Bigger, younger coal plants are retiring

Share

The last decade has seen a dramatic change in the U.S. generation fleet, with hundreds of older coal-fired power plants being shut down, and replaced with at first gas plants, and increasingly wind and solar.

There are many reasons for this. The Sierra Club’s Beyond Coal campaign deserves credit, as does the Obama Administration’s mercury rule, which pushed older, dirtier plants into the red. But according to multiple studies, the chief cause of this was the shale boom and the inability of coal to compete with generation from cheap fracked gas.

Today the U.S. Department of Energy’s Energy Information Administration (EIA) released a new analysis which provides additional depth to the coal retirement story, which could suggest that the fall in coal is accelerating, which would create even more space for renewables.

It’s hard to draw too many conclusions from the overall capacity of coal plants that have retired, as the pattern is highly uneven from year to year. But of the 546 coal-fired power plants totaling over 102 GW which have gone offline during the last decade, the ones that have shut down in the last few years have been both younger and larger than previous plants.

According to EIA, The average age of coal plant that shut down in 2018 was 46 years – 10 years younger than the ones that shut down in 2015. Additionally, the average capacity of plants that are shutting down has nearly tripled, from around 100 MW in 2015 to 350 MW last year. And this means that it is not only small, ancient coal plants that are feeling the heat, but younger, bigger units, which have better economies of scale.

 

New wind & solar cheaper than existing coal

This phenomenon of younger and larger coal plants shutting down which was revealed by EIA is supported by a study which Energy Innovation released in March which showed that it would be cheaper to replace 74% of U.S. coal with new wind and solar. The study further found that wind and/or solar cost at least 25% less for a whopping 94 GW of existing plants.

One of the key advantages here that is overlooked in much of the media coverage of this report is that as coal plants shut down, the transmission infrastructure which was built to bring their power to market becomes available for other forms of generation – including new wind and solar projects.

This is also being validated by the decisions of some utilities, such as Northern Indiana Public Service Company (NIPSCO), which announced last September that it will shut down all of its coal generation by 2028, replacing these plants with solar, wind, demand response and spot market purchases.

 

The losing war to save coal

These findings stand in sharp contrast to a bill recently signed by Governor Mike DeWine (R) in Ohio, which will provide an estimated $900 million bailout for coal and nuclear power plants, largely to benefit bankrupt power company FirstEnergy Solutions but also Duke Energy and American Electric Power (AEP), which invested in two coal plants through the Ohio Valley Electric Corporation.

It also stands in sharp contrast to the long-term plans of Duke Energy, which plans to keep coal plants in Indiana online for decades. But like President Trump’s empty promises to coal miners, Duke, FirstEnergy, AEP and the DeWine Administration can’t stop the death of coal. Instead, they can only engage in cynical delays, as the economics become more and more forbidding.