Coal-fired capacity decline this year on pace to surpass prior record set in 2015
As coal-fired power plants in the United States grow increasingly uneconomic, capacity retirements by year end are likely to hit a record 15.4 gigawatts (GW), exceeding the previous record of 14.7 GW set in 2015, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
The IEEFA report outlines how 44 units at 22 coal-fired plants will likely be closing in 2018 in an environment where aging and costly coal plants can no longer compete against cheaper renewables and gas-fired generation. Sizable coal plant closures are imminent in 14 states, including Florida, Indiana, Kansas, Kentucky, Maryland, Minnesota, Missouri, Ohio, Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.
“The competitive environment for coal-fired power in the generation marketplace is becoming ever more challenging as the price of renewables continues to fall and as natural gas prices are expected to remain low for the foreseeable future,” said Seth Feaster, IEEFA data analyst and author of the report.
The report also noted the closure of 117 coal-fired units with 36.7 GW of capacity from 2018 through 2024 that have already been announced – with more under review. While the U.S. coal-fired power fleet still had about 246 GW of capacity operating in July 2018, retirements already announced will cut that capacity by 15 percent through 2024, IEEFA said.
The closures will affect the Ohio River Valley the most significantly, with four large plants expected to shut down in Ohio, Pennsylvania and West Virginia. In August, FirstEnergy closed Bruce Mansfield Power Plant, with a capacity of 2,510 megawatts (MW) in Beaver County, Pa., and W.H. Sammis Power Plant, with a capacity of 2,210 MW in Jefferson County, Ohio. The company also plans to close its Pleasants Power Station, with a capacity of 1,300 MW in Pleasants County, W. Va., in 2022.
American Electric Power (AEP) will be closing its Conesville Power Plant, with a capacity of 1,530 MW, in Coshocton County, Ohio, in early 2019.
The units of the four plants came online between 1959 and 1980. While age is an important factor in the closure of coal plants across the country – the majority of coal-fired power plants are 40 years old or more – coal is becoming cost prohibitive and even younger plants are closing. Sandow Power Plant No. 5 in Rockdale, Texas, with a capacity of 600 MW, was closed in January 2018 just eight years after opening.
Because of the closures and a variety of other causes, coal’s share of the electricity market is expected to fall to 27 percent in 2019 from 39 percent in 2014. Twenty-four units are planned to close in 2019, 14 in 2020, six in 2021, 16 in 2022, seven in 2023, and six in 2024.
“The EIA now expects natural gas to be the fuel for 35 percent of electricity generation in 2018 and 2019, up from 28 percent five years ago,” the report stated. “The contribution from non-hydro renewables, mostly wind and solar, is also expected to rise, to 10 percent in 2018 and nearly 11 percent in 2019.”
The 23 units already closed in 2018 belong to: JEA, Next Era Energy, Vistra Energy, Tennessee Valley Authority, WEC Energy, AES, AEP, Avenue Capital Group, NiSource, and Alliant Energy and are located in Florida, Texas, Tennessee, Wisconsin, Ohio, Maryland and Indiana.
The 21 units planned to close before the end of 2018 belong to: WEC Energy, Vistra Energy, ALLETE, CPS Energy, Duke Energy, Evergy, Dominion Energy, and OGE Energy. They are located in Wisconsin, Pennsylvania, Minnesota, Texas, Florida, Missouri, Virginia, Oklahoma and Kansas.
Most recently announced is the pending closure of Units 1 and 2 of Henderson Municipal Power and Light’s 300 MW coal plant in Henderson, Ky., as of Feb. 1, 2019. In a letter to Big Rivers Electric Corporation, which operates the plant, from Midcontinent Independent System Operator Inc. (MISO Energy) in October, MISO Director of Resource Utilization Vikram Godbole wrote, “the retirement of Henderson Municipal Power and Light Units 1 and 2 would not result in violations of applicable reliability criteria” and may retire.
The Kentucky plant announcement is just the latest in a list of closures. However, units located in all areas of the country will be included in the retirements by the end of 2024.
