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2/10/2009

Goodbye, Coal: What Power Options Are Left?


President Obama likes to tout the virtues of energy efficiency, from tire gauges on the campaign trail to miserly microwaves. But efficiency might become more than a bully-pulpit message and more of the nations’s energy answer—by default.
How’s that? Even with the recession, U.S. electricity demand is expected to increase in the coming decade, and more power capacity is needed to meet that and build a cushion against potential blackouts. The problem is that the energy options that could fill that gap are falling by the wayside like Agatha Christie’s ten little Indians.


Take coal. Last night, NV Energy in Nevada finally pulled the plug on its planned 1,500 megawatt coal-fired power plant because. Costs for the project have already soared from $3.8 billion to $5 billion, Reuters reports, and looming environmental regulation means “clean coal” is the only way to make the project work. And since clean coal doesn’t exist yet, NV Energy “delayed” the project until at least 2020. Other states like Montana and Kansas have also seen coal plants derailed by a combination of rising costs and imminent environmental regulations.
Natural gas could be the answer, and is steadily growing as a share of the nation’s electricity mix. But just ask Texans about the downside of relying more on natural gas to keep the lights on. A new study shows that Texas retail electricity bills rose 64% in the last decade. Part of that price spike could be due to Texas’ deregulation of its power markets, but the state’s reliance on natural gas has also played a big part, given the price volatility of natural gas.
That’s one advantage to renewable energy like wind and solar power—predictable prices (and one reason even Texas cities are scrambling to get more power from wind.) Generating predictable power, on the other hand, isn’t the strong suit of renewable energy, and even doubling the country’s clean-energy capacity as President Obama wants will barely sate the nation’s power appetite.
Nuclear power isn’t a clear short-term answer, given the long lead times needed to secure regulatory approval and build new reactors, not to mention dicey economics of late.
That doesn’t leave a lot of options to cover the projected power shortfall. So, what’s left standing? Well, “negawatts” for one. That’s the thinking behind President Obama’s push to revamp public buildings and weatherize private homes—efficiency will make the country’s existing power plants go further.
The trick is fixing the way the power sector works to make saving energy as rational for power companies as generating power is by “decoupling” utility revenues from the amount of electricity generated. A dozen states currently do that, and 26 more are studying ways to make efficiency a money-spinner.
In that sense, the WSJ noted, the recession could actually offer a silver lining: The near-term slump in power demand is turning some recalcitrant power utilities into supporters of electricity-sector overhaul because it would offer them a safety net in hard times
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