Four Things That Are Killing Coal

Although President Trump has been promoting a pro-coal energy agenda, there are four things killing coal that the administration may not be able to remedy.

That was the message Bill Ritter Jr. delivered to American Society of Mechanical Engineers (ASME) Power and Energy Conference & Exhibition attendees during his keynote address on June 27. Ritter is the former governor of Colorado, founder of the Center for the New Energy Economy at Colorado State University, and author of Powering Forward: What Everyone Should Know About America's Energy Revolution.

"In the United States of America, our power system-our power portfolio-is changing in a fairly dynamic way," Ritter said. "I would argue, in spite of our November election . . . that transition is still happening."

The four things Ritter said are likely beyond Trump's control: state-level actions, municipal-level responses to climate change, corporate power-purchasing activities, and bipartisan cooperation outside of Washington, D.C.

1. State-Level Actions

Although Ritter noted that Congress has not passed a single piece of comprehensive energy legislation in the past 10 years, he said about 4,000 pieces of energy legislation get introduced annually on the state level, of which as many as 600 have gone on to become law each year. In other words, in the absence of federal leadership, states have taken environmental policy and climate policy into their own hands.

States began to implement renewable portfolio standards (RPSs) and energy efficiency resource standards in the late 1990s and early 2000s. Today, 31 states have RPSs. If you combine the populations from those states, Ritter said the group would rank as the fifth-largest country in the world.

In recent years, several states have increased goals far beyond their initial targets. For example, California, Oregon, and New York have all set goals of reaching 50% renewables, and Hawaii is shooting for 100% renewables, albeit by a different deadline. Other states are starting to push the envelope too. Those ambitions are putting pressure on the coal power industry.

"We did an analysis of the planned retirements of coal-fired generation in the western United States," Ritter said. "By 2037 or 2038, 85 to 90% of the coal-fired generation is planned to retire."

According to Ritter, the expanding natural gas market is another driving factor of coal's demise, with energy efficiency and energy conservation playing a minor role. Furthermore, the transition is not just taking place in the West, it's happening throughout the U.S.

2. Municipal-Level Responses to Climate Change

Leaders from more than 250 cities met in Miami Beach, Fla., June 23-26, for the U.S. Conference of Mayors' 85th Annual Meeting. Although many topics received attention, energy and the environment were two in which multiple resolutions were adopted.

Among the more notable decisions, the group agreed to support a "cities-driven plan to reverse climate change," which passed with only five "no" votes. Likewise, the mayors approved a resolution supporting "cities establishing a community-wide target of powering their communities with 100 percent clean, renewable energy by 2035," with only two dissenting ballots.

Although those votes may seem more symbolic than substantive, the fact is that many municipalities do operate their own utilities. Ritter said some of those are taking their climate plan and utilizing it in their utility resource planning process.

"My city-where Colorado State University is-Fort Collins, Colorado, has its own municipal utility, plus it has a climate plan for 2030, 2035, and 2040," said Ritter. Cities such as San Antonio, Texas, and Austin, Texas, do too. And even in cities that don't have municipal utilities, the companies that serve those cities must pay attention to the climate plans.

"In Denver, Colorado, we don't have our own municipal utility, but it's 20% of Xcel's load. Xcel has about two-thirds of all the power in the state of Colorado. And when Denver put in place a climate plan, then Xcel Energy had to look and say, 'our resource plan has to match their climate plan,' " Ritter said.

3. Corporate Power-Purchasing Activities

Private purchasing of power by large corporations is also taking a toll on the coal power industry. It may have started with companies such as Google and Amazon, but many more Fortune 500 companies have set their own renewable energy goals since the first long-term contract was signed in 2010.

In November 2016, Microsoft announced it had agreed to purchase 237 MW of wind energy from projects in Wyoming and Kansas. When combined with previous purchases from Illinois and Texas wind farms, the company had more than 500 MW under contract.

"Microsoft is committed to building a responsible cloud, and these agreements represent progress toward our goal of improving the energy mix at our datacenters," Brad Smith, president and chief legal officer at Microsoft, said in a company press release. "Our commitment extends beyond greening our own operations because these projects help create a greener, more reliable grid in the communities in which we operate," he added.

Ritter believes these tech giants and others are looking to the future and trying to utilize clean power as a positive public relations tactic. He noted even Las Vegas casinos are doing it.

"The governor of Nevada just signed nine different clean energy bills. The people of Nevada passed an initiated measure on the ballot that was called 'Energy Choice.' It basically says that the customers of Nevada can choose where they buy their energy. It was run by casinos," Ritter said. "Imagine this, casinos-MGM Grand with a 100% renewable energy target-this is corporate purchasing having its impact on markets."

4. Bipartisan Cooperation Outside of Washington, D.C.

Ritter said that if people only pay attention to what's happening in Washington, D.C., it is easy to conclude that the country's political system is broken. Very little compromise seems to take place in Congress and votes are generally split along party lines.

However, Ritter said if you look at state, city, and local governments, bipartisanship is alive and well. He pointed to the Governors' Accord for a New Energy Future-a coalition formed by 17 state governors, including six Republicans-as an example.

The coalition seeks to diversify energy generation and expand clean energy sources, modernize energy infrastructure, and encourage clean transportation options. The group believes that planning for the energy transition and working together to make transformational policy changes will help secure a stronger national energy future.

According to Ritter, Michigan Gov. Rick Snyder was a driving force behind that state's move away from coal and toward wind, solar, and natural gas. "That's a Republican governor doing it," Ritter said. "Doing it really because he believes in protecting the consumers and the ability to do business in a different way than they have in the past."

One of the largest utilities in Iowa-MidAmerican Energy-has a 100% renewable vision for customers in that state. At a news conference last year announcing the company's $3.6 billion Wind XI project, Republican Gov. Terry Branstad said, "Wind XI puts Iowa on track to be the first state in the nation to generate more than 40% of its energy needs from wind power-far ahead of any other state."

Branstad welcomed MidAmerican Energy's effort to expand renewable energy in Iowa and thanked the company for investing in the state. "Every wind turbine you see in Iowa means income for farmers, revenue for counties, and jobs for Iowa families," he said.

Ritter said people throughout the U.S. are realizing "There are reasons conservatives should look at this energy transition and not push back against it, but be a part of it. Some of that may have to do with business opportunities. Some of it may have to do with just where the rest of the world-rest of the country-is going. Some of it may have to do with the Paris Agreement or climate change. The reasons may differ, but across the country we see a growing interest by conservatives in trying to do this in a bipartisan way."

As a result, Ritter doesn't think the Trump administration will make an appreciable impact on coal-fired generation or fossil-fuel production in the U.S. "I think the markets are going to overwhelm any pushback that the administration in Washington, D.C., can do," he said.

-Aaron Larson, executive editor (@AaronL_Power, @POWERmagazine)

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