US coal consumption is likely to decline sharply again in 2020, although the current roster of planned and completed retirements from coal-fired plants suggests that the year may not be as rough as the previous two.
A recent S&P Global Market Intelligence analysis of federal data reveals that 2019 at 13.703 MW is the highest level of annual coal capacity retirements in the United States since 2015. It is estimated that the amount of coal capacity scheduled for retirement in 2020 will exceed the amount retired in each of 2014, 2016 and 2017; It has already announced another retirement.
Tri-State Generation and Transmission Association Inc. said Jan. 9 that by the end of 2020, it was shutting the 247-MW Escalante power station in New Mexico. Since 2014, nearly 62,000 MW of coal-fired generation capacity has been retired by U.S. power generators, with a further 26,947 MW of retirements teed up through 2025.
“Generally, I’d say utilities seem pretty keen to remove coal… sooner rather than later,” said Analyst Andrew Weisel of Scotia Capital (USA) Inc. in a January 8 phone interview. “I think many businesses are very focused on[ environmental, social and governance] from an investor viewpoint. So there’s a general interest, not to mention what their consumers want.”
Stanley Morgan & Co. In a December 2019 report, LLC forecasts that around 70,000 MW to as much as 190,000 MW of coal-fired generation is “economically at risk” from the deployment of a “second wave of renewables” in the United States. The research firm said these projections already set to close down exclude about 24,000 MW of coal generation.
U.S. domestic coal consumption for power is estimated to decline by another 5 percent in 2020, said Matt Preston, North American coal markets research director for Wood Mackenzie.
Coal plant operators have been retiring more than 18,800 MW of coal capacity in the PJM Interconnection since 2014 with more than 3,100 MW of shuttered coal plants on the horizon.
Between 2014 and 2025 the Midcontinent ISO will have shut down 20,433 MW of coal capacity based on completed, approved and confirmed retirements.
Meanwhile, in the Electric Reliability Council of Texas Inc., coal plant operators have pulled the plug on 4,973 MW of capacity since 2014. American Electric Energy Co. Inc.’s, or AEP’s, intentions to shut down Oklaunion’s 650-MW coal plant in Texas this year is ERCOT’s only confirmed retirement through 2025, data shows.
While President Donald Trump promised to put the coal industry back and initiated many sector-supportive policy initiatives, utilities continue to abandon coal plants at a faster rate than they had before he took office.
High levels of retirement from coal resources marked both 2018 and 2019, though 2015 continues to be the peak year for retirements from coal plants so far. The U.S. That year The Environmental Protection Agency imposed restrictions on mercury emissions, and many utilities chose to shutter older coal plants instead of retrofitting modern pollution controls.
Pressed by various stakeholders, many with environmental concerns related to coal burning, power generators now continue to turn to natural gas and renewable energies. Meanwhile, the transition to lower-emission fuels is being boosted by a surplus of cheap natural gas and declining renewable energy costs. Power generators with ambitions to remove coal capacity say they hold to those plans amid more supportive policies coming from the Trump administration.
Targeted advocacy from groups like the Sierra Club and their Beyond Coal campaign also played an important role in the precipitous decline of the U.S. coal sector over the past several years. In a recent interview, Mary Anne Hitt, director of Beyond Coal, emphasized the work the group does to drive a transition away from coal.