Bittersweet. Report: Cheap Natural Gas and Renewables Could Close Half of US Coal Fleet by 2030 https://www.greentechmedia.com/articles/read/report-nearly-half-of-u-s-coal-plants-could-close-by-2030 (via Instapaper)
The U.S. coal power plant fleet has been shrinking for years, with the official tally of coal plants closed exceeding those still open as of late last year. Another 43 gigawatts, or about 18 percent of the remaining 249 gigawatts of capacity, is expected to close by 2030. Absent “market interventions at a grand scale” — such as the Trump administration’s plan to force utilities to buy uncompetitive coal-fired power under the mandate of national security — the same trends are accelerating beyond current estimates, and could lead to the country’s coal fleet being nearly halved again by 2030. These are some of the conclusions of a note released this week by the research firm Rhodium Group. According to its analysis, while “the Department of Energy contemplates action to prop up ailing coal and nuclear plants, low natural-gas prices and cheap renewables have the potential to drive far more coal off the grid.” Rhodium Group’s new projections, based on data collected for its Taking Stock 2018 report released in June, use a range of scenarios to project both retirements of coal capacity and reductions in total electricity generated by coal. Under the most favorable market dynamics for coal, “we project at least 71 [gigawatts] of retirements by 2030, roughly 65% more than currently planned,” the firm wrote. That’s a higher rate of retirement than the 65 gigawatts by 2030 projected by the U.S. Energy Information Administration’s reference case. And it would require natural-gas prices rising to $4 per 1 million British Thermal Units (mmbtu), along with more rapid than expected economic growth. This high-cost, high-growth scenario could also offer the remaining coal fleet more opportunities to sell power and increase utilization, Rhodium Group states. “In our high energy cost scenarios, we find a 24%-26% decline in coal capacity from 2017 through 2030 leads to an 11%-12% decline in coal generation over the same period. Rising gas prices and demand allow fleetwide average utilization to rise from 55% in 2017 to as high as 70% in 2030 under these scenarios. Even though this is the most favorable outcome for coal across our projections, it leaves coal generation at levels last seen in the early 1980s." Under the Rhodium Group’s “central” scenario, coal retirements reach 92 gigawatts by 2030, with generation falling nearly as much as capacity. “The cliff for coal gets much more treacherous if renewable energy costs decline moderately and natural gas prices are in the $3/mmbtu range,” it notes. And “the cliff gets steeper still if renewable energy costs decline along the most optimistic path and natural-gas prices stay near recent lows at $2.50/mmbtu,” it notes. Under this low-price scenario, coal retirements could top 124 gigawatts by 2030, with total generation falling even further, as most coal-fired power plants are unable to compete against cheaper alternatives. “If natural gas prices stay low, renewable energy costs decline quickly and electricity demand remains weak, the U.S. coal fleet could be nearly half its current size by 2030 with generation at levels not seen since 1965,” the report states. These same market forces could “force a huge swath of the nuclear fleet offline as well.” While the Rhodium Group’s projections are new, its view of a dim future for the U.S. coal industry is shared by a majority of energy industry analysts and policymakers. The Trump administration has been pushing for policies aimed at combating these market forces, from Energy Secretary Rick Perry’s failed attempt last year to classify coal and nuclear plants as critical grid assets, to the DOE’s reported plan to use its national security authority to force utilities to buy coal and nuclear power, at a potential cost of tens of billions of dollars to U.S. consumers. “Stopping or slowing the next wave of retirements would require market interventions at a grand scale — with costs and market distortions that may make such actions a hard sell,” the firm wrote. Sent from my iPhone -- -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org --- You received this message because you are subscribed to the Google Groups "Centroids: The Center of the Radical Centrist Community" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. For more options, visit https://groups.google.com/d/optout.
