U.S. Coal-Fired Generator Retirements to Reach 47 Gigawatts by 2020, Says EIA

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--In the Energy Information Administration's (EIA) annual electric generator report, it is forecasted that a capacity of nearly 27 gigawatts (GW), which is also 27,000 megawatts (MW), of coal-fired thermal power generators will be retired by power plant owners and operators in the U.S. between 2012 and 2016. In 2011, there were 1,387 coal-fired generators in the country, which had a total capacity of 318 GW. The 27-GW represents about 8.5% of the total coal-fired capacity in 2011.

Throughout 2020, the EIA forecasts that 49 GW of coal-fired capacity will be retired, representing over 16% of existing coal-fired capacity, but less than 5% of total power generation throughout the country.

In the next five years, capacity that is retired will be four times greater than the 6.5 GW of retirements in the preceding five years. The expected 9 GW of retirements in 2012 will be the largest single year total ever, but is set to be beaten by 10 GW in 2015.

The average capacity of all coal-fired units in 2011 was 228 MW. In 2012, 12 units of at least 200 MW are expected to be retired, including two 790 MW units. Another 13 unit with capacity of 200 MW or greater are expected to be retired in 2015.

Through 2020, coal-fired retirements are concentrated in two North American Reliability Corporation (NERC)regions. The SERC region covers the southeast region and the Reliability First Corporation region, which covers most of the Mid-Atlantic and Ohio Valley. These regions account for 65% of coal-fired capacity in the U.S. The older, less efficient coal-fired generators in these regions (that lack pollution control equipment) are sensitive to changing trends in fuel prices and electricity demand, which are two key factors that influence retirement decisions.

The older generators, which have high heat rates (lower thermal efficiency) and that do not have flue gas desulfurization (FGD) installed are the most vulnerable to retirement. In 2010, 435 of all coal-fired plants did not have FGD systems. Coal plants without FGD systems will probably be required to install either a FGD or dry sorbent injection system to continue operating, so they can be in compliance with mercury and air toxic standards.

Although the EIA has made further projections, it is expected that nearly all the projected coal-fired retirements will take place before 2020. After that date, all environmental requirements are assumed to be met and both electricity demand and natural gas prices are projected to increase.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.