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Why Coal Plant Closings Will Continue

The appointment of Oklahoma Attorney General Scott Pruitt to head the Environmental Protection Agency (EPA) reveals that President-elect Trump is dead serious about his campaign promises to rein in environmental regulations and revive the coal industry. Pruitt is a vocal critic of the EPA’s Clean Power Plan (CPP), which seeks to cut carbon dioxide emissions from power plants, and he has threatened to dismantle CPP to end the “war on coal.”

However, the war on coal is a false narrative that oversimplifies what is happening in the energy economy. In blaming environmental regulations under the Obama administration as the sole reason for the recent turmoil in the coal industry, Trump and Pruitt are ignoring fundamental market realities that are buffeting the industry.

A December 2016 Brookings paper shows how the ongoing large-scale switch in the power sector from coal to cheaper and abundant natural gas—a trend driven more by investors and market forces than by environmental regulations—is playing a huge role in states’ increased ability to “decouple” their economic growth from growth in carbon emissions. The natural gas glut has reshaped how we get electricity across the board, with natural gas-fired generation expected to surpass coal generation in the United States for the first time in 2016.

At the same time, renewable energy is continuing to increase its market share aided by declining costs, increasing efficiency, and economies of scale. Renewables, including hydro, wind, solar, biomass, and geothermal, provided 16.9 percent of electricity generated in the first half of 2016. That compares with 13.7 percent in all of 2015.  Read more...