A new analysis from the Institute for Energy (IER) research shows, despite what California’s politicians say in public, coal-fired power plants still provide significant, critical supplies of electricity to much of the state.
Recent state laws imposing energy conservation schemes upon ratepayers and reducing carbon dioxide emissions from energy use within the state have left the state with the 5th highest residential electricity prices in the nation and the nation’s highest gasoline prices. Research shows, these prices are likely to rise even higher both absolutely and in comparison with prices in other states, as restrictions on carbon dioxide emissions increase and the state weans itself entirely from the least expensive source of electric power, coal fired power plants, as required by law.
The few coal plants remaining in California make up only 0.4 percent of the state’s generation in 2014, however, California imports electricity from neighboring states and as much as half of Southern California’s electric generation comes from coal-fired generating plants in Arizona, New Mexico, and Utah. In addition, California is one of the nation’s largest industrial consumers of coal. In 2013, it was the eighth-biggest industrial coal user, consuming 1.4 million tons.
Southern California Coal Dependent
According to a study by SNL Financial, three out-of-state coal-fired power plants are providing up to 50 percent of the electricity for Southern California: the Intermountain Power Project in Utah, the San Juan plant in New Mexico and the Navajo plant in Arizona. The three plants received a total of 19.6 million tons of coal in 2014 and 10.1 million tons of coal through July of 2015.
California’s carbon law AB 32 requires the state’s greenhouse gas emissions return to 1990 levels by 2020, setting in-state plant performance standards too stringent for conventional coal units to meet and making it illegal for California utilities to get coal power from out-of-state plants by 2027. As a result, the plants will need find new markets for their energy, be shuttered or converted to natural gas.
For instance, in order to keep selling electricity to California, Utah’s Intermountain Power Project anticipates converting to natural gas by 2025. The Utah power company sells about 90 percent of its power to six California municipalities.
As California’s utilities and municipal users wean themselves from coal, their electric power rates, already among the highest in the nation, will rise. An IER report on the levelized cost of existing electric plants shows a new natural gas-fired plant is about twice as expensive as an existing coal-fired plant and a new wind plant is 2 to 3 times as expensive as an existing coal plant. As Governor Jerry Brown signed a new law on October 7, requiring retail electricity sellers and investor- and publicly owned utilities in the state to get 50 percent of their electricity from renewable sources by the end of 2030, IER estimates energy costs will rise even higher than would have already been the case due to the draw down from coal’s use for electricity.
H. Sterling Burnett, Ph.D., ([email protected]) is the managing editor of Environment & Climate News.
Thomas F. Stacy, George Taylor, “The Levelized Cost of Electricity from Existing Generation Sources,” Institute for Energy Research, June 24, 2015: https://heartland.org/policy-documents/levelized-cost-electricity-existing-generation-sources