Could Miniature Power Plants Save the Coal Industry?

The US Department of Energy may spend US$175 million on a program to save the coal industry.

The agency wants to design at least two small-scale, coal-fired power plants with a capacity of about 200 megawatts. That’s roughly one-third the size of a typical generator that uses coal.

According to Bloomberg, Steven Winberg, the assistant secretary for fossil fuel, told reporters at an energy conference in Houston last week that these mini plants could be fired up more quickly than bigger ones.

“That would allow them to smooth out fluctuations in an electric grid that is increasingly dependent on renewable energy sources … that are subject to weather-related fluctuations,” he added.

The potential program already has the backing of US President Donald Trump and Murray Energy CEO Bob Murray. Murray Energy is currently the largest closely held US coal miner.

When asked about the department’s proposed plan, Murray called it a wonderful idea and said that, “[i]t represents thinking out of the box.”

The agency’s suggestion would certainly support Trump’s vow to help save the coal industry.

According to environmental group the Sierra Club, 268 coal-fired power plants have closed or been designated for retirement since 2010, including 22 since Trump was inaugurated.

But despite the department’s good intentions and support from leaders in the coal industry, many insiders are confused by the concept, and environmentalists are opposed to the idea.

“Building a new coal plant today is a bad idea, and building small, modular coal plants is an especially bad idea. They are still dirty and the costs just don’t add up,” said John Walke, director of the Clean Air Project at the Natural Resources Defense Council.

Tammy Ridout, a spokeswoman for Utility American Electric Power, which operates about 15,000 megawatts of coal-generated power, told Bloomberg that it has no plans to build more coal plants.

She added, “[n]ew coal technology has a long way to go to compete as a 24/7 power source with natural gas. We continue to follow the technology developments related to coal generation, but we don’t believe that small modular coal plants will necessarily meet the needs of the industry, our customers and the energy grid.”

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.