A fleet of coal-fired plants built between the ‘50s and ‘70s is reaching the end of its long life in the Midwest. The news is an indication of the challenging future facing Wyoming coal.
From Wisconsin to Texas, Midwest states provide the bulk of the demand for Wyoming’s coal.
The Cowboy State dug about 400 million tons of coal from the ground in 2014, the year before the bust, according to federal counts. In that year, states like Illinois and Texas each received about 15 percent of the state’s coal shipments for use in power generation, according to the Wyoming Mining Association.
As that market slowly erodes, Wyomingites hope their work to develop clean coal technology keeps coal viable in the future, said Jason Begger, director of the Wyoming Infrastructure Authority.
The problem is twofold, he said. The most obvious issue is that Wyoming needs a customer base to sustain its coal. However, there is another aspect, and it’s equally important. Wyoming has dedicated itself to researching and developing carbon capture technology. Divisions at the University of Wyoming work toward this endeavor, and the state has entered into a public-private partnership in Gillette, where the Dry Fork Power Station, owned by the Basin Electric Power Cooperative, will provide scientists with a testing ground for new technologies.
However, if new coal plants don’t start replacing the old ones, all that work and investment will be for naught, he said.
The hope from some in Wyoming is that carbon capture technologies will be cheap enough, soon enough, to encourage utilities to build cleaner coal plants. There is also a degree of hope in the new president. But the direction is uncertain, Begger said.
“The companies are looking at the long-term price trends,” he said. “With the new administration, what is their approach going to be? There is some really great technology out there.”
It’s feasible that newer plants will be the wave of the future. And there are places in the country, and the world, where that investment is happening.
Many are skeptical.
In a recent paper by the Brookings Institution, a Washington D.C.-based public policy think tank, analysts said the trend toward natural gas plants is growing, as are renewables like wind farms. That trend is driven by markets and investor choices, and will not be influenced by the new presidential administration, they said.
“The frequency of coal retirements highlights the speed at which the nation’s utilities are changing the energy mix by replacing coal with natural gas and renewables, particularly wind,” the study stated. “Few new coal plants are in the works to replace those that are being shut down.”
Of the new power generation planned for the next eight years, only 1.5 gigawatts out of 100.5 gigawatts are from coal, according to Brookings.
The closing plants don’t tell us anything new about the long-term trends for Wyoming coal, said Rob Godby, economist at the University of Wyoming’s School of Energy Resources.
“That’s why projections for PRB coal have this kind of long steady decline,” he said. “It doesn’t fall off a cliff … but over time [the plants] are going to wear out, and they are going to be replaced.”
The price is the problem, he said.
“The two cheapest sources of generation right now to build are wind and natural gas,” he said. “You could halve the greenhouse gas emissions and build a plant that’s not even as expensive as a normal coal-fired power plant if you build a natural gas plant or a wind farm.”
However, there is time left for coal in Wyoming, and Western coal is still expected to make up a significant part of the electricity portfolio for some time to come.
Many of the plants built to use Wyoming coal were built after the ‘70s, after the implementation of the Clean Air Act, which favored the lower-sulfur Western coal, Godby explained.
Those plants have years ahead of them, which fits into expectations of the coal industry’s future, he said.
However, the overall trend is not promising. The Energy Information Administration projects that coal usage will shrink nationally from 40 percent to 27 percent by 2030.
And if Brookings is correct, and carbon capture is not cheaper, the closing plants will be replaced by natural gas and renewable generation, further shrinking one of Wyoming’s key industries.