(Platts, May 14) – The US coal fleet provided 92% of the surge in electricity required by power providers east of the Mississippi River during the winter of 2014, according to a study released Wednesday by the National Coal Council.
Fred Palmer, a senior vice president of Peabody Energy, told an audience gathered for the NCC’s Spring Meeting in Washington, DC, that utilities such as AEP, Southern Company and the TVA all had to lean heavily on their coal-fired units, a large percentage of which are slated to close in the next few years due to government mandates.
Palmer said that while the coal industry shares the government’s desire to reduce emissions and improve coal-fired plant efficiencies, it’s important to keep coal in the nation’s electricity mix.
In particular, Palmer highlighted the jump in natural gas prices during the winter as well as the increasing amount of new and announced natural gas-fired units as risks to the nation’s grid reliability.
“The best way to get to $10[/MMBtu] gas is to plan for $4[/MMBtu] natural gas,” said Palmer.
Palmer said the study emphasizes the reliability of the nation’s coal-fired fleet as well as its ability to provide low-cost electricity.
He said the industry is happy to collaborate on technological advances that can bring down the cost of carbon capture and storage but cautioned that many US coal plants were not built near oil fields where the carbon dioxide can easily be sold to petroleum producers for enhanced oil recovery.
Palmer also suggested that if the government is serious about CCS technology that it ought to socialize the cost, through tax incentives, like it does with wind and solar projects.
The NCC is a federal advisory committee that reports to the US Secretary of Energy, and it’s membership is open to the public. It was established in 1985.
