Coal on the Decline
Articles out of Florida say that the next planned coal fired power plant has been cancelled. This markes a milestone of sorts, since it was partially an economic decision. The Seminole Electric Cooperative has cited…
– Uncertainty – there might be new fees on carbon intensive fuels or coal in particular
– Lower cost Natural Gas – the cleaner fuel seems more abundant with less risk of carbon tariffs
– Energy efficiency measures (from a scaled back economy and from Federal incentives) reduce demand
– Alerternative Power, especially solar, is cheaper and in greater demand from power consumers
To my thinking, the cost of coal must now suffer with the additional cost of uncertainty in regulation when competing with the other energy sources.
Most alternative energies don’t face the kind of minimum start-up size issues that coal and gas face. Installing a ten megawatt facility of wind or solar one megawatt at a time isn’t much more expensive than installing it all at once. This allows a utility more financial flexibility in a fiscal landscape with less freely flowing capital. There might even be additional savings from falling wind & solar prices during an extended project. And there are no fuel costs with wind or solar, which brings in a owning vs. renting calculation.
It is analogous to weighing whether one should rent an entire home, or, for just a little bit more per room, buy that home one room at a time as your budget allows, while being able to fully utilize each of the rooms one has purchased. What resident wouldn’t prefer the second option? I think the owning vs. renting model will be a major motivator for the more fiscally astute companies and landowners to chose wind & solar.