Editor's Note: A version of this post was originally published on the IEEFA blog.
By Jim Flood
Energy Finance 2015, a four-day training program for environmental advocates and attorneys, convened last week at the New York University School of Law.
On day two, Paul Coster of JPMorgan Chase made headlines by saying, “2014 was a historic year for investments for renewables.”
Coster knows whereof he speaks as the lead alternative-energy analyst for JPMorgan Chase and a seasoned Wall Street figure who has a deep understanding of these markets.
Highlights from his talk included:
Dumoulin-Smith said in a Monday afternoon presentation that a cap-and-trade exchange for carbon is inevitable and that it may first emerge regionally, and could do so without a government mandate.
Renewables are now mainstream, he said, as the economics of wind and solar continue to improve and as energy companies engage en masse in “de-risking” by becoming increasingly diversified through investments in wind and solar. Much of those investments, he added, will be driven by persistently low interest rates, and he added this caveat: low rates may not last forever.
Enforcement of EPA air-quality standards around “criteria pollutants” — Dumoulin-Smith pointed to these EPA standards — have driven the trend toward more and more retirements of coal-fired plants.
“If there had been no environmental movement between 2005 and 2015, a lot more plants would have been built because no one would have been speaking truth to power,” Schlissel said. “You can’t quantify it, but certainly it’s essential for people to be there doing what all of us in this room do.”
Schlissel noted that out of 249 coal plants that were scheduled to be built in 2007, 183 have been canceled, 22 were completed and 44 are in limbo. The scheme faltered, he said, because the plants became economically untenable due to skyrocketing construction costs, the rise of cheap natural gas, widespread citizen opposition and increasing skepticism on the part of investors.
Additional perspective from Tom Sanzillo, IEEFA’s director of finance: “Anything we could use to disrupt the ability of the industry to get these coal plants built, we used,” including litigation, talking directly to state governors, and meeting with bank officials to discuss the financial risks of investing in coal-reliant assets.
Zinser noted that Peabody built and sold the plant at a time in which most cities and towns in the region were moving away from coal-fired electricity -- and that Peabody marketed it anyway as a low-cost, stable source of energy. Quite the opposite has happened.
While the original estimate for the construction costs was $2.5 billion, Zinser noted, the final cost was $5 billion, the debt incurred was double the original estimate, and 50 percent of the cost of electricity from Prairie State now goes toward debt service.
Zinser said community activists in Batavia have helped initiate the following:
Image credit: Flickr/Lawrence Murray
Jim Flood is an IEEFA contributor.