Tuesday, July 16, 2019

New Trump emissions rule makes it easier for power plants to comply, but isn't slowing the decline of coal

Despite the Trump administration's efforts to help the coal industry, the U.S. coal business has continued to decline steadily since 2014. Even the administration's latest effort, a scaled-back replacement of the Obama-era Clean Power Plan, to lower compliance costs for power plants, doesn't seem to be helping much.

Though the new Affordable Clean Energy rule reduces the government's authority to regulate carbon dioxide, many power-plant operators who've been planning to shut down coal-fired plants over the next several years say the rule hasn't changed their minds. "Just days after the ACE rule was finalized, the Tennessee Valley Authority released an integrated resource plan that recommends further retirements of coal-fired power plants such as its 1,017-MW Paradise coal-fired plant, despite the president specifically advocating for keeping the TVA's plants open," Taylor Kuykendall, Darren Sweeney, and Ashleigh Cotting report for S&P Global Market Intelligence.

Though the new rule may slow the decline in coal-fired power generation, it won't stem the surge in energy production from natural gas and renewable energy, according to financial site Fitch Ratings.

"While the economics of natural gas and renewable energy compared to coal are driving much of the shift, Duke Energy Corp. spells out that part of the issue is growing public concern about climate change," S&P Global reports. Duke Energy Indiana wrote in a July report on its plans, "Carbon regulation is more a matter of if, than when, and warrants consideration in the plan. Given the magnitude of the change that would be driven by substantive carbon regulation, a measured transition towards a less carbon-intensive future is prudent."

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