Coal-powered AI robots are a dirty fantasy
Tribune News Service
The same day President Donald Trump launched his AI Action Plan, his Energy Secretary Chris Wright pulled federal support for a power project with ties to renewable energy that could help that plan. Not coincidentally, Trump instructed Wright at his AI summit that he must say 'clean, beautiful' before any mention of the word 'coal' and that the US must compete with China's construction of new coal-fired plants. Possibly the only thing more bizarre than Trump's enforced catch-phrasing is his vision of 21st century robots running on a power technology that hasn't been cutting-edge since the days of Thomas Edison. Coal has long been a political prop for Trump, but this has taken on greater significance in his second term, with a naked assault on both the regulation of greenhouse gas emissions and zero-carbon technologies (nuclear power excepted). When coal isn't being touted as beautiful or clean, it is pitched as reliable and cheap, and due for a comeback if freed from overbearing rules.
This is a fantasy, and a bleak one at that, not just for the climate but also that AI plan. You don't need a conspiracy theory to explain coal's decline in the US. It lost 31 percentage points of market share in US power generation between 2005 and 2024, and natural gas picked up four-fifths of that. Why? Gas got cheaper. Five times the cost of coal in 2005, on an energy-equivalent basis, that gap was all but erased by booming shale supply (which Trump also backs). Meanwhile, the cost of building new coal plants, already a multiple of that for gas, went up even as it went down for gas (and renewables). Coal's decline was well established by 2015, when former President Barack Obama unveiled his Clean Power Plan — which was never implemented anyway. The problem is straightforward: Coal-power is an old technology outmatched by newer ones. The average coal-plant running today began operating when Jimmy Carter was president. The youngest, Sandy Creek in Texas, came online in 2014. By 2020, its owners were reportedly in debt restructuring talks and the following year the plant tripped offline in Texas' winter blackouts. Utilisation, or the proportion of the year it actually runs, has slumped.
The cheapest existing coal plants remain competitive, according to Lazard Inc.'s latest analysis of levelised costs. Yet they are hardly a slam-dunk compared with gas or unsubsidized wind and solar. The latter are intermittent, of course, and securing firm power to back them up, such as contracting with a gas peaker-plant or battery, boosts their cost considerably. Even then, new coal is in a similar cost range — and that is only with the implicit subsidy of spewing unpriced carbon.
This shows why rising forecasts of power demand, stoking fears of dark datacenters or blackouts, offer a lifeline to some existing coal plants that would otherwise retire. But this won't catalyze new ones, even when you consider the suddenly rising cost of new gas plants. Utility NextEra Energy Inc. recently cited a levelised cost for new gas-power of $90-$115 per megawatt-hour. That would put it closer to new coal, but there are reasons why there's a backlog for turbines, not for boilers. Gas plants are more efficient than coal, especially in ramping up and down to match shifting demand and output from renewables, and also emit about half as much carbon.
The whiplash of US energy policy over the past decade demonstrates why a developer must think in terms of not the next three years but the next 30. Similarly, AI hyperscalers are prioritising sheer speed over net-zero now, but tethering their reputations to coal over the long term would be inadvisable. This is why, for all of coal's vaunted qualities, the Trump administration still tries to tilt the field so heavily toward it and away from renewable competitors. Wright has made extensive use of federal powers to keep coal plants running that might otherwise close or run minimally; roughly a fifth of all such emergency orders since 2000 have been issued this year.
Similarly, Wright's decision to pull an agreed $4.9 billion federal loan-guarantee for the 800-mile Grain Belt Express transmission line reeks of politics, rather than the economic analysis his department claims. The project, bringing wind and solar power from the Great Plains to states further east, had secured approval from four states, partly due to expected cost savings, as well as court victories over opponents.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
2 hours ago
- Khaleej Times
Indian rupee loses against UAE dirham as Trump ups tariff threats on India
The Indian rupee opened weaker on Tuesday (August 5), pressured by heightened US-India trade tensions following President Donald Trump's renewed tariff threats. The currency managed to avert a drop past the record low of 87.95 (Dh23.96) to the dollar, likely due to intervention by the central bank, traders said. The rupee opened at 87.85 (Dh23.93), compared to 87.6550 (Dh23.8841) on Monday (August 4). At one point, the non-deliverable forward market had indicated that the rupee would weaken past 88 at open. "It was looking like a straight break of 88 at open, RBI came in and capped the move," a senior FX trader at a private bank said. According to higher tariffs herald increased pressure on the Indian economy, given its heavy exposure to the US as a market for exports. In 2024, India had a trade surplus of about $44 billion with the United States. Trump's threat also comes just before a Reserve Bank of India meeting this week, where the central bank is widely expected to trim rates further in the face of increasing economic headwinds.
Arabian Post
2 hours ago
- Arabian Post
Trump threatens higher tariffs over oil trade with Russia
Arabian Post Staff -Dubai US President Donald Trump has announced plans to significantly raise tariffs on exports from India, citing the country's oil purchases from Russia as the primary reason for the move. The statement marks an escalation in tensions between the two countries, with both sides having clashed over trade policies and geopolitical issues in recent years. Trump's remarks, made on social media, have ignited a strong response from New Delhi, which views the threat as unjustified and damaging to its economic interests. The US President criticized India's ongoing imports of Russian crude oil, calling the move a betrayal, as the West intensifies efforts to isolate Moscow over its invasion of Ukraine. He pointed out that India's purchases were then being resold on the international market for profits, further compounding the situation. ADVERTISEMENT The US government has consistently condemned the sale of Russian oil to countries that are still buying from Moscow amid global sanctions designed to cripple the Russian economy. These sanctions, which were imposed by the US and its allies in response to Russia's aggressive actions in Ukraine, have led to a complex diplomatic web, with several nations, including India, caught in the middle. While the US and European Union have significantly reduced their oil imports from Russia, countries like India and China have stepped in to fill the gap, buying discounted crude oil from Moscow. India, in particular, has ramped up its purchases of Russian energy, a decision that is seen by many as a strategic move to secure energy resources at lower costs. These purchases have helped India maintain its economic growth amidst the energy price crisis exacerbated by the war in Ukraine. The announcement by Trump that tariffs on Indian goods would be substantially raised could have serious repercussions for trade between the two nations. India is one of the United States' largest trading partners, and any significant tariffs would undoubtedly affect a range of industries, from agriculture to technology. In 2022, the bilateral trade between the two countries surpassed $150 billion, with India exporting a wide array of goods to the US, including textiles, chemicals, and pharmaceuticals. The Indian government, however, has rejected Trump's claims, arguing that its oil purchases from Russia are in line with its energy security needs and do not violate any international laws. New Delhi has maintained a neutral stance on the war in Ukraine, calling for dialogue and diplomacy to resolve the crisis rather than escalating sanctions and pressure on Russia. India's position reflects a broader strategy of balancing its foreign relations with both the West and Russia. While it maintains strong ties with the US and Europe, it also values its long-standing relationship with Russia, particularly in defense and energy sectors. Over the years, Russia has been a reliable supplier of defense equipment to India, a factor that continues to shape India's foreign policy decisions. ADVERTISEMENT The economic impact of higher tariffs could have a ripple effect on both countries' economies. India could face higher costs for its exports to the US, which might lead to inflationary pressures within certain sectors. For the US, such tariffs could result in higher prices for American consumers on imported goods, potentially exacerbating inflation at a time when the country is already grappling with economic challenges. The political fallout from Trump's threat to raise tariffs could further complicate efforts to resolve trade disputes between the US and India. Both nations have been working on strengthening their strategic and economic ties, but issues like tariffs and energy trade could undermine this progress. Negotiations over trade deals, such as the proposed free trade agreement, may now face significant hurdles as both sides dig in their heels. The decision to increase tariffs on India could also have wider implications for the global economy. It might set a precedent for other nations to retaliate against countries purchasing Russian oil, particularly those in the Global South who have not been willing to fully sever their economic ties with Moscow. This could potentially fragment the global energy market even further, making it harder for countries to secure stable and affordable energy supplies. This development highlights the growing division between the US-led West and countries that have opted to remain neutral or continue engaging with Russia. As the war in Ukraine shows no sign of abating, the economic and diplomatic repercussions of these decisions are likely to continue shaping global relations for the foreseeable future.
Zawya
2 hours ago
- Zawya
Fed's Daly says time is nearing for rate cuts, may need more than two
San Francisco Federal Reserve Bank President Mary Daly on Monday said that given mounting evidence that the U.S. job market is softening and no signs of persistent tariff-driven inflation, the time is nearing for interest rate cuts. "I was willing to wait another cycle, but I can't wait forever," Daly said of the Fed's decision last week to leave short-term borrowing costs in their 4.25%-4.50% range rather than cut them, as a couple of her colleagues wanted and as President Donald Trump has demanded. While that doesn't mean a September rate cut is a lock, she said, "I would lean to thinking that every meeting going forward is a live meeting to think about these policy adjustments." The two quarter-point interest-rate cuts that Fed policymakers back in June penciled in for this year still "look to be an appropriate amount of recalibration, and less important is, does it happen in September and December than does it happen at all kinds of permutations to get those two cuts." Daly said there is still plenty of data including a couple of labor market and inflation reports due out before the Fed's policy-setting meeting, in September, and she's keeping an open mind. "We of course could do fewer than two (rate cuts) if inflation picks up and spills over or if the labor market springs back," Daly said. But "I think the more likely thing is that we might have to do more than also should be prepared in my judgment to do more if the labor market looks to be entering that period of weakness and we still haven't seen spillovers to inflation." A Labor Department report Friday showed U.S. employers added just 73,000 jobs last month, and massive revisions to previously reported data showed only 33,000 jobs were added in the two prior months. Those figures, to Daly's mind, don't mean the job market is precariously weak - in times of economic flux, she said, raw employment numbers are often less informative than ratios like the unemployment rate, which ticked up just a tenth of a percentage point in July to 4.2%. Still, she said, looking at a broad dashboard of labor-market measures, there is "evidence after piece of evidence" that the labor market is softening quite a bit compared to last year. "I would see further softening as an unwelcome result," she said. "I'm comfortable with the decision we made in July, but I am increasingly less comfortable with making that decision again and again." At the same time, she said, there's no evidence that tariff-driven price increases are seeping more broadly into inflation, and if the Fed waits long enough to be certain it won't -- a process that could take six months or a year, she said - the Fed will "for sure" be too late to move. The Fed is approaching a "tradeoff space where you are trying to make a judgment about where does policy need to be to continue to put downward pressure on inflation, and where does it need to be to continue to make sure that sustainable employment can be achieved," she said. "That's why I didn't think that July was a necessary change, but I do think, increasingly, policy is not aligned."
