Have power prices hit a peak?

US Electricity Generation H1 2018 saw wind and solar gains but hydro declines, as natural gas led the grid mix and coal fell; renewables' share, GWh, emissions, and capacity additions shaped the power sector.

Key Points

It is the H1 2018 US power mix, where natural gas led, coal declined, and wind and solar grew while hydro fell.

✅ Natural gas reached 32% of generation, highest share

✅ Coal fell; renewables roughly tied nuclear at ~20%

✅ Wind and solar up; hydro output down vs 2017

To complement our revival of US electricity capacity reports, here’s a revival of our reports on US electricity generation.

As with the fresh new capacity report, things are not looking too bright when it comes to electricity generation. There’s still a lot of grey — in the bar charts below, in the skies near fossil fuel power plants, and in the human and planetary outlook based on how slowly we are cutting fossil fuel electricity generation.

As you can see in the charts above, wind and solar energy generation increased notably from the first half of 2017 to the first half of 2018, and the EIA expected larger summer solar and wind generation in subsequent months, reinforcing that momentum.

A large positive when it comes to the environment and human health is that coal generation dropped a great deal year over year — by even more than renewables increased, though the EIA later noted an increase in coal-fired generation in a subsequent year, complicating the trend. However, on the down side, natural gas soared as it became the #1 source of electricity generation in the United States (32% of US electricity). Furthermore, coal was still solidly in the #2 position (27% of US electricity). Renewables and nuclear were essentially in a tie at 19.8% of generation, with renewables just a tad above nuclear.

Actually, combined with an increase in nuclear power generation, natural gas electricity production increased so much that the renewable energy share of electricity generation actually dropped in the first half of 2018 versus the first half of 2017, even amid declining electricity use in some periods. It was 19.8% this year and 20% last year.

Again, solar and wind saw a significant growth in its market share, from 9% to 9.9%, but hydro brought the whole category down due to a decrease from 9% to 8%.

The visuals above are probably the best way to examine it all. The H1 2018 chart was still dominated by fossil fuels, which together accounted for approximately 60% of electricity generation, even though by 2021 non-fossil sources supplied about 40% of U.S. electricity, highlighting the longer-term shift. In H1 2017, the figure was 59.7%. Furthermore, if you switch to the “Change H1 2018 vs H1 2017 (GWh)” chart, you can watch a giant grey bar representing natural gas take over the top of the chart. It almost looks like it’s part of the border of the chart. The biggest glimmer of positivity in that chart is seeing the decline in coal at the bottom.

What will the second half of the year bring? Well, the gigantic US electricity generation market shifts slowly, even as monthly figures can swing, as January generation jumped 9.3% year over year according to the EIA, reminding us about volatility. There is so much base capacity, and power plants last so long, that it takes a special kind of magic to create a rapid transition to renewable energy. As you know from reading this quarter’s US renewable energy capacity report, only 43% of new US power capacity in the first half of the year was from renewables. The majority of it was from natural gas. Along with other portions of the calculation, that means that electricity generation from natural gas is likely to increase more than electricity generation from renewables.

Jump into the numbers below and let us know if you have any more thoughts.

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Just Transition for Coal and Nuclear Workers explains policy frameworks, compensation packages, retraining, and community support during decarbonization, plant closures, and energy shifts across Europe and the U.S., including Diablo Canyon and Uniper strategies.

Key Points

A policy approach to protect and retrain legacy power workers as coal and nuclear plants retire during decarbonization.

✅ Germany and Spain fund closures with compensation and retraining.

✅ U.S. lacks federal support; Diablo Canyon is a notable exception.

✅ Firms like Uniper convert coal sites to gas and clean energy roles.

The coronavirus pandemic has not changed the grim reality facing workers at coal and nuclear power plants in the U.S. and Europe. How those workers will fare in the years ahead will vary greatly based on where they live and the prevailing political winds.

In Europe, the retirement of aging plants is increasingly seen as a matter of national concern. Germany this year agreed to a €40 billion ($45 billion) compensation package for workers affected by the country's planned phaseout of coal generation by 2038, amid its broader exit from nuclear power as part of its energy transition. Last month the Spanish authorities agreed on a just transition plan affecting 2,300 workers across 12 thermal power plants that are due to close this year.

In contrast, there is no federal support plan for such workers in the U.S., said Tim Judson, executive director at the Maryland-based Nuclear Information and Resource Service, which lobbies for an end to nuclear and fossil-fuel power.

For all of President Donald Trump’s professed love of blue-collar workers in sectors such as coal, “where there are economic transitions going on, we’re terrible at supporting workers and communities,” Judson said of the U.S. Even at the state level, support for such workers is "almost nonexistent,” he said, “although there are a lot of efforts going on right now to start putting in place just transition programs, especially for the energy sector.”

One example that stands out in the U.S. is the support package secured for workers at utility PG&E's Diablo Canyon Power Plant, California's last operating nuclear power plant that is scheduled for permanent closure in 2025. “There was a settlement between the utility, environmental groups and labor unions to phase out that plant that included a very robust just transition package for the workers and the local community,” Judson said.

Are there enough clean energy jobs to replace those being lost?
Governments are more likely to step in with "just transition" plans where they have been responsible for plant closures in the first place. This is the case for California, Germany and Spain, all moving aggressively to decarbonize their energy sectors and pursue net-zero emissions policy goals.

Some companies are beginning to take a more proactive approach to helping their workers with the transition. German energy giant Uniper, for example, is working with authorities to save jobs by seeking to turn coal plants into lower-emissions gas-fired units.

Germany’s coal phaseout will force Uniper to shut down 1.5 gigawatts of hard-coal capacity by 2022, but the company has said it is looking at "forward-looking" options for its plants that "will be geared toward tomorrow's energy world and offer long-term employment prospects."

Christine Bossak, Uniper’s manager of external communications, told GTM this approach would be adopted in all the countries where Uniper operates coal plants.

Job losses are usually inevitable when a plant is closed, Bossak acknowledged. “But the extent of the reduction depends on the alternative possibilities that can be created at the site or other locations. We will take care of every single employee, should he or she be affected by a closure. We work with the works council and our local partners to find sustainable solutions.”

Diana Junquera Curiel, energy industry director for the global union federation IndustriALL, said such corporate commitments looked good on paper — but the level of practical support depends on the prevailing political sentiment in a country, as seen in Germany's nuclear debate over climate strategy.

Even in Spain, where the closure of coal plants was being discussed 15 years ago, a final agreement had to be rushed through at the last minute upon the arrival of a socialist government, Junquera Curiel said. An earlier right-wing administration had sat on the plan for eight years, she added.

The hope is that heel-dragging over just transition programs will diminish as the scale of legacy plant closures grows.

Nuclear industry facing a similar challenge as coal
One reason why government support is so important is there's no guarantee a burgeoning clean energy economy will be able to absorb all the workers losing legacy generation jobs. Although the construction of renewable energy projects requires large crews, it often takes no more than a handful of people to operate and maintain a wind or solar plant once it's up and running, Junquera Curiel observed.

Meanwhile, the job losses are unlikely to slow. In Europe, Austria and Sweden both closed their last coal-fired units recently, even as Europe loses nuclear capacity in key markets.

In the U.S., the Energy Information Administration's base-case prediction is that coal's share of power generation will fall from 24 percent in 2019 to 13 percent in 2050, while nuclear's will fall from 20 percent to 12 percent over that time horizon. The EIA has long underestimated the growth trajectory of renewables in the mix; only in 2020 did it concede that renewables will eventually overtake natural gas as the country's largest source of power.

The Institute for Energy Economics and Financial Analysis has predicted that even a coronavirus-inspired halt to renewables is unlikely to stop a calamitous drop in coal’s contribution to U.S. generation.

The nuclear sector faces a similar challenge as coal, albeit over a longer timeline. Last year saw the nuclear industry starting to lose capacity worldwide in what could be the beginning of a terminal decline, highlighted by Germany's shutdown of its last three reactors in 2023. Last week, the Indian Point Energy Center closed permanently after nearly half a century of cranking out power for New York City.*

“Amid ongoing debates over whether to keep struggling reactors online in certain markets, the industry position would be that governments should support continued operation of existing reactors and new build as part of an overall policy to transition to a sustainable clean energy system,” said Jonathan Cobb, senior communication manager at the World Nuclear Association.

If this doesn’t happen, plant workers will be hoping they can at least get a Diablo Canyon treatment. Based on the progress of just transition plans so far, that may depend on how they vote just as much as who they work for.

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BC-Alberta Transmission Intertie enables clean hydro to balance wind and solar, expanding transmission capacity so Site C hydro can dispatch power, cut emissions, lower costs, and accelerate electrification across provincial grids under federal climate policy.

Key Points

A cross-provincial grid link using BC hydro to firm Alberta wind and solar, cutting emissions and costs.

✅ Balances variable renewables with dispatchable hydro from Site C.

✅ Enables power trade: peak exports, low-cost wind imports.

✅ Lowers decarbonization costs and supports electrification goals.

By Mark Jaccard

Lost in the news and noise of the federal government's newly announced $170-per-tonne carbon tax was a single, critical sentence in Canada's updated climate plan, one that signals a strategy that could serve as the cornerstone for a future free of greenhouse gas emissions.

"The government will work with provinces and territories to connect parts of Canada that have abundant clean hydroelectricity with parts that are currently more dependent on fossil fuels for electricity generation — including by advancing strategic intertie projects."

Why do we think this one sentence is so important? And what has it got to do with the controversial Site C project Site C electricity debate under construction in British Columbia?

The answer lies in the huge amount of electricity we'll need to generate in Canada to achieve our climate goals for 2030 and 2050. Even while we aggressively pursue energy efficiency, our electric cars, buses and perhaps trucks in Canada's net-zero race will need a huge amount of new electricity, as will our buildings and industries. 

Luckily, Canada is blessed with an electricity system that is the envy of the world — already over 80 per cent zero emission, the bulk being from flexible hydro-electricity, with a backbone of nuclear power largely in Ontario, a national electricity success and rapidly growing shares of cheap wind and solar. 

Provincial differences
Yet the story differs significantly from one province to another. While B.C.'s electricity is nearly emissions free, the opposite is true of its neighbour, Alberta, where more than 80 per cent still comes from fossil fuels. This, despite an impressive shift away from coal power in recent years.

Now imagine if B.C. and Alberta were one province.

This might sound like the start of a bad joke, or a horror movie to some, but it's the crux of new research by a trio of energy economists who put a fine point on the value of such co-operation.

The study, by Brett Dolter, Kent Fellows and Nic Rivers, takes a detailed look at the economic case for completing Site C, BC Hydro's controversial large hydro project under construction, and makes three key conclusions.

First, they argue Site C should likely not have been started in the first place. Only a narrow set of assumptions can now justify its total cost. But what's done is done, and absent a time machine, the decision to complete the dam rests on go-forward costs.

On that note, their second conclusion is no more optimistic. Considering the cost to complete the project, even accounting for avoiding termination costs should it be cancelled, they find the economics of completing Site C over-budget status to be weak. If the New York Times had a Site C needle in the style of the newspaper's election visual, it would be "leaning cancel" at this point.

In Alberta, more than 80 per cent of the electricity still comes from fossil fuels, despite an impressive shift away from coal power in recent years. (CBC)
But it is their third conclusion that stands out as worthy of attention. They argue there is a case for completing Site C if the following conditions are met:

B.C. and Alberta reduce their electricity sector emissions by more than 75 per cent (this really means Alberta, given B.C.'s already clean position); and

B.C. and Alberta expand their ability to move electricity between their respective provinces by building new transmission lines.

Let's deal with each of these in turn.

On Condition 1, we give an emphatic: YES! Reducing electricity emissions is an absolute must to meet climate pledges if Canada is to come even close to achieving its net-zero goals. As noted above, a clean electricity grid will be the cornerstone of a decarbonized economy as we generate a great deal more power to electrify everything from industrial processes to heating to transportation and more. 

Condition 2 is more challenging. Talk of increasing transmission connections across Canada, including Hydro-Québec's U.S. strategy has been ongoing for over 50 years, with little success to speak of. But this time might well be different. And the implications for a completed Site C, should the government go that route, are profound.

Wind and solar costs rapidly declining
Somewhat ironically, the case for Site C is made stronger by the rapidly declining costs of two of its apparent renewable competitors: wind and solar.

The cost of wind and solar generation has fallen by 70 per cent and 90 per cent, respectively, a dramatic decline in the past 10 years. No longer can these variable sources of power be derided as high cost; they are unequivocally the cheapest sources of raw energy in electricity systems today.

However, electricity system operators must deal with their "non-dispatchability," a seemingly complicated term that simply means they produce electricity only when the sun shines and the wind blows, which is not necessarily when electricity customers want their electricity delivered (dispatched) to them. And because of this characteristic, the value of dispatchable electricity sources, like a completed Site C, will grow as a complement to wind and solar. 

Thus, as Alberta's generation of cheap wind and solar grows, so too does the value of connecting it with the firm, dispatchable resources available in B.C.

Rather than displacing wind and solar, large hydro facilities with the ability to increase or decrease output on short notice can actually enable more investment in these renewable sources. Expanding the transmission connection, with Site C on one side of that line, becomes even more valuable.

Many in B.C. might read this and rightly ask themselves, why should we foot the bill for this costly project to help out Albertans? The answer is that it won't be charity — B.C. will get paid handsomely for the power it delivers in peak periods and will be able to import wind power at low prices from Alberta in other times. B.C. will benefit greatly from these gains of trade.

Turning to Alberta, why should Albertans support B.C. reaping these gains? The answer is two-fold.

First, Site C will actually enable more low-cost wind and solar to be built in Alberta due to hydro's ability to balance these non-dispatchable renewables. Jobs and economic opportunity will occur in Alberta from this renewable energy growth.

Second, while B.C. imports won't come cheap, they will be less costly than the decarbonization alternatives Alberta would need without B.C.'s flexible hydro, as the economists' study shows. This means lower overall costs to Alberta's power consumers.

A clear role for Ottawa
To be sure, there are challenges to increasing the connectedness of B.C. and Alberta's power systems, not least of which is BC Hydro being a regulated, government-owned monopoly while Alberta is a competitive market amongst private generators. Some significant accommodations in climate policy and grids will be needed to ensure both sides can compete and benefit from trade on an equal footing.

There is also the pesky matter of permitting and constructing thousands of kilometres of power lines. Getting linear energy infrastructure built in Canada has not exactly been our forte of late.

We are not naive to the significant challenges in such an approach, but it's not often that we see such a clear narrative for beneficial climate action that, when considered at the provincial level, is likely to be thwarted, but when considered more broadly can produce a big win.

It's the clearest example yet of a role for the federal government to bridge the gap, to facilitate the needed regulatory conversations, and, let's be frank, to bring money to the table to make the line happen. Neither provincial side is likely to do it on their own, nor, as history has shown, are they likely to do it together. 

For a government committed to reducing emissions, and with a justified emphasis on the electricity sector, the opportunity to expand the Alberta-B.C. transmission intertie, leveraging the flexibility of B.C.'s hydro with the abundance of wind and solar potential on the Prairies, offers a potential massive decarbonization win for Western Canada that is too good to ignore.

Mark Jaccard, a professor at Simon Fraser University, and Blake Shaffer, a professor at the University of Calgary

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Illinois Zero Emission Credits support nuclear plants via tradable credits tied to wholesale electricity prices, carbon costs, created by the Future Energy Jobs Bill to avert Exelon closures and sustain low-carbon power.

Key Points

State credits that value nuclear power's zero-carbon output, priced by market and carbon metrics to keep plants running.

✅ Pegged to wholesale prices, carbon costs, and state averages.

✅ Created by Future Energy Jobs Bill to prevent plant retirements.

✅ Supports Exelon Quad Cities and Clinton nuclear facilities.

Nuclear plants have produced over half of Illinois electricity generation since 2010, but the states two largest plants would have been retired amid the debate over saving nuclear plants if the state had not created a zero emission credit (ZEC) mechanism to support the facilities.

The two plants, Quad Cities and Clinton, collectively delivered more than 12 percent of the states electricity generation over the past several years. In May 2016, however, Exelon, the owner of the plants, announced that they had together lost over $800 million dollars over the previous six years and revealed plans to retire them in 2017 and 2018, similar to the Three Mile Island closure later announced for 2019 by its owner.

In December 2016, Illinois passed the Future Energy Jobs Bill, which established a zero emission credit (ZEC) mechanism

to support the plants financially. Exelon then cancelled its plans to retire the two facilities.

The ZEC is a tradable credit that represents the environmental attributes of one megawatt-hour of energy produced from the states nuclear plants. Its price is based on a number of factors that include wholesale electricity market prices, nuclear generation costs, state average market prices, and estimated costs of the long-term effects of carbon dioxide emissions.

The bill is set to take effect in June, but faces multiple court challenges as some utilities have expressed concerns that the ZEC violates the commerce clause and affects federal authority to regulate wholesale energy prices, amid gas-fired competition in nearby markets that shapes the revenue outlook.

Illinois ranks first in the United States for both generating capacity and net electricity generation from nuclear power, a resource many see as essential for net-zero emissions goals, and accounts for approximately one-eighth of the nuclear power generation in the nation.

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Assault on Kyiv's Power Grid intensifies as missiles and drones strike critical energy infrastructure. Ukraine's air defenses intercept threats, yet blackouts, heating risks, and civilian systems damage mount amid escalating winter conditions.

Key Points

Missile and drone strikes on Kyiv's power grid to cripple infrastructure, cause blackouts, and pressure civilians.

✅ Targets power plants, substations, and transmission lines

✅ Air defenses intercept many missiles and drones

✅ Blackouts jeopardize heating, safety, and communications

In a troubling escalation of hostilities, Russian forces launched a relentless five-hour assault on Kyiv, employing missiles and drones to target critical infrastructure, particularly Ukraine's power grid. This attack not only highlights the ongoing conflict between Russia and Ukraine but also underscores the vulnerability of essential services, as seen in power outages in western Ukraine in recent weeks, in the face of military aggression.

The Nature of the Attack

The assault began early in the morning and continued for several hours, with air raid sirens ringing out across the capital as residents were urged to seek shelter. Eyewitnesses reported a barrage of missile strikes, along with the ominous whir of drones overhead. The Ukrainian military responded with its air defense systems, successfully intercepting a number of the incoming threats, but several strikes still managed to penetrate the defenses.

One of the most alarming aspects of this attack was its focus on Ukraine's energy infrastructure. Critical power facilities were hit, resulting in significant disruptions to electricity supply across Kyiv and surrounding regions. The attacks not only caused immediate outages but also threatened to complicate efforts to keep the lights on in the aftermath.

Impacts on Civilians and Infrastructure

The consequences of the missile and drone strikes were felt immediately by residents. Many found themselves without power, leading to disruptions in heating, lighting, and communications. With winter approaching, the implications of such outages become even more serious, as keeping the lights on this winter becomes harder while temperatures drop and the demand for heating increases.

Emergency services were quickly mobilized to assess the damage and begin repairs, but the scale of the attack posed significant challenges. In addition to the direct damage to power facilities, the strikes created a climate of fear and uncertainty among civilians, even as many explore new energy solutions to endure blackouts.

Strategic Objectives Behind the Assault

Military analysts suggest that targeting Ukraine's energy infrastructure is a calculated strategy by Russian forces. By crippling the power grid, the intention may be to sow chaos and undermine public morale, forcing the government to divert resources to emergency responses rather than frontline defenses. This tactic has been employed previously, with significant ramifications for civilian life and national stability.

Moreover, as winter approaches, the vulnerability of Ukraine’s energy systems becomes even more pronounced, with analysts warning that winter looms over the battlefront for civilians and troops alike. With many civilians relying on electric heating and other essential services, an attack on the power grid can have devastating effects on public health and safety. The psychological impact of such assaults can also contribute to a sense of hopelessness among the population, potentially influencing public sentiment regarding the war.

International Response and Solidarity

The international community has responded with concern to the recent escalation in attacks. Ukrainian officials have called for increased military support and defensive measures to protect critical infrastructure from future assaults, amid policy shifts such as the U.S. ending support for grid restoration that complicate planning. Many countries have expressed solidarity with Ukraine, reiterating their commitment to support the nation as it navigates the complexities of this ongoing conflict.

In addition to military assistance, humanitarian aid is also critical, and instances of solidarity such as Ukraine helping Spain amid blackouts demonstrate shared resilience. As the situation continues to evolve, many organizations are working to provide relief to those affected by the attacks, offering resources such as food, shelter, and medical assistance. The focus remains not only on immediate recovery efforts but also on long-term strategies to bolster Ukraine’s resilience against future attacks.

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DTEK Rotterdam+ price-fixing case scrutinizes alleged collusion over coal-based electricity tariffs in Ukraine, with NABU probing NERC regulators, market manipulation, consumer overpayment, and wholesale pricing tied to imported coal benchmarks.

Key Points

NABU probes alleged DTEK-NERC collusion to inflate coal power tariffs via Rotterdam+; all suspects deny wrongdoing.

✅ NABU alleges tariff manipulation tied to coal import benchmarks.

✅ Four DTEK execs and four NERC officials reportedly charged.

✅ Probe centers on 2016-2017 overpayments; defendants contest.

Two more executives of DTEK, Ukraine’s largest private power and coal producer and recently in energy talks with Octopus Energy, have been charged in a criminal case on August 14 involving an alleged conspiracy to fix electricity prices with the state energy regulator, Interfax reported.

They are Ivan Helyukh, the CEO of subsidiary DTEK Grid, which operates as Ukraine modernizes its network alongside global moves toward a smart electricity grid, and Borys Lisoviy, a top manager of power generation company Skhidenergo, according to Kyiv-based Concorde Capital investment bank.

Ukraine’s Anti-Corruption Bureau (NABU) alleges that now four DTEK managers “pressured” and colluded with four regulators at the National Energy and Utilities Regulatory Commission to manipulate tariffs on electricity generated from coal that forced consumers to overpay, reflecting debates about unjustified profits in the UK, $747 million in 2016-2017.

DTEK allegedly benefited $560 million in the scheme.

All eight suspects are charged with “abuse of office” and deny wrongdoing, similar to findings in a B.C. Hydro regulator report published in Canada.

There is “no legitimate basis for suspicions set out in the investigation,” DTEK said in an August 8 statement.

Suspect Dmytro Vovk, the former head of NERC, dismissed the investigation as a “wild goose chase” on Facebook.

In separate statements over the past week, DTEK said the managers who are charged have prematurely returned from vacation to “fully cooperate” with authorities in order to “help establish the truth.”

A Kyiv court on August 14 set bail at $400,000 for one DTEK manager who wasn’t named, as enforcement actions like the NT Power penalty highlight regulatory consequences.

The so-called Rotterdam+ pricing formula that NABU has been investigating since March 2017, similar to federal scrutiny of TVA rates, was in place from April 2016 until July of this year.

It based the wholesale price of electricity by Ukrainian thermal power plants on coal prices set in the Rotterdam port plus delivery costs to Ukraine.

NABU alleges that at certain times it has not seen documented proof that the purchased coal originated in Rotterdam, insisting that there was no justification for the price hikes, echoing issues around paying for electricity in India in some markets.

Ukraine started facing thermal-coal shortages after fighting between government forces and Russia-backed separatists in the eastern part of the country erupted in April 2014. A vast majority of the anthracite-coal mines on which many Ukrainian plants rely are located on territory controlled by the separatists.

Overnight, Ukraine went from being a net exporter of coal to a net importer and started purchasing coal from as far away as South Africa and Australia.

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