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Coal power in America in steep decline

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Across the United States, the abundant supply of low-cost natural gas and a growing portfolio of gas power plants have put extreme pressure on coal power economically.  Combine that with the high growth in wind, solar and energy storage projects, and the ever-increasing carbon-reduction goals being set by states, communities, utilities, and corporations, and you have the perfect storm.  The result is reduced plant utilization rates and the continued stream of announcements for the early closure of coal assets, including some of the largest power plants in America.

For the better part of three decades, from 1985 through 2014, net operating coal capacity in the United States exceeded 300 GW.  By the end of 2020, it is expected to drop below 240 GW for the first time since 1978, and by 2030, based on plants scheduled for retirement, net capacity is expected to dip below 200 GW for the first time since 1975.  This is based on data compiled by the Hitachi ABB Power Grid’s Velocity Suite research team. 

U.S. coal capacity additions and retirements by year, GW

Coal accounted for only 17.2% of the country’s fuel mix through the first four months of 2020 – down 33.6% from the same period in 2019.  Meanwhile, natural gas was running 10% higher and accounted for 39.7% of the country’s fuel mix, while solar, wind and other non-hydro renewables accounted for a record 13.4% of the total fuel mix – up 11.2% from the same four-month period in 2019. 

Early retirement set for large coal-fired unit in Georgia

On June 26, 2020, the board of directors of Jacksonville, Florida-based utility JEA, announced they had signed a 20-year contract with Florida Power & Light (FPL) to replace power from the JEA’s minority ownership (23.6%) in the 891 MW Unit 4 at Georgia Power-operated Plant Scherer.  FPL owns the remaining 76.4% of Unit 4.  

Plant Scherer is currently the largest operating coal-fueled plant in the United States with a nameplate capacity of roughly 3,564 MW.  The new contract will start when unit four is retired early in 2022, making Georgia Power’s Plant Bowen the largest operating plant in the United States.

Plant Scherer unit-level electricity production, MWh

Owners of the three remaining units at Plant Scherer include:

  • Units 1 & 2 (1,782 MW combined) – Oglethorpe Power Corp (60%), Municipal Electric Authority of Georgia (30.2%), Georgia Power Company (8.4%), and the City of Dalton, Georgia (1.4%)
  • Unit 3 (891 MW) – Georgia Power Company (75%), and NextEra Energy’s Gulf Power Company (25%)

Georgia Power owns 100% of all four units (3,499 MW combined) at Plant Bowen. 

Largest coal plants set to trade positions in 2022

Southern Company subsidiary Georgia Power operates the two largest coal-fueled power plants in the United States – both are in the state of Georgia.  Plant Bowen, the second-largest coal plant in the country, located near Cartersville in Bartow County, is comprised of four generating units built in the early 1970s with a total installed nameplate capacity of 3,499 MW.  Plant Scherer, the largest operating coal plant, is also comprised of four generating units with a combined nameplate capacity of 3,564 MW.  Plant Scherer is located near the city of Juliette in Monroe County.  The plant is named for the former chairman and chief executive officer of Georgia Power, Robert W. Scherer.       

The two plants have been huge power supply contributors since the first unit at Bowen started operation in 1971.  During the two decades from 2000 through 2019, Plant’s Scherer and Bowen generated more than 750 million MWh, and as recently as 2010, the two behemoth plants combined generated more than 46.3 million MWh of electricity in a year.  With the closure of Scherer Unit 4 in early 2022, Plant Bowen will become the largest coal-fired power plant based on installed operating capacity in the country.  During the past decade, Plant Bowen has been running at about two-thirds of capacity.  Electricity output averaged 14.3 million MWh per year over the ten-year period from 2010 through 2019 – down from 21.7 million MWh per year during the previous decade.

Plant Bowen and Scherer electricity production, MWh

The lowest annual electricity production from both power plants was recorded during 2019 at 23.1 million MWh – about half of the decade peak of 46.3 million MWh generated in 2010. 

Along with the upcoming shutdown of Scherer Unit 4, there have been several recent announcements for early coal plant closures across the country, including:

  • Craig Station (CO) Unit 2 (410 MW) is scheduled for closure in September 2028, Unit 1 (427 MW) was previously slated for retirement in 2025, with unit 3 (448 MW) slated for 2030.  The plant is operated by Tri-State Generation and Transmission and is owned by five western utilities including Tri-State.   
  • Platte River Power Authority’s (CO) Rawhide Coal Plant (280 MW) is slated to close by 2030
  • Colorado Springs Utilities (CO) announced the early closure of their two remaining coal plants, Martin Drake (207 MW) and Ray D Nixon (207 MW) in 2023 and 2030 respectively
  • Tucson Electric’s (AZ) two units at the Springerville Generating Station (845.6 MW combined) are scheduled to close in 2027 and 2032.    

The early closure of Unit 4 at Plant Scherer follows national trends where nearly 100 GW of coal-fired generating capacity has retired since 2000, and between now and 2025 an additional 25 GW are slated for closure.  Driven by economics, competitively priced natural gas, and a surge in cost-competitive renewables and energy storage projects, coal as a utility fuel is in steep decline across America.

Kent Knutson's picture

Thank Kent for the Post!

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Discussions

Bob Meinetz's picture
Bob Meinetz on Jul 24, 2020 2:52 pm GMT

"Coal Power in America in Steep Decline," or "Gas Power in Steep Ascent"?

I guess what the real story is depends on one's point of view, but since 2006 gas generation has increased 92% faster than wind and solar combined. With methane flaring and fugitive methane, I'm searching for evidence emissions aren't worse than they were in 2006 - and coming up blank.

Because no energy storage project in the U.S. is storing renewable energy alone (and its total capacity is inconsequential), the "surge in...energy storage projects" might be better characterized as the Surge in Energy Storage Hype.

Joe Deely's picture
Joe Deely on Jul 24, 2020 7:47 pm GMT

Bob Meinetz's picture
Bob Meinetz on Jul 27, 2020 2:03 pm GMT

That U.S. carbon, NOx, and fluorinated gas emissions are virtually unchanged since 1990 represents the colossal failure of renewables to lower them in any appreciable time frame. Not sure if that was your point.

In less than half the time represented on your chart, France cut combined transportation and electricity emissions by over 47% (and electricity emissions by 70%) with nuclear power alone. Without burning trees or one extra cubic foot of natural gas.

Joe Deely's picture
Joe Deely on Jul 24, 2020 7:53 pm GMT

Kent,

The data thru May is now out.  Here is my favorite nugget from that data...

Love that baseload coal...

Gary Hilberg's picture
Gary Hilberg on Jul 28, 2020 1:55 pm GMT

This is the key to the less competitive COE for coal, Kent's data shows that we still have a very large installed base of coal, 250 GW, but the annualized capacity factor is dropping rapidly so fixed costs are a much larger percentage of the total COE.  In the end, economics wins.  With the PTC and effectively zero variable costs, Wind will always generate, when it can.  So coal will continue to decline primarily due to economics, but the utilities will market this as environmental.  

Kent Knutson's picture
Kent Knutson on Jul 28, 2020 3:50 pm GMT

Gary, Joe and Bob, thanks for all your comments and charts.  As Gary put it . . . there are about 250 GW of operating coal capacity out there today . . . and that will dip below 200 GW before or by the end of the decade.     That's still 200 GW . . . that is a lot of capacity . . . Coal has been a god-send to organized markets when the wind dies and sun doesn't shine -- especially during peak periods in the summer and the winter.  Abundant and relatively low natural gas prices have pressured coal downward, but note . . . it doesn't take much of an increase in gas prices to make coal attractive.  It's important to have dispatchable power resources available when extreme weather drives demand upward.  There have been great strides in the integration of renewables and innovation in new technologies like battery storage, but in today's market, it's still extremely important to have a diverse and balanced portfolio of resources.       

Matt Chester's picture
Matt Chester on Jul 28, 2020 4:13 pm GMT

Do you foresee a future role of coal where it's more often than not dormant but remains 'ready to go' should the supply/demand at the moment require it? There's obviously a point where that becomes economically unsustainable without some sort of payment for it, similar to the payments for on-site fuel storage discussed by DOE that got shot down a little over a year ago

Joe Deely's picture
Joe Deely on Jul 28, 2020 5:43 pm GMT

Matt/Kent, 

I agree that the recent switch to "seasonal coal" - as implemented by Xcel in MN - is something that may help coal capacity stick around a little longer than expected.

However, let's be clear - there is absolutely no possibility that we will have 200 GW of coal by 2030.  Note:  I prefer using Net Summer capacity as shown by EIA in Table 6.2.C of their Monthly Energy Report.

The lastest data - from May 2020 shows coal capcity at 225GW  which is down about 11GW in the last 12 months.

Even with "seasonal coal" I think coal capacity will be closer to 100 GW by 2030. 

Using only the EIA planned retirements data is not a realistic way of  estimating future coal capacity. For example, EIA shows that Florida currently has about 7.8 GW of coal summer capacity. The planned retirement report shows 2 units retiring in 2020/2021 for a total of 715MW. This would mean FL would still have 7GW of coal by 2030.  Not a chance. 

In reality, coal capacity in FL will be below 1GW by 2030.

Pick any state across the country and you can see the same thing. All coal capacity in VA  will be gone by 2030, TX coal capacity will be down from 19 GW now to almost nothing by 2030, etc...

Even WY - the coal capital of the US will see its current 6,400 MW of coal shrink dramatically over the next decade.

 

 

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