QUICK FACTS
- Kentucky is the seventh-largest coal-producing state in the nation. About one out of six U.S. operating coal mines are located in Kentucky, more than any other state except West Virginia and Pennsylvania.
- Kentucky’s one oil refinery can process about 291,000 barrels of crude oil per calendar day. It is the 15th-largest U.S. oil refinery and provides about 1.6% of the nation’s total refining capacity.
- In 2021, about 71% of Kentucky’s electricity net generation was coal-fired, the fourth-largest share of any state after West Virginia, Missouri, and Wyoming.
- Kentucky has 22 underground natural gas storage sites that can hold almost 222 billion cubic feet of gas, which is about 2% of U.S. total underground storage capacity.
- In 2021, Kentucky had the 12th-lowest average electricity price of any state and the second-lowest price for a state east of the Mississippi River. Slightly more than half of Kentucky households use electricity for their heating.
Last Updated: August 18, 2022
Michelle Bloodworth | January 3, 2023 | Power Magazine
So far, utilities have announced plans to retire some 93,000 MW (nameplate) of coal— almost half the existing coal fleet—by the end of this decade. Coal retirements combined with increasing penetration of wind and solar power are the major cause for concern about generating capacity shortfalls in many regions of the country, especially during extreme weather. The North American Electric Reliability Corporation (NERC) is responsible for grid reliability across the U.S. and parts of Canada and Mexico.
In 2015, NERC gave subtle warnings about the possibility of reliability problems. “The North American Bulk Power System (BPS) is undergoing a significant change in the mix of generation resources and the subsequent transmission expansion… the rate of this transformation in certain regions is impacting planning and operating of the BPS,” it said.
By late last year, NERC’s warnings had become more direct.
“The BPS has already seen a great deal of change and more is underway. Managing this pace of change presents the greatest challenge to reliability. … Energy risks emerge when variable energy resources (VER) like wind and solar are not supported by flexible resources that include sufficient dispatchable, fuel-assured, and weatherized generation,” it cautioned.
Accredited Capacity Differences Proving NERC’s point about the rapid grid transition, almost 64,000 MW (nameplate) of coal-fired capacity retired, and 220,000 MW (nameplate) of wind and solar capacity were added to the grid between 2015 and this year. This presents a problem because the accredited capacity of coal is 90%, while the accredited capacity of wind is a little less than 17% and the accredited capacity of solar will decline from 50% to 20% as more solar capacity is brought online, according to the Midcontinent Independent System Operator (MISO). (The accredited capacity of nuclear is 95% and natural gas is 90%, the same as coal.)
To illustrate how accredited capacity works, 1,000 MW of nameplate coal capacity can be counted on to provide 900 MW of power when electricity demand peaks. By comparison, 1,000 MW of nameplate wind capacity can be counted on to produce only 170 MW of power at peak demand. MISO, for example, has projected that its system will have 232,000 MW of nameplate capacity in 2026, but only 176,000 MW of accredited capacity.
By 2031, the MISO shortfall between accredited and nameplate capacity widens to 71,000 MW. The U.S. cannot afford to have retirements outpace additions, especially at a time when electrification of the economy (such as through growth in electric vehicles) is increasing electricity demand.
EPA Exacerbates Situation
To make matters worse, these capacity gaps do not include coal retirements that will be caused by U.S. Environmental Protection Agency (EPA) regulations. For example, the EPA estimates that its proposed Ozone Transport Rule will cause the retirement of 23,000 MW of coal, more than 10% of the existing coal fleet, by 2025. This is only one of six EPA rules that will cause more coal retirements. The other five are the Coal Combustion Residuals Rule, Effluent Limitations Guidelines, Regional Haze Rule, a replacement for the Affordable Clean Energy Rule, and revised Mercury and Air Toxics Standards. We estimate that the collective impacts of these rules will cause coal retirements to increase substantially during from 2026 to 2028, even though announced coal retirements already total more than 37,000 MW during the three-year period.
Preventing Disaster
It is time to move beyond studying the reliability train wreck that we seem headed for, and take meaningful and timely steps to prevent it, such as the following:
- NERC’s reliability assessments are critical to help head off problems, but NERC needs to assess the impacts of a realistic number of future coal retirements. We expect NERC to issue another assessment by mid-December that takes into consideration more coal retirements than it has in the past.
- Utility commissioners and grid operators need to pay more attention to coal retirements and EPA regulations.
- Grid operators need to identify all the attributes that are necessary for reliability and ensure that market rules are designed to provide those attributes. The Federal Energy Regulatory Commission (FERC) should encourage such efforts by the grid operators.
- In light of future reliability risks, we would like to see federal agencies conduct a formal reliability assessment for rules and policies that could adversely impact grid reliability. An Executive Order could accomplish this.
- Last, there are any number of actions the EPA could take on its own to avoid causing reliability problems. These include paying careful attention to the concerns of FERC, NERC, and grid operators; deferring to states about how to implement regulations; making regulations flexible, not prescriptive; and providing adequate time for retiring coal capacity to be replaced.
We asked in recent polling what is most important to people about their electricity: that it is reliable, affordable, or produced by wind and solar? Reliability ranked number one, followed closely by affordability. Both of these ranked far ahead of wind and solar. This suggests there will be serious consequences if the EPA, utility commissioners, grid operators, NERC, FERC, and others fail to keep the lights on at a price consumers find acceptable.
—Michelle Bloodworth is president and CEO of America’s Power, the only national trade organization whose sole mission is to advocate at the federal and state levels on behalf of the U.S. coal fleet and its supply chain.
LEXINGTON, KY (January 3, 2023) — The Kentucky Coal Association (KCA) applauds today’s action by State Treasurer Allison Ball taking the first steps to force the divestment of state assets from companies that push anti-coal, anti-fossil fuel, ESG (Environmental and Social Guidance) policies.
In a news release announcing the action, Treasurer Ball explained, “When companies boycott fossil fuels, they intentionally choke off the lifeblood of capital to Kentucky’s signature industries. Traditional energy sources fuel our Kentucky economy, provide much needed jobs, and warm our homes. Kentucky must not allow our signature industries to be irreparably damaged based upon the ideological whims of a select few.”
KCA President Tucker Davis said Ball’s action is a much-needed step in combating the proliferation of asset management companies and pushing a radicalized social agenda with state tax dollars.
“For far too long these companies have engaged in the manipulation of investment dollars with the specific intent of destroying the nation’s fossil fuel industry,” Davis said. “These policies are directly contrary to the best interests of Kentucky, which depends on coal, oil and gas for a substantial part of its budget and for meeting more than 90 percent of its energy needs. These companies have effectively strangled fossil fuel industries for investment capital. They have used their clout to drive decisions that are based on their own social agenda and not the needs and best interests of their investors. We welcome Treasurer Ball’s action.”
The following companies are included in the Treasurer’s list as subject to divestment of state assets: Blackrock Inc., BNP Parisbas SA, Citigroup, Climate First Bank, Danske Bank A/S. HSBC PLC, JP Morgan Chase, Nordea Bank ABP, Schroder’s PLC, Svenska Handelsbanken AB, and Swedbank.
For more information contact Tucker Davis at the Kentucky Coal Association at (859)233-4743 or via email at tdavis@kentuckycoal.com.
FRANKFORT, KY (November 18, 2022) – The North American Electric Reliability Corporation (NERC) is warning of the likelihood of blackouts, brownouts and electricity this shortage this winter. In a report released Thursday, John Moura, NERC’s director of Reliability Assessment and Performance Analysis said, “while the grid has a sufficient supply of capacity resources under normal winter conditions, we are concerned that some areas are highly vulnerable to extreme and prolonged cold. As a result, load-shedding may be required to maintain reliability.”
In response to NERC’s report, KCA President Tucker Davis released the following statement:
“Electricity is vital to a modern economy, but more and more often our country is seeing electricity shortages, blackouts, brownouts and forced reduction of use. This simply didn’t have to happen. It was planned and an intentional part of the left’s war on coal. In 2008, coal provided more than 50 percent of the nation’s electricity. At that time, electricity was affordable, reliable and abundant.
“Between 2009 and today, almost 300 coal powerplants – 40 percent of the nation’s coal-fired generation fleet, has been closed and another 27,000 MW of coal-fired generation in 24 states is expected to retire in the next two years. It is clear that shutting down our nation’s coal-fired generation fleet has been a mistake. We simply can’t afford to continue down this road. These closures are leaving widespread energy poverty and economic destruction in their wake. We urge our elected representatives to take the steps needed not only to stop further closures of coal-fired power generation, but also to reverse the policies of the Obama and Biden administrations. We need more affordable-reliable coal-fired electricity, not less.”
President Biden said Friday that “we’re going to be shutting [coal] plants down all across America” in order to shift to wind power in a comment that drew criticism from the Republican National Committee.
“I was in Massachusetts about a month ago on the site of the largest old coal plant in America,” Biden said at an event in Carlsbad, California, on Friday. “Guess what? It cost them too much money. They can’t count. No one is building new coal plants because they can’t rely on it. Even if they have all the coal guaranteed for the rest of the existence of the planet.”
The Kentucky Coal Association held its annual meeting for 2022 on October 14 at Malone’s Prime Events Center in Lexington. Speakers for the meeting included Senator Rand Paul; Rep. Andy Barr; Kentucky State Treasurer Allison Ball; KCA Attorney Clay Larkin; KCA Lobbyist Amy Wickliffe; Mark Heath, an attorney with the law firm of Spillman, Thomas & Battle in Charleston, West Virginia, and Ambassador Kelly Craft, who is running for governor.
Ball was presented with a Friends of Coal Award for 2022.
In the photo above, Kentucky Coal Association President Tucker Davis (second from left) joins Clay Larkin, Joe Craft, David Lamb and Kentucky State Treasurer Allison Ball, recipient of the KCA’s Friends of Coal Award for 2022.
Weeks before international climate negotiations convene in Egypt, US officials are working to broker multibillion-dollar plans to steer some of the world’s most populous countries to cleaner forms of energy.
“We’re very much engaged in negotiating with Indonesia, with Vietnam, with South Africa and Mexico,” John Kerry, the US special presidential envoy for climate, said in an interview Thursday. “There’s a lot of energy going into these efforts.”
Kerry is set to visit Vietnam next week and will travel to Mexico again before the UN climate summit in November, he said. That comes amid ongoing negotiations with Indonesia and work to develop a detailed investment plan for a landmark $8.5 billion initiative to shift South Africa’s power system away from coal.
The regional initiatives are part of an effort to drive green energy and climate progress in developing countries, buttressing broader multilateral efforts. Rich countries have been encouraged to provide financing to support clean-energy initiatives to nations such as South Africa and Indonesia under a rubric branded “just energy-transition partnerships.”
“We’re creating a formula by which countries are able to embrace real transformation to move to a clean energy economy,” Kerry said.
Meanwhile, Kerry said he continues to press Wall Street to drive billions of dollars into clean-energy projects around the globe.
“We’re working on a way to attract private capital to the table in a way that has environmental integrity and which can accelerate the deployment of funds.”
Sometimes we can spend so much time at a place that it seems alive. That’s certainly how I felt when it came to the Joppa Generating Station in southern Illinois, a coal-fired power plant that I worked at as the station chemist for 23 years. Earlier this year, I stood aghast and watched my old friend, a reliable titan of the energy industry, breathe her last – destroyed by the Sierra Club, regulators driven by misguided ideology, and greedy executives who saw an opportunity to leverage that ideology to force Americans into one of the most radical and costly economic transformations in world history; the change from reliable low cost fossil fuels to unreliable high cost wind and solar.
During my two decades at Joppa, my crew and I monitored her boiler water and steam chemistry like a physician does a patient’s blood. I personally climbed over her turbines and into her boiler components any time maintenance was performed, checking for any hint of poor health. I was a small cog in a larger machine of workers who kept her running at almost full capacity, in every kind of weather, for 62 years.
Joppa delivered cheap, reliable, and safe electricity to tens of thousands of families from the time she was commissioned in 1956. The longer I worked there, the more I was amazed by the feat of engineering she represented – the visionaries who designed the plant still used slide-rules, and drew up the plans by hand.
In the early 1950s, the Department of Defense (DOD) summoned the CEOs of several utilities, normally fierce competitors, to Washington, D.C. DOD officials convinced these men that, since the Cold War was in full swing, they should work together to build the generating station. The new power plant’s purpose would be to supply the massive amounts of electricity needed for a Uranium Enrichment plant being built simultaneously across the river in Paducah, Kentucky, to support the nation’s nuclear arsenal. The plant would be the largest in the United States at that time and would be designed to military specifications for toughness and reliability. Notwithstanding that in the coming decades her size would be surpassed by newer plants, Joppa’s reliability was rarely exceeded.
American steel, two inches thick in some places, made up her core. She had mechanical design features that had been perfected in WWII and that would operate almost continually for half a century. Yet, she was flexible. Over her life, her caretakers changed the fuel she used and the way it was burned, among many other features, to make her compliant with the never-ending onslaught of environmental regulations.
Local news stories decried the lost jobs that would result from her closing, but that’s a fraction of the price that will now be paid. As recent experience in California and Texas, as well as in Europe, has already demonstrated, the rapid reduction in the number of coal-fueled plants threatens the reliability of electricity supplies, threatening millions with blackouts. In contrast, coal-fired plants, with their on-site, 90-day supply of fuel, operate in the coldest polar vortex or the most intense heat wave. The death of the Joppa Generating Station, and the deaths of dozens of other coal plants, will be felt by the nation when rolling blackouts soon become the norm if the Biden administration’s suicidal green energy policies are not soon reversed.
The threat of a railroad strike is back after a major rail union’s rank-and-file members reject a tentative agreement.
Railroads move about 30 percent of the nation’s freight, but about 90 percent of West Virginia’s coal, so a strike could have a huge effect on the Mountain State.
The U.S.’s third largest railroad union has rejected a deal renewing the possibility of a strike that could cripple the economy and supply chain. Both sides plan a return to the bargaining table before that happens.
