Can the Switch Be Turned Back On?

It is ironic to see preservationists lobbying to save power plants with smokestacks, but that is the strange case of the Zuni power plant in Denver. The coal-fired steam plant was built in 1901 and provided electricity to a growing metropolis until decommissioned by Excel Energy in 2021. Excel doesn’t want it anymore, having switched from coal to natural gas, and wants to tear it down to avoid future liability issues.

Neighborhood preservation activists, with Denver city council support, have been working to convince Excel not to do that, hoping to turn it into a market, restaurants, galleries or something. Excel delayed demolition while it tried to convince Denver that if it wanted to save the industrial site the city could buy it. Denver has now been given 30 days to make up its mind, as Excel reminds leaders that it is in the power business, not the community development business.

What is the highest and best use of such a unique facility? Here is an idea: turn it back into a power plant. Not the old facility that spewed black smoke into the air a century ago, but a more modern installation that includes clean-burning technology – like the one Excel was operating there until deciding to flip the switch in 2021. Hundreds of millions of dollars have been spent building new power plants that use natural gas instead of coal, while the old plants were simply switched off.

Those decisions – on the part of Excel and dozens of other utilities around the country – were not based on economics or consumer demand. They were based on wrong-headed government policy. Newly appointed Energy Secertary Chris Wright is already calling attention to the problem, saying the U.S. should stop closing coal plants. He has no pro-coal bias, as a highly successful entrepreneur from the competitor natural gas industry, but he understands, and is now explaining to Washington politicians, that America’s cheapest and most abundant energy source is critical to meeting energy demand. Demand that is growing, not shrinking.

In fact, nearly $3 trillion in new investments in the U.S. by high-tech giants like Taiwan Semiconductor, Apple, and Stargate herald a new age of AI data centers, new factories, and other developments that require massive amounts of electricity, beyond the capacity of existing U.S. power grids. America is in dire need of more power plants, not fewer, so it makes no sense to shut down already existing infrastructure. 

Highlighting the need to reverse the course of federal policy, Secretary Wright says, “We are on a path to continually shrink the electricity we generate from coal. That has made electricity more expensive and our grid less stable.” Yet despite that stark reality, the war on coal has been remarkably successful. Twenty years ago, the U.S. got 56 percent of its electricity from coal, today barely 15 percent (Energy Department data). Wright adds, “The best we can hope for in the short-term is to stop the closure of coal power plants.” At a minimum. Over 60 coal plants with 64,000 megawatts of capacity, are scheduled to be shut down by 2030.

The President has said we might need major new power plants built alongside the coming new AI data centers, because they require so much power. New plants cost hundreds of millions, though, so first we ought to at least consider reopening shuttered plants that have not yet been torn down (the Zuni plant is one of over 700). Upgrading and modernizing some of those might be expensive but not compared to the cost of building all-new infrastructure elsewhere.

Alex Epstein, president and founder of the Center for Industrial Progress, testified before the House Oversight Committee last week on “opportunities to strengthen America’s energy reliability” and put a fine point on the problem. “Our electricity crisis is simple: government is artificially restricting reliable electricity supply, then artificially increasing demand.” Restricting supply by killing the coal industry; artificially increasing demand by mandating electric cars, banning gas appliances, and generally forcing electrification of the economy. That shifts the country away from its most abundant and affordable source, of which the U.S. has a virtually unlimited supply (coal underlies 80 percent of Colorado, and much of the rest of the country, too).

Epstein says, “Shortages are now routine throughout the U.S., and if we don’t start increasing reliable generation very quickly, our grid will get crushed by the exploding electricity demands of AI.” The first step should be to keep what we already have, perhaps starting with Zuni.