What’s the best way to phase out the huge fleet of aging coal plants?
The anti-coal movement has a lot to celebrate right now. Of the 151 coal plants on the drawing boards as of the May 2007 report by the Energy Department, 82 have now been abandoned, blocked, or placed on hold. In September, Juliette Jowitt of the UK’s Manchester Guardian wrote:
In a few years, the backlash against coal power in America has become the country’s biggest-ever environmental campaign, transforming the nation’s awareness of climate change and inspiring political leaders to take firmer action after years of doubt and delay. Plants have been defeated in at least 30 of the 50 states, uniting those with already strong environmental records, such as California, with more conservative areas, such as the southern and central states.
Meanwhile, replacement scenarios such as Google’s Clean Energy 2030 plan and WeCanSolveIt.org’s Repower America plan have detailed how coal power can be replaced within two decades with climate-friendly alternatives.
But there’s one more important piece of the equation left to be tackled: what to do about the large fleet of existing coal plants. These old plants, many born in the Baby Boom years of the 1940s, ’50s, and ’60s alongside their human boomer counterparts, won’t just go away on their own. In fact, many of them are working harder than ever. Cheap to run, they produce power for roughly 3 cents per kilowatt hour, which makes them cash cows for the utilities that own them. Typically they enjoy strong support from communities that depend on them for jobs, and shutting them down will be even harder than stopping new coal plants.
Before getting into more detail about these plants, let’s step back a moment and review why retiring the fleet of existing coal plants is vital. Climate scientists have singled out coal as the worst of the fossil fuels, first because it is more carbon intensive than other fuels and second because reserves are much larger. A recent paper by Pushker Kharecha and James Hansen estimates that if coal emissions can be completely phased out, carbon dioxide levels won’t get above 446 parts per million, even assuming little progress in curbing oil and gas. On the other hand, if coal is not phased out, the study projects carbon dioxide peaking at a dangerous 563 ppm.
In a letter to Nevada governor Charles Gibbons, Hansen described phasing out coal emissions as “80% of the solution to the global warming crisis."
The existing coal plant fleet consists of roughly 500 plants (1,500 generators), providing approximately 336 gigawatts of electrical generating capacity.
In examining these plants, the first thing that pops out is how old most coal plants are. These are not spanking-new industrial investments. Only 39 GW (12 percent) were built since 1985. The median coal plant was built in December 1964, making it close to 44 years old. Nearly four out of every ten coal plants were built before John Kennedy became president. Nearly one of every ten was built before the Korean War.
Because of their age, these plants simply aren’t candidates for carbon capture and storage retrofits — even the most ardent proponents of CCS technology don’t think so. The only option is to make sure they are phased out over the next two decades, and that means starting now to develop scenarios and programs.
Here’s one possible scenario: a “reverse seniority layoff” program that would close plants according to their age, starting with the most geriatric plants and moving slowly towards plants in middle age. Here’s one possible schedule: start immediately in 2009 by retiring coal plants that are presently in their sixties and seventies. Then from 2010 to 2014 retire plants as they reach their fifty-fifth birthday. From 2010 to 2019 retire plants as they reach fifty. And finally, from 2020 to 2029, retire plants when they reach forty-five.
The beauty of a “reverse seniority layoff” is that it would allow plant owners to fully amortize their investments, and it would also ample time to implement programs for making sure that coal plant workforces and communities are taken care of. Yet implementing it would result in the elimination of 95 percent of the existing coal fleet by 2030.
One principle should be front-and-center in any plan to phase out coal plants: workers should not bear the brunt of the adjustment. Currently, about 174,000 workers depend directly or indirectly on the existing coal plant fleet: 60,000 at power plants, 83,000 in mines, and 31,000 in transportation. Out of the total U.S. workforce of 142 million (2005), that’s a trifling 0.12%. However, this workforce is often the mainstay in many otherwise faltering small towns.
The jobs problem will be considerably less serious if phase-outs are done in an orderly manner and scheduled well in advance. The average age of power plant workers is 48 and the typical power plant loses half its staff each decade due to normal attrition. This means that when multiple generating units occupy the same plant site, older units can be retired without layoffs as the workforce naturally shrinks.
In many ways, the political and social challenges that need to be overcome in shutting down a coal plant are akin to those involved in shutting down a military base, and fortunately a solid policy model has been developed known as the Base Realignment and Closure (BRAC) system. That process has created a political “safe zone” allowing over 350 military bases to be closed, while at the same time helping communities readjust.
Optimistically, we might assume that one or another of the pending pieces of federal climate legislation, once enacted, will automatically lead to the closure of the existing fleet. But this is an iffy assumption given how cheap many of these existing coal plants are to operate. One study of the Pacific Northwest, for example, showed high carbon prices up to $44 edging out natural gas rather than coal. That’s a perfectly acceptable outcome from the standpoint of market efficiency, but from a climate perspective shutting down gas while keeping coal would be the wrong outcome because coal is far more carbon-intensive a fuel than natural gas.
Is it better to phase out coal plants via an overt, “command-and-control” process, say through a federally managed program like BRAC; or is it better to think in terms of squeezing out plants through rising carbon prices (if high enough) or ratcheting emissions standards? The benefit of the overt approach is that it can proceed on a careful schedule that focuses on minimizing impacts; the problem with it is that it applies a central planning model to an industry organized into hundreds of private and public entities. The latter approach adheres to more familiar regulatory models, but the risk with it is that loopholes and grandfathering will allow too many plants to survive, just as they have already survived previous waves of environmental regulation.
Overall, the problem of the existing coal plant fleet is a knotty one, and the fact that coal usage is distributed very unevenly across the country makes it all the more difficult. Asking a utility that gets 15% of its power from coal to shut down its old coal plants is one thing; expecting a utility that gets 95% of its power from coal to shut down its whole generating portfolio is something altogether different.
Even so, the problem of phasing out the existing coal plant fleet must be tackled. Although it involves huge challenges, each can be overcome through careful, principled policy. What’s not acceptable is a policy vacuum.