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Coal frets over grid reliability, resilience as its customers embrace transition

As the U.S. coal fleet shrinks, stakeholders in the future of the fuel continue to push concerns about reliability and resilience of the nation's electricity grid.

Fuel diversity and security, as well as reliability and resiliency of the nation's electric grid, are key benefits of using coal to generate electricity, said several speakers at a conference co-hosted by the Virginia Coal and Energy Alliance Inc. and the Southern States Energy Board on May 20. However, grid operators and utilities have insisted the nation's electricity supply is stable and reliable despite a large chunk of the coal fleet being retired in recent years.

"I truly believe that in order for people to support policies for a future coal fleet, they really have to understand the importance of the existing coal fleet and why we do need a coal fleet," said Michelle Bloodworth, president and CEO of the American Coalition for Clean Coal Electricity.

The coal industry has made a significant push for policies that would support its aging fleet of power plant customers based on the idea that the fuel provides extra value to the electricity grid and should be compensated for those attributes. While President Donald Trump and his administration initially seemed cooperative and showed signs of wanting to support the industry, those efforts have not translated to any federal policy support for coal as the idea gained little support from the public and the nation's major suppliers of electricity.

Over the years, the industry repeatedly emphasized the fuel was critical to the nation's electricity grid, particularly during extreme weather events. In the past few years, several potentially disastrous weather events were successfully managed by grid operators despite sharp declines in coal generation, offsetting the effect of coal's dire warnings about coal retirements.

"We've come close to having the grid go down three times in the last six years," said Joseph Giove, director of coal business operations for the United States Department of Energy's Office of Fossil Energy. "The good news is that nothing happened. The grid didn't go down. But in a sense, the bad news is nothing happened because you can ignore it."

PJM Interconnection, a traditionally coal-heavy network of electricity generators, has taken several steps toward studying the reliability of its quickly shifting generation portfolio. PJM deploys an "all of the above" strategy when it comes to sources of generation but the "reality of the situation is that there is an emerging fuel mix in this nation" that is comprised of increasingly more renewable energy, said Timothy Burdis, lead strategist within the state government policy department at PJM.

"Competitive markets have and will continue to deliver high levels of reliability at least cost," Burdis said. "We're reliable today and we're reliable into the future, but with the change in fuel mix, fuel security is going to ensure and has to ensure reliability as we go through that change."

While coal suppliers are pushing for support for aging coal plants, utilities are weighing not only increasingly challenging economics for coal generation, but also a higher demand for low-carbon energy. American Electric Power Co. Inc., for example, is a utility with a lot of coal generation in its portfolio that is increasingly losing share to renewable energy driven by carbon dioxide emission reduction goals.

"We'll continue to count on the remaining life expectancies from the existing coal plants and increase our natural gas consumption to maximize what we believe is the incredible value of baseload generation," said Debra Osborne, vice president of generating assets at American Electric Power's Appalachian Power Co. subsidiary. "Our strategy for generation continues to count on coal. We have and will continue to reduce emissions, CO2 as well as SOx, NOx and mercury, and we will continue to respond to the signals from our customers, lawmakers and regulators."

Dominion Energy Inc. retired 1,600 MW of coal, gas and wood waste power generation in March. James Beamer, the managing director of legislative outreach for Dominion, said the company is embracing changes transforming the energy sector and has made new investments in places like utilization of methane gas from hog operations and pumped storage.

"We provide safe, reliable and affordable energy and meet the needs of our customers and our communities," Beamer said. "While proud of our legacy, we know our past will not guarantee the future. We live in a rapidly evolving world and we are determined not only to respond to that revolution, but to drive it forward."