Energy Forward Blog


Congressional Action on Energy Efficiency Bill Would Provide Savings for Consumers, Benefits for Utilities

Energy efficiency programs across the country offer energy and cost savings for consumers and support thousands of jobs. The reduction in CO2 emissions achieved from energy efficiency may also count toward compliance with forthcoming EPA regulations aimed at reducing CO2 emissions from power plants. Earlier this year, the Senate Committee on Energy and Natural Resources overwhelmingly passed the “The Energy Savings and Industrial Competitiveness Act of 2013,” S. 761. The bill was introduced by Senators Jeanne Shaheen (D – N.H.) and Rob Portman (R – Ohio) to encourage greater use of energy efficiency technologies in residential, commercial and industrial buildings, and foster new job creation. The Senators introduced S. 1392, a revised version of S. 761, for consideration on the Senate floor at the end of July. It was subsequently removed from the Senate calendar, however, to make room for the budget and debt ceiling discussions. With those issues temporarily resolved, energy watchers are looking for the Senate to put the bill back on the calendar.

Major provisions of the Shaheen-Portman bill include: directing the Department of Energy (DOE) to develop model building codes to make new homes and commercial buildings more energy efficient; assistance to states to develop and adopt codes that exceed the model codes; authorizing DOE to provide grants to universities for career training in the design and operation of energy efficient buildings; revision of industrial efficiency programs at DOE to promote efficient manufacturing technology; establishment of the Supply Star program to identify and promote practices, companies and products that use highly energy efficient supply chains; and guidance to federal agencies on adopting energy efficiency protocols.

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Southeast Asia Will Dramatically Increase Its Demand for Coal

A new report issued by the International Energy Agency, Southeast Asia Energy Outlook, predicts that Southeast Asia’s demand for energy will spike more than 80 percent by 2035, with coal as the “fuel of choice” for the region’s exploding power sector. According to the report, electricity generation between 2011 and 2035 will increase by more than the current power output of India. Coal’s relative abundance and affordability in the region boosts its share of electricity generation from less than one-third today to almost one-half in 2035, mainly at the expense of natural gas and oil. This shift is already underway, with about three-quarters of the thermal capacity now under construction being coal-fired. The report notes that the average efficiency of the current fleet of coal plants is only 34%, and thus deploying more efficient coal-fired plants should be a major priority in the region. Most of the plants currently under construction, however, are not taking advantage of the latest technology; 70 percent of the coal-fired plants under construction in the region were subcritical designs, the least efficient.

As the Appalachian region struggles with declining coal production, the impact of coal plant closings, and the anticipated impact of EPA regulation of greenhouse gases from new and existing coal plants, it is worth noting that the global trend will be far different. Developing nations are quickly ramping up their electricity generation, and coal remains the “fuel of choice” for baseload generation.

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Recovering the Cost of Coal Plant Upgrades

Senator Joe Manchin (Dem., W.V) had scheduled a field hearing of the U.S. Senate Energy and Natural Resources Committee on the future of the coal industry, to be held in Morgantown on Wednesday, September 4. The hearing was postponed, given the events in Syria and the need for Senator Manchin to be in Washington, DC for meetings and hearings regarding U.S. military action. This author was asked to testify as part of the second panel at the hearing, regarding “Regulatory Hurdles for Cost Recovery for Coal Plant Maintenance and Upgrades.” Here is the testimony that I filed with the Subcommittee on Public Lands, Forests and Mining, and about which I will testify when the field hearing is rescheduled.

Coal-fired power plants are currently facing challenges on two fronts: Environmental regulations are requiring costly retrofits to address air and water pollution issues, while efficient natural gas-fired power plants are becoming increasingly cost competitive as natural gas prices remain low. In the face of these challenges, many coal-fired power plants have been identified by their owners/operators for retirement, with more likely to come over the next decade. According to a July 27, 2012 report from the Energy Information Administration (EIA), plant owners and operators have reported that they expect to retire almost 27 gigawatts (GW) of capacity from 175 coal-fired generators between 2012 and 2016. In 2011, there were 1,387 coal-fired generators in the United States, totaling almost 318 GW. The 27 GW of retiring capacity thus represents about 8.5 percent of total 2011 coal-fired capacity. More recent announcements of retirement plans suggest that by 2015, over 52 GW (or over 16 percent of the existing coal-fired generating capacity in this country) will be retired.

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