An interesting article from the ABC points out that improving and cheaper technology will make coal powered generation obsolete “within years.” The interesting observation is that “solar plus storage” will be competitive with grid-supplied electricity in many parts of the U.S. within 4 years.
I wonder how that will impact the local coal mines.
Technology, not regulation, will kill coal fired power
The Obama administration’s plan to reduce power plant emissions may be a bold effort to put climate change back on the political agenda, but it doesn’t exactly have the big generators in the US quivering with fear.
Not yet anyway.
In a detailed analysis, Bank of America-Merrill Lynch’s energy team argue the EPA draft rule, which mandates a 30 per cent reduction in emissions by 2030, is “a relatively soft requirement.”
On BoA-Merrill Lynch figures, the rule changes to the Clean Air Act effectively amount to a 1 per cent per year reduction in carbon from 2013 levels.
The baseline year for the 30 per cent reduction is 2005, which is pretty well the peak of carbon emissions in the US – only in 2007 were emissions higher.
Since then, the closure of numerous coal fired power stations, the gradual switch to gas fired generation and lower demand have seen emissions in the US fall by about 16 per cent, making any reduction trajectory less onerous.
The BoA-Merrill Lynch team says the EPA’s move had already been anticipated by the market and is not a “material surprise” to valuations. If anything the rule changes are “a light touch”.
However, another report put out by a different investment bank two weeks before the EPA came out with its new carbon rules may give the coal burners a far greater concern for their future.
Full article here