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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Roughly 21% of the nation's existing coal-fired generation, about 57,000 megawatts (MW), is uneconomic compared with currently operating gas-fired generation, according to a recent study from the Union of Concerned Scientists (UCS) (Cambridge, Massachusetts). The group's recent report, "A Dwindling Role for Coal," observed "the closure of many more coal-fired power plants seems inevitable," as economics and environmental issues are expected to continue to exert a one-two punch on coal-fired generation.
Between 2008 and 2016, roughly 59,300 MW of coal-fired generation, about 17% of the nation's generating capacity, were retired and an additional 13,400 MW, or roughly 4%, of coal-fired power plants were converted to burn natural gas or other fuels, according to the UCS report, which was released October 10. The group estimated those closures and conversions led to an 80% reduction in sulfur dioxide (SO2) emissions, a 64% reduction in oxides of nitrogen (NOx) emissions and a 34% reduction in carbon dioxide (CO2) emissions. The states with the largest number of unit retirements over the 2008-2016 period were Ohio (50 units), Indiana (30 units) Michigan and North Carolina (28 units each), Pennsylvania (27 units) and Wisconsin (23 units).
Looking to the future, the group identified 128 coal-fired units, representing about 38,100 MW, that are already slated for retirement, and another 35 units with a total capacity of about 12,800 MW that are slated to convert to another fuel, mostly natural gas. That represents 51,000 MW, or about 18%, of the coal-fired generating capacity as of yearend 2016.
The group applied what it termed an "economic stress test" on coal-burning generating units operating at yearend 2016 and found about 21% of the fleet, approximately 57,000 MW, were uneconomic compared with an equivalently sized natural gas combined-cycle (NGCC) plant operating at the same capacity factor. The states with the greatest number of uneconomic units at yearend 2016 were: Florida (16 units), Georgia (15 units), Virginia (13 units), West Virginia and South Carolina (12 units each) and North Carolina (11 units).
Click on the image at right to see a pie chart of the U.S. coal fleet as of yearend 2016.
The report was written by Jeremy Richardson, a senior energy analyst in UCS' climate and energy program, Sam Gomberg, another senior energy analyst in that program, and Julie McNamara, an energy analyst in that program.
"Our analysis shows that the transition away from coal over the past decade is poised to continue - thanks primarily to market forces," Richardson said in a statement. "Without factoring the cost of installing missing modern pollution controls into the calculations, a large portion of today's coal fleet can't compete economically with cleaner energy options, such as natural gas and, in some cases, renewables. This is particularly true in the Southeast, where most coal units operate at a higher cost than cleaner energy options, causing them to fail our economic stress test."
In preparing the report, UCS noted research by Lazard Limited (NYSE:LAZ) (Hamilton, Bermuda) and other organizations on the growing cost-effectiveness of renewable energy. For more on that, see December 5, 2017, article - Study: Renewable Energy Costs Stay on Downward Trajectory, Nuclear Up, Coal Flat.
"With advance planning, and investment, the nation can take advantage of many cost-effective clean energy options - such as renewable energy and energy efficiency - to replace retiring coal plants, while maintaining an affordable and reliable electric supply," the UCS authors wrote.
The report highlights what communities in Michigan, Illinois, North Carolina and West Virginia have done and are doing to transition away from coal-fired power.
While the UCS energy analysts are happy with the declining reliance on coal-fired generation, they are concerned about the industry's rising reliance on gas-fired generation. "In states where a large portion of the existing coal fleet is likely to be shuttered, a wholesale shift from one fossil fuel to another puts consumers at risk," report co-author Sam Gomberg said. "In Florida, for example, natural gas has become the de-facto substitute for retired coal and already makes up the majority of the state's electricity mix. This could cost consumers dearly in the form of price spikes or obsolete infrastructure. Instead, states should be seeking to take advantage of the opportunity to diversify their energy mix with renewables, energy efficiency, and emerging technologies such as battery storage and smart meters."
"Our analysis and the experiences of communities underscores the need for policies that enable planning for and investment in cost-effective, reliable and just transition to a clean energy economy," the report authors urged. "Policymakers should incentivize investments in renewable energy and energy efficiency to create jobs and diversify local economies, ensure that public-health benefits and clean-energy opportunities flow to all communities in an equitable way and help struggling coal-dependent communities with job transition assistance and economic development."
While the UCS report may not gain a lot of traction with the Trump administration, which is pushing for a revitalization of coal mining and coal-fired power, it may be better received among coal-burning utilities. Both as a presidential candidate and as president, Trump has been sharply critical of the energy and environmental policies of his predecessor, Barack Obama, alleging those policies killed jobs and unfairly constrained U.S. energy firms. And while coal-mining companies have welcomed the administration's pro-coal approach to energy and the environment, utilities have been unwilling to invest in new coal-fired generation. For more on that, see Industrial Info's April 20, 2017, article - Trump, Utilities Disagree Over the Future of Coal-Fired Generation.
"We're not waiting" for resolution of legal challenges to the Clean Power Plan, one Coal Country utility executive told Industrial Info recently. "We're moving ahead and closing uneconomic coal plants. Our investments in energy efficiency have been so successful that we won't have to build new gas plants or renewable energy facilities for years to come."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Between 2008 and 2016, roughly 59,300 MW of coal-fired generation, about 17% of the nation's generating capacity, were retired and an additional 13,400 MW, or roughly 4%, of coal-fired power plants were converted to burn natural gas or other fuels, according to the UCS report, which was released October 10. The group estimated those closures and conversions led to an 80% reduction in sulfur dioxide (SO2) emissions, a 64% reduction in oxides of nitrogen (NOx) emissions and a 34% reduction in carbon dioxide (CO2) emissions. The states with the largest number of unit retirements over the 2008-2016 period were Ohio (50 units), Indiana (30 units) Michigan and North Carolina (28 units each), Pennsylvania (27 units) and Wisconsin (23 units).
Looking to the future, the group identified 128 coal-fired units, representing about 38,100 MW, that are already slated for retirement, and another 35 units with a total capacity of about 12,800 MW that are slated to convert to another fuel, mostly natural gas. That represents 51,000 MW, or about 18%, of the coal-fired generating capacity as of yearend 2016.
The group applied what it termed an "economic stress test" on coal-burning generating units operating at yearend 2016 and found about 21% of the fleet, approximately 57,000 MW, were uneconomic compared with an equivalently sized natural gas combined-cycle (NGCC) plant operating at the same capacity factor. The states with the greatest number of uneconomic units at yearend 2016 were: Florida (16 units), Georgia (15 units), Virginia (13 units), West Virginia and South Carolina (12 units each) and North Carolina (11 units).
The report was written by Jeremy Richardson, a senior energy analyst in UCS' climate and energy program, Sam Gomberg, another senior energy analyst in that program, and Julie McNamara, an energy analyst in that program.
"Our analysis shows that the transition away from coal over the past decade is poised to continue - thanks primarily to market forces," Richardson said in a statement. "Without factoring the cost of installing missing modern pollution controls into the calculations, a large portion of today's coal fleet can't compete economically with cleaner energy options, such as natural gas and, in some cases, renewables. This is particularly true in the Southeast, where most coal units operate at a higher cost than cleaner energy options, causing them to fail our economic stress test."
In preparing the report, UCS noted research by Lazard Limited (NYSE:LAZ) (Hamilton, Bermuda) and other organizations on the growing cost-effectiveness of renewable energy. For more on that, see December 5, 2017, article - Study: Renewable Energy Costs Stay on Downward Trajectory, Nuclear Up, Coal Flat.
"With advance planning, and investment, the nation can take advantage of many cost-effective clean energy options - such as renewable energy and energy efficiency - to replace retiring coal plants, while maintaining an affordable and reliable electric supply," the UCS authors wrote.
The report highlights what communities in Michigan, Illinois, North Carolina and West Virginia have done and are doing to transition away from coal-fired power.
While the UCS energy analysts are happy with the declining reliance on coal-fired generation, they are concerned about the industry's rising reliance on gas-fired generation. "In states where a large portion of the existing coal fleet is likely to be shuttered, a wholesale shift from one fossil fuel to another puts consumers at risk," report co-author Sam Gomberg said. "In Florida, for example, natural gas has become the de-facto substitute for retired coal and already makes up the majority of the state's electricity mix. This could cost consumers dearly in the form of price spikes or obsolete infrastructure. Instead, states should be seeking to take advantage of the opportunity to diversify their energy mix with renewables, energy efficiency, and emerging technologies such as battery storage and smart meters."
"Our analysis and the experiences of communities underscores the need for policies that enable planning for and investment in cost-effective, reliable and just transition to a clean energy economy," the report authors urged. "Policymakers should incentivize investments in renewable energy and energy efficiency to create jobs and diversify local economies, ensure that public-health benefits and clean-energy opportunities flow to all communities in an equitable way and help struggling coal-dependent communities with job transition assistance and economic development."
While the UCS report may not gain a lot of traction with the Trump administration, which is pushing for a revitalization of coal mining and coal-fired power, it may be better received among coal-burning utilities. Both as a presidential candidate and as president, Trump has been sharply critical of the energy and environmental policies of his predecessor, Barack Obama, alleging those policies killed jobs and unfairly constrained U.S. energy firms. And while coal-mining companies have welcomed the administration's pro-coal approach to energy and the environment, utilities have been unwilling to invest in new coal-fired generation. For more on that, see Industrial Info's April 20, 2017, article - Trump, Utilities Disagree Over the Future of Coal-Fired Generation.
"We're not waiting" for resolution of legal challenges to the Clean Power Plan, one Coal Country utility executive told Industrial Info recently. "We're moving ahead and closing uneconomic coal plants. Our investments in energy efficiency have been so successful that we won't have to build new gas plants or renewable energy facilities for years to come."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
