Energy securityHere’s why Trump’s new strategy to keep ailing coal and nuclear plants open makes no sense
President Donald Trump recently ordered Energy Secretary Rick Perry to take “immediate steps” to stop the closure of coal and nuclear power plants. The proposal is premised on these power plants being essential to national security. To be sure, the coal and nuclear industries are in trouble. Thirty-six coal plants have retired since Trump was elected, and another 30 will close in the coming months. More than 1 in 10 of the nation’s nuclear reactors are likely to be decommissioned by 2025. But experts are not worried about any electricity shortages or outages between now and 2025. The Energy Department’s own assessment of whether the ongoing wave of coal and nuclear plant retirements are threatening grid reliability, found no cause for alarm. The Federal Energy Regulatory Commission unanimously rejected an earlier proposal for the tax-payers to subsidize these declining industries. In short, there is no emergency that justifies this unprecedented intrusion into the electricity markets that would warrant forcing taxpayers and utilities to pay a premium to keep coal and nuclear plants online. The only “emergencies” are the financial woes of the plant owners caused by the rapid decline coal consumption and the nuclear industry’s weak outlook.
President Donald Trump recently ordered Energy Secretary Rick Perry to take “immediate steps” to stop the closure of coal and nuclear power plants.
And according to a draft memo that surfaced the same day, the federal government may establish a “Strategic Electric Generation Reserve” to purchase electricity from coal and nuclear plants for two years.
Both proposals, which have garnered little support, are premised on these power plants being essential to national security. If implemented, the government would be activating emergency powers rarely tapped before for any purpose.
Based on my four decades of experience as a utility regulatory attorney and law professor, I can see why this proposal has caused much controversy, partly because of how energy markets work.
No credible evidence
To be sure, these industries are in trouble.
The share of U.S. power derived from coal has fallen from about one-half in 2000 to less than one-third in 2017. Despite Trump’s full-throated support for the coal industry, another roughly 12 gigawatts of coal-fired capacity, or about 4 percent of the American coal fleet, is slated for retirement in 2018. According to a tally from environmental advocacy group the Sierra Club, 36 coal plants have retired since Trump was elected and according to various announcements, another 30 will close and few new coal plants are being planned or built.
The share of power generated by nuclear reactors, despite holding steady at about one-fifth of the national grid since 2000, is about to slide. More than 1 in 10 of the nation’s nuclear reactors are likely to be decommissioned by 2025. If completed, the only two large-scale ones under construction will cost far more than originally planned.
