Effects on Coal - A Rise in Prices?!

It's a fact that regulations impact prices, for better or worse. So it's only natural that the EPA's new standards will affect coal prices (and therefore electricity prices).

Like Cthulhu, you need to just accept this fact.

After all, the regulations, according to the EPA, are expected to force about 19% of the current coal-fired power plant force to shut down and decrease coal consumption by around 28%. In turn, it's expected that this will rise electricity prices by around 6.5% by 2020.

"Under the provisions of this rule, EPA projects that approximately 46 to 49 GW of additional coal-fired generation (19% of the current capacity, 4.6% of generation capacity in 2020) may be removed from operation by 2020."

Some fear this may lead to a price hike of up to 150% for natural gas.

According to the Department of Energy, there is a distinct possibility that electricity prices could rise by 80%, at least at first. “The precise number will vary, but for first generation we project $70 to $90 per ton [on the wholesale price of electricity],” Julio Friedmann, of the Department of Energy, said. “For second generation, it will be more like a $40 to $50 per ton price. Second generation of demonstrations will begin in a few years, but won’t be until middle of the next decade that we will have lessons learned and cost savings.”

So will these new regulations put electricity in a sleeper hold and force you to dole out more dough for the basics? Well... like all things, it depends. For some regions, there little use of coal, so the effects will be far less. It also depends greatly on the economy's whims, such as with other energy sources, such as natural gas. That said, the EPA has stated that the worst hit area will likely be the Midwest.

But what about Arizona prices? Well, depending on the source, it could be as much as a price raise of up to 31%. Is that true? Honestly, it's hard to be positive until we actually take action. But hey, it's not like the reason why coal's price is so low because of government subsidies. But that's enough for one post. We'll go deeper into jobs and subsidies later!