Pandemic is reducing electricity demand and coal-burning power plants are the first to shut down
A report this week from the U.S. government found coal consumption in 2019 was the lowest it’s been since 1978. Because of the COVID-19 pandemic, electricity demand is down even more this year, and some utilities are shutting down their more expensive-to-operate coal-burning power plants.
Michigan’s two largest power companies, Consumers Energy and DTE Energy already have shuttered some coal-fired plants.
Laura Sherman is the President of Michigan Innovation Business Council, a group representing renewable energy companies. She says while the pandemic might be triggering some utility companies to close coal-burning plants, it is not the main cause.
“What's causing this shift away from coal is that it's not the cheapest resource anymore. Over the last decade approximately, the cost of energy for wind has dropped by 70 percent, and utility scale solar has dropped by 89 percent,” she explained.
Sherman says Michigan’s two large utilities have recognized that coal is no longer the future of energy generation. Climate change is the political part of their decisions to end fossil fuel generated electricity, but cost is the main driver.
“And they're both making more investment, and especially Consumers, making significant investments in things like utility-scale solar as basically the cheapest thing they can build to satisfy the load that they have,” she said.
Neither Consumers nor DTE has indicated closing coal-burning plants early because of reduced consumption is in the works, but together the two utilities plan to shut down five coal-burning units by 2023.
ED NOTE: DTE is one of Michigan Radio's many corporate sponsors.