In its Annual Energy Outlook 2023 (AEO2023), the US Energy Information Administration (EIA) has projected that US coal-fired generating capacity will drop below half of 2022 levels by 2050.
According to the EIA, in a scenario assuming higher zero-carbon technology costs than in its base case, called the reference case, coal-fired capacity is projected to drop by 52% to 97 GW by 2050. In the reference case, coal-fired capacity falls by 64% to 73 GW by 2050. In another scenario, where the EIA assumes lower zero-carbon technology costs than in the reference case, coal-fired capacity is projected to fall by 88% to 23 GW by 2050.
The EIA’s AEO2023 explores long-term energy trends in the US and presents an outlook for energy markets through 2050. The EIA uses different scenarios, called cases, to understand how varying assumptions affect energy trends.
In the High Zero-Carbon Technology Cost (High ZTC) case, the EIA assumes technology costs for zero-carbon resources – such as renewables, nuclear, and battery storage – will stay flat at their 2022 levels through 2050. This assumption results in less retirement of coal-fired generating capacity. In the Low Zero-Carbon Technology Cost (Low ZTC) case, the EIA assumes the cost of zero-carbon technologies declines by about 40% by 2050 compared with the reference case.
All AEO2023 cases – including the reference, Low ZTC, and High ZTC cases – reflect laws and regulations adopted through mid-November, including the 2022 Inflation Reduction Act (IRA), which provides tax credits for zero-emission technologies that further reduce the cost of resources such as solar and wind.
The 52% to 88% drop in total coal-fired capacity includes approximately 99 GW to 159 GW of retiring coal-fired capacity and a small amount of coal-fired capacity projected to be converted to natural gas-fired capacity. Of the retirements, 61 GW come from coal-fired plants that owners and operators have already announced plans to retire. Various factors such as an aging coal fleet, environmental regulations, and competition from natural gas-fired, solar, and wind plants have contributed to the declining economics of coal-fired capacity.
Capacity is the maximum electric output a generator can produce under specific conditions. The generation, or electricity produced over time, from wind and solar depends on the availability of sunshine or wind. Although we project the combined capacity from solar and wind is more than three times higher by 2050 from 2022, fossil fuel and nuclear plants, which are available to operate around the clock, still supply a portion of projected generation.
In the High ZTC case, coal produces 8% of US electricity generation in 2050 compared with a combined 40% from solar and wind, 31% from natural gas, and 13% from nuclear. In the reference case, the combined share from solar and wind grows to 55% of total generation by 2050 with smaller shares of 5% from coal, 22% from natural gas, and 11% from nuclear. In the Low ZTC case, solar and wind generate 69% of electricity in 2050 compared with only 1% from coal, 11% from natural gas, and 12% from nuclear. The coal-fired generation in all three cases comes from the newer, more efficient coal-fired power plants that will remain online because they can provide lower-cost, dispatchable power to the grid.
Read the article online at: https://www.worldcoal.com/power/15052023/us-eia-projects-coal-capacity-will-decline-to-half-of-2022-levels-by-2050/
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