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Broker eXcelerate Series: Coal, Nuclear and Renewables - Pros and Cons of Power Generation



The United States is among the larger and more geographically diverse countries in the world with a relatively spread-out population. While some countries can rely mostly on a one or two power sources to fuel its electric grid, such as Poland which gets almost three-quarters of its electricity via coal or Norway which gets 95% of its electricity via hydropower, the characterization of America as a melting pot also extends to her energy mix.


Today, no single energy source accounts for more than 40% of total electricity generated in the United States. In fact, unique energy sources are prominent in different regions based on available natural resources, the size and needs of their populations, and local policies and regulations. Thus, to truly understand power generation in the United States requires a study of the full toolbox at the disposal of the U.S. utility sector.


To kick off that investigation, let’s look at the most prominent energy sources across the American power grid.


TRENDS IN U.S. ENERGY MIX

The U.S. energy mix does not exist in a static state, constantly evolving to account of evolution in the energy markets. The year-to-year changes in power generation via different energy sources, the opening and retirement of different power plants, and the rise of smaller-scale distributed energy generation (like solar farms) has created a changing mix of energy.


In 2010, the U.S. Energy Information Administration (EIA) reports that total U.S. power generation in 2010 was 3,972 billion kilowatthours (kWh). Of that electricity, 46% came from coal, 23% from natural gas, 20% from nuclear power, and 10% from renewables (7% hydropower, 2% wind, and less than 1% each from solar, biomass, and geothermal).


For the full year of 2019, EIA’s data shows that the script has changed notably in the years since. Of 3,965 billion kWh (still within 1% of the total generation from 2010), the U.S. electric grid saw 37% of its supply come from natural gas, 24% from coal plants, 20% from nuclear power, and 18% from renewables (7% from hydropower, 7% from wind, 2% from solar, and less than 1% each from biomass and geothermal).

These trends are expected to continue the evolution of the power grid. EIA’s energy outlook predicts total generation will grow 6% to 4,047 billion kWh in 2030. In that 2030 power mix, 33% of electricity will come from natural gas, 32% will come from renewables, 18% will come from coal, and 17% will come from nuclear

Why all the shifts in the makeup of the power mix? If there’s such a changing landscape, clearly that means we’re moving from less than optimal to more advantageous. So, let’s explore these most prominent energy sources and their relative strengths and weaknesses.


BREAKING DOWN THE MOST PROMINENT SOURCES OF ELECTRICITY

NATURAL GAS

As a resource, natural gas is a fossil fuel that gets mined from directly below the Earth’s surface, just like oil and other petroleum products. In fact, natural gas production often goes hand in hand with oil production at the same sites and operated by the same companies and teams. To generate electricity from this fuel, natural gas gets burned. The goal of this combustion is to turn the blades of a turbine. This process can be via gas turbine, where the hot gases from that burning is used to directly drive a generator, or the process can use the more prominent steam turbine, where the heat from burned natural gas boils water until it turns to steam and the motion of the steam spins a turbine. Either way, spinning turbines convert that mechanical motion-based energy into electrical energy by rotating a conductive coil within an electromagnetic, generating electricity that can then be sent through the power sector’s transmission and distribution system.


Natural gas is the most prominent source of U.S. electricity, and of course that’s no accident. The conversion process from gas to electricity is quite mature, cost-effective, and reliable. Because of the quick startup time of natural gas power plants, whether gas turbine or steam turbine, gas plants can be called upon to provide power generation during unexpected outages elsewhere or during times of peak demand. The fuel itself is relatively affordable and getting more affordable in the United States specifically as drilling technology advances, making it one of the cheapest sources of energy for U.S. utilities, especially as gas is produced in the same process as oil so the same drilling sites are producing both at once. And while natural gas is a fossil fuel, the emissions associated with gas-fired power plants is notably lower than those associated with coal-fired power plants, causing many to view it as a good source to shift towards as the coal industry declines.


That said, natural gas-fired power plants do come with lots of issues, prominently in the environmental areas. The drilling process for oil and gas creates a lot of issues in the natural landscape that cannot be undone, including pollution to air, water, and land in the surrounding areas. And while natural gas is less of a greenhouse gas (GHG) emitter than coal, it is still quite a prominent source of climate change issues thanks to the emission still associated with it, including the methane that gets released during fracking for gas (with methane being much more damaging than carbon dioxide as a GHG), leaking and flaring in the production process, and more. In the end, as well, natural gas is inherently not renewable because there is a finite amount of recoverable natural gas available to us.


COAL

Coal plants operate just like natural gas plants do with steam turbines, except instead of burning natural gas it’s coal that gets burned to turn the water into steam and spin the generator. The reason that coal has been such a prominent source of power generation for so long is because of just how abundant the fuel is and how inexpensive it is, both to mine and the ease with which it can be transported. Coal plants, once built, are also quite reliable as a source of baseload generation, never having to rely in intermittent energy sources and being available to constantly provide the electricity needed to power the grid.


That said, coal has earned itself a poor reputation from the environmental standpoint. It is the most carbon-intensive source of energy, meaning a kWh of coal-produced energy does the most damage to the climate. Outside of GHG emissions, coal also carries additional environmental concerns, such as the hazards of coal ash that can pollute land, air, and water and the direct impact that its burning brings via pollution and the associated creation of smog and public health risks. Lastly, coal is a fossil fuel so while abundant, it is by definition not infinite. And coal continues to lose its cost advantage that has propped it up as a major electricity source as natural gas becomes even cheaper.


NUCLEAR

A nuclear power plant is another example of electricity generation using steam turbines to turn heat into electrical energy, with the difference being that the fuel for nuclear plants isn’t put through combustion like fossil fuels, but rather uses nuclear fission. Fission takes nuclear fuel, such as uranium, and splits the atomic elements into two smaller elements in a process that releases a massive amount of energy (which is than used to heat the water and create steam).


Nuclear energy has many advocates because the process of nuclear energy production does not contribute CO2 or other greenhouse gases, but at the same time the power generated is reliable and consistent, not reliant on outside factors. Further, fuel costs and operating costs of nuclear generators are quite low.


However, nuclear energy still faces an uphill climb to grab more of the U.S. energy mix. For one, the building of initial power plants is extremely expensive and takes a very long time. On top of that, builders must contend with the political football that is nuclear power, as people have concerns (whether fair or not) about the environmental impact of nuclear energy generation and associated nuclear waste, not to mention the level of safety associated with living near a nuclear plant. And while the fuel is massively abundant and thus relatively sustainable, the nuclear energy production uses a lot of water so there are still environmental impact concerns.


HYDROPOWER

Hydropower was for a long time the most prominent renewable energy source in the United States. The process of hydropower electricity generation takes the same principles of using a spinning turbine to create electricity as the previous examples. The difference though is that the method in which it does so is much simpler, and even ancient. Simply by using the motion of water (whether running downhill via a river or released deliberately from a dam), that water directly spins a turbine to create the necessary motion. Historically, grain mills tapped into this energy from moving water in the same way, but today we use it with turbines to create clean electricity.


The benefits of hydropower include next to no direct pollution associated with it. Similarly, simply by using the natural flow of water, hydropower is renewable at its core. By using dams and other tools, the hydropower plant operators also create hydropower that is consistent when its needed and flexible if it needs to be used as energy storage. And while the availability of hydropower is largely restricted geographically, plenty of countries and regions tend to have some hydropower-capable resources available to them.


Hydropower isn’t all positive, though, as its use also comes with some different types of environmental concerns. For example, changing a natural waterway to be used for hydropower has a real and potentially harmful impact on those sources of water and the ecosystems that depend on them. Further, when hydropower is used with a dam to create artificial standing water, that can also be a source of methane production which is a potent GHG. Lastly, while hydropower is cheap to run once built, the creation of hydropower sources is extremely capital intensive. Some have said that, while the Hoover Dam has provided unimaginable amounts of hydropower electricity over the years, it would be near impossible to get funding to build it out today because of how immense the project would be.


WIND

Wind energy works much in the same way as hydropower, but rather than rely on the movement of water it, of course, relies on the movement of air from wind. And just like hydropower is a modern version of what ancient civilizations realized they could do with natural motion, wind power is also similar to the windmills of the past but tapped into turbines, grid infrastructure, and the generation of electricity.


The prominence of wind power has grown greatly recently, even overtaking hydropower in the United States in the past few years, and that’s thanks to its many benefits. Wind energy is a completely clean energy source, as it’s just tapping into potential energy that’s already there, requiring no fuel to be burned and no associated pollution. With ‘wind’ as the fuel, the energy source is free, abundant, and sustainable. Further, the amount of energy generated for a given footprint of area is actually quite good and getting better each year, especially when compared with other renewable energy sources. Because the fuel is free, the operating costs are relatively low, and new opportunities are growing with each passing year in both on-shore wind and off-shore wind.


Of course, though, wind power is not the perfect electricity source. While the fuel is free, building turbines can be a costly affair. Most prominently, wind energy is inherently intermittent and unreliable. While patterns exist for predicting wind, in the end no power can be produced by wind turbines during times when the wind stops blow, which can last days at a time in some situations. Additionally, many have concerns over the fatal risk that large wind turbines post to local bats and birds, especially endangered and/or protected species. Lastly, residents near wind turbines will sometimes complain about their aesthetics and the noise pollution the create.


SOLAR

When discussing renewable energy, solar energy is typically the first source people imagine. Solar energy is typically created using photovoltaic (PV) panels that take direct sun rays and use a chemical process generate electricity. These PV panels are the ones that will feature prominently on households, the rooftops of businesses, and other commonly applications. Solar energy can also be tapped into using solar-thermal power plants that use highly reflective substances and mirrors to concentrate intense solar rays to heat up water, which creates steam and spins a turbine just like in the fossil fuel or nuclear generating sectors.


Solar energy shares many of the same benefits as wind energy, including the fact that its ‘fuel’ is free, abundant, and replenishable regularly. The production of solar energy also creates no pollution, making it a clean energy source. And while certainly some regions are more prone to solar energy thanks to more prominent and direct sunlight, all areas of the country have some level of solar potential that can be tapped into for clean energy generation. An advantage to solar power over most other electricity generators, too, is the fact that they don’t have moving parts and thus the maintenance process is easier and much cheaper.


However, solar energy also shares some of the shortcomings of wind energy. Notably, the initial purchase and installation of large-scale solar generation is quite expensive. And after paying so much for the setup, you still don’t get reliable energy generation, as you’re out of luck when the sun goes down and can be at the whim of cloud cover in any given day. To become a prominent source of electricity generation, solar energy will also require an explosion in the footprint used, meaning land that could have been used for other beneficial purposes may thus become available.


Further, while solar generation has no environmental issues in converting sunlight into electricity, the production of PV panels themselves use materials and processes that do contribute greenhouse gases and environmental hazards, not to mention the potential buildup of disposed solar panels that cannot be easily recycled at their end of life.


GEOTHERMAL

Geothermal energy simply means tapping into the heat being naturally produced at significant depths of the Earth. The further down you go, the more heat is being put out naturally, and that heat can then be used in conjunction with steam turbines to generate electricity.


Because it simply taps into naturally occurring processes without taking anything from them, geothermal energy production is completely renewable and comes with minimal pollution or emissions. The benefits geothermal experiences compared with other prominent renewable energy sources include the ability to use very minimal land footprint and not being intermittent in nature.


That said, geothermal is not available as a silver bullet for electricity generation. Notably, geothermal electricity can only be generated where these natural geothermal resources are available, meaning it is not a scalable energy source. And even where it can be built, the cost to do so can be prohibitive.


BIOMASS

Electricity generated via biomass simply means the combustion of any organic product created or diverted for the biomass stream, which includes wood chips, municipal scraps, specifically grown biomass crops, and more. Burning that biomass can then be used for steam turbines, gas turbines, or even internal combustion engines (in the case of vehicles).


Biomass can inherently represent diverse feedstocks, meaning there’s no reliance on any single source of fuel. And while the process uses is combustion, biomass energy emits significantly less pollution than fossil fuel combustion while also being cheaper. And because the fuels are grown, they are renewable and can tap into the fuel that is being grown in many different regions.


However, biomass does come with some notable detriments. The burning of biomass does emit GHG, so it is not as clean as wind or solar, and biomass electricity creates further environmental concerns via disposal of ashes and other waste product. And the nature of where the biomass comes from dictates how sustainable of a fuel it actually is it. If the inputs are natural byproducts (such as woodchips that would have otherwise been disposed of or solid municipal waste that doesn’t have another use), then they are sustainable, but sometimes biomass is generated from crops grown for that specific purpose. In such instances, the energy, water, and land to grow and transport those crops need to be taken into account as well.



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