Market and product

Subsidies for renewable and even nuclear generation are an increasing concern for the US thermal coal industry, Rob Hardman, vice president of fuel supply at Dynegy, said Thursday at the World Trade & Transport Conference in New Orleans, Louisiana.

During a fuel buyers panel discussion, Hardman said coal burn continues to threatened by zero-emission generation, including nuclear generation that would be uneconomic if not for billions of dollars in tax credits.

Hardman noted that in December the state of Illinois approved more than $2 billion in subsidies to keep the Clinton and Quad Cities nuclear plants running. Those plants were in jeopardy of closing because of the fierceness of the competition. Other utilities could seek similar financial support to keep nuclear units online in Ohio, he said.

"These subsides are keeping uneconomic generation running and favoring generation in competitive markets," Hardman said.

US power demand has remained flat to slightly down, he said, and coal's generation share is slipping further because of low natural gas prices and tax credits given to other fuel sources that coal could otherwise compete with.

"Folks have done everything they need to comply environmentally, what's next is to see what happens to coal with these subsidies and where they go," he said. - Platts