The typical pulverized coal power plant in the U.S. is about 35 years old, yet the fleet will continue to operate for many years to come. New coal-fired plants, meanwhile, will continue to enter service but at a slow rate. There may not be a future price for carbon dioxide (CO2) given the dramatic scientific and political developments that we are going through, but cheap natural gas makes it difficult to justify the higher up-front costs of a new coal plant.
Still, there is significant new electricity generation capacity is possible from these older plants, perhaps as much as 30,000 MW–twice EIA’s projected growth of coal power over the next two decades. In addition, new technology upgrades have the potential of improving the operating efficiency by 3% to 5%. But the impediment for such win-wins is the risk of a New Source Review violation, years of litigation, and possibly fines.…
“Today the conservation movement is led by sober business men and is based on the cold calculations of the engineers. Conservation, no longer viewed as a political issue, has become a business proposition…. The old school looked on conservation as a governmental function; the new school believes in entrusting it to the hands of business men and engineers.”
– Erich Zimmermann, World Resources and Industries (New York: Harper & Brothers, 1933), pp. 784–85.
Profit-seeking conservation is nothing new, as economists have noted. So why must we assume that self-interested conservation is a ‘market failure’ requiring government subsidies and mandates? Why is market decision-making with energy necessarily sub-optimal?
And if “market failure” is posited, what must be said about “government failure”? Political processes are human too, and worse, bureaucrats do not have their own hard-earned cash on the line.…