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Clean Power Plan will significantly impact US coal power

Published by
World Coal,

According to an analyst with research and consulting firm GlobalData, the recently revealed US Clean Power Plan (CPP) will negatively affect the US coal industry and potentially reduce up to 60 GW of coal power capacity by 2020.

Pavan Vyakaranam, GlobalData’s Associate Project Manager covering Power, explained that 20 GW of the 326 GW of current coal power in the US is projected to retire in the following five years. An additional 30 – 40 GW may also follow as it will have difficulty meeting emission standards set by the US Environmental Protection Agency (EPA).

Vyakaranam elaborated: “Despite a decline in coal-based power generation over the last decade, coal generated around 39% of US electricity in 2014 and remains the largest source of carbon emissions. However, with the CPP’s aim of reducing emissions by 32% by 2030 from 2005 levels, coal will continue to decline."

GlobalData indicates the future US power sector may try to balance low-cost natural gas power with clean power generation from renewables. Renewables will need substantial investment however, as the analyst explained, certain states, such as Texas and California, have increased renewable capacity and others could follow this trend. This could open opportunities for this sector but may lead to power producers and utilities with large coal operations being significantly impacted as it is likely these facilities will not meet EPA emissions standards.

Vyakaranam concluded that states have approximately two years before they must begin implementing plans and, with the US preparing for the presidential elections in 2016, the next government will greatly influence the extent to which the CPP is implemented.

Edited from press release by Harleigh Hobbs

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