Coal plant boom poses questions
DALLAS — A building boom that would add scores of new coal-fired power plants to the nation’s power grid is creating a new dilemma for politicians, environmentalists and utility companies across the United States.
Should power companies be permitted to build new plants that pollute more but are reliable and less expensive? Or should regulators push utilities toward cleaner burning coal plants, even if it means they will cost more and are based on newer, yet still unproven, technology?
How those questions are answered will have huge implications over the next few decades. It could determine how Americans light, heat and cool their homes and business, the rate of return on utility investments and the potential environmental impact of the new plants.
Nowhere do these competing interests play out with such force as in Texas, where 16 new coal-fired plants are proposed — 11 of them by Dallas-based TXU Corp., the state’s biggest power company.
The scope of TXU’s 5-year, $10 billion plan is considered bellwether and being closely watched by industry analysts, lawmakers, competitors and environmentalists across the U.S.
“TXU put its stake in the ground and said it will (build the plants) faster and cheaper than anyone else,” said Daniele M. Seitz, analyst with investment firm Dahlman Rose. “So they have something to prove.”
The company is hardly alone, however.
Some 154 new coal-fired plants are on the drawing board in 42 states. Texas and Illinois are the only states where 10 or more plants are planned, according to the National Energy Technology Laboratory.
Energy analysts say factors driving coal’s resurgence are soaring power demands, volatile natural gas prices and a favorable investment market.
Coal now accounts for about 50 percent of the power generated in the U.S. By the year 2030, that share will increase to 57 percent, according to Energy Department forecasts.
The U.S. has the world’s largest coal reserves, enough to last for the next 200 to 250 years, analysts believe.
Larry Makovich, managing director for consulting group Cambridge Energy Research Associates, said the urgency to bring more power-generating plants online cannot be understated.
“A fundamental reality of the power business is there is no single fuel of choice, so if you are going to survive in the long run, you need to have a good mix of fuels and technologies,” he said. “If we are going to keep supply and demand in balance, you’re looking at a five-year lead time, so you have to get started building these plants now.”
The argument over how TXU should build power-generating plants plays out almost daily with critics and proponents weighing in on the potential merits and drawbacks of the company’s plans.
TXU says the proposed plants will meet the state’s growing demand for power, give a sorely needed economic boost to nearby small towns and will reduce toxic emissions by replacing older, less efficient plants.
“The coal plant of today is so much cleaner; it makes so much less emissions than what most Americans and Texans can conjure,” said Mike McCall, chief executive of TXU’s wholesale division. “It can be a good viable resource without really harming the environment.”
Critics, however, counter the company is driven by profits and is rushing to beat more stringent federal restrictions on carbon dioxide emissions in an era of escalating concerns over global warming. Texas already produces more carbon dioxide than any other state, a fact that worries big city mayors downwind of the proposed plants.