Why The Coal Industry’s Arguments Against New Clean Air Standards Are Bogus
Written by Adam James
A new paper from Dr. Susan Tierney at the Analysis Group confirms that Americans do not have to choose between clean air, a liveable climate, and reliable electricity.
The coal industry has been lobbying intensely against new clean air standards and regulations for carbon dioxide emissions. There are two important takeaways from the report that debunk the coal lobby’s arguments against EPA regulations:
1. Despite coal plant closures, PJM (the largest grid operator in the country) actually exceeded its targeted reserve margin — capacity above peak levels — following its annual auction.
2.Wholesale electricity rates have decreased in since 2009 and are projected to drop 10 percent from 2011 levels by 2015.
The people who operate our grid are doing it reliably and with less coal. Last week, the Energy Information Administration found that coal’s share of electricity generation had dropped from 44.6 percent in Q1 of 2011 to 36 percent in Q1 of 2012. Yet the lights stayed on.
Why It Matters
There are two things consumers want from a utility: to turn on the lights cheaply and to do it without harming public health or the environment.
The idea that we can’t have both is a fallacy. Proponents of coal have conducted a very aggressive (albeit, incorrect) messaging campaign that goes something like this:
1. Coal is cheap
2. Cheap coal makes cheap electricity
3. Therefore, reducing reliance on cheap coal means more expensive and/or less reliable electricity
This argument has come up repeatedly as a reason to reject EPA air quality regulations to limit coal pollution, including the Mercury and Air Toxics Standard (MATS) and the Carbon Pollution Rule. Now, most folks believe that these regulations are important — even if they do lead to slightly higher costs, since public health is a serious concern.
But we don’t have to choose between higher costs and less pollution, as Dr. Tierney explains.
Tierney looks at recent results from PJM’s capacity auction to see the impact of coal plant closures. PJM holds an annual auction where it “procure[s] resources needed to guarantee reliability three years into the future.” These auctions allow companies to competitively bid into the market to secure contracts for future generation.
For coal plants affected by regulation, this will theoretically make their operating costs higher and impact their ability to bid. Other resources like nuclear, renewables, and natural gas would then have the opportunity to step up their market share if they can provide a better deal and reliable delivery. In the auction process, PJM shoots to have 15 percent reserve margin, which is the ability to deliver power over peak demand.
If the coal lobby’s argument against regulation were correct, one of two things should have happened: Either electricity should be more expensive, or it should be less reliable to deliver.
But neither of those scenarios came to be. In fact, it’s quite the opposite: electricity prices based on contracts secured at the auction will actually be 10 percent below 2011 prices, and PJM overshot its capacity margin by 5 percent.
Once again, the scare tactics from the coal industry and its allies have been proven false.
This post was originally published by Climate Progress.
Photo from calignosus via flickr