Today, in its Energy Source blog, the Financial Times looked at the possibility of a broad switch from coal plants to natural gas power plants.  It cites Bernstein Research as predicting that this shift will come despite uncertainty over greenhouse gas emissions regulation.  In particular, existing provisions in the Clean Air Act are noted:  the first that Eastern states are currently allowed to trade sulfur allowances among themselves—something that is likely to come under a state-by-state restriction next month, and second that plans to curb mercury emissions by insisting coal plants use the best technology available could mean that all coal plants would need to install sulfur dioxide scrubbers (at a cost that Bernstein Research considers “prohibitive.”)

Ms. Mackenzie rightly highlights that “there are a few unknowns in this equation,” and that while regulations are broadly going ahead, “their exact execution isn’t certain.”   Natural plant retirements are also highlighted as having a greater effect on coal consumption than expected EPA regulations of sulfur dioxide and mercury.

A couple of other issues can be highlighted that offer a little more thought on the question and its premise:

Macro-Perspective:  U.S. electricity consumption is expected to rise by 28.8 percent over the next 25 years.  Today, coal provides over 40 percent of this electricity.  It is used as baseload power (running essentially all the time) and is the cheapest form of electricity generation.  One has to question whether “death” is really even an appropriate word.  There is little chance that a major shift away from coal generation can occur without seriously affecting both the supply and cost of U.S. electricity (which, of course, every sector to some extent relies on for energy).

A More Micro-Perspective:  The Congressional Research Service recently released a paper highlighting some of the factors that might affect the potential of natural gas power plants to displace coal power plants.  The premise being that a large proportion of natural gas generating capacity is underutilized (42 percent).  It notes that if utilization could be doubled, 19 percent of coal power emissions could be displaced.  However, it outlines a number of reasons why such displacement is unrealistic.

Transmission:

Plants rely on different paths to move power and there is no guarantee that a natural gas power plant could send to the same loads.

The interconnections are relatively isolated and surplus in one cannot be used in another.

Dispatch:

The concept of displacement assumes natural gas power is underutilized or idle when coal is operating which is not necessarily the case (in fact they follow a similar utilization pattern—see graphic).

Prices:

I is historically very difficult to forecast what the effect would be on prices of both coal and natural gas.

The paper for example provides hypothetical estimates displacement based on power plant proximity.  However, even for coal plants within 25 miles of a natural gas plant, just 9 percent of total U.S. coal generation and 5 percent of the carbon dioxide emissions could potentially be displaced.

From an emissions perspective there is no doubt that natural gas currently has an advantage over coal in electricity generation, but coal nonetheless remains a fundamental source of energy in the United States.  We need to address both energy and climate security, and understand that there are times when one is improved at the expense of the other.  This is a careful balancing act that neither heavy-handed regulation and idealistic hopes, or a complete absence of intervention can solve.  A common-sense approach that focuses on demand, supply, efficiency and diversification is required.

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