In the latest sign of the U.S. coal industry’s declining ability to compete in the power sector, Peabody Energy is now struggling to find electric utility companies who are willing to accept a “clean coal” award that it presents annually.

In an email obtained through a public records request, a Peabody executive explained that it’s “hard these days for utilities to take the praise publicly.”

Peabody Energy, the largest coal mining company in the U.S., has spent years promoting the marketing phrase “clean coal” as part of its effort to convince the public and regulators that utilities should continue operating coal-fired power plants. One of those public relations efforts is Peabody’s presentation of “clean coal” awards each year to electric utilities and other entities at the Power-Gen International Conference.

Those awards have mostly highlighted utilities’ efforts to reduce air pollutants like sulfur dioxide or nitrous oxide at coal plants. A few awards have gone to carbon capture projects, such as Southern Company’s Kemper project. In a December 2016 press release, Peabody said its judges had determined that “the technology holds great promise for future new electric power plants,” despite a New York Times investigation five months earlier that revealed executives had concealed extensive problems from regulators. The Kemper carbon capture project was canceled soon after receiving Peabody’s award, following repeated failures and billions of dollars in cost overruns.

Last week in New Orleans, Peabody Energy announced its latest “clean coal” awards – but this time, it did not include any utility companies. The awards instead went to the Carbon Utilization Research Council, Mitsubishi Heavy Industries, a professor, and the Electric Power Research Institute.

An email obtained by the Energy and Policy Institute through a public records request shows that Peabody now finds it difficult to give its “clean coal” awards to utility companies.

Jacob Williams, a former Peabody executive and now the CEO of the Florida Municipal Power Agency, emailed a former colleague at Peabody to ask if the company was planning to “Hand out Clean Coal Awards” at last year’s Power-Gen International Conference in Orlando.

That Peabody executive, Bryan Galli, responded that it could be the last year for the “clean coal” awards, because it’s “hard these days for utilities to take the praise publicly.”

Utility executives have explained why they have decided to shut down coal plants instead of pursuing carbon capture and sequestration projects. Xcel Energy Colorado President Alice Jackson pointed out last month that there are no U.S. coal plants with cost-effective carbon capture, and explained that “It was a better plan for us to move forward with closure of Comanche 1 and 2 from the economics for our customers than it was to continue operating these plants.” And despite a carbon capture proposal for the San Juan Generating Station in New Mexico, PNM Vice President for Public Policy Dan Barnell explained at a stakeholder meeting in July why New Mexico’s largest utility had decided that closing the plant was more prudent:

“There are much better options and we would be betting far too much on unproven, costly technology that wouldn’t benefit the communities we work in, the environment we vowed to protect or the customers we serve. At the end of the day, this technology would cost well over $1.5 billion, would need 80 percent more water than what we currently use and would need 25 percent of the power it generates to be fed back into the operation to run the machinery.”

The latest analysis by PNM showed that adding carbon capture to the San Juan Generating Station would increase costs by $1.3 billion compared to its preferred scenario, which would retire the plant in 2022.

But the biggest change in recent years has been declining prices for renewable energy. Wind power prices fell 70% over the last decade, while solar power prices fell 89%, according to the latest report from investment bank Lazard, which analyzes the levelized cost of energy of various energy sources each year. Those prices mean that many utilities can now reduce costs by replacing existing coal plants with new renewable energy – even before the added costs of trying to capture emissions from those coal plants.

Coal accounted for 27.5% of U.S. electricity generation in 2018, down from 44.4% in 2009, according to the Energy Information Administration.

Violet Sistovaris, the President of the Indiana utility NIPSCO, explained last week that the utility expects to save billions of dollars for its customers by closing its coal plants:

“Retiring all of our coal plants as quickly as possible was the least-cost option. Running the coal plants to the end of life was the most expensive. They have aged and gotten more expensive to maintain and operate as anyone who runs an industrial facility can appreciate.”

Posted by Joe Smyth

Joe Smyth was a Research and Communications Manager for the Energy and Policy Institute.

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  1. […] in 2018, a Peabody executive emailed a former colleague to say that it could be the last year for the “clean coal” awards, because it’s “hard these days for utilities to take the praise publicly.” Peabody did grant […]

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