Part of our special coverage of Climate Week NYC 2019.
Today, United Nations Special Envoy for Climate Action and former New York City Mayor Michael R. Bloomberg announced his support for the U.N. Secretary General António Guterres’ initiative to stop the development of new coal-fired power plants after 2020. Earlier this year, Bloomberg also announced his intention to invest $500 billion to shut down remaining coal plants in the U.S. by 2030.
These initiatives and investments mark the latest efforts to hasten the demise of already-weakened coal-fired power in the world’s energy portfolio. Coal as an energy source has already been on the decline for several years. It no longer makes economic—or environmental—sense to invest in what is essentially a 1970s energy strategy.
Coal is the fuel of the past. The rise of cheap natural gas accelerated the cost-ineffectiveness of coal and significant decreases in the cost of solar and wind have led to predictions of bettering global grid parity with fossil fuels by next year. Combine that with increased energy efficiency across all sectors (residential, commercial, and industrial) and you are left with a poor economic outlook for coal.
Other factors are also important to consider. In a changing climate, with water stress and scarcity increasingly a concern, thermoelectric power is responsible for about 40 percent of all U.S. freshwater withdrawals. That number has decreased in recent years as the oldest coal plants are taken offline and energy efficiency, solar PV, and wind deployment have increased, which all use little to no water. Coal makes up about 27 percent of the U.S. electric generation (considerably less than just ten years ago) and is one of the thirstiest fuel sources. Technology aimed at making coal less dirty, such as carbon capture and storage (CCS), has turned out to be much more expensive than going with a cheaper electricity source (and CCS also places additional stress on already-stressed water supplies).
Despite all this, shutting down old coal plants and preventing new coal plants from being built is complicated beyond just the basic economics of coal itself. Transitioning utilities to more renewable energy, in particular incorporating distributed energy resources into its business model, will require some out-of-the-box thinking by the utilities themselves. The traditional business model relies on selling kilowatt-hours of electricity, so restructuring the business model to sell a service (distributed generation, demand response programs, and so on) rather than a commodity will be key. Some utilities have thus far resisted this change, even in the face of cities and states adopting clean energy goals.
Further, transmission and distribution systems will need investment to enable them to better dispatch demand, improve grid operations, and better integrate renewable energy and storage. Finally, while regions with heavy coal production have already faced significant stress related to job loss, there is a huge opportunity to retrain workers, but it will require significant investment in money and other resources, not just sound bites on campaign trails.
Bloomberg’s announcement also calls on the private sector, and utilities in particular, to undertake some of these transformative actions and notes that his foundation and philanthropies are working with developing countries to help them leapfrog into the clean energy economy. In order to see this goal through in the U.S., sustained interest and investment from the private sector—utilities, not least among them—and the public sector—climate change policies and workforce development—are essential.
Image credit: Diana Parkhouse/Unsplash
Kate is a writer and policy wonk, with a focus on water, clean energy, climate change and environmental security. She spent over a decade running energy-water nexus and energy efficiency programs at Environmental Defense Fund as well as time at the U.S. Departments of Energy and Defense, U.S. Government Accountability Office, and state and federal legislatures. She serves as an Advisory Board member of CleanTX, which aims to accelerate the growth of the clean tech industry in Texas.