The beginning of the end of coal?

Yesterday on All Things Considered I reported how the Minnesota Department of Commerce is pushing for the closure of five coal-fired electric generators in northern Minnesota by the end of the decade.

tacharbor-0286.jpgMinnesota’s Commerce Department wants Minnesota Power to shut down one of its three coal-fired generators at its Taconite Harbor Energy Center along the North Shore of Lake Superior in Schroeder.

That recommendation from Commerce came after the Minnesota Public Utilities Commission ordered Minnesota Power to study the economics of closing some of its coal units. It was the first time the PUC had ordered a so-called “baseload diversification study.” The PUC has since also asked Interstate Power and Light and Otter Tail Power for similar studies. It wants Otter Tail to evaluate retiring its Hoot Lake coal-fired power plant.

Tough new environmental regulations are increasingly making older and smaller coal-fired generation stations uneconomic. Many utilities are turning instead to cheap and much cleaner burning natural gas. Xcel has already converted two Twin Cities area coal plants to natural gas. Midwest Generation just announced it will close two Chicago area coal plants sooner then expected rather than retrofit them.

So is this the beginning of the end of coal? Bloomberg Energy Analyst Rob Barnett published a report this week that declares the “twilight of coal-fired power” in the U.S. Barnett says a proposed new EPA carbon dioxide standard rolled out last month “effectively bans the construction of new coal-fired power plants” in the U.S.

Still, Barnett says we’ll still have coal-fired power in the U.S. for decades to come. It will just make up a smaller chunk of our electric generation. Already, coal’s share of generation capacity has shrunk from 52% to 40% since 2000.

Minnesota Power’s plans mirror that trajectory. The utility now derives about 95% of its electricity from coal. But next year that share will drop to 75%, and utility Vice President Al Rudeck says that will drop to 50% by 2025.

But the company also announced this week it will spend nearly $400 million dollars on environmental upgrades at its giant Boswell power plant in Cohasset. As Rudeck describes, the utility will invest more heavily in wind, hydro, and gas, but coal will still provide the base of its generation.