‘We don’t see a pathway’ to coal phaseout, says US utility

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‘We don’t see a pathway’ to coal phaseout, says US utility

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Good morning and welcome back to Energy Source, coming to you from New York.

While the US is off celebrating independence from Britain, our colleagues across the pond are covering the general election, where Labour is set for a landslide victory. The party has put energy at the centre of its campaign, pledging to cut carbon emissions from electricity generation to net zero by 2030 and create a state-owned energy company.

In today’s Energy Source, we sit down with the chief executive of FirstEnergy. The US investor-owned utility sees no pathway to phase out coal amid growing demand for more around-the-clock power fuelled by data centres for artificial intelligence and new manufacturing. 

Our second item dives into a new report from the Clean Air Task Force that casts doubt on green hydrogen’s ability to decarbonise the power sector. Data Drill looks at how the global liquefied natural gas market is set for a glut. 

Thanks for reading,


‘We’re just honest’: FirstEnergy CEO on coal plant retirement delays

Fast-growing power demand driven by artificial intelligence and the deterioration of the US grid are narrowing the pathway for decarbonisation, warns FirstEnergy, one of the largest US investor-owned utilities. 

“When we were looking at emissions reduction, it was based on running our coal-fired power plants less at the end of the decade,” Brian Tierney, chief executive of FirstEnergy, told Energy Source. “We don’t see a pathway for that now.”

The Ohio-based utility withdrew its 2030 target to exit coal earlier this year, keeping its two West Virginia plants running until 2035 and 2040, citing increasing power demand, reduced generation capacity and state politics.

“The things that are bumping up against each other are people’s growing demand and desire for reliability, what’s affordable for most customers, and then what’s sustainable. It’s easier to make two of those three things congruent with one another. It’s harder to get all three solved at the same time,” Tierney said.

“That’s why we had to withdraw our interim goal. Some people think we were bad people for doing that. I think . . . we’re just honest,” he added.

The comments from FirstEnergy come amid a series of retirement delays for coal plants as the scramble to meet soaring power demand from data centres for AI puts decarbonisation plans on the backburner. On Monday, Google reported its emissions jumped nearly 50 per cent over the past five years due to data centre expansion, putting its 2030 net zero target in doubt.

FirstEnergy serves five states in the mid-Atlantic and is part of the PJM Interconnection, a power market that includes northern Virginia, the world’s largest data centre hub. Electricity demand in the PJM region is one of the fastest-growing in the country, with the operator this year more than tripling its growth forecast for the next decade. 

Natural gas made up 43 per cent of US power generation last year, while wind and solar contributed 14 per cent, according to the Energy Information Administration. Coal-fired generation, which makes up 16 per cent of the electricity mix, has declined rapidly over the past decade as plants were retired and gas became the more competitive option.

The Biden administration has set a target of creating a carbon-free power sector by 2035. The 2040 retirement date from FirstEnergy runs against new rules from the US Environmental Protection Agency, which require coal plants to be retired by 2039 or install expensive carbon capture systems. The rule has been challenged by multiple Republican attorneys-general, utilities and trade groups who argue the technology to capture emissions is premature and will raise prices for consumers.

Report casts doubt on clean hydrogen’s role in power sector

Clean hydrogen faces “limited prospects” in its ability to decarbonise the grid and could exacerbate the struggle to meet growing power demand, warns the Clean Air Task Force in a new report shared exclusively with Energy Source.

The environmental non-profit found that while burning clean hydrogen in power plants is technically feasible, it is highly inefficient and is double the cost of other low-carbon alternatives for around-the-clock power.

The report’s authors looked at the cost of production for blue hydrogen, produced using gas and capturing its emissions, and green hydrogen, which splits water using electricity. CATF estimates that green hydrogen burns three times more power than it returns to the grid, draining the already limited pool of low-carbon sources needed by everyday consumers of energy. Blue hydrogen, meanwhile, has a highly variable emissions profile.

“[Green hydrogen] generally increases overall electricity demand and cannibalises clean electricity that could be used for another application,” said Kasparas Spokas, who co-authored the report with Ghassan Wakim. “People need to be cautious about this strategy to decarbonise the power sector.”

The report comes as the hype surrounding clean hydrogen simmers down as projects struggle to secure financing due to languishing demand and uncertain regulations. BloombergNEF, for example, estimates only 6 per cent of US clean hydrogen projects have secured binding supply agreements.

Data Drill

The global liquefied natural gas market is heading towards oversupply, says BloombergNEF in a new outlook released on Tuesday.

The research firm expects global demand for the chilled fuel to reach 560mn tonnes by 2030. That is about 11 per cent lower than expected supply, according to BNEF, which cautioned that project delays and further Russian sanctions could tighten the market.

The outlook comes as a wave of new LNG terminals are expected to come online before the end of the decade, with the US and Qatar leading capacity additions. On Monday, a Donald Trump-appointed Louisiana district court judge struck down President Joe Biden’s pause on LNG project approvals, putting the permitting freeze up in the air.

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Job Moves

  • Iberdrola subsidiary ScottishPower has appointed Charles Langan as chief financial officer and Nicola Connelly as chief executive of its SP Energy Networks division.

  • Curtis Philippon has been appointed chief executive of Canadian midstream company Gibson Energy. Philippon joins from Certarus.

  • Pharos Energy has named Katherine Roe as chief executive and Mohamed Sayed as chief operating officer. Roe joins from Wentworth Resources, where she served as CFO. Sayed previously served as a group head at Pharos Energy.

  • Jennifer Kneale, chief financial officer of Targa Resources, has been appointed president of finance and administration of the Texas midstream company. William Byers will succeed Kneale as CFO and joins from Manchester Energy.

Power Points

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.

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