By - Jim Vess

U.S. coal consumption hits a 39-year low, coal-fired power plant closures continue

Energize Weekly, December 12, 2018

U.S. coal consumption in 2018 is projected by the federal Energy Information Administration (EIA) to fall to 691 million short tons—a 4 percent drop from 2017 and the lowest level in 39 years.

“The decline in coal consumption since 2007 is the result of both the retirements of coal-fired power plants and the decreases in the capacity factors, or utilization, of coal plants as increased competition from natural gas and renewable sources have reduced coal’s market share,” the EIA said.

The electric power sector, which is the prime consumer of coal—accounting for 93 percent of consumption between 2007 and 2018, has seen waves of coal-fired plant closures. In 2018, 14 gigawatts (GW) of coal-fired plants were set to shut, the largest year for closures after 2015.

In 2007, coal-fired capacity in the United States totaled 313 GW across 1,470 generators. By the end of 2017, 529 of those generators representing 18 percent of the total capacity had closed.

Another 4 GW is projected to be retired in 2019. Coal consumption is forecast to drop 8 percent. A single, new 17-megawatt coal-fired plant is scheduled to come online in 2019.

The decline in coal-fired plants and coal consumption has been driven by two forces: natural gas prices and environmental regulations.

“Natural gas prices have stayed relatively low since domestic natural gas production began to grow in 2007,” the EIA said. “This period of sustained, low natural gas prices has kept the cost of generating electricity with natural gas competitive with generation from coal.”

The largest number of coal retirements came in 2015 as stricter emissions standards under the Mercury and Air Toxics Standard (MATS) went into effect for coal-fired and natural gas-fired plants.

“Instead of investing in emissions control technologies, many smaller power plants that operated at lower capacity factors were retired before the new standards were implemented,” EIA said. “Some plants applied for and received one-year extensions, which contributed to retirements in 2016.”

Among other factors contributing to the closure of coal units and the decline in consumption are the fact that some plants aged out—the average age of the coal plants retired in the last 10 years was 52 years-old—and increased competition from renewable energy generation, primarily wind and solar.

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