Building the infrastructure the US needs to decarbonize is daunting. Luckily, many of yesterday’s coal plant sites are ripe for reuse.
(Bloomberg) — It is now five months since the US Inflation Reduction Act created hundreds of billions of dollars in support for decarbonization technologies. In that time I have had many discussions with entrepreneurs, investors, financiers and energy developers about it. All, needless to say, are excited. That excitement can be a bit breathless at times.
But when the principals of deep decarbonization catch their breath, there is something else they mention. It is weariness, crossed with wariness. Their concern: What if deploying everything the IRA promises isn’t possible through technology, or money, or willpower? What if, instead, it comes up against a massively distributed blocking mechanism — a collective inability to navigate new assets through sclerotic planning and permission schedules?
I hope this is not the path. But if it is, many carbon-cutting efforts will go unrealized because we quite literally could not plan for them. It would be unfortunate to pin fundamental climate progress not on lack of technology, or capital, or positive interest, but rather on languor at best and opposition at worse.
All of these weary and wary conversations have me thinking, though. There is also a way to plan around a collective inability to plan, so to speak, and it runs through the very large body of existing energy assets in the US.
After a coal power plant is retired, the site goes through a long and complex process that includes decommissioning, remediation and redevelopment. Those are unequivocally good steps. And in a planning-constrained future, perhaps coal plants — as well as gas plants down the line, and older renewables too — could be turned into an opportunity and not just a cost.
A good example of this approach is a Google data center built on the grounds of the former Widows Creek coal power plant in Alabama. The company’s description of its rationale is instructive:
Data centers need a lot of infrastructure to run 24/7, and there’s a lot of potential in redeveloping large industrial sites like former coal power plants. Decades of investment shouldn’t go to waste just because a site has closed; we can repurpose existing electric and other infrastructure to make sure our data centers are reliably serving our users around the world.
Similarly, for its advanced nuclear project in Wyoming, TerraPower plans to utilize a retiring coal plant. The company’s reasons for choosing the site included “community support, the physical characteristics of the site, the ability of the site to obtain a license from the Nuclear Regulatory Commission (NRC), access to existing infrastructure, and the needs of the grid.” And in New Jersey, Starwood Energy Group recently demolished a defunct coal plant in preparation for installing batteries on the site.
From 2010 to 2019, more than 500 coal-fired power plants were retired in the US. Many of those plants were very old (in 2011, the average plant being retired was commissioned in the 1950s) and very small, with capacity of less than 100 megawatts. But retiring plants have recently tended to be younger and larger — meaning they have upgraded transmission infrastructure and larger physical footprints, and are located farther away from urban areas.
Obviously, not every big project needed for the energy transition will fit into the footprint of a decommissioned fossil-fuel plant. But many will — reactors, factories, logistics centers and anything that consumes significant power rather than generates it. And ideally, reusing yesterday’s infrastructure for tomorrow’s purposes will work in tandem with vastly increased planning and permission for everything else. It will be a bonus, not the bulk, of building.
The opportunity reminds me of the Classical thought experiment known as the Ship of Theseus, which asks whether or not a ship that has had all of its components replaced over many years is still the same ship in essence. If a coal plant dies, does it live on and is it still an asset? I would hope so. And I hope that many other people engage in this thought experiment too, and create climate-positive outcomes in the process.
Nat Bullard is a senior contributor to BloombergNEF and Bloomberg Green. He is a venture partner at Voyager, an early-stage climate technology investor.
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