Record number of coal plants to close in 2018 as utility industry carbon emissions drop
Energize Weekly, November 7, 2018
The U.S. power sector will close a record 15.4 gigawatts (GW) of coal-fired power plants in 2018, as federal data shows a steady, long-term drop in carbon dioxide emissions from the sector.
An assessment by the non-profit Institute for Energy Economics and Financial Analysis (IEEFA) projects the retirement of 44 units at 22 plants in 13 states for the year, including coal-producing states such as West Virginia, Pennsylvania and Ohio.
An estimated 11 GW of coal-fired capacity has already been closed this year, according to the IEEFA analysis. The current record for closures is 14.7 GW in 2015.
There are announced closures for an additional 36.7 GW of coal-fired capacity—117 units—by 2024, the IEEFA said. That represents 15 percent of the 246 GW of still operating coal-fired capacity.
“Cost is the biggest force in the decline of coal, as renewables and gas-fired generation are proving cheaper and more flexible,” the IEEFA study said.
The steady closure of coal-fired plants coupled with lower electricity demand has also led to a 28 percent drop in carbon dioxide emissions in the power sector since 2005, according to the federal Energy Information Administration. (EIA).
The drop to 1,744 million metric tons of emissions is steeper than for all other economic sectors, which averaged a 5 percent decline, the EIA said. Carbon dioxide, a greenhouse gas, has been linked to climate change.
“The power sector has become less carbon intensive as natural gas-fired generation displaced coal-fired and petroleum-fired generation and as the non-carbon sources of electricity generation—especially renewables such as wind and solar—have grown,” the EIA said. “The substitution of natural gas for other fossil fuels has largely been market driven, as ample supplies of lower-priced natural gas and the relative ease of adding natural gas-fired capacity have allowed it to pick up share in electric power generation in many markets.”
In 2016, natural gas generation surpassed coal as the largest source of electricity generation. The EIA projects natural gas as 35 percent of the total in 2019, while coal slips to 27 percent from 39 percent in 2014. Non-hydro renewable generation—mainly wind and solar—is expected to rise to 11 percent in 2019.
Plant age is another factor weighing against coal generation, with most of the coal-fired units built 30 to 55 years ago, the IEEFA study said. “Many of those units are approaching the end of their normal operating life,” the study said.
Another reason for the drop in emissions and another economic pressure on coal plants has been slower growth in electricity demand. In six of the last 10 years, demand has actually decreased, the EIA said. “Industrial demand has declined and residential and commercial demand has remained relatively flat,” the agency said.
Ohio River coal plant economies will be among the hardest hit by growth in natural gas and renewable generation, the IEEFA study said. “Companies in the region whose employees stand to be affected include FirstEnergy Solutions, Murray Energy and Westmoreland Coal, although those companies and that region are by no means the only ones confronting fundamental change,” the analysis said.
Coal units will have been closed by the end of 2018 in Florida, Texas, Wisconsin, Missouri, Pennsylvania, Tennessee, Ohio, Indiana, Maryland, Minnesota, Maryland, Kansas and Oklahoma, the IEEFA study said.