial use of carbon dioxide and support the deployment of new products from coal and coal byproducts, the report states.

The report's co-chairs were Peabody Energy Corp. president and CEO Glenn Kellow, Basin Electric Power Cooperative General Manager and CEO Paul Sukut, and BNSF Railway Co. Executive Chairman Matt Rose. Despite being publicly available on the council's website, the report is marked "not for distribution or publication" and "embargoed" pending National Coal Council member approval.

The council is scheduled to vote on the report and a similar report on coal exports at a meeting later this month.