These days it seems like if you just blink the costs for coal-fired generation have gone up. I did some calculations for operating a coal-fired 350 MW unit, based on figures from a few of our customers. The results were startling: From January 2007 to January 2009 the cost of operating a typical 350 MW unit (without an SCR or FGD) will increase by more than 130 percent.
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To calculate these costs, I used current $5.65/ton Chicago Climate Exchange (CCE) prices for CO2. The European Union market is currently trading above $20/ton and a US Federal market is predicted to be closer to the latter than the former, but it is always better to be conservative.
Keep in mind that the delta in NOx is not just a $2,000/ton market being layered on top of the existing seasonal market. The latter also functions for 12 months instead of five.
Similarly the spot market for eastern medium sulfur coal is currently way above $3.00/mmBtu, but unlike gas and oil (where world supplies peaked some years ago) I believe the huge supply of coal and dampening of recent currency fluctuation will ultimately push it back down toward the $3.00/ton we were seeing six months ago.
I’m not hearing too much about this issue from the staff at the plant level, but I imagine that these costs are weighing heavily on the minds of upper management.
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Regarding the abundance of coal - it is certainly true that we have quite a bit in the US. What most people fail to see though is that the extraction of coal, and then its delivery by train, are both very diesel-intensive processes. Not an expert in coal economics, but I'd wager that much more than half the price of coal is the cost of diesel fuel. Hence, when diesel cost goes up, so does the cost of coal.
Of all the distillates, the greatest global demand pressure is on diesel, due to its perceived greater efficiency as a motor fuel, and due to the ability to site diesel generators quickly in developing countries (and in countries expereincing rolling blackouts).
So the cost of coal might not be as volatile as natural gas and liquid fuels; but coal is not immune from the larger forces of energy economics. There is no more "cheap coal" as we used to know it. Nonetheless, coal-derived electricity will likely remain the lowest cost base-load option available long-term.