Are these coal units competitive?
Most of these units are not competitive in today's electricity market. That they operate to the extent they do is related to situational requirements — possibly including the need to honor take-or-pay coal contracts.
The owners of these near-term retirement units have considered the reliability consequences of retirement and are satisfied. Contrary to what seems like a way to prop up coal demand, our analysis indicates that the effect on total coal burn — should those coal units not retire — is minimal. It would essentially push other coal units to lower capacity factors, and the amount of coal-fired power generation would barely change.
Coal and the value of reliability and resilience
The administration also passed on another potential opportunity to make a stronger case for coal with the release of the Department of Energy's analysis of grid reliability.
The DOE's report was promoted by the coal and nuclear industries based on the theory that baseload plants, particularly coal and nuclear, are disadvantaged in the marketplace by renewable subsidies and a market structure that doesn't reward reliability — the ability to meet electricity demand — and resilience — the ability to survive or recover from extraordinary events.
The coal industry was hoping that the report would, perhaps, make recommendations for supporting coal plants. Instead, the report recognized that reliability and resilience are valuable and required, but it did not specifically endorse coal units other than to mention that coal units rank high in both reliability and resilience.
The report recommends that grid operators and vertical utilities work to properly value reliability and resilience while employing a fuel- and technology-neutral approach to near- and long-term planning.
President Trump and his administration are vocal supporters of the coal industry. However, the administration has decided that the security and reliability of the national electric system is not in jeopardy over the next two years to the extent that emergency executive powers must be used to "save" the grid, however painful the situation may be for some coal producers and coal unit operators.