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DOE on multiple paths to save 'misunderstood' coal from US energy transition

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Department of Energy Secretary Rick Perry holds up a piece of coal mounted as a plaque that was presented to him during a visit to a National Energy Technology Laboratory site in Pittsburgh in July 2017. The agency has spearheaded numerous efforts to help the declining U.S. coal sector.
Source: Associated Press

The U.S. Department of Energy has shown strong support for slowing or pausing a trend of coal-fired power plant retirements, though it has had little success in getting action that would secure that goal as a U.S. transition from coal has continued.

Without coal, the 13-state PJM Interconnection would have suffered a "system collapse" during an early 2018 cold-weather weather event known as the bomb cyclone, the Energy Department's National Energy Technology Laboratory said in a March 27 report. An accompanying infographic touts that "coal came to the rescue."

The latest study is just one of the agency's efforts to give a leg up to a U.S. coal sector that has offered political support and policy recommendations.

"Coal is very misunderstood," DOE's director of coal business operations, Joseph Giove, said during a speech at a late-February energy conference. "There are those that believe and there are those that proliferate the opinion that we don't need coal, we can just shut it off tomorrow, or we can phase it out over the very near future. Now, there's a name for this point of view. It's called 'fake news.'"

He also highlighted the challenge in building out new coal plants as the existing fleet gets older. The fuel is "dirtier" than other energy sources, he said, and systems for burning it cleaner and more efficiently are costly.

"The cleaner you want it, the more cleanup systems you put on, the more it costs," Giove said. "So the cleaner you make it, the more expensive it is, and one of the major benefits of coal then goes away."

As aging plants become uneconomic and new U.S. coal plants remain elusive, the DOE is working to boost early stage research and development to increase the efficiency and reliability of fossil fuel power systems, including coal plants.

"This is research that the private sector has less incentive to invest in but can help industry improve plant efficiency, which, in turn, helps reduce emissions," a DOE official speaking on background said. "DOE supports early stage research and development to enable the next generation of high-efficiency and low-emission coal-fired power plants that will be able to compete with other electricity sources and provide reliable, low-cost power."

John Coequyt, the Sierra Club's global climate policy director, said "coal's days are numbered" not only because of higher emissions but because coal does not fit well in a modern energy market that demands nonpolluting sources of energy that are cheap and flexible.

"Coal is a bad investment because it is expensive when compared to competitors like solar, wind and energy efficiency," Coequyt said.

As for the idea that the grid can go without coal being "fake news," Coequyt said those supporting a transition from coal do not expect to shut down all coal plants at once. The Sierra Club is aiming to retire all U.S. coal capacity by 2030 and has produced reports showing global coal plant development is slowing already.

While coal advocates have said the fuel is essential to a modern grid, multiple other groups and studies have suggested otherwise. PJM Interconnection, a focus of the DOE's report, concluded that while many coal plants have been taken offline, markets encouraged new efficient generation of all fuel types and helped to retain existing generation needed to serve PJM's electric power consumers.

In recent months, the DOE and the coal sector have often found themselves on the same page on energy issues, a major change from an Obama administration focused on taking action on climate change.

Early in the Trump administration, DOE Secretary Rick Perry visited Longview Power LLC's coal-fired power plant in Morgantown, W.Va., a new and efficient coal-fired facility. Perry said the plant exemplified responsible coal use and was the kind of project the president was talking about when he said he would revive the coal industry.

Later, the DOE released a report eventually used by the agency to drive a proposal to incentivize coal and nuclear power for baseload power attributes. The Federal Energy and Regulatory Commission rejected the idea, but the report released March 27 revisits concerns Perry expressed in the proposal, including the ability to meet U.S. power needs during severe weather events if coal plant retirements continue at the same rate.

Speaking at a recent industry conference, Murray Energy Corp. CEO Robert Murray called Perry's proposal to FERC the "single greatest action that has been taken" in his 60-year career to support power in the U.S.

Reports have shown Murray, an early Donald Trump supporter and donor, met with Perry in early 2017 and presented a plan that would "assist in the survival of our country's coal industry." According to a report from In These Times, a photo from the event showed the plan included a suggestion to require power markets to value attributes provided by baseload assets, "especially coal plants."

In a letter from Murray to a Trump aide that the Associated Press obtained, the coal CEO wrote that during a meeting with Murray and a FirstEnergy Corp. executive, Trump asked to relay a message to his economic adviser to "do whatever these two want him to do." Murray said that later, Trump told Perry, "I want this done," in reference to steps Murray had requested the DOE take to aid certain coal-fired power plants his mines serve, though the DOE has said it does not have authority to do so.

In recent months, the agency also proposed funding to help design small high-efficiency coal plants, contracted a frequent consultant to the coal industry for a study that ultimately suggested coal production could grow significantly in the U.S., and helped facilitate a deal between a coal exporter and a Ukraine customer.

Wells Griffith, an official who reportedly helped put the Ukraine deal together, was named to the National Economic Council as a top energy adviser. The DOE's special adviser in the Office of Fossil Energy, Doug Matheney, is a former coal industry advocate who recently visited a West Virginia industry conference where he said his "total purpose" for going to Washington, D.C., was to "help create coal jobs in the United States."