en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The coal-fired Power industry had a rotten first quarter. The first quarter included announcements that cut against coal from a wide range of asset owners, including units of FirstEnergy Corporation (NYSE:FE) (Akron, Ohio), CMS Energy Corporation (NYSE:CMS) (Jackson, Michigan), American Electric Power Company Incorporated (NYSE:AEP) (AEP) (Columbus, Ohio), PPL Corporation (NYSE:PPL) (Allentown, Pennsylvania), Talen Energy Corporation (Allentown, Pennsylvania), and Vectren Corporation (NYSE:VVC) (Evansville, Indiana), among others.
Executives at several utilities, including AEP, PPL and Vectren, said they were closing coal plants to cut greenhouse gas emissions. Others, like FirstEnergy, were simply bowing to economics and closed plants that had been built decades earlier.
Patti Pope, president and chief executive at CMS Energy, said her company's rationale for closing coal plants was simple: protect the planet. "We believe it is incredibly important that we step up to the plate and take the appropriate actions to be on the right side of history on a critical issue like climate change," she said.
During the just-concluded quarter, AEP announced plans to slash its carbon dioxide (CO2) emissions 60% by 2030 and 80% by 2050 compared to its 2000 baseline. PPL also announced a CO2-reduction goal of 70% by 2050 compared to its 2010 emissions baseline. Vectren pledged to cut its carbon emissions by 60% by 2024, driven by its customers' rising demand for cleaner energy.
In announcing PPL's CO2 reduction commitment, William Spence, chairman, president and chief executive said, "as the world considers climate change, we will continue to take steps to minimize our impact on the environment, transform the way we generate electricity and incorporate new, lower-emitting technology."
During the first quarter, AEP announced a plan to invest in 8,000 megawatts (MW) of wind and solar generation as part of its CO2-reduction strategy. AEP Chief Executive Officer Nick Akins made this comment: "Our customers want us to partner with them to provide cleaner energy and new technologies, while continuing to provide reliable, affordable energy. Our investors want us to protect their investment in our company, deliver attractive returns and manage climate-related risk. This long-term strategy allows us to do both."
The mid-February announcement by FirstEnergy that it would close its Pleasants Power Station, a 1,300-MW plant in West Virginia that began operating in 1979, is the 268th coal-plant closure announcement since 2010, according to the Sierra Club (Oakland, California). In fact, the group further said, utilities announced more coal plant closures during the first three months of 2018 than took place during the last three years of the Obama administration.
Data assembled by Bloomberg New Energy Finance provides further illustration of coal's sinking fortunes in the nation's electric power mix. Roughly 30% of electricity in the U.S. was generated by coal in 2017, a sharp decline from the 48% share that fuel had in the nation's fuel mix a decade earlier.
Click on the image at right to see a chart of the recent history on electric fuel mix in the U.S.
Looking forward, coal's future prospects don't appear to get any better. In its 2018 Annual Energy Outlook, released in February, the U.S. Energy Information Administration (EIA) (Washington, D.C.) projected coal capacity will fall from about 260,000 MW in 2016 to about 200,000 MW by 2024. Further declines in the out years are expected by the agency.
Click on the image at right to see the EIA's projection of coal plant closures going forward.
In its most recent energy infrastructure report, issued March 13, the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) predicted 66 coal-fired units with combined generating capacity of 15,963 MW would retire by February 2021. The agency's energy infrastructure update forecast four new coal-fired units with a collective generating capacity of 1,927 MW will come online by February 2021.
In that energy infrastructure report, which covered activities through January 2018 and thus does not reflect coal plant closures announced in February and March, FERC reported the installed capacity of coal-fired units fell to 275,000 MW, which works out to about 23.21% of the nation's generating capacity. By contrast, the installed capacity of natural gas generation has soared to about 516,000 MW, about 43.47% of the nation's generating capacity.
Coal's current predicament and glum projections are the result of various factors: state and federal policies, low electric load growth, shifting consumer preferences, inexpensive natural gas and declining prices for renewable energy. For more on that, see December 11, 2017, article - UCS Report Claims 21% of Existing U.S. Coal Units are Uneconomic, December 5, 2017, article - Study: Renewable Energy Costs Stay on Downward Trajectory, Nuclear Up, Coal Flat and July 19, 2017, article - What Felled Coal and What Does its Future Look Like?
"The first quarter indeed was a rough one for coal-fired utilities," said Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "And I don't see any bright lights at the end of the tunnel. The economics of Power production continue to evolve, but none of it looks good for coal."
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.
Executives at several utilities, including AEP, PPL and Vectren, said they were closing coal plants to cut greenhouse gas emissions. Others, like FirstEnergy, were simply bowing to economics and closed plants that had been built decades earlier.
Patti Pope, president and chief executive at CMS Energy, said her company's rationale for closing coal plants was simple: protect the planet. "We believe it is incredibly important that we step up to the plate and take the appropriate actions to be on the right side of history on a critical issue like climate change," she said.
During the just-concluded quarter, AEP announced plans to slash its carbon dioxide (CO2) emissions 60% by 2030 and 80% by 2050 compared to its 2000 baseline. PPL also announced a CO2-reduction goal of 70% by 2050 compared to its 2010 emissions baseline. Vectren pledged to cut its carbon emissions by 60% by 2024, driven by its customers' rising demand for cleaner energy.
In announcing PPL's CO2 reduction commitment, William Spence, chairman, president and chief executive said, "as the world considers climate change, we will continue to take steps to minimize our impact on the environment, transform the way we generate electricity and incorporate new, lower-emitting technology."
During the first quarter, AEP announced a plan to invest in 8,000 megawatts (MW) of wind and solar generation as part of its CO2-reduction strategy. AEP Chief Executive Officer Nick Akins made this comment: "Our customers want us to partner with them to provide cleaner energy and new technologies, while continuing to provide reliable, affordable energy. Our investors want us to protect their investment in our company, deliver attractive returns and manage climate-related risk. This long-term strategy allows us to do both."
The mid-February announcement by FirstEnergy that it would close its Pleasants Power Station, a 1,300-MW plant in West Virginia that began operating in 1979, is the 268th coal-plant closure announcement since 2010, according to the Sierra Club (Oakland, California). In fact, the group further said, utilities announced more coal plant closures during the first three months of 2018 than took place during the last three years of the Obama administration.
Data assembled by Bloomberg New Energy Finance provides further illustration of coal's sinking fortunes in the nation's electric power mix. Roughly 30% of electricity in the U.S. was generated by coal in 2017, a sharp decline from the 48% share that fuel had in the nation's fuel mix a decade earlier.
Click on the image at right to see a chart of the recent history on electric fuel mix in the U.S.Looking forward, coal's future prospects don't appear to get any better. In its 2018 Annual Energy Outlook, released in February, the U.S. Energy Information Administration (EIA) (Washington, D.C.) projected coal capacity will fall from about 260,000 MW in 2016 to about 200,000 MW by 2024. Further declines in the out years are expected by the agency.
Click on the image at right to see the EIA's projection of coal plant closures going forward.In its most recent energy infrastructure report, issued March 13, the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) predicted 66 coal-fired units with combined generating capacity of 15,963 MW would retire by February 2021. The agency's energy infrastructure update forecast four new coal-fired units with a collective generating capacity of 1,927 MW will come online by February 2021.
In that energy infrastructure report, which covered activities through January 2018 and thus does not reflect coal plant closures announced in February and March, FERC reported the installed capacity of coal-fired units fell to 275,000 MW, which works out to about 23.21% of the nation's generating capacity. By contrast, the installed capacity of natural gas generation has soared to about 516,000 MW, about 43.47% of the nation's generating capacity.
Coal's current predicament and glum projections are the result of various factors: state and federal policies, low electric load growth, shifting consumer preferences, inexpensive natural gas and declining prices for renewable energy. For more on that, see December 11, 2017, article - UCS Report Claims 21% of Existing U.S. Coal Units are Uneconomic, December 5, 2017, article - Study: Renewable Energy Costs Stay on Downward Trajectory, Nuclear Up, Coal Flat and July 19, 2017, article - What Felled Coal and What Does its Future Look Like?
"The first quarter indeed was a rough one for coal-fired utilities," said Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "And I don't see any bright lights at the end of the tunnel. The economics of Power production continue to evolve, but none of it looks good for coal."
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.
