Steven Winberg, assistant secretary for fossil energy at the U.S. Department of Energy, discussed the agency's efforts to improve the outlook for coal at the Eastern Fuel Buyers Conference in Orlando, Fla., on May 9.

Source: S&P Global Market Intelligence

The U.S. government is not only working on new coal plant technologies to make the proposition of new coal plants more economical in the near term, but also more advanced technologies that may not come to fruition for at least another generation.

Under President Donald Trump, the United States is embracing domestic resources including coal, oil and natural gas by encouraging its development, production and export, according to Steven Winberg, assistant secretary for fossil energy at the U.S. Department of Energy. Talking to a crowd primarily focused on the buying and selling of coal, Winberg said there are good reasons to be optimistic about coal under the Trump administration even as many argue for a transition away from coal.

"He wants to revive coal, not revile it," Winberg said of Trump.

However, U.S. coal plant retirements continue under the Trump administration. Earlier in the week, Florida utility Lakeland Electric said it would shut down its coal-fired unit 3 at the C.D. McIntosh Jr ST steam turbine less than an hour's drive from the conference. Still, several presenters were more optimistic about power regulation under the new administration.

"The landscape has changed and a coordinated, non-political approach to energy policy is long overdue," said Karen Bramley, the gas regulatory manager with Peoples Gas System, a subsidiary of TECO Energy Inc.'s Tampa Electric Co., in opening remarks at the conference.

Coal-fired power systems, conventionally designed as large plants to be operated at baseload levels, are increasingly losing ground to natural gas and other competing generation sources in the U.S. The DOE is working "very hard to build a future for coal" to develop new technologies to make coal a more attractive fuel source, Winberg said.

"This administration is putting its money where its mouth is to build the coal plants of the next generation," he said of programs like Coal FIRST, which aims to make coal plants more "flexible, innovative, resilient, small and transformative."

In April, the DOE announced $100 million in federal funding for cost-shared projects focusing on developing coal plants that can better compete with more flexible generation sources.

Winberg would not say how many entities applied for the program, but said it was a "very high-quality group" and noted 13 projects were selected to receive $1.95 million in federal funding for conceptual designs under a request for proposals to build "coal-based power plants of the future." The goal of the projects is to test the technical and economic feasibility of the approach.

Recipients of the funding include engineering firms, a university and a subsidiary of coal producer Consol Energy Inc.

"Imagine a plant that can go from cold start to tens to even hundreds of thousands of megawatts in milliseconds. Imagine that the unit is also rugged and small," Winberg said of more advanced coal technology that could potentially be scalable and even fit on a flatbed truck. "I'm looking around this room and none of us will probably see this commercialized, but our children will and our grandchildren will."

The agency is also working to make carbon capture and storage technology more economically feasible. Failed attempts at large-scale carbon capture projects like Southern Co.'s Kemper project in Mississippi has left many investors skittish about the technology, but Winberg said if the government can help get the cost of capturing carbon below $30 per ton, a business case be made and private industry can take over.

"If we don't find a way to cost-effectively capture and utilize CO2, I don't see any coal being built in the United States," Winberg said. "That's just the way it is."

Winberg also said the agency is "hard at work" on a study addressing the limitations on coal and other energy exports off the U.S. West Coast. A lack of access to coal demand in Asia has long been a sticking point for the coal industry, particularly for producers in the Powder River Basin and Uinta Basin.

On the other hand, the agency is working to support natural gas as well, Winberg said. Low natural gas prices are a major driver of coal's declining share of domestic electricity generation. Currently, the DOE is analyzing industry data for the potential to "tease out" improved production from unconventional natural gas wells, Winberg said.

"Right now, we only get about 10% out of that reserve," Winberg said. "If we're successful, even marginally successful, we'll see natural gas prices that are low for decades to come."