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A lot of coal plants in developed countries are closing. The least efficient ones are most likely to close. That should tend to make the % unprofitable fall, bu

A lot of coal plants in developed countries are closing. The least efficient ones are most likely to close. That should tend to make the % unprofitable fall, but it's rising instead.

colechristensen 7y ago
Electricity production (in the building power plants sense) isn't very elastic. Profitability wouldn't be the only, or likely the primary consideration for what to close and when. The market for electricity isn't very "efficient" in that way, a utility or market doesn't buy and sell from an individual power plant so the price/profitability of a single plant doesn't reflect the supply/demand from that plant.
- TheSpiceIsLife 7y ago
  Yeah, you’d think if 41% were unprofitable this year then next year there’d only be 4000 odd coal-fired plants, and so on and so forth. So obviously profitability isn’t the only thing keeping these plants open or not. Additionally: but this risks locking in high-cost coal power Coal is only high-cost when compared against certain metrics that favour non-coal electricity sources. On the whole electricity is extremely cheap, even from fossil sources, and where the end user may pay enough to care about total usage, the major components of the retail price are not source related, but rather delivery / tax / administrative / bureaucratic.
  - greglindahl 7y ago
    I assume you're counting the cost of pollution and carbon into your price of coal electricity, right?
    - revscat 7y ago
      It is insane to me that doing this is not a part of GAAP, and is very much the exception rather then the rule.
    - TheSpiceIsLife 7y ago
      It’s a good point, and I tend to agree. However, why would I do that when everyone else isn’t. And how would I do that when there’s no economic framework for me, as an individual retail customer, to do so? Sure, I can buy 100% renewables, but here in Australia the retailers want to charge me more for that choice. Here in Tasmania the local retailer, Aurora Energy, wants an additional 6.023 cents / kWh for 100% renewable, that’s that’s on top of their peak rate of 32.587 cents / kWh. An additional 18.5%! Why would I do that if I’m already living near my economic ability? Edit to add: And, even if I did choose to pay that premium, it’ll have approximately no effect whatsoever on global climate outcomes. Me paying an additional 18.5% on my bill to feel good won’t suck the carbon out of the air! This is why we neee regulation in this scenario more than we need individual choice.
      - greglindahl 7y ago
        I was asking about the underlying assumptions, not the retail market. Those are two different things. You appear to be only referring only to the latter. Surely we should be able to talk about the first before considering the second?
        TheSpiceIsLife 7y ago
        I meant to address that with my last sentence.
bluGill 7y ago
Close or mothballed? There is a difference. I met someone some years back who's job was to keep a coal power plant operational. The boiler was from the 1880s, and the generator installed in the 1920s. They don't use the generator as regular mains power costs 5 times less due to the efficiency of modern technology. However the utility gives them a large enough discount on power to keep it running that he had a job and can repair it as needed. Once every 5 years or so the utility calls him to turn it on and 12 hours later it is providing power to half the town. I believe anicdotes like that are somewhat common as the utilities want to be sure there is always power when someone wants it.
- philipkglass 7y ago
  Some are mothballing but a lot are being demolished. Here are a few recent articles: "Demolition Of Power Plant Rumbles Across Bucks County" https://levittownnow.com/2020/04/04/demolition-of-power-plant-rumbles-across-bucks-county/ https://levittownnow.com/2020/04/04/demolition-of-power-plan... "Fortum’s Inkoo coal-fired power plant demolished to ground level" https://www.webwire.com/ViewPressRel.asp?aId=257097 https://www.webwire.com/ViewPressRel.asp?aId=257097 "Last Smokestack Demolished At Former Coal-Fired Power Plant" https://www.wgbh.org/news/local-news/2020/02/24/last-smokestack-demolished-at-former-coal-fired-power-plant https://www.wgbh.org/news/local-news/2020/02/24/last-smokest... "Sunbury Generation plant demolished by explosives" https://local21news.com/news/local/watch-sunbury-generation-plant-to-be-demolished-by-explosives https://local21news.com/news/local/watch-sunbury-generation-...
- greglindahl 7y ago
  Most peaker plants are natural gas these days. Coal plants tend to take a lot longer to start. Regardless of that, from a climate change point of view, a plant that runs for a small amount of time once per 5 years is not that significant.
  - bluGill 7y ago
    True, but base load plants are needed in reserve as well.
- 7y ago

A lot of coal plants in developed countries are closing. The least efficient ones are most likely to close. That should tend to make the % unprofitable fall, but it's rising instead.

colechristensen 7y ago

Electricity production (in the building power plants sense) isn't very elastic. Profitability wouldn't be the only, or likely the primary consideration for what to close and when. The market for electricity isn't very "efficient" in that way, a utility or market doesn't buy and sell from an individual power plant so the price/profitability of a single plant doesn't reflect the supply/demand from that plant.

TheSpiceIsLife 7y ago
Yeah, you’d think if 41% were unprofitable this year then next year there’d only be 4000 odd coal-fired plants, and so on and so forth. So obviously profitability isn’t the only thing keeping these plants open or not. Additionally: but this risks locking in high-cost coal power Coal is only high-cost when compared against certain metrics that favour non-coal electricity sources. On the whole electricity is extremely cheap, even from fossil sources, and where the end user may pay enough to care about total usage, the major components of the retail price are not source related, but rather delivery / tax / administrative / bureaucratic.
- greglindahl 7y ago
  I assume you're counting the cost of pollution and carbon into your price of coal electricity, right?
  - revscat 7y ago
    It is insane to me that doing this is not a part of GAAP, and is very much the exception rather then the rule.
  - TheSpiceIsLife 7y ago
    It’s a good point, and I tend to agree. However, why would I do that when everyone else isn’t. And how would I do that when there’s no economic framework for me, as an individual retail customer, to do so? Sure, I can buy 100% renewables, but here in Australia the retailers want to charge me more for that choice. Here in Tasmania the local retailer, Aurora Energy, wants an additional 6.023 cents / kWh for 100% renewable, that’s that’s on top of their peak rate of 32.587 cents / kWh. An additional 18.5%! Why would I do that if I’m already living near my economic ability? Edit to add: And, even if I did choose to pay that premium, it’ll have approximately no effect whatsoever on global climate outcomes. Me paying an additional 18.5% on my bill to feel good won’t suck the carbon out of the air! This is why we neee regulation in this scenario more than we need individual choice.
    - greglindahl 7y ago
      I was asking about the underlying assumptions, not the retail market. Those are two different things. You appear to be only referring only to the latter. Surely we should be able to talk about the first before considering the second?
      - TheSpiceIsLife 7y ago
        I meant to address that with my last sentence.

bluGill 7y ago

Close or mothballed? There is a difference. I met someone some years back who's job was to keep a coal power plant operational. The boiler was from the 1880s, and the generator installed in the 1920s. They don't use the generator as regular mains power costs 5 times less due to the efficiency of modern technology. However the utility gives them a large enough discount on power to keep it running that he had a job and can repair it as needed. Once every 5 years or so the utility calls him to turn it on and 12 hours later it is providing power to half the town. I believe anicdotes like that are somewhat common as the utilities want to be sure there is always power when someone wants it.

philipkglass 7y ago
Some are mothballing but a lot are being demolished. Here are a few recent articles: "Demolition Of Power Plant Rumbles Across Bucks County" https://levittownnow.com/2020/04/04/demolition-of-power-plant-rumbles-across-bucks-county/ https://levittownnow.com/2020/04/04/demolition-of-power-plan... "Fortum’s Inkoo coal-fired power plant demolished to ground level" https://www.webwire.com/ViewPressRel.asp?aId=257097 https://www.webwire.com/ViewPressRel.asp?aId=257097 "Last Smokestack Demolished At Former Coal-Fired Power Plant" https://www.wgbh.org/news/local-news/2020/02/24/last-smokestack-demolished-at-former-coal-fired-power-plant https://www.wgbh.org/news/local-news/2020/02/24/last-smokest... "Sunbury Generation plant demolished by explosives" https://local21news.com/news/local/watch-sunbury-generation-plant-to-be-demolished-by-explosives https://local21news.com/news/local/watch-sunbury-generation-...
greglindahl 7y ago
Most peaker plants are natural gas these days. Coal plants tend to take a lot longer to start. Regardless of that, from a climate change point of view, a plant that runs for a small amount of time once per 5 years is not that significant.
- bluGill 7y ago
  True, but base load plants are needed in reserve as well.
7y ago