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Fuels rush in as natural gas retreats
The tight supplies driving up the price of natural gas add urgency to calls for more energy efficiency investments and renewable energy development in the Northwest. But even as clean energy advocates watch their primary competitor fall from grace, an even more dreaded fuel foe is back in vogue: coal.
It's easier to be green.
New attention has been focused on energy alternatives that avoid fossil fuel consumption. Last month, U.S. energy secretary Spencer Abraham announced a new Smart Energy Use Campaign to encourage energy efficiency investments aimed at reducing winter demand for natural gas. In September, the Western Governors Association conference will address actions states can take to secure natural gas supplies at reasonable costs.
Renewable energy developers have cited natural gas's price volatility as they press for policies to promote clean energy generation – an energy source that carry little or no fuel costs. Policymakers are listening more intently to advocates of state and federal renewable energy standards, who argue that renewable energy development will stabilize rates and pay back long-term economic benefits.
Coal weighs in.
But coal plant developers are also billing themselves as viable alternatives to natural gas, citing cheap and plentiful fuel supplies. Many Northwest utilities are listening – Avista, PacifiCorp and Puget Sound Energy have identified new coal plants as preferred resources in recent integrated resource plans (IRP).
Avista's 2003 IRP identifies the need for about 200 megawatts of coal-fired generation (along with other new resources) between 2004 and 2013. After 2013, the IRP states, "only coal [emphasis added] is selected as a result of a change in the relationship between natural gas and coal prices. Natural gas prices over the IRP term increase faster than coal, making coal generation less costly in later years."
You can't get here from there
Despite low and constant costs, coal still faces significant hurdles. The lowest-cost power plants are located near mines or inland coal reserves. But the region's highly congested transmission grid currently precludes connecting large generation facilities in coal-rich areas east of the Continental Divide to the Northwest's primary load centers along the Interstate 5 corridor.
A coal plant proposed near Roundup, Montana, 35 miles north of Billings, has received local and state permits (its air permits are still contested), but could be put on hold because the Bonneville Power Administration says the plant cannot be brought online without new transmission – possibly a 500-kilovolt line.
Transmission bottlenecks are not exactly good news for renewable energy developers, either, however, as the West's greatest wind generating potential lies in Montana.
Risky business
All prospective coal plants face the growing likelihood of legal limits on emissions of carbon dioxide, the most significant climate-changing greenhouse gas and an unavoidable byproduct of burning coal (and other fossil fuels) for electricity.
The U.S. Senate took no action on global warming during its recent energy bill debate, but Sens. John McCain (R-Ariz.) and Joseph Lieberman (D-Conn.) will be allowed to present their moderate emissions trading proposal. Washington state regulators soon will issue new requirements for mitigating carbon dioxide emissions from new power plants (see July Report ).
Utilities and power-plant developers would be foolish to assume future environmental regulations pose no financial risks. Clean-energy proponents also note the foolishness of ignoring the very real price-stability benefits of investing in renewable resources such as wind and solar power, and of failing to fully value the contributions renewable sources and energy efficiency make to total electric capacity.
"The lesson we take from the natural gas crisis isn't that we should burn more of an even dirtier non-renewable resource," said NW Energy Coalition Executive Director Sara Patton. "We have better options – better for our health, better for our economy and for our pocketbooks."