Equilibrium/Sustainability — Presented by Southern Company — Amid failing power grid, Puerto Ricans go DIY

Equilibrium/Sustainability — Presented by Southern Company — Amid failing power grid, Puerto Ricans go DIY
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Today is Tuesday. Welcome to Equilibrium, a newsletter that tracks the growing global battle over the future of sustainability. Subscribe here: thehill.com/newsletter-signup

The lack of reliable power is sparking a political crisis on the island territory of Puerto Rico, where years of neglect, a string of severe hurricanes and a shaky takeover by a private contractor have resulted in the most expensive and unreliable electricity in the U.S., according to The New York Times.

And attempts to rebuild or patch a grid that was ailing even before the storms hit risk making things worse, University of Puerto Rico professor Agustín A. Irizarry told the Times.

In the absence of centralized solutions, “people are doing it on their own," installing rooftop solar and batteries "without the government stepping in,” Irizarry said. 

“Eventually, there won’t be clients for the electrical grid because they will not have taken the trouble to modernize the grid," he added.

Today we'll look at two aspects of the global crunch in electric power. First, we’ll examine why the U.S. is experiencing its first year-over-year increase in coal-fired power production since the Obama administration — and why it's probably not a sign of a coal revival. Then we’ll turn to China, where new solar power facilities are suddenly outcompeting the dominant coal industry on price.

For Equilibrium, we are Saul Elbein and Sharon Udasin. Please send tips or comments to Saul at selbein@thehill.com or Sharon at sudasin@thehill.com. Follow us on Twitter: @saul_elbein and @sharonudasin

Let’s get to it.

Coal electricity on track for 22 percent jump

The U.S. is expected to generate 22 percent more coal-fired power in 2021 than in 2020 — the first year-over-year increase in coal production since 2014, according to the U.S. Energy Information Administration (EIA).

This jump is linked to a surge in natural gas prices in comparison to coal prices, which have remained relatively stable, the EIA found in its latest Short-Term Energy Outlook.

Because coal and natural gas are the two largest sources of electricity generation in the U.S., these two fossil fuels compete in many parts of the country to supply power, the EIA report said. Natural gas prices have been more volatile than coal prices — meaning that the cost of gas ends up determining the relative market share of the resource.

But aren’t natural gas plants more efficient? Yes. The greater efficiency of electricity production from natural gas can maintain an economic advantage even if gas prices are a bit higher than those of coal, according to the EIA.

However, the current year-to-date delivered cost of natural gas to U.S. power plants is more than double last year’s price, the EIA outlook said. 

So is coal making a comeback? Not likely. Researchers at the EIA said that they don’t expect this year’s increase to continue.

For one thing, the electric power sector has retired about 30 percent of its coal-generating capacity since 2010, and no new plants have come online since 2013, the report said. And even though coal stocks at U.S. power plants remain low, production at operating coal mines has not been increasing as rapidly as the surge in coal demand, according to the EIA. 

Just two years ago, U.S. coal consumption decreased to its lowest level since 1964, as natural gas prices reached record lows, CNN reported.

What about beyond 2021? The EIA forecasted that in 2022, U.S. coal-fired electricity production will drop about 5 percent in response to continuing plant retirements, as well as slightly lower natural gas prices.



At Southern Company, we achieved our interim net zero energy goal ten years early. Today, we continue our work toward a net zero future.



What about elsewhere? Coal has reemerged as an alternative to natural gas particularly in Europe, where wholesale gas prices have become so high that many utilities have switched to coal, Reuters reported. 

Coal demand from markets like China and India has increased, according to Reuters. An International Energy Agency report forecasted that coal demand worldwide would continue to rise somewhat until 2025, The Wall Street Journal reported.

"It will be a tragedy if in this crunch we will start investing again in coal, which is an energy that has no future and is extremely polluting," European Commission Executive Vice President Frans Timmermans told Reuters.

So what’s the solution? From Timmermans’s perspective, governments should be opting for renewable energy, which he said has remained consistently cheap as coal prices have increased, according to Reuters.  

"The smart thing to do is, during this energy crisis, to reduce as soon as possible your dependency on fossil fuels,” Timmermans said.

But renewables may just not be ready. As demand for gas, oil and coal has soared in recent weeks, the fuel frenzy “has laid bare the fragility of global supplies as countries drive to pivot from fossil fuels to cleaner sources of energy,” the Journal reported.

Investors and governments are trying to accelerate the clean energy transition, but green energy spending is not yet growing fast enough to make up for the fact that fossil fuels still account for most of the world’s energy, according to the Journal.

Last words: “The world isn’t investing enough to meet its future energy needs,” the International Energy Agency report said, cited by the Journal.  “And uncertainties over policies and demand trajectories create a strong risk of a volatile period ahead for energy markets.”

Solar rising in China, will catch up with coal: study

China will be able to deploy new solar capacity nationwide at the same price as coal by 2023, a new study out of Harvard University has found.  

As the world’s largest carbon emitter, China’s rapid late 20th-century rise was and remains fueled largely by coal. But it is also on the cusp of a snowballing energy transition, as the cost of generating solar power continues to drop, according to the Harvard study, which occurred in collaboration withTsinghua, Nankai and Renmin universities.

“Today subsidy-free solar power has become cheaper than coal power in most parts of China,” in a trajectory spreading across the country, study coauthor Xi Lu of Tsinghua said in a statement.

Top line: China’s path toward mass solar deployment won’t stop in 2023 — the point at which the researchers expect solar development to reach the same price as coal. They calculated that by 2060, China will have the capacity to meet 43 percent of its power needs with solar energy that costs less than half of China’s 2019 coal energy prices.  

That figure would be less than a quarter of the current average U.S. energy cost, the study found.

These forecasts indicate much faster growth than anticipated in previous studies, which the researchers said had failed to account for the way that China’s growing solar sector — which now represents a third of total global solar production — has benefited from a hothouse of synergy and shared economies of scale.

A solar snowball: One big factor in the rate of solar growth is the “cost of capital:” how much solar developers have to pay in interest or dividends to get access to the money needed to build a new project.

This number has plummeted 63 percent in China since 2011, even as government subsidies fell away, researchers said.

This fall was driven by the simultaneous development of photovoltaic solar power and battery storage technology in tandem with a growth of regulatory and technical know-how needed to integrate intermittent solar with electrical grids.



At Southern Company, we achieved our interim net zero energy goal ten years early. Today, we continue our work toward a net zero future.


The storage problem: That change has helped shift the balance away from coal power, which is in many ways the inverse of solar. But it also helps explain how coal still accounts for about two-thirds of China’s energy mix. The country’s energy demands surged by 8.5 times between 1979 and 2019 — leading to severe air pollution events over China’s population centers, the report found. 

Coal energy contains ancient sunlight stored in the carbonized bodies of ancient plants — making it functionally an on-demand battery that can be burned in a generator as needed to make electricity to meet demand.

Solar energy, by contrast, produces electricity immediately as photons hit photovoltaic solar panels, discharging electricity down a wire — making these panels, in many ways, a simpler addition than fossil fuels-energy to the electric grid, according to the report.

The challenge for solar is storage: The grid cannot easily cope with the wide swings of solar energy, meaning that its lower generation costs and simpler tie-ins are offset by the need for new, higher-capacity battery technology.

An energy transition point is in sight: But the Chinese industrial hothouse of solar and storage innovation and production meant that China had sufficient “technical potential” as of 2020 to roll out enough new solar generation to meet twice the nation’s existing energy needs — from residential power to car traffic — with solar energy alone, the study found.

While the country is a long way from tapping that theoretical potential, in more than three-quarters of China, new solar power is now the same price as coal, according to the report.

Last words: "The findings highlight a crucial energy transition point, not only for China but for other countries, at which combined solar power and storage systems become a cheaper alternative to coal-fired electricity and a more grid-compatible option,” coauthor Michael B. McElroy of Harvard said in a statement.


Tuesday Troubles 

In which people try to solve things that are going wrong — whether those problems have solutions or not.

Big corporations like P&G, IKEA say shortages aren’t impacting their sales

  • Procter & Gamble Co. said that it expects to see continued profit growth over the coming months, even as a global supply chain shortage brings increases in costs, The Wall Street Journal reported.
  • This is because big corporations, like P&G, are digging into their pockets “to insulate themselves from the global supply-chain meltdown,” by charging more for items like razors, beauty products, oral care items, diapers and toilet paper, according to the Journal.
  • Another global giant, IKEA, told the Journal that although many of its products have disappeared from shelves as they await trucks in warehouses, the company has not experienced significant losses in sales due to the range of products it offers.
  • The consumer shift to online purchases has also provided IKEA with a sales boost that has compensated for lost revenue, the Journal reported.

Kidnapping of missionaries highlights a Haiti at risk of state failure

  • 400 Mawozo, a Haitian gang known for making a business of kidnapping, is demanding $1 million apiece for 17 members of a kidnapped Amish-Mennonite missionary group, according to The Wall Street Journal.
  • The Haitian government is reluctant to pay the $17 million, which the gang will likely use “for more guns and more munitions,” Justice Minister Liszt Quitel told the Journal.
  • The dilemma highlights a key sustainability problem in Haiti: With the state in turmoil, armed gangs are filling the power vacuum.
  • "The gangs are federated, they are well-armed, they have more money and ideology,"  Gedeon Jean, director of Haitian nonprofit Center for Analysis and Research in Human Rights, told the Journal.
  • The country is "heading toward a proto-state. The gangs are getting stronger while the police are getting weaker," Jean said.

EU satellite spots secret location of massive Russian gas leak

  • European Space Agency satellite imagery has revealed the likely location of a Russian pipeline leak that could have otherwise gone undetected, The Washington Post reported.
  • The four-year-old Copernicus Sentinel-5P, which orbits the planet 14 times a day, can look for traces of methane and other gases — hovering some 520 miles over the Earth, according to the Post.
  • While Russian state gas giant Gazprom hurried to repair the defect — from which methane was escaping “at a breakneck rate of approximately 395 metric tons an hour” this past June — the company remained secretive about the exact location of the leak, the Post reported.
  • But by using the satellite imagery, a Washington Post photographer has now pinpointed a likely spot about 490 miles east of Moscow, according to the Post.


Please visit The Hill’s sustainability section online for the web version of this newsletter and more stories. We’ll see you on Wednesday.