For 2nd Year in a Row, No New Coal Plants Built in US
While the more sweeping changes needed to definitively address climate change remained elusive in 2010, looking back on the year yields some subtler good news: For the second straight year, there was no new construction a single coal plant on US soil. The Washington Post ran a story over the weekend analyzing the 2010 investment trends in the energy sector -- and guess which fuel source was losing out? Spurred by a lack of market interest, coal may finally be beginning a long, gradual decline from prominence in the US energy mix.Here's the WaPo:
The headline news for the coal industry in 2010 was what didn't happen: Construction did not begin on a single new coal-fired power plant in the United States for the second straight year. This in a nation where a fleet of coal-fired plants generates nearly half the electricity used.By way of contrast, 20 new coal plants began construction from 2000-2008. Plans to build 38 more were scrapped by power companies across the nation in 2009, and some 48 old polluting factories were marked for retirement.
But a combination of low natural gas prices, shale gas discoveries, the economic slowdown and litigation by environmental groups has stopped - at least for now - groundbreaking on new ones. "Coal is a dead man walkin'," says Kevin Parker, global head of asset management and a member of the executive committee at Deutsche Bank. "Banks won't finance them. Insurance companies won't insure them. The EPA is coming after them. . . . And the economics to make it clean don't work."
All of which is good news, but none of which is definitive. For one thing, the last two years have seen the federal government come closer than ever before to pricing carbon emissions -- even if the law never materialized, you can bet investors were pinching their wallets in case it did. More investment could yet worm its way into coal given clearer signals from a Congress more sympathetic to dirty fuels (like the one that's about to take over).
That said, there's little denying that coal is losing ground -- mountaintop removal is deeply unpopular, the signs of global warming (for which coal-burning is a primary cause) are becoming clearer to the global (if not American) public, and cleaner forms of energy are becoming cheaper and more readily available. It's no surprise that investors are turning away.