Utilities Are Bullish on Solar, Down on Coal Despite Clean Power Plan Rollback
President Trump made good on a campaign promise yesterday to start rolling back President Obama’s climate change policies and take steps to reboot the coal industry.
The “Energy Independence” executive order is part of “putting an end to a war on coal,” Trump said. The action triggers a review of the Clean Power Plan, as well as methane emissions rules. Among other things, it also lifts a freeze on federal coal leasing. Interior Secretary Ryan Zinke already signed two secretarial orders today: One lifts the 2016 moratorium on new coal leases on federal land; the other directs the agency to re-examine its mitigation and climate change policies.
But despite Trump’s pledge to revive coal, the industry experts who manage power plants don’t see the coal sector making a comeback.
A new survey of utility executives found that just 4 percent think coal use will increase moderately or significantly in their utility’s power mix over the next decade, while 27 percent said coal use would decrease moderately and 52 percent said it would decrease significantly.
Utility executives were most confident — more than two-thirds of respondents in each region — there would be moderate or significant growth in utility-scale solar, followed by distributed generation, such as rooftop solar, and then by distributed energy storage. A majority of respondents in each region also expect grid-scale energy storage, wind and natural gas to play a greater role in their power mix going forward. They were least optimistic about oil and nuclear (especially on the coasts), with coal coming in last.
The results are based on an online survey of more than 600 electric utility employees in the U.S. and Canada, conducted by Utility Dive in January 2017. Just over half of the respondents work at an investor-owned utility, 32 percent work at a municipal or public utility and 14 percent work at an electric cooperative.
Utilities want to see a federal carbon policy
Most utility executives indicate they do not expect the election of Donald Trump to change the outlook for generation resources in their service areas, according to the report. But a significant minority indicated his election will have some effect.
This comes back again to coal. Nearly half of respondents indicated they now have a “more positive outlook” on the future of coal after the election, although few expect to deploy more coal capacity at their own utilities. This outlook reflects the view that existing coal plants will likely stay in operation longer without federal emissions regulations in place.
The outlook for other resources is expected to remain largely unchanged under President Trump. Interestingly, respondents from the South and Southeast indicated a more positive view on the future of nuclear power, very likely because this is the only region with new nuclear generating units slated to come online in the coming years. It’s unclear exactly how much this view has to do with Trump versus what’s already on the books, given that nuclear is likely to suffer the most with the rollback of the Clean Power Plan.
This leads to utility executives’ greatest concern when it comes to their fuel mix: regulatory and market uncertainty. “Whether it relates to federal emissions rules, state regulatory reforms or ongoing upheaval in wholesale electricity markets, increased uncertainty has become front of mind for utilities considering the future of their power mixes,” the report states.