Friday, March 28, 2008

The Coal Bubble

From the Florence Morning News, earlier this month:

Santee Cooper’s plan part of nationwide rush

Sunday, Mar 09, 2008 - 04:00 AM
By Dana Beach, Executive Director of the Coastal Conservation League

An op-ed in last Sunday’s Morning News by O.L. Thompson, chairman of the Board of Santee Cooper, makes three unsupportable claims regarding the state’s energy needs: first, that South Carolina is in imminent danger of blackouts; second, that energy efficiency and renewable energy cannot meet the state’s energy needs; and third, that the only way for Santee Cooper to serve its customers is to build a new coal-fired electric generation plant on the Great Pee Dee River.

Santee Cooper and Mr. Thompson contend we need this coal plant because of South Carolina’s growing population. If we don’t build coal plants to keep up with growth, they say we’ll run out of power. There are a number of reasons to doubt this claim.

We all expect South Carolina to grow over the long term, but if recent economic trends are any indication, growth will not be coming to our state as quickly as we thought back in 2005 when Santee Cooper began developing its plans for new generation.

In fact, Santee Cooper’s proposal is part of a nationwide rush on the part of utilities to build coal plants. As with any rush, it is characterized by “irrational exuberance.” Indeed, the Department of Energy has recently estimated that far more power plants are being developed than are necessary.

Santee Cooper itself just recently finished constructing a new coal plant last year and will complete another next year. Do we need another? In the Carolinas, the electric power industry’s own planning authority, the North American Electric Reliability Corporation, estimates that there will be more than enough power for our region over the next ten years.

Even if bullish growth projections come true, growth doesn’t directly equate to energy consumption. South Carolina is among the least efficient users of electricity in the nation not because of a unique set of conditions beyond our control, but because our utilities have failed to promote ways to maintain our standard of living while using less energy.

Santee Cooper and its Chairman assert that energy efficiency and renewable energy are incapable of meeting the state’s energy needs. Yet the national expert Santee Cooper hired to demonstrate the need for additional power is the same national expert that produced two studies for Santee Cooper’s largest customer, the state’s electric cooperatives. These studies show that energy efficiency and renewables could cost-effectively produce up to 25 percent of the states energy by 2017.

Santee Cooper’s own CEO has led the National Action Plan on Energy Efficiency, which concluded that “Well designed energy efficiency programs are delivering annual energy savings on the order of 1 percent of electricity and natural gas sales.” Energy savings at this level are enough to displace the need for new power plants.

But according to data it has provided to the Department of Energy, Santee Cooper has saved only about 0.6 percent of its retail sales, achieving less than 0.02 percent annual savings over the past four years. In truth, Santee Cooper has yet to take a serious look at energy efficiency.

Instead of spending over a billion dollars to build a new coal plant, our state power authority should provide incentives to its customers to conserve energy and produce renewable energy in homes and businesses.

Clean energy alternatives like efficiency and renewables are faster to deploy, cheaper to build, cleaner to operate, and produce more jobs per unit of energy than any other option. For this reason, they are the clear answer to the needs of Santee Cooper’s customers.

In contrast to Chairman Thompson’s claim, rushing to build a coal plant is the easy way out for Santee Cooper. Its customers will pay the tens of billions of dollars it will cost to operate this plant, over its 50 year lifetime, through increased electric bills; they will pay for the global warming it helps to cause via higher insurance rates; and they will pay for the pollution it generates through more frequent doctor’s visits. Santee Cooper will pay none of these bills.

Before Santee Cooper goes ahead with its plans, it ought to spend a little of its time and money studying the full costs and implications of its proposed coal plant, and how alternative energy options compare. Santee Cooper hasn’t done that yet. We call on the state’s Public Service Authority to join us and the public it serves, to do such a study. It might be tough, but it’s the right thing to do.

— Dana Beach is the executive director of the Coastal Conservation

Read a like-minded letter to the editor of the Florence Morning News.

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