Wednesday, April 18, 2018
Business

President Obama's push to curb emissions leaves Florida in tough spot

President Barack Obama's strategy to curb greenhouse gas emissions doesn't bode well for Florida.

Obama announced last week that he wants tougher restrictions on carbon emissions from coal plants, which means closing or retrofitting many existing power generators.

He wants more electricity generated from so-called "clean coal" plants, renewable energy such as solar and wind, and further development of nuclear technology that includes small modular reactors.

Florida, however, has become heavily reliant on natural gas to generate electricity, with coal making up a big chunk of the rest. The state's major utilities are struggling to build any new nuclear plants for a price that makes sense.

And the state lacks a comprehensive, plausible plan to diversify its energy mix, say critics of state energy policy. The Sunshine State, for instance, has very little solar generation and no policy to support significant expansion of it.

Florida needs a plan that fits into the changing energy landscape on which much of the rest of the nation is operating and one suitable for what Obama has proposed, the critics say.

For instance, 30 states have already introduced requirements for producing energy with renewable sources, as Obama is calling for.

The president allocated $7.9 billion in the 2014 fiscal year budget toward clean energy projects, but Florida is not well positioned to take advantage of those funds.

"Florida will be slow on the uptake to implement a policy that concentrates on moving away from carbon," said Scott McIntyre, president of the Florida Alliance for Renewable Energy. "We remain mired in the lack of policy."

Stephen Smith, executive director of the Southern Alliance for Clean Energy, said Florida needs a planning approach that focuses on the cleanest and least costly options, beginning with energy efficiency.

"Florida does not have the traditional utility planning tools that every other southern state has," he said. "We will see Florida drift further into a significant dependency on gas. I think the coal measures are going to push Florida even further in that direction."

It's not yet clear exactly what Obama's emissions standards will look like. He has given the U.S. Environmental Protection Agency orders to draft the standards, but that isn't expected to materialize for a couple of years. One of the president's aims: reduce the nation's greenhouse gas emissions by 17 percent by 2020.

Ronald Brise, chairman of the state Public Service Commission, said Florida is working to diversify its energy mix and will ultimately produce the kind of balanced approach the president is suggesting, despite what critics say.

"Our rules — which are based on the policy as established by the Florida Legislature — provide for energy development in clean coal, natural gas, nuclear, and renewable options," Brise said in a statement.

• • •

So far, Florida's policies have failed to achieve the balance state leaders had hoped.

Over the last decade, state policy put almost all of Florida's eggs in the nuclear power basket to avoid overreliance on natural gas, which now provides more than 60 percent of Florida's electricity generation.

Natural gas is considered the cleanest of the fossil fuels, emitting about half the carbon as a coal plant. Nuclear plants have no carbon emissions.

Florida was one of the five worst states for energy-related carbon dioxide emissions, according to a May report by the U.S. Energy Information Administration.

The state has set minimal goals and few policies to support renewable energy and move in the direction many states are already headed and that Obama proposes.

And, so far, the new nuclear plant option isn't working out.

The first of four new nuclear units in the state was supposed to come online just 21/2 years from now, in 2016, with the second a year later.

Now none of the reactors will come online for more than a decade. As the price of the two-reactor complex in Levy County soared from an estimated $4 to $6 billion to almost $25 billion, it's becoming difficult to deliver the projects at all.

Even efforts to increase power at the state's few existing nuclear plants have had mixed success.

Florida Power & Light added 500 megawatts, enough to power 375,000 homes, to its Turkey Point and St. Lucie plants. But Duke Energy lost the Crystal River nuclear plant — its only reactor in Florida — in a botched maintenance and upgrade project in 2009.

After repair costs became prohibitive, Duke announced in February that it would permanently close the plant, dashing another one of the state's nuclear ambitions.

Florida couldn't get a break on its nuclear aspirations or its ultimate goal of diversifying the state's energy sources — then it suffered yet another blow.

Natural gas prices fell to historic lows due to the discovery of a growing domestic supply. The abundance of natural gas has made it difficult for new nuclear projects that carry huge capital costs to compete.

"It's the same old story with nuclear power," said Smith, of the Southern Alliance for Clean Energy, "cost … and schedule slippages."

• • •

Florida lawmakers thought they had the answer to huge capital costs for nuclear and clean coal plants. But that hasn't panned out either.

A law passed in 2006 allows utilities to charge customers in advance for some of the costs of new nuclear plants. The Legislature also decided to add clean coal plants to the advance fee statute.

Utilities use the law for the nuclear projects, but none use the law to help build clean coal plants.

And they're not likely to anytime soon.

The nation operates just four of the clean coal plants, known formally as integrated gasification combined cycle units. These plants convert coal into gas — a technology that dates to the 1800s when it was used to power street lights — and can remove 98 percent of sulfur.

Sulfur that is not captured turns into the pollutant sulfur dioxide. The plant does not reduce carbon dioxide emissions any more than a regular coal plant.

Tampa Electric, which generates half its electricity from natural gas and half from coal, operates a 300 megawatt clean coal plant that was built in 1996 at its Polk County power station.

So if the clean coal plants reduce emissions, why aren't utilities building more of them?

Clean coal plants face the same problem as nuclear.

"The answer has to do with natural gas prices," said Byron Burrows, manager of air programs at Tampa Electric, a subsidiary of TECO Energy. "It's just more expensive to build" the clean coal units.

With the heavy cost of other options, Duke has decided to build a new natural gas plant in Florida by June 2018 to replace the shuttered Crystal River nuclear plant and in anticipation of closing two of four coal units at the same power station by 2020.

Duke, which produces 65 percent of its electricity from natural gas and 35 percent from coal, is experimenting with different coal blends and equipment to reduce emissions by the 50-year-old coal units.

The other option to keep older coal plants operating is to install scrubbers that reduce emissions, which Duke installed on two of the Crystal River coal units and Tampa Electric did with its traditional coal-fired plants within the last decade.

The question is what new standards will the Obama administration develop for coal plants, and what will it cost customers.

"I want a clean earth and a clean environment," said J. R. Kelly, state public counsel, who represents consumers before the Public Service Commission. "The question is, how much is that going to cost? How much can consumers endure?"

• ••

Critics of the state's current policies say the real help for consumers would come from a requirement that utilities encourage more conservation and produce more electricity from renewable sources.

The requirement is known as a renewable portfolio standard, which most states — but not Florida — already have.

The critics also encourage what is known as third party sales, which, for instance, would allow a solar company to install solar on rooftops or parking lot canopies at commercial businesses and sell that power to the grid. That's illegal in Florida.

Only the property owners can sell power generated on their property to the grid — unless the power is generated by a utility company or a business with contracts with the utility companies.

Jerry Paul, a nuclear engineer and former state lawmaker, disagrees with critics who say there is no policy in place. He, as Brise noted, said the state regularly evaluates its energy mix and it should include a look at all resources, in particular the use of domestic coal and natural gas.

"There is a process in place," Paul said. "You could make an argument that more weight should be given to one source or another. That's a more intellectually sound way of looking at it."

Paul said he believes the state Legislature has the tools it needs already to make the necessary adjustments if the state soon needs to meet new standards set by the Obama administration

He points to the Legislature's decision in 2008 to create 110 megawatts of solar, produced by Florida Power & Light.

But that's the largest solar effort and almost all of the 150 megawatts of Florida's solar capacity. Florida ranks 10th nationally, behind New Jersey, which reached 1 gigawatt of solar capacity or almost 10 times the Sunshine State.

And other states are installing solar at a faster pace than Florida, even though the cost to install solar photovoltaic systems in Florida ranks second lowest for residential and the third lowest for non-residential, according to the Solar Energy Industries Association.

Smith and McIntyre, of the Florida Renewable Energy Alliance, said the trouble Florida has with producing some forms of clean energy is that no one currently is taking the leadership role to execute such ideas.

They say state requirements for renewable energy and energy efficiency would raise Florida's profile when it comes to clean energy. The lack of leadership, they say, already has cost the state environmentally and economically.

"The movement to clean energy is an employment opportunity for the state of Florida that we are not capitalizing on because we have no energy policy," McIntyre said. "There's no leadership."

Ivan Penn can be reached at [email protected] or (727) 892-2332.

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