Competition Making Coal Power Panic

Written By Christian DeHaemer

Posted September 8, 2015

Imagine this: an energy company with outdated coal and nuclear power plants decides it does not want to replace or upgrade those plants, and instead will force its current customers into a 15-year contract to buy that energy so the company can stay profitable on its current assets.

That can’t be real though, right? It would make more sense for the company to give up the old plants, some of which have a history of safety issues, and upgrade to cheaper natural gas plants or hybrid fossil fuel-renewable plants, right?


FirstEnergy, based in Ohio, is planning to place the bill for its obsolete coal and nuclear plants on its customers, forcing the utilities the company owns to buy that energy at rates nearly $26 per megawatt hour higher than the national average.

Oh, and that inflated price is exDark Coalpected to rise another $2 per megawatt hour every year.

The company claims this move will save customers about $2 billion over the 15-year contract. But this is based on the assumption that natural gas prices will skyrocket in that time, and renewable technologies will not continue to get more affordable as they have been in recent years.

Even if the former were to happen, which it could given that natural gas demand is increasing with the clean energy movement, there is little to no chance renewable energy innovations will suddenly stop to allow coal power to be competitively priced again.

Understand, FirstEnergy was once part of the push for energy efficiency. In 2013, the company itself calculated that “for every $1 spent on energy efficiency, customers had saved more than $2 in power costs,” which they reported to the Public Utilities Commission of Ohio (PUCO).

However, the company has since changed its tune: with natural gas and renewable production becoming more affordable than both coal and nuclear, the competition is making FirstEnergy’s baseload power plants more costly.

Now, that’s not to say nuclear power isn’t an important part of any clean energy portfolio; only that the particular nuclear power plant the company is fighting to keep online, the Davis-Besse plan near Lake Erie, is old and in need of upgrades that the company does not wish to pay for.

If this push to keep coal and old nuclear plants online succeeds, it will reduce the ability of Ohio to meet the new Clean Power Plan requirements. What’s more, it may affect nearby states whose requirements call for emissions trades with Ohio.

However, this success is about as unlikely as the sudden death of renewables.

We’ve spoken before about the power of zeitgeist, or popular opinion. And the world at large is in favor of cleaner energy and renewable power.

This seems to be just one last ditch effort by a coal-centered company to keep its unpopular assets running in a market that doesn’t want them.

To continue reading…

Click here to read the Vox article.

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Christian DeHaemer

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Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.

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