The Writing on the Wall for the Coal Industry: Wind Power is Displacing Coal in the Midwest

By Casille Systermans, Policy Extern

For over a century, coal served as an invaluable energy resource for the United States. The nation was arguably built on coal. However, time has shown that burning coal is dangerous for human health and the environment, and as a result the country has begun to move away from using coal as a primary fuel source. Coal plants across the country are being slated for shut down, often because they cannot make the upgrades necessary to meet current environmental standards and compete with abundant, cheap natural gas. In response to this shift, political battles over the future of coal production are raging across the United States.

The Trump administration is doing all that it can to “save” coal from the “war on coal.” In September, the U.S. Department of Energy (DOE) issued a notice of proposed rulemaking that effectively aims to subsidize coal and nuclear plants. If the proposed rule were adopted, it would guarantee coal and nuclear plants full recovery of costs plus a fair rate of return in competitive energy markets across the country. However, the efforts of the DOE and the Trump administration are likely futile.

In the Midwest, coal plants are being slated for shut down because they can no longer compete wind energy.

Within a day of President Donald Trump announcing his intention to back out of the Paris Climate Agreement, Kansas City Power and Light Co. (KCP&L) announced its intention to retire three coal-fired power plants. KCP & L cited several reasons for their decision, including a commitment to clean energy and the fact that “[w]ind resources have become a much more economic generation resource for the region.”

In its 2017 IRP, Ameren Missouri, a Missouri utility that serves 1.2 million electric customers in central and eastern Missouri, including the greater St. Louis area, announced its intention to decrease carbon dioxide (CO₂) emissions by 80% by 2050 (based on 2005 levels). To achieve this, Ameren Missouri will add at least 700 MW of wind generation by 2020 as well as 50 MW of solar generation by 2025. The IRP also includes plans to retire more than half of Ameren Missouri’s coal-fired generation capacity.

At the end of October, Empire District Electric Co., a Midwest Utility that serves 172,000 customers in southwest Missouri and parts of Arkansas, Kansas and Oklahoma, submitted a proposal seeking approval to build 800 MW of wind generation and to shut down the coal-fired workhorse of its generation fleet, the Asbury Power Plant. Empire explained that the projected cost of acquiring new wind generation resources is lower than the costs associated with operating and maintaining the Asbury Power Plant.

Coal is swiftly losing the ability to compete with utility-scale wind and in most cases already cannot compete with natural gas. Therefore, fighting to keep coal viable by pushing the costs onto ratepayers is unproductive and serves only to delay the inevitable. Coal is on the way out, utilities in the Midwest and across the country are beginning to recognize this, and it is time for policy makers to recognize this reality as well. Policy makers should be looking forward to what comes next and work to enact policies that will protect the American people during the inevitable transition to cleaner energy sources.