Why don't we build power plants next to coal mines?

Factual Questions
1

I often drive by a coal-fired power plant in Central Texas. This power plant supplies energy to Austin and various surrounding communities. It takes a train-load of coal every day to operate the plant. This train comes from Wyoming.

So, rather than send 365 trains a year from Wyoming to Texas, why don’t we build the power plant next to the mine in Wyoming and send the electricity to Austin? It seems that that would be much cheaper, safer, and more environmentally friendly. The train has four locomotives. Perhaps it has more locomotives when it is in the mountains. Of course, the train also has a crew, the train cars and locomotives have to be maintained. The track has to be maintained. Surely high-powered transmission lines wouldn’t have the maintenance costs that all of that takes. The only advantage I see to shipping the coal thousands of miles is that the power plant has a reserve amount of coal on-site that will run the plant for several days if the flow of coal is interrupted. It would be harder to stockpile electricity in the event of an interruption of the power lines.

So, why don’t we build power plants next to coal mines?

2

One of the reasons, I think, is politicians in each jurisdiction need to get jobs for their area. One fights for a big project in one area and another fights for another part of the project in another area, neither cares about the overall project so much as making a name for themselves in their region.

3

I guess the power stations need to be next to water - burn the coal, heat water into steam, steam turns the turbines.

Must be cheaper to transport coal than water.

4

The longer the distance from generation site to site where the electricity is used, the more energy is lost due to heating of the transmission wires - so it makes sense to put big power plants relatively close to big cities

5

High power lines lose power over long distances. The longer the distance the larger the rate of power loss. Given enough distance and a train is far more efficient.****

6

As I drove through Wyoming last summer, I noticed several power plants that were built next to coal mines, so we do do that.

However, looking at plants in Wyoming and Texas:
http://www.powerplantjobs.com/ppj.nsf/powerplants1?openform&cat=wy&Count=500
http://www.powerplantjobs.com/ppj.nsf/powerplants1?openform&cat=tx&Count=500

I see that Wyo generates 6970 gigawatts, while Tex generates 111283*, so perhaps there’s room to do more of what you suggest.

  • These are totals for all types of power plants in each state. I expect Texas runs more natural gas plants than Wyoming, while Wyoming has a larger percentage of coal fired plants. The data is there, I just didn’t dig it out.
7

MegaWatts?

8

Yes.

9

This is a big industry here in Montana, and probably in Wyoming as well. It’s referred to as “coal by wire”, and I gather that the electrical power so generated is one of our major exports to other states.

10

A lot of it has to do with the Clean Air Act. It would be much more efficient to burn the coal near where the power is used but, that would add to the pollution of the cities. It is better, legally, to burn it in the wide open spaces of the Great American West and send the power, inefficiently, to the cities that need it. If I’m wrong, someone Fight my Ignorance with cites, please.

11

Mines often play out in fewer years than the design life of a typical coal fired plant. Also, it is helpful to site a plant near an aboundant source of cooling water…saves on big expensive cooling towers.

Often the coal mines are at higher elevation than the power plant…thus the trains climb the grade empty, and coast down the hill with a load…this makes rail delivery very economical.

12

I’ll appeal to authority on this as I’ve spent nearly 2 decades working with coal power plants, worked with or at more than 500 of them in the US alone, and have also been involved in mine studies, rail and ship transport studies, emissions studies, and so many things I’m not going to list them all again.

The CAA itself generally does not care where you site your plant so long as you meet emissions regulations. Note that there are regional and local exceptions to this however which abound (regional nonattainment areas, etc.). Typically they involve ozone or opacity issues, not so much SO2. However, the fact is that the large majority of coal power plants were sited and built long before even the 1970 CAA, let alone the 1990 amendments that gave it bite. Sure, people tended to site coal power plants at the edge of the city for pollution reasons (and for surface area reasons - the coal handling yard, rail loops, etc. take up a lot of space), but remember as well, in the big coal building boom of 1950-1965, our national T&D system was in much worse shape than it is now, and T&D reasons were the over-riding concern for siting. You wanted plants close to the power load, but not too far.

So the primary, #1 reason coal plants are sited away from the mines is T&D losses. The #2 reason is economics. But there are other reasons as well. One is that sometimes the coal plant was originally sited near a mine, but due to emissions regulations they now must import lower-sulfur coal, which is why you get crazy things such as coal plants right next to perfectly working mines, receiving coal from well more than 1,000 rail miles away. I was working with 2 coal power plants just today who are buying coal from about 800 miles away, instead of taking it from at least 30 mines right next door to them, and the #1 reason is economics, #2 is emissions. And as noted earlier in this thread, mines do sometimes run out faster than expected - I’ve seen my share of this. Mainly it’s that the plant has had so many life extensions that the mine can’t keep up, but that’s a whole other can of worms.

On economics - it is actually very often cheaper to buy coal from far away than to get it locally. One example I like to use was an actual study I did where it was cheaper to mine coal in Indonesia, load it on a train, transload it to Panamax, cross the Pacific Ocean, send the ship through the Panama Canal, cross the Caribbean and go up the Atlantic Seaboard to Virginia, unload at a terminal, transload onto train again, then send it to the plant - than to take coal from a mine literally across the freaking highway. The only reason the plant didn’t do it was fear of strikes by the union. Coal transport by rail is really just that cheap. It can cost as little as $11/ton to ship coal from Wyoming to Kansas City, and I’ve seen it be under $30/ton to ship it from Wyoming to South Carolina. The Wyoming coal costs about $5-$10/ton (depending), so your total cost is still very low, maybe $40/ton delivered to go about 2/3 of the way across the country. Contrast that to local mine prices in the Appalachians to South Carolina, which are running $40-$60/ton without transport, and $50-$75/ton with. Those figures are of course very rough, since every single coal plant and fuel purchase contract is different.

I’ve been involved in maybe 200 studies on this subject and managed nearly 100 studies myself, and in no case did elevation make a difference to coal source selection. The reason being, even if it’s River location only makes a minor difference, and would never be a deciding factor between minemouth or not. Water is complicated - it makes a difference for availability of coal sources, true, but I’ve not seen it be (for rivers, that is) a deciding factor in whether to site a plant close or far from a mine. It is true that having navigable, bargeable water access increases your coal choices and can reduce your cost. And it certainly makes a huge difference in siting the plant for the purpose of cooling water for the condensers.

Another issue is, who owns the mine? Unless the mine can sell to other plants and has good rail access, it’s most likely going to be owned by the utility. Some folks, like Deseret, can run their own mine fairly well. Others…not so much. Owning and operating a mine is a burden that most US utilities would never want to get into (although outside the US it’s much, much more common). Now you could site plants right smack in the middle of something like the PRB, and there are a few there (I’ve been to them all), but the T&D losses are terrible to get the power anywhere else.

13

I think that Una once said here that there were more or less three separate power grids in the United States: East of the Rockies; West of the Rockies, and Texas. Line losses aside, it may be more efficient to keep Texas on a separate cycle than to sync up the entire country. This pretty much would be required to hook Austin up to a power plant in Wyoming.

(On edit: Una, would you mind commenting on this?)

14

Yallourn power plant at the left and the coal mine (open cut) on the right. That’s where I get my power from, as does most of Victoria.

15

I actually don’t know if there is a problem crossing into the ERCOT region or not. I’m not 100% sure that would overweigh the issue of the T&D losses even if they were all on a common grid, especially since Texas is so darned big.

16

Clearly- you ARE the authority on this subject-at least around here. Thanks for the detailed post. And your story re Indoneisa, how recent was that? It is an amazing story. I assume the primary reason is open-pit vs tunneling?

17

Una, who do you work for? My hubby works with our state’s emissions inventory and what you’re saying sounds like what he deals with.

18

That particular study was ten years back, but it could be today - while the differences in prices are smaller now (due to increased demand of Indonesian coal and a shortage of some ships), for the plant in question in Virginia it would still be cheaper to transport Indonesian coal to the plant. However, other economic factors and reliability ones would limit their use of it to no more than 20-25% by mass at that specific plant.

19

I work for a utility and government consulting firm, not in any government capacity (although I’m sometimes hired by State, the US, and governments of other countries).

20

Sorry, I forgot to answer the second part. Open-pit is part of it, and a labor force that gets paid much less than in the US is another part. However, you can get open-pit coal from Wyoming for as little as $4 a ton (and if you are willing to forgo some mine-site blending, slightly less than that). The largest factor of all is that ship transport of an easily loadable/unloadable item like coal is just very inexpensive, and the rail situation in the US is set up such that many coal plants are only served by a single company - thus, that company has a monopoly, and can charge whatever the market will bear.

To give an example of how much this monopoly adds to our delivered coal costs (and as a result your utility bills), consider this: I spoke once with the VP of a large utility, who told me that her plant, which had been served by only a single rail line, spent tens of millions of its own money to build a line connecting to a second company’s line, so they could see some competition in rail costs. Although there was a lot of anger and even outright threats from their original rail company (who threatened to cut off ALL coal shipments if the plant connected up to one of their competitors, to the point where the State had to threaten to sue the rail line if they shut down a plant supplying power to 2M people), when they were done the competition dropped the price of coal so much that their investment had a payback period of about 8 months.