The U.S. Department of Energy issued a request for information on Tuesday for the development of small-scale, modular, coal-based "power plants of the future." But economic factors indicate that this technology may not have a future at all.
"The objective of this RFI is to support DOE’s mission to lead research and technology development that promotes the advancement of coal-fired power plants that provide stable power generation with operational flexibility, high efficiency, and low emissions," according to the announcement.
These small modular coal plants are expected to be lower-cost than traditional facilities, capable of performing load-following to meet the evolving demands of the power grid, and with efficiency greater than 40 percent. Stakeholder submissions are due June 8.
A DOE official told news outlets earlier this year that the agency plans to establish competitive funding opportunities for small and modular coal-fired power plants, framing it as a "paradigm shift" for the embattled coal industry. President Trump has made shoring up the coal sector a strategic priority for his administration.
The idea of building small and responsive coal units theoretically complements a power grid with a significant amount of renewables and/or gas price volatility. But while the coal industry may consider this a laudable effort, it's an undertaking beset with difficulty.
Small power plants lose the benefits of economies of scale, unless there is enough demand to make modular construction cost-efficient. The nuclear industry has embraced this strategy with the development of small modular reactors, or SMRs, because downsizing and standardizing the reactor design can significantly reduce complexity. But coal plants don't have the same level of complexity as a nuclear plant, so it's unclear how this approach will benefit the fossil fuel.
Furthermore, even if small modular coal plants can be proven technically feasible, industry analysts are having difficulty understanding how a coal-related process could be competitive, given the low cost of natural gas and cheap renewables, coupled with negative public opinion around coal power.
There may be niches where a low-cost coal technology could be a viable option, such as combined-heat-and-power opportunities or other industrial processes. But these applications are limited.
"If existing coal plants in the U.S. that only need to recoup operating costs are losing money and closing, then it is difficult to imagine how any new coal plant, no matter how efficient or cheap, can be built and recover investment costs on top of operating costs — at least in the U.S. — as long as gas prices remain low," said Wade Schauer, director of Americas Power & Renewables Research at Wood Mackenzie.
He added that the new DOE program doesn't seem to address carbon capture. As a result, these plants would still produce a lot more carbon dioxide than would a gas-fired combined cycle plant, for example.
"With renewable costs still falling, I don't see how this changes the equation for coal," Schauer said. "Still, I would assume there will be some states and engineering firms fighting for the DOE funding for a pilot plant."
