Is it possible the Class of 2020 will see the last coal barge on the Ohio River?
Will coal trains be a rarity in southern West Virginia and eastern Kentucky?
Last week, the U.S. Energy Information Administration issued a report that said something is about to happen that many people outside Appalachia and Wyoming have waited for. This year, the nation could generate more electricity from renewable sources than from coal.
And next year, renewables — hydropower, wind, solar, biomass and geothermal — could generate more power than nuclear.
In its most recent Short-Term Energy Outlook, the EIA forecasts that U.S. coal consumption will decrease by 23% this year. Power plants’ consumption of coal could decrease by 24% this year compared to last year, partly because natural gas prices are so low. Next year, coal consumption could increase by 10% if gas prices rise as expected and if the economy recovers as expected, the report said.
For 2020, the EIA expects natural gas to produce about 39% of the nation’s electricity, nuclear 21%, renewables 20% and coal 19%.
“Renewable energy sources account for the largest portion of new generating capacity in 2020, driving EIA’s forecast of 11% growth in renewable generation by the electric power sector. Renewable energy is typically dispatched whenever it is available because of its low operating cost,” the EIA forecast said.
This part of the United States is not big on renewables yet. At 6 p.m. Thursday, to use one moment in time, natural gas was producing about 39% of power used on the PJM Interconnection regional grid, which stretches from New Jersey and Pennsylvania westward through West Virginia and Ohio into central Kentucky and parts of Indiana, Illinois and Michigan.
Nuclear power generated about 36% of the power used. Coal was about 18%. Renewables? About 8%.
Coal has its advantages. It can be stored on site for months. It’s relatively easy to move, as the necessary infrastructure is in place. But it has many disadvantages, too. Perhaps the biggest drawback of all: Coal carries a host of political liabilities. No new coal-fired power plants are being planned to replace those that could retire in the next 20 to 30 years.
West Virginia has always known coal is a finite resource and sooner or later it will need an economy that is not so dependent on coal. Metallurgical coal — the kind used in making steel — has a future, although it is likely to continue its up-and-down market cycle. Thermal coal — the kind used in power plants — is losing market share with no signs of significant reversal.
The Mountain State will continue to produce metallurgical coal as long as the market exists. Development of a new mine in the north central region by Arch Resources (formerly Arch Coal) is evidence of that. But thermal coal is a shrinking industry.
It’s not that renewables have a bright short-term future, either. The economic slowdown that has accompanied the novel coronavirus has affected that industry, too. According to a study by BW Research Partnership reported by Reuters news service, the clean energy sector has lost nearly 17% of its jobs since the lockdown began. Job losses were more than double what the industry had created since 2017.
Meanwhile, people in the renewables industry are lobbying Congress to continue favorable tax breaks that are due to expire, Reuters said.
The bottom line: Either coal turns around or West Virginia comes up with a viable plan for life after coal.