Story by David Blackmon
As the United States continues to rapidly retire its dwindling fleet of coal-fired power plants in the name of fighting climate change, the world’s two most populous nations, China and India, continue efforts to dramatically expand their own coal usage. These two starkly divergent approaches inevitably lead to questions about which philosophy will prevail at the end of the day, and whether there is actually any “energy transition” happening at all.
The simple fact of the matter is that both the Xi Jinping government in China and India’s government, led by Prime Minister Narendra Modi, consistently choose to prioritise the maintenance of their national energy security above climate goals set at annual conferences like the upcoming COP 28 conference in the UAE. Like many other developing nations, India and China have been rational actors when it comes to fulfilling the energy needs of their societies, choosing factors like affordability and reliability over the Western norm of policymaker virtue signaling.
This is a stark contrast to the approach by the Biden administration in the US, which has been working overtime to kill the nation’s once-dominant coal industry in its feverish pursuit of often arbitrary and irrational climate goals. This rapid dismantling of US coal recently led one commissioner at the Federal Energy Regulatory Commission (FERC), Mark Christie, to question, “Are the lights going to stay on?”
Christie’s concern is that the current rapid and rising pace of retirements of not just coal-fired power plants, but also plants powered by natural gas, seems certain to lead to even higher levels of instability on a power grid that is becoming overwhelmed by unpredictable and weather-dependent wind and solar generation.
A new report from America’s Power, an association representing many US coal-fired power generators, tracks the pace of planned retirements currently scheduled by coal operators. The results are concerning, to say the least.
“Announced coal retirements, as of August, totalled 91,600 megawatts (MW) during the 8-year period 2023-2030,” the report notes “However, the 4-year period 2023-2026 and 6-year period 2023-2028 merit even more attention because of the lack of time to mitigate reliability challenges – such as adding dispatchable replacement capacity – if these retirements happen as announced. Announced coal retirements total 44,700 MW over the next 4 years and 83,400 MW during the next 6 years.”
Given that the permitting, funding, construction and starting-up of dispatchable replacement capacity can take 7-10 years under ideal conditions in the US, consideration of that 6-year time frame becomes especially crucial. Yet, as the report notes, no one in the Biden administration appears to be attempting to address the situation in any real way despite consistent warnings since 2019 of a looming shortage of reliable generating capacity on the grid.
As US policymakers appear to be intentionally working to dismantle the country’s energy security, India’s state-owned energy giant NTPC reported this week that mining of coal during the first half of that country’s 2023/24 fiscal year expanded by a whopping 83 per cent. With a current installed power generation capacity of more than 73 gigawatts (GW), NTPC is India’s largest integrated power provider. During the same six-month period which began on April 1, NTPC also reported a 94 per cent boost in coal dispatch, an astonishing number.
China, meanwhile, continues to permit 1 to 2 new coal-fired power plants every week, and now has 243 GW of new capacity permitted and under construction, according to the Center for Research on Energy and Clean Air. While it is true that China also leads the world in investments in new renewable generation capacity, as Biden officials like Energy Secretary Jennifer Granholm are fond of pointing out, the Xi government fully understands the crucial factor of maintaining adequate dispatchable capacity whenever less than ideal weather conditions invariably cause renewables to under-perform.
The contrast in approach between the US and other western nations and that of China, India and many other developing nations, is starkly clear. Governments that are rational actors where energy security is concerned are always going to prioritize the maintenance of their national energy security over other concerns, especially climate goals pushed on them by Western countries.
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So, when you see the staunchly green International Energy Agency or others projecting “peak oil demand by 2030,” just ignore it, because we haven’t even managed to hit “peak coal” yet, and won’t be getting there anytime soon.