Despite push for renewable electricity, coal habit proves hard to break

For nearly half a century, the county seat of Eastern Montana’s Rosebud County, where Joiner serves as a commissioner, has been powered by coal, which has been mined on one side of town and burned on the other. 

For decades, the more than 2,000 megawatts of electricity that coal generated was sent west, to Washington and Oregon, where it helped power Seattle, Portland and Spokane. While the electricity went elsewhere, the plant’s power was also felt in town, where it generated hundreds of good-paying union jobs and helped fill the coffers of the state and local governments. 

So when Oregon lawmakers passed a climate law in 2016 that required utilities to stop buying coal-generated electricity by 2030 and Washington lawmakers passed similar legislation a few years later with a deadline five years sooner, it seemed like they were signing Colstrip’s death warrant, Joiner said.

“About six or seven years ago, when they were talking about closing the plants, (we thought) Colstrip would be a ghost town,” Joiner said. “We thought everybody was gonna pack up and leave, worst-case scenario.”

In 2020, it seemed like those dire predictions were coming true, when two of Colstrip’s four units permanently powered down, after the utilities that owned them, Talen Montana and Puget Sound Energy, said they couldn’t make “the units economically viable.” 

But the closure created a rare opportunity to connect new energy to Colstrip’s transmission lines. And renewable energy company NextEra Energy was ready to jump at the chance. 

By 2021, a crew of 350 had already started erecting 131 turbines, each reaching 584 feet into the sky and weighing 798,000 pounds – and capable of collectively generating 350 megawatts of electricity, across Rosebud and Garfield counties. The power from that first phase of what’s known as Clearwater Wind Project is now sent to Puget Sound Energy, on the west side of Washington. And this spring, NextEra will begin building out the second, 400-megawatt phase of the project. 

Clearwater isn’t the only renewable project to emerge in southeastern Montana. PacifiCorp, another Colstrip owner, constructed a 240-megawatt wind farm in 2020, and plans are also in the works to start work next year on a separate 600-megawatt, $1 billion wind farm in Rosebud and Treasure counties. Solar projects are also popping up in an area where coal has long ruled the energy scene. 

But the story of what’s happening in Colstrip isn’t one about the nation’s seamless transition away from fossil fuels and to green energy. Instead, what’s happening in Colstrip is indicative of what’s happening as governments and private entities push to end carbon emissions: renewable energy companies are lining up to build wind and solar farms, even as some utilities and communities try to hang onto the jobs, the revenue and the on-demand power that fossil fuels provide. 

In Colstrip, for example, fears of the industry’s imminent demise were exaggerated. With demand still strong for the two operating units, the local coal mine is still “going gangbusters,” according to Jon Heroux, corporate counsel for external relations for Westmoreland Mining, which owns the Rosebud Mine in Colstrip. And as West Coast utilities drop their shares in the coal plant, utilities in states without mandates are picking them up. 

Late last year, Talen Energy Supply, which operates the Colstrip power plant and already owned 222 megawatts of its power, acquired 370 more megawatts when Seattle-based Puget Sound Energy decided to offload its share in Colstrip’s coal power to comply with Washington state’s 2025 deadline. And when Spokane-based utility Avista decided to offload its share in Colstrip’s coal power for the same reason in January, NorthWestern Energy, a Montana utility that already owned 222 megawatts of power from Colstrip, agreed to take it. 

Demand for Colstrip’s coal power could continue to grow if recently announced plans are realized for a new transmission line that would take electricity east, to North Dakota and other markets that lack impending mandates against carbon emissions. But the opposite is also true: the line could also allow wind and solar power from the Great Plains to more easily travel west, providing renewable energy to states that need it. 

While the continued demand for coal comes as a relief to Joiner and other local officials, not everyone in Montana is glad to see the stacks of Colstrip continuing to pump carbon into the atmosphere of Eastern Montana. 

“The sooner we can get out of Colstrip, the better,” said Anne Hedges, director of policy and legislative affairs for Montana Environmental Information Center, a nonprofit environmental advocacy group. Hedges thinks the time is now to start shifting away from coal, not only to help combat climate change but also to reduce costs for utilities customers. As utilities across the country try to balance the near-term need for affordable and reliable power with the long-term goal of ending carbon emissions, the result is a “time of significant uncertainty,” according to a recent assessment of the power supply in the Pacific Northwest. What’s uncertain is nothing less than the bedrock of the U.S. energy sector: where power will come from, how much it will cost and whether it will be reliable. 

The use of coal to create electricity has been in decline for over a decade, but what has replaced it has largely been another fossil fuel, natural gas. As of 2022, natural gas accounted for 38% of U.S. electricity generation, while coal made up 23% of the mix. Because natural gas produces about half the emissions as coal, that shift has led to a significant drop in carbon emissions from electricity generation. But with fossil fuels still powering some 60% of the grid, the U.S. has a long way to go – and not long to get there – if it’s going to meet the Biden administration’s goal to end carbon-pollution from the electric grid by 2035. 

While the growth of clean, renewable power has been steady, it has also been relatively slow. As of last year, wind and solar accounted for only about 20% of the electricity supply. That’s up sharply from 2010, when renewable’s contribution registered, but much more dramatic growth will have to occur to end carbon emissions. 

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In the push to make that rapid growth possible, states and the federal government have set targets, implemented mandates, created tax credits and pushed other policies designed to incentivize the construction of wind and solar farms. Meanwhile, uncertainty about the future of fossil fuel use, spiking natural gas prices as a result of the Russian invasion of Ukraine, and growing international demand for coal have contributed to the declining availability of, and increasing prices for, coal. 

The result, according to a recent report from the energy and climate policy think-tank Energy Innovation, is that all but one of the nation’s 210 remaining coal-fired power plants cost more to run than it would cost to replace them with renewables. Facing such economic challenges, more than 350 coal plants have shuttered in recent years, and nearly 10,000 megawatts of the nation’s coal capacity shut down each year from 2012 to 2021, according to the U.S. Energy Information Administration. 

But the authors of the report, known as “Coal Cost Crossover 3.0,” acknowledge that there’s more than money at stake and at play in the clean-energy transition. 

“The overall value of these power plants depends on much more than just cost,” write the authors. “While the coal cost crossover describes a scenario in which renewable resources replace coal generation on a one-to-one basis, the reality is that coal retirement is a complex process that depends on the reliability needs of the local and regional electricity grid, which in turn, depends on the entire resource portfolio’s dynamics.” 

The complex dynamics preventing a smooth transition to renewables include concerns about reliability and adequacy as well as issues with infrastructure, timing and jobs. The result, according to Michelle Solomon, a senior policy analyst at Energy Innovation and a lead author of the coal conversion report, is that “there are a lot of barriers to switching from coal to renewables that are keeping coal online.” 

One of the “big issues,” Solomon said, is simply that most coal plants, especially in the West, are “owned and operated by regulated utilities,” which are vertical monopolies that control the production, transmission and distribution of electricity. When such utilities built coal power plants, they did so under the assumption that their customers would pay the cost over time. The life of a coal plant is usually about 30 years, but it can be extended – and customers can continue to be charged for it – if a utility makes investments. 

But the prospect of retiring a coal plant early usually means retiring it before the utility’s investment has been paid back. And if a utility does that, Solomon said, it often means “customers will just have to continue paying for the plant, even though it’s not being used.” 

In Colstrip, the still-operating units aren’t slated to be paid off until 2042. And if improvements are made, that time could be extended. 

“We’ll continue to use Colstrip as long as its useful life and as long as it’s a cost-effective resource for our customers,” said Jo Dee Black, a NorthWestern Energy spokesperson. “We expect its useful life to go on for decades.” 

It’s not just the fact utilities owe money on coal plants that keeps them on the grid. It’s also the fact that there’s a long line of renewable energy projects just waiting for a chance to get on an electric grid that doesn’t have room to accommodate them. 

A recent report from the Lawrence Berkeley National Laboratory found that zero-carbon power projects with a capacity of some 900 gigawatts of electricity are waiting for a chance to join the power grid. But as delays persist, 72% of projects that requested interconnection between 2000 and 2016 were eventually withdrawn without being built. In the West alone, according to the Berkeley lab report, 609 projects have been built while almost 3,000 have been withdrawn between 2000 and 2021. 

“Because of issues with transmission capacity, they’re having a hard time getting those renewables connected to the grid,” Solomon said. “And of course you need to have new resources online before you get rid of the old. And so that’s also slowing down the speed at which we can move from fossil to clean.” 

Another barrier, according to Solomon, is what she calls “reliability concerns”: the perception that energy forms that require sunshine and blowing wind can’t replace a fuel form that can provide power no matter the weather, whenever it’s needed. 

While Solomon argues that such concerns can be overcome with energy storage, there’s doubt among some – including some utility companies – that this is possible. At least not yet. 

“When wind and solar are generating, they’re generally very cost-effective resources,” said Black, from NorthWestern. “But when they’re not generating, … then we have to go into the market to make that up.”

Battery storage projects – including a massive 1 gigawatt renewable-plus-battery storage project that NorthWestern unsuccessfully sued to stop – are beginning to change that equation by making wind- and solar-generated electricity available on demand. But, Black said, prices on the open market can be “very volatile.” And Black said NorthWestern is “more dependent on the energy market than any of our peers,” increasing its risk that power will be expensive or unavailable. To reduce that dependency, NorthWestern isn’t just taking on a new stake in Colstrip. It’s also building a new 175-megawatt, $285 million natural gas plant near Billings to make more power available on demand.

When the first phase of the Clearwater wind farm was being constructed, about 350 workers came to southeastern Montana to erect the turbines. But the project only created about 10 or 20 permanent positions, said Jim Atchison, executive director of the Southeastern Montana Development Corporation. With the second phase of the Clearwater slated to begin “any day,” Atchison said the hundreds of construction jobs were a welcome boon – but the employment impact does “not compare to the 600 jobs at Colstrip. So it’s apples to oranges there. The other thing that comes into play there with renewables is the taxes. Coal taxes or mining taxes generally produce a lot of revenue for the state of Montana.” 

But Greg Brophy, a farmer and former state senator who is the Colorado director of a conservative environmental advocacy group called The Western Way, argues that wind projects like Clearwater can help “spread the economic” impact of energy production in rural areas. 

With private contracts that offer landowners about $5,000 per year per megawatt, Brophy said a farmer can pull in “mailbox money … that’s kind of life changing for a lot of these farm families.” 

In the case of the Clearwater wind project near Colstrip, leases for turbines are expected to pay out some $226 million over a 30-year period. They are also expected to generate some $217 million in property taxes for the three counties where the wind farm is located. 

While wind and solar projects could provide a windfall for struggling agricultural producers, they have led to concerns about how much land they would take up. But various studies suggest their impact would be relatively small. The NREL study, for example, found the total area taken up by wind turbines and solar infrastructure in a carbon-free electricity system would be about equal to the land occupied by railroads now. 

The size of that hypothetical system, though, is much larger than the current footprint of renewable energy, as clean energy will not only have to replace fossil fuel sources but also have to meet a demand for electricity that’s expected to grow significantly.

John Ollis, planning and analysis manager for the Northwest Power and Conservation Council, said the scale of growth that will be required to meet clean-energy mandates and targets is unprecedented. 

“To meet those policies, clean energy will need to be built in a size that no one has ever seen before,” said Ollis, whose group helps plan energy needs for the region that includes Montana, Idaho, Washington and Oregon. 

Because wind and solar only produce power when the conditions are conducive – the Clearwater turbines, for example, are only expected to create their maximum amount of power about 40% of the time – utilities can’t simply replace fossil-fuel power with renewable power, megawatt by megawatt. Instead, Ollis predicted, they will have to build wind and solar resources with between twice and three-times as much of their maximum, or “nameplate,” capacity. And that doesn’t even account for the possibility that increased electrification of cars and other things “could double” energy demand over the coming decades, Ollis said. 

Building that much capacity, Ollis said, will require an “astonishing investment of money.” It will also require using the “existing system in a savvy way,” so that energy can be better shared between regions. 

With “so much uncertainty” about how the U.S. will rapidly create so much more renewable energy and a more efficient grid, Ollis said he expects coal and gas “will get used a lot to facilitate this transition,” especially to provide on-demand energy when demand peaks due to extreme weather. 

In Rosebud County, Joiner and others are optimistic about Colstrip’s future as an energy community. In the near term, that vision includes coal. But Atchison, from the local economic development council, knows the winds have shifted. 

“I think what you’re seeing Colstrip is changing but not closing,” Atchison said.

The possibilities are many, he said, listing not only wind and solar but also hydrogen, geothermal and nuclear as sources of power that might one day replace coal in the community. 

Even the local coal mine’s owners know its days are numbered, said Westmoreland’s Heroux. Heroux said Westmoreland is “looking at everything” as it tries to figure out how to be part of the green-energy transition. That might mean manufacturing or recycling green technology. It might involve mining for the minerals that technology requires. It might mean Westmoreland builds its own clean-energy projects.  

“There's a lot of things that Westmoreland is looking to do,” he said. 

In the meantime, though, the company plans “to supply our customers for as long as they want us to supply them.” 

How long that will be, however, is unclear.

NorthWestern Energy has stated it intends to ultimately replace its share in Colstrip and another coal plant in North Dakota, but it hasn’t said when – or how, exactly. 

“It is our hope to operate the Colstrip and Coyote coal plants through their useful lives, and then replace them, at the right time and price, with newer and proven technologies which we believe will be available in the future,” reads a NorthWestern document that provides a “high level overview” of its plan to achieve net-zero carbon emissions by 2050. 

As for the “proven technologies” that could replace that coal power, NorthWestern’s net-zero plan doesn’t spell out what those might be. Instead, it counts on all the challenges associated with the clean-energy transition being overcome. 

“Technological advancements along with decreasing costs of carbon-free generation and the regionalization of intermittent generation will significantly contribute to achieve our goal of Net Zero carbon emissions by 2050,” the report says. 

But Hedges, of the Montana Environmental Information Center, questions whether this represents a sincere commitment from NorthWestern. 

“They have a goal sometime in the future, but no plan to get there,” Hedges said. “And they’re going to add fossil fuels until then. What a non-plan that is.”  

She argues NorthWestern’s decision to double-down on coal power will cost consumers who will be on the hook for a greater share of Colstrip’s operations and maintenance, which amounts to “millions and millions of dollars” a year and which could increase as the plant ages and requires more repairs. 

Instead, Hedges says NorthWestern should be doing what utilities in Washington and Oregon are doing: moving to renewable technologies that already exist, to projects like the Clearwater and Silverthorn wind farms. She acknowledges it will be costly up front, as new projects are built, but Hedgers said the conclusion of reports like the Coal Crossover study will be borne out: renewables will prove better not only for the environment but also for utility customers. 

Claims from NorthWestern about the high cost of renewables relative to coal only take into account “half of the equation,” Hedges said. “The point is, they have to operate that (coal) facility day in and day out. And they need fuel for whatever type of generation resource they have. The wind is free. Gas is anything but free. And coal is really expensive and increasing in price.” 

Not that it will be easy to get off fossil fuels, she acknowledges. It will take innovation and an emphasis on efficiency, she said. This modern system won’t be like the coal and past plants of the past – and the present – which provide a steady revenue stream for utilities and can easily be “turned on and off,” Hedges said. Instead, she said, it will be regional and renewable. It will involve new connections and new projects, more cooperation and more storage. 

“It’s complicated,” Hedges said. “There’s no simple path."