Date: 2024-12-21 Page is: DBtxt003.php txt00017579
Energy News
Inside Climate News ... Clean Economy Weekly
Ohio Coal / Wyoming's giant wind farm, 13 years in the making / and other energy issues
Peter Burgess
Clean Economy Weekly
10:15 AM (33 minutes ago) to me
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We begin this week in my Ohio backyard, with a coal company filing for bankruptcy and the ramifications of an Ohio coal and nuclear bailout law that eliminates clean energy requirements. Then, we head to Wyoming to check in on a long-gestating plan for a giant wind farm.
I’m Dan Gearino, your guide to the clean energy economy. Send me news tips and questions to dan.gearino@insideclimatenews.org, and thanks for reading!
— Dan
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Bailout and Bankruptcy in Ohio
When I was working on a story in May about Ohio’s coal and nuclear energy bailout plan, Ohio State University economist Ned Hill said this about FirstEnergy:
“They’ve proven to be much better at generating income through lobbying than through running their utility company.”
I thought of that comment this week as Ohio-based Murray Energy, the country’s third-largest coal producer, filed for bankruptcy.
Murray Energy, led by founder Robert Murray, has been a force in state and federal politics through campaign donations and lobbying. It has gotten much of what it wanted, underscored by the policy wish list it gave the Trump administration in 2017.
The administration ended up taking several of the actions on the list, including withdrawing from the Paris climate accord and moving to eliminate cross-state air pollution rules.
Even if the administration might have done those things without Murray’s urging, it’s remarkable that a coal company and the U.S. president are so closely aligned.
But even the shrewdest lobbyist has been unable to change the market reality that is hammering the coal industry. In a nutshell: Natural gas and renewables are cheaper sources of electricity than coal.
This brings me back to the Ohio bailout law, signed in July, which had Murray Energy’s fingerprints all over it.
The law provides subsidies for two FirstEnergy Solutions nuclear power plants plus two coal plants owned by Ohio Valley Electric Corp. It also eliminates a mandate requiring utilities to get more electricity from renewables and to improve efficiency.
Murray Energy urged passage of the bill and was a major donor to several of its leading supporters in the legislature, even though the company does not supply coal to the two coal plants that get the subsidies.
Right after the bill became law, FirstEnergy Solutions said the law helped to improve its finances, so much so that it could now keep open a coal plant that it previously said it would close. That plant uses coal produced by Murray Energy.
Opponents said they would try to force a statewide vote to overturn the law.
But it looks like the push for a referendum is likely to fail. The signature drive came up short, obtaining 221,092 signatures by the Oct. 21 deadline when it needed 265,774.
The campaign is not done yet. It has a case pending before the Ohio Supreme Court in which it argues that it should be allowed more time to gather signatures.
Regardless of the outcome, the bailout law says a lot about how companies can get what they want by deploying campaign donations and political pressure, even as their own businesses flounder.
The outcome is almost certainly bad for Ohio’s economy, as I’ll get to next.
(Photo: Robert Murray. Credit: Justin Sullivan/Getty Images)
How Does Ohio Move on from the Gutting of Its Clean Energy Rules?
Before I came to ICN, I covered the business of energy for the Columbus Dispatch for 10 years. I started a few months after the passage of a 2008 law that set renewable energy and energy efficiency requirements for utilities.
Then I spent the rest of those years covering the ongoing push by utilities and fossil fuel companies to weaken or repeal those requirements.
One person who was there almost every step of the way was Rob Kelter, senior attorney for the Environmental Law & Policy Center, testifying in hearings, observing debates and explaining the virtues of energy efficiency to reporters such as me.
I spoke with him this week to help make sense of Ohio's new nuclear and coal bailout law, which also guts the state's renewable energy and energy efficiency rules.
“There’s no question it’s disappointing,” he told me. “The most disappointing thing was the inability to convince legislators that energy efficiency was beneficial.”
The law eliminates charges on customer bills that once supported efficiency programs and renewables and replaces them with new charges to pay for coal and nuclear. The sponsors say this leads to a net savings because the charges going away are larger than the new ones.
That logic is flawed, Kelter said.
Energy efficiency, he explained, is about using less electricity, which lowers utility bills. It includes programs to replace lighting, add insulation and make other changes in homes and businesses to cut energy use.
On a systemwide scale, energy efficiency means that there is less need for new power plants, which saves billions of dollars.
Under the law, utilities will no longer be required to meet targets for reducing customers’ energy use. Customers can still work on their own to use less power, but there will be less momentum without utilities encouraging and paying for the programs.
The law also eliminates the requirement that utilities meet annual benchmarks for buying renewable energy. The effects of this provision are more difficult to assess, in part because Ohio businesses and communities have plans to develop renewable energy that likely would happen anyway and are not tied to state rules.
Looking ahead, Kelter thinks Ohio leaders will face increasing pressure to support clean energy as it becomes clear that other states are benefiting from the investment and cost savings. He thinks some of this will even come from the utilities that now support the gutting of clean energy requirements.
“We’re at a time where we’ve got to figure out what the future really looks like,” he said.
The question is when that will happen.
In the meantime, the subsidies for nuclear and coal power will burden consumers, leading to higher costs in the long run because of the loss of efficiency programs, Kelter said.
“It ultimately hurts the economy,” he said.
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A Wyoming-Size Wind Farm Moves Closer to Construction
A Wyoming wind farm proposal that has been in the works for more than a decade has taken a step forward.
The Bureau of Land Management this month issued a preliminary approval for one part of the Chokecherry and Sierra Madre Wind Energy Project, the Casper Star-Tribune reported.
This is a promising development for a wind farm that would be the largest in the country, at 2,500 to 3,000 megawatts. But it also has been in progress for so long that it’s reasonable to wonder if it ever will be built.
The $5 billion project, to be located in Carbon County, along the border with Colorado, is being developed by Power Company of Wyoming, an independent power company owned by The Anschutz Corp. of Denver.
Why has this project, in development since 2006, taken so long? The timeline provided by the company shows a long list of regulatory approvals still needed at various levels of government, indicating a slow, bureaucratic process.
Another factor is that the developer is also looking to build a transmission line to carry the electricity from the wind farm to markets on the West Coast. This adds layers of complexity, said Heather Tupper, who manages the region that includes the proposed wind farm for the Wyoming Business Council, the state economic development office.
She told me that the project would be an economic boon for a part of the state that has seen its coal industry wither. She is optimistic that the project will happen because the developers continue to move forward, even if some steps take a long time.
“They kind of went through all the growing pains,” she said, adding that the developers have shown “a tenacity” to see the project completed.
Adding a 3,000 megawatt wind farm would nearly triple Wyoming’s wind power capacity, currently 1,536 megawatts.
It would be 50 percent larger than American Electric Power’s proposal to build a 2,000 megawatt wind farm in Oklahoma, which was scrapped last year. That project was often described as being the largest in the country.
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Offshore Wind Is Still a Good Deal, Despite Ørsted Lowering Its Estimates
The world’s leading offshore wind energy developer made an announcement this week that slightly dims the financial prospects of this rapidly expanding form of clean energy.
Denmark-based Ørsted said it is reducing its estimate of the electricity output of its offshore turbines.
The company previously had said its turbines would have a capacity factor in the range of 48 to 50 percent. This means that anticipated wind levels would turn the turbines enough to produce 48 percent to 50 percent of the electricity that the turbines are mechanically capable of producing.
Now, the company says the number is 48 percent, according to this Bloomberg story. Yes, that’s still within the range, but now at the low end of it, and that makes a difference when it comes to revenue.
The seemingly miniscule change adds up to tens of millions of dollars of potentially lost revenue per year for project developers. This isn’t enough to kill projects worth billions, but it does have an effect.
“2 percent is a big deal,” Tom Edwards, an analyst at Cornwall Insight, told Bloomberg. “Over the lifetime that’s a lot of energy.”
Marianne Wiinholt, Ørsted’s chief financial officer, told reporters, “This is not a major setback for the industry at all. The industry will still grow. We are more competitive than gas or coal.”
Ørsted is getting out ahead of what would be a thorny situation if the projects do not perform in line with expectations. The company’s worldwide reach includes several big projects planned for the United States, such as Ocean Wind, the 1,100-megawatt project off Atlantic City, New Jersey.
I’ll be watching closely to see if this announcement has any effect on U.S. projects or the broader discussions about the role of offshore wind in the U.S. energy mix.
(Photo: Christopher Furlong/Getty Images)
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