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December 21, 2014

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ENERGY:

Second thoughts on coal plants are contagious, it seems

The announcement may have proved the environmental version of the domino theory — when one coal plant falls, the next isn’t far behind.

NV Energy’s announcement Monday that it was shelving plans for a large, coal-fired power plant near Ely for at least a decade came as no surprise to those who have been tracking the industry.

In recent months, plans for similar projects have faced new roadblocks that went beyond the typical opposition from environmentalists and not-in-my-back-yard complaints. Some of those plants fell altogether.

Some blamed environmental concerns on the part of regulators and legislators. Others were toppled by the economic risk that comes with political and regulatory uncertainties over carbon legislation.

The U.S. Environmental Protection Agency’s appeals board rejected portions of emissions permits for coal plants in Utah and New Mexico in November and January.

Then, in late January, the Air Force ditched plans for a liquid coal plant in Montana, and on Jan. 30, Arizona Public Service, the state’s major utility, filed a long-range plan that emphasized renewables and said the company would build no new coal plants.

On Feb. 1, a Montana utility announced it would scrap plans for a coal-fired plant in favor of wind and natural gas.

Two days later Georgia regulators proposed a bill that would put a hold on new coal plants and prevent existing ones from burning coal mined by destroying mountaintops. That same day Michigan Gov. Jennifer Granholm said in her State of the State address that she would send all developers of new coal plants back to the drawing board to consider clean alternatives first, and Pennsylvania regulators rejected a waste coal plant proposed there.

On Feb. 6, Wisconsin Gov. Jim Doyle announced that a power plant operated by the University of Wisconsin would begin burning biomass instead of coal. The next day, major utility American Electric Power announced that it would put a coal gasification plant in Ohio on hold.

Then came NV Energy’s Monday announcement, lauded by environmentalists nationally and by Senate Majority Leader Harry Reid, who over the past year has been a harsh critic of the company’s plans for a coal plant.

“This landmark decision puts Nevada at the cutting edge of clean energy development in the nation, and that will pave the way to creating thousands of new jobs and putting the state on the road to renewed prosperity,” said Lydia Ball, a spokeswoman for the Sierra Club and environmental coalition Nevada Clean Energy Campaign.

Virginia Cramer, associate press secretary of the Sierra Club, said NV Energy won’t be the last to make such an announcement.

“What we’re seeing is a trend. More and more companies like NV Energy and state officials like Gov. Granholm are realizing that coal is not a good investment anymore,” she said.

Although NV Energy’s decision had certainly been anticipated, NV Energy President and Chief Executive Michael Yackira’s statements about why the company is shelving the plant went further than many observers had expected.

Yackira said he expects climate change legislation — such as a carbon tax or a pay-to-pollute system — to pass during this session of Congress, by the end of 2010.

Without knowing the cost of a possible carbon regime, Yackira said, it was too financially risky for the company and for ratepayers to invest in a plant whose energy might become increasingly expensive in the coming years.

Yackira said the company would take up the proposal for a 1,500-megawatt coal-fired power plant near Ely again in a decade or so, when scientists expect commercial power plants to be able to capture greenhouse gas emissions and store them underground.

He said the company would get by in the meantime with three new natural-gas-fired plants it has built or purchased in the past two years, and by developing wind, geothermal and solar resources in Nevada.

Cramer said the many companies proposing coal plants like NV Energy’s are probably wary of the Obama administration’s concern about global warming and its willingness to take action to stop it.

In fact, Yackira said two other companies proposing coal plants in Nevada are facing the same considerations.

“I don’t think anyone is going to be able to develop a coal plant any faster ... than the middle of the next decade,” he said.

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