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US to expect further coal plant retirements

World Coal,

The Annual Energy Outlook 2014 (AEO2014) Reference Case expects more coal-fired power plant retirements by 2016 than have been already scheduled.

Coal-fired power plants in the US have been under economic pressure in recent years thanks to low natural gas prices and slow electricity demand growth. AEO2014 projects a total of 60 GW of capacity will retire by 2020. This includes retirements that have already been reported to the US Energy Information Administration (EIA).

Emissions standards

Plants fuelled by coal are subject to the Mercury and Air Toxics Standards (MATS), which require considerable reductions in emissions of mercury, acid gases and toxic metals. The new standards are scheduled to take effect in April 2015, although this deadline may be conditionally extended by up to one year by state environmental permitting agencies.

Projected retirements of coal-fired generating capacity in the AEO2014 include retirements in addition those reported to the EIA as planned by power plant owners and operators. In these projections, 90% of the coal-fired capacity retirements occur by 2016.

MATS compliance

To comply with MATS, all coal-fired plants must have flue gas desulfurization equipment (scrubbers) or dry sorbent injection systems installed by 2016. Retirement decisions are based on the relative economics and regulatory environment of the electricity markets. A plant may retire if higher coal prices, lower wholesale electricity prices, or reduced utilization make investment in equipment like scrubbers uneconomical. The projections shown in the graph below reflect EIA's baseline for comparing a number of different sensitivity cases exploring variations on these factors.

At the end of 2012 there were 1308 coal-fired generating units in the US, with a total capacity of 310 GW. In 2012 alone, 10.2 GW of coal-fired capacity was retired, representing 3.2% of the 2011 total.

Progression of retirements

The table below shows the progression of coal-fired generating unit retirements between 2010 and 2012. Units that retired in 2010, 2011, or 2012 were small, with an average size of 97 megawatts (MW), and inefficient, with an average tested heat rate of approximately 10 695 British thermal units per kilowatthour (Btu/kWh). In contrast, units scheduled for retirement over the next 10 years are larger and more efficient: at 145 MW, the average size is 50% larger than recent retirements, with an average tested heat rate of 10 398 Btu/kWh.

Edited from various sources by Katie Woodward

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