Utilities consider coal as a fuel for future power plants

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Posted: Sunday, February 11, 2001 | 9:34 a.m.

Utilities consider coal as a fuel for future power plants due to stable price and supply By Gargi Chakrabarty Of The Post-Dispatch

Skyrocketing oil and natural gas prices are leading power-generating utility companies to reconsider coal as an attractive fuel for future power plants.

This rethinking of coal comes years after stiffening environmental regulations caused power plants to turn toward cleaner-burning natural gas as a fuel for generating electric power. Utilities say the price of coal has remained more stable than other fuels and more-favorable energy policies may again make it a viable choice for tomorrow's new power plants.

"Coal tends to be more predictable, both in pricing and supply, than either oil or natural gas," said Vic Svec, vice president of public relations with Peabody Group. "We expect to see more coal-based generations in the future."

Environmental activists are already preparing to oppose construction of new, coal-fired plants. They also question whether the cost of controlling emissions would offset savings from burning coal.

AmerenUE is already studying a plan to build a new coal-fired generation plant in Illinois. It had last built a coal-fired plant nearly 25 years ago. Plans to build 11 new coal-fired generating plants over the next 10 years in North America, producing more than 7,500 megawatts of power, have been announced.

St. Louis-based Peabody Group, which sold 190.3 million tons of coal in fiscal 2000, as compared with 176 million tons in 1999, expects the industry to grow at a faster pace than in previous years.

There's an ample supply of coal waiting to be mined, proponents say. "Coal accounts for 85 percent of all fossil fuel reserves in the U.S., while natural gas is 10 percent and oil is 5 percent," Svec said. "This long-term supply reserve of coal makes it an attractive fuel for utilities."

The high price of natural gas and oil has also prompted some legislators to encourage the use of coal as a stable fuel for electric power generation.

U.S. Sen. Robert Bryd, D-W.Va., has introduced a bill in Congress that would grant tax incentives to coal-fired generating plants. The Bush administration is formulating a new energy policy that is expected to consider coal as a viable fossil fuel, said an energy analyst who did not want to be identified.

Though coal-fired power plants are typically twice as expensive as natural gas plants, coal power is about one-fifth the cost of natural gas, said Susan Gallagher, spokeswoman for Ameren UE.

As coal-fired plants in the West raise output to send more power to California, the coal industry is saying "I told you so" to those who shunned its use. "Good energy policy can neither neglect nor penalize coal," said National Mining Association President and Chief Executive Officer Jack N. Gerard. "California would not be in crisis today if they hadn't foreclosed on coal in days gone by."

The renewed interest in coal has led some environmentalists to say they would fight any administrative effort aimed at encouraging increased use of coal instead of cleaner-burning natural gas.

"We will fight Sen. Bryd's bill in the House, we will fight any effort to subsidize coal-fired generations," said Patricio Silva, Midwest activities coordinator with the National Resources Defense Council, an environmental group. "We are concerned about the increased ozone and particulate pollution emitted by these generations."

Pollution from coal-fired plants could pose a health hazard, Silva suggested. "There is a study by the Johns Hopkins Institute that said particulate pollution from coal-fired plants are a factor to early mortality," he said.

Silva said that the council would monitor all permits to build coal-fired generations to ensure that the companies comply with the federal and state environment regulations.

Ken Medkiff, director of the Missouri Sierra Club, said it would be very difficult for an electric company to build a new coal-fired plant, given the strict emission standards. "The utilities would have a number of hurdles to cross," he said. "The amount of money they would have to spend to clean up the air would offset any benefit they get."

Utility officials acknowledged that coal-fired plants would have to comply with emissions standards.

Ameren UE said it had earmarked $800,000 for research in coal efficiency by the California-based Electric Power Research Institute.

"The rising cost of natural gas makes us think forward," said Gallagher. "Ameren UE is continuing to fund research in coal-fired generations to make them more efficient."

Ron Lande, energy analyst with Edward Jones, said that, "after the unprecedented increase in natural gas prices, utilities are rethinking about phasing out coal-fired plants."

"They are looking at keeping the coal plants and investing in emission technology, such as scrubbers," he said.

Coal use in the United States is expected to reach an all time high of 1.085 billion tons in 2001, almost 21 million tons' greater than last year, according to the mining association. In line with demand, coal production is expected to be 21 million tons higher in 2001, at a record 1.115 billion tons.

Most of the increased output will be burned to generate electricity, the association said.

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-- Martin Thompson (mthom1927@aol.com), February 11, 2001


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