Former President Donald Trump's victory in the US presidential election is expected to lead to the reversal of some federal regulations that limit coal-fired generation at the same time as electricity demand growth is growing.
During his presidential campaign, Trump pledged to dismantle the US Environmental Protection Agency's (EPA) new power plant regulations on greenhouse gas and mercury emissions, which would require most coal plants to either be upgraded to capture 90pc of their carbon emissions or retire by 2032. He also promised to cut energy prices in half within the first 12 months of his inauguration, at least partly by rolling back other rules imposed under the administration of current President Joe Biden.
Trump took a similar path during his first term as president, including rolling back the Clean Power Plan imposed under the administration of former president Barack Obama and narrowing the scope of what bodies of water were subject to federal oversight. The Biden administration, in turn, repealed and replaced EPA regulations made during Trump's first presidency.
US courts also invalidated some of the rules rolled out during Obama and Trump's administrations and are currently overseeing litigation on rules imposed under Biden, including the new CO2 and mercury rules finalized earlier this year.
Market participants critical of the new rules have said they could force additional premature coal-fired power plant retirements and hurt electric grid reliability.
The need for "reliable, low cost power is going to mitigate, or potentially negate, any political desires to advance the premature closing of coal-fired generation," US coal producer Alliance Resource Partners' chief executive Joseph Craft said last week.
Craft — whose wife, Kelly Craft, served as the US Ambassador to the UN during Trump's first presidential term — described power demand growth from data centers, artificial intelligence and onshoring manufacturing as a "national security issue" that will require coal plants stay open to meet the "non-traditional demand." Following Trump's re-election "we're going to see more and more, in the domestic market, that utilities are not going to want to close those plants," Craft said.
Trump will likely have support for his agenda in Congress, with Republicans regaining the majority in the US Senate and appearing on track to retain their lead in the House of Representatives.
Some Democrats in coal states also may be supportive of a slower transition from coal.
"What I've come to understand, especially representing a lot of old coal communities in my district — coal mining towns that built those communities — seeing that transition up close and personal has been very informative," Congresswoman Nikki Budzinski (D-Illinois) said during a panel discussion hosted by lawfirm Bracewell on 6 November. "We want to be building more, we want to be building faster, and we need to be building in all of the above in order to meet our energy needs."
Delayed plant retirements
Some utilities already are signaling they may draw out the timelines for some coal-fired power plant retirements in response to the projected load-growth.
The new integrated resource plan (IRP) filed by Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU) last month had a preferred scenario that included keeping units 3 and 4 of the utilities' Mill Creek generating station and unit 3 of the E.W. Brown plant on line until 2035. The utilities in January 2023 had proposed retiring the 412MW E.W. Brown unit 3 by 2028, but the request was rejected by the Kentucky Public Service Commission late last year.
"Despite significant amounts of energy efficiency, customer-installed solar, and other energy-saving activities that are forecast to reduce load by over 3.5pc by 2032, LG&E and KU expect economic development to increase system load by 30pc to 45pc by 2032 compared to 2024," the utilities said.
LG&E and KU also are considering adding new natural gas and solar capacity as well as installing battery storage. They also included an "enhanced solar plan" in their IRP that would install even more solar power in coming years "since the growth of data centers load is driven by customers with aggressive carbon goals."
Duke Energy also indicated last month it may delay the retirement of units 1 and 2 of the Gibson coal plant in Indiana by three years, but installing technology to allow the units to co-fire with natural gas. The proposed change could keep the units operating until 2038, Duke said.
Some utilities have not even provided a retirement date for their remaining coal plants. Dominion Energy currently does not have any fossil fuel-fired power plant retirements in its 15-year outlook "precisely because of the load growth," the company's chief executive Robert Blue said on 1 November.
However, Craft and many other coal market participants have stated that, even with Trump's victory, there will not be any new coal plants being built. This has one coal producer forecast for coal's share of the US generation mix remaining consistent with 2024 through the end of the decade.
