Decouple: All about coal
Mark Nelson, managing director of the Radiant Energy Group, joins us for his second masterclass, this time all about coal. Much maligned by environmentalists and a significant source of air…
Groups who oppose the reliable and affordable electricity generated by coal and natural gas such as the Sierra Club and Fresh Energy are predictably scrutinizing Great River Energy (GRE) for their plans to keep generating electricity at the Coal Creek Power Station, an enormous 1,156 MW power plant located in North Dakota. These special interest groups are hoping to pressure the Minnesota Public Utilities Commission into rejecting GRE’s long term resource plan, which depends heavily on the Coal Creek plant to meet the electricity demands of their customers.
This shouldn’t surprise anyone, because the Sierra Club has spearheaded a nationwide campaign against affordable coal electricity in favor wind and solar, despite the fact that these energy sources that simply cannot provide the around-the-clock electricity we all depend upon. Although we can sympathize with GRE for the position they currently find themselves in, this situation was entirely predictable, and in some respects, GRE only has themselves to blame.
Let’s start with some background.
Earlier this year, Great River Energy announced it would get 50 percent of its electricity from renewable sources in the next 12 years. While this announcement generated a few positive headlines, the announcement was more theater than an actual change in the way they would generate electricity. This is because GRE didn’t plan to change their electricity generation portfolio very much. Instead, they planned to switch to renewable electricity on paper only, while still generating massive amounts of electricity at Coal Creek.
If this sounds confusing, that’s because it is. GRE plans on using Renewable Energy Certificates (RECs), which are certificates attached to a given megawatt hour of electricity that is generated by a renewable resource, like a wind turbine. These RECs are bought and sold in the Midwest Renewable Energy Tracking System (MRETS).
By purchasing and “retiring” a certificate, a megawatt hour of coal electricity magically transforms into a “renewable resource.”
If this sounds like a shell game to you, that’s because it is. In my opinion, REC trading is a shady practice that gives consumers a false impression that going green is cheap and easy for companies like Apple and Facebook, when in reality this transition will be neither cheap nor easy. Renewable energy mandates have already caused Minnesota’s electricity prices to skyrocket, increasing 26 percent faster than the national average since the state’s renewable energy mandate was implemented in 2007.
Apparently the Sierra Club doesn’t think much of GRE’s 50 percent renewable announcement, either, which is why they are pushing members of the PUC to disapprove the resource plan and ask the co-op to go back to the drawing board to reduce it’s reliance on coal in favor of more wind, solar, and energy efficiency.
I don’t know if GRE thought the Sierra Club would overlook their plan to satisfy their pledge with RECs or if they were naive enough to think that these professional activists would give their coal plant a pass because they were buying them. Newsflash, they won’t.
Either way, GRE is between a rock and a hard place and its partially their doing. They should shoot straight with their customers rather than pretending the transition from fossil fuels will be easy or affordable, and let their customers know the electricity they refuse to live without cannot possibly be delivered to them 24/7, 365 days a year with intermittent renewable energy resources.
Rather than kowtow to environmental groups hoping they don’t attack them this time, GRE should take a stand and help inform the public about the importance of having dispatchable, affordable energy.