Analysis: Here’s Why 50 Percent More Coal Plants Could Be Retiring Than Experts Previously Thought

Here’s Why 50 Percent More Coal Plants Could Be Retiring Than Experts Previously Thought

The Energy Information Agency just boosted its projection of coal power retirement by 2016 from 40 to 60 gigawatts, according to GreenTech Media.
Back in 2012, EIA initially predicted that 27 gigawatts of coal-fired power would close throughout the country by 2016. At the end of 2013, that prediction increased to 40 gigawatts. The agency’s latest release places the number at 60 gigawatts of retired coal power by 2020 — but with the vast majority of it closing by 2016.
EIA attributes the retirement to three forces: new federal regulations, low demand growth for electricity, and low natural gas prices. The latter may very well prove unsustainable. But even if natural gas prices do rise, coal faces enough natural constraints — beyond the regulatory and natural constraints — that it’s not clear it could expand proportionally.
The new regulations are the Mercury and Air Toxics Standards (MATS), which go into effect in 2016. They’re aimed at cutting mercury, toxic metals, oxides, and other emissions that come out of coal plants along with carbon dioxide — and which also inflict all sorts of health consequences on Americans. With many of the country’s older plants, the investment required to update their pollution controls simply won’t be worth it, and they’ll be closed. Significantly, EIA’s projection doesn’t appear to account for upcoming regulations that will cut carbon emissions from power plants, which could drive the retirements even higher.
As for the low demand, that isn’t just a consequence of the recession. It’s also due to improvements in energy efficiency, which cut demand for electricity even as they raise living standards. And those improvements should continue.
EIA also thinks the size of the units that get shuttered will start going up. Between 2010 and 2012 the average size of units that were shuttered was 97 megawatts. Over the next ten years, they anticipate the average size will go up to 145 megawatts.
The 2010-2012 closures were unusually old, dirty, and inefficient, averaging 52 years in age. The designed age limit for coal plants tends to be about 30 years, and well over half the coal-fired units in the country have already blown well past that limit. As a result, there’s a lot of low-hanging fruit in terms of cleaning up coal power. About 30 percent of the carbon emissions from the US power sector come from just one percent of the country’s power plants — usually the oldest and dirtiest of the fleet.
Late last year, the Union of Concerned Scientists estimated that 329 coal-fired units in the country were economically uncompetitive and ripe for retirement. They totaled 59 gigawatts of capacity, nearly identical to EIA’s latest estimate of 60 gigawatts. And there are already plenty of high-efficiency and low-emission technologies available to clean up the coal plants that aren’t immediately shuttered. They just need government regulations to provide the necessary incentive.
As GreenTech media also pointed out, EIA is also a conservative organization (temperamentally rather than ideologically) and they tend to lowball their projections for growth in the renewable energy sector. So that’s another reason retirements could be even higher.
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