Cheap Seats 2022 By Rich Trzupek
Coal is Still King - 11/16
By Rich Trzupek
The supposed leader of the free world, at least when he is relatively coherent, President Dementia recently declared that solar and wind powered energy represented the future because, among other reasons, using coal to generate energy was more expensive than those renewable alternatives. The Prez got no closer to reality here than he does when trying to hit his next jacket sleeve after completing half of that particular challenge.
You’ll be pleased, or surprised, to learn that in the year 2022 the world will have consumed more coal, and therefore generated more greenhouse gas emissions associated with coal consumption, than any other year in history. All of those coal-fired powerplant closures that the US, Canada, the UK and the European Union bragged about? They don’t represent any kind of substantial reduction in worldwide greenhouse gas emissions. They are rather a pretty insignificant speed bump as those emissions continue to grow.
Clue one, when witnessing governments, environmental groups and the legacy media crow about projects that purport (and actually sometimes do) reduce greenhouse gas emissions by some millions of tons is their collective inability or unwillingness to acknowledge that a million tons or so doesn’t matter in a world where annual greenhouse gas emissions are measured in the tens of billions of tons. Moreover, when two nations are effectively in control of how many of those tens of billions of tons will be generated in a given year – China and India – the idea that any other nation or collection of nations can have a significant effect on this trend line is ludicrous.
In that context, when President Biden champions renewable energy for being cheaper than coal, one cannot help but wonder why China and India have not invested in more renewable capacity and much less in new fossil fuel capacity.
Environmental NGOs that need western nations to play the role of environmental villains will argue that China and India are actually paragons of environmental virtue. Consider, for example, the huge renewable portfolio operated by the People’s Republic of China. True, PRC does manage a large renewable portfolio. But that portfolio is not primarily about wind farms and solar fields, which are unreliable sources of energy production. It’s largely about hydroelectric generation, which is very reliable and relatively cheap. It’s about massive projects like the Three Gorges Dam, which provides a whopping amount of energy to the PRC. It’s also a project on a colossal scale of hydroelectric generation that would never be allowed in North America, the UK or the European Union in modern times.
The Big Coal Lie that Biden so cheerfully repeated is that coal-fired power is more expensive than renewable power. The implication being that coal-fired power was dying because it is now a less economically sound investment than wind and solar.
There is one part of this argument that energy realists like yours truly must yield to environmentalist hysterics: Renewables win when considering the cost of the fuel. Sunlight is free. The wind is free. Coal is cheap, relatively speaking, but it ain’t free.
Having conceded that point, let us now consider the other costs that factor into providing energy to the masses. First, there’s the capital cost of building the generation facility and the infrastructure needed to deliver power to the grid. Recovering that capital cost is a matter of how much power you can sell once the facility is built and for what price.
The amount of power that one can sell is defined by a metric called capacity factor. Capacity factor is a mathematical measurement that compares how much power a facility could theoretically generate to how much power that facility actually generates. For example, if you operate a plant capable of generating 1,000 megawatts that actually produces an average of 900 megawatt-hours of electricity in a given year, that plant’s capacity factor is 90 percent.
Most coal plants operate with capacity factors in excess of 80 percent, which is very good. They are part of the foundation of a reliable electrical grid providing base load power, along with nukes, some natural gas fired capacity and hydro-electric. In contrast, the capacity factor of wind farms rarely approach 30 percent and that of solar projects rarely get close to 20 percent. There are exceptions of course. Build a wind mill in a high mountain pass in the Sierra Nevada and you’ll get pretty consistent power. Build a solar farm in the high plains of Arizona and the same will be true.
But areas where the wind is always blowing and the sun is always shining – in the day time anyway – are relatively rare. So the normal economic model doesn’t work for most wind and solar facilities. The cost of building these facilities is high on dollars per megawatt basis and the time it takes to recover that investment is long because the huge, expensive power plant you just build spends most of its time doing nothing.
Absent government provided incentives, most wind farms and solar facilities would not exist. They are only profitable because government programs provide them with extremely generous subsidies. So when the president says that wind and solar is cheaper than coal he is correct only if one chooses to ignore the huge amount of taxpayer money that we contribute to make the balance sheets work for those technologies.
The folks running China and India can do the math. They’re very good at it. They know that packing on coal-fired generation capacity is the cheapest, most reliable way of expanding their ability to generate and distribute power and they know that such expansion is the key to economic growth. So they’ll smile and put up some mostly useless windmills and build some basically pointless solar farms to keep the environmental NGOs and their mainstream media allies happy. It’s a small price to pay to keep those green credentials up to date in the western world.
But as these economies continue to expand, that expansion has little of nothing to do with the plaything projects that intoxicate environmental groups like the Sierra Club. In China, and India, and effectively in the world as a whole, coal is still king.