The Haney Energy Saving Group: Why Solar Power Is Booming But Will Never Replace Coal

In 2013, that figure more than doubled to 8.3 million MWh. And think back to those ten years ago, the United States generated only 6,000 Mwh from photovoltaic solar cells. Solar power is gradually approaching price parity with other energy sources such as coal, with full-cycle unsubsidized costs of nearly 13 cents per kilowatt-hour versus 12 cents for more modern coal plants.

So has the solar revolution finally arrived? Not really. Even after ten years of unbridled growth, solar power hardly has an impact on the US energy field.In truth, solar power is only equal to the amount of electricity the nation produces by burning natural gas derived from landfills. . And it’s just slightly more significant than the 7.3 million Mwh we get from burning human waste filtered from municipal sewer structures.

Ultimately, when you put together all of the energy sources consumed in this nation, the solar energy captured adds up to significantly less than 1 trillion Btu out of an annual total of 96.5 trillion.

The most important sources are traditional resources. Oil is still ahead of the rest by 36 trillion Btu, natural gas by 26 quads and nuclear by 8. Hydropower and biomass are still behind at 2.6 and 2.7 quads. The wind is only 1.5 quads. And coal, the great carbon-emitting monster of global energy sources, contributes 19 quads. That’s roughly 8 times all of the country’s wind and solar generation combined.

This is very important to remember in light of the EPA’s pending efforts to institute draconian new regulations governing carbon dioxide emissions from coal-burning electrical installations. Coal emits about 1.7 billion metric tons per year of carbon dioxide out of the total 5.3 billion tons per year.

The assumption, by lawmakers like President Obama, is that the nation can reduce carbon emissions by shutting down coal plants, while making up for lost electricity by using more natural gas and putting in more solar and wind plants. In fact, natural gas has replaced much of coal production. In 2013, coal production from US mines was reduced to 995.8 million short tons. The last time it fell this far was in the late 1980s. Coal production peaked in 2008 at 1.17 billion short tons.

The president is instituting significant measures to control heat-trapping pollution from coal-fired power plants and to increase renewable energy production at state facilities, using his executive powers to solve climate change problems and prevent debacles. partisans in Congress.

The deficit in demand has severely affected the largest coal mining companies in the United States. In the past five years, Peabody Energy BTU shares + 1.5% are down 36%, Arch Coal is down 67% and Alpha Natural Resources ANR is down -1.67% from 78%. In contrast, the shares of Solar City SCTY – 4.48%, up 400% in just 18 months.

However, coal is not dead. Certainly not close to that. “Even when the president is against coal, it’s like you’re against City Hall. But the truth will win,” says Andrew Redinger, managing director of KeyBanc Capital Markets, which has done investment banking work for coal companies and solar developers. “I see that coal will recover soon. The best thing for coal will be when we start exporting natural gas.”

This winter proved that “announcing the death of coal is premature,” says Bob Yu, an analyst at Bentek, a division of Platts. “Winter showed that natural gas is used for heating. Coal use increased significantly this winter due to purchases of natural gas by retail buyers.”

Consider what happened last winter during the cold grip of the polar vortex. In January, the natural gas shortage in the Northeast led to price spikes above $ 100 per mmBTU in some markets. Spot prices for electricity in the Mid-Atlantic region peaked at $ 2,000 per megawatt hour for a short period. Natural gas saw such a high demand for residential furnaces that power companies couldn’t even get what they needed for their electrical installations. Some had to turn to backup emergency generators that use much more expensive oil. So far the so-called excess shale gas.

Natural gas prices have already tripled in two years. And the shift from coal to gas has already been reversed. From constituting 40% of the national electricity mix in the first quarter of 2013, the share of coal grew to 41.4% in the first quarter of 2014. Natural gas fell from 25.6% of total energy production ago one year to 23.8% in the first quarter. quarter of 2014.

This will dampen what has been a slow move away from coal. Power companies have been shutting down old coal-fired facilities ahead of stricter emissions regulations, with 4.7 gigawatts of coal capacity shut down in 2013, up from 10.3 GW in 2012. Another 60 GW of additional shutdowns will occur by 2020. Analyst Yu says, “That may sound like a lot, but not in relation to the whole power combination.” The plants to be closed are many years old and not yet equipped with the expensive “scrubbing” technology that can reduce harmful emissions by 90%, even when burning low-quality sulfur-containing coal.

In large power facilities in the Midwest, where coal still supplies more than 70% of the fuel, the costs of converting coal to power are so low that we will see a negligible shift to natural gas, especially with gas prices tripling. in two years. In fact, the issue is whether shale gas drillers will have the ability to fill depleted gas storage before next winter. We should be fine. After all, the predictions say that there is more than an ample supply of natural gas available where possible. Once the pipeline obstacles are removed, there should be enough gas for everyone wherever it is needed.

So what would require the United States to replace all coal-fired power facilities (totaling 19 quads of power a year) with solar power and natural gas? Let’s analyze it. Assuming a bonanza in natural gas turbine construction, coupled with an increase in gas power plant operations at full capacity, we could significantly improve gas power generation by 50% in five years, supplying about 13 quads. To offset the remainder of coal’s share of solar energy, it would be necessary to increase the amount of electricity we get from solar energy by roughly six times to roughly 50,000 megawatt hours per year. Achieving that would mean 20% compound annual growth in solar installations for a decade. Or almost 9% CAGR for 20 years.

This is feasible in the short term. Electricity production from solar photovoltaic power generation nearly tripled from 2009 to 2010. It more than doubled in 2011. And more than three times in 2012. Achieving that growth rate is not difficult when you are young; but the bigger the base, the more difficult it becomes. Wind power is a good example: it managed to grow 19% last year from a much larger base, to 168 million Mwh. But remember: both wind and solar power must overcome the geography hurdle: Developers build systems in the windiest and sunniest areas first. The worse the location, the more panels or windmills you will need to get the same amount of electricity. That is why it is less important how many megawatts of solar capacity are built and more important how much actual electricity those solar panels produce.

For all the “grid parity” discussions, the simple truth is that even mixed with much more power generation from natural gas, renewables will take many decades to completely replace coal. And the irony will be that as the demand for coal declines, it will become less and less expensive, making it even more attractive for coal-fired electrical installations that will last through the coming storm. The direct cost of producing electricity from coal is 2.5 cents per kWh.

It is encouraging to see that even some veteran environmentalists have proven to be realistic when it comes to coal. Armond Cohen, CEO of Clean Air Task Force, has focused for three decades on minimizing the environmental impact of the global energy system. However, in an article published late last year, he stated that “coal is not going to disappear.”

Coal will be crucial for economic modernization in the developing world, where most of the energy supply will be installed in the next three decades. Coal will also play an important residual role in much of the OECD. Coal is not going away. We need to start using it without emitting significant amounts of carbon dioxide, and quickly. If we don’t, the risk to the global climate is great and possibly irreversible. It’s that easy. People who think otherwise, and just wait for the death of coal, are not admitting the facts.

Let me be blunt and clear: Except for environmental challenges, this expansion of the coal-fired power boom is a desirable development; Reliable energy is a correlate of economic growth and human development. But let me be equally clear: the carbon produced by this expansion is unacceptable and puts us on a path of serious collision with our global climate.

Coal has gotten vastly cleaner over the last generation. And new and better ways to get energy from coal will be discovered without producing dangerous by-products and without affecting the environment. It is scalable and reliable in a way that renewable energy sources simply are not. So unless we’re willing to endure blackouts that freeze Grandma in the winter and melt her in the summer, coal will remain a faithful source of power generation in the United States for many years to come.