EIA study says cost a big factor for retired coal-fired plants

A study by the U.S. Energy Information Administration (EIA) found that a larger share of coal-fired electric plants with higher operating and maintenance costs have been retired than those with relatively low operating and maintenance costs.

Since the sector’s peak in 2001, many coal-fired electric plants have closed. In 2011 they produced 318 gigawatts (GW), but that number declined to 257 GW in 2017 with the closure of several plants.

EIA found that the highest cost group operated at costs ranging from $28 per megawatt hour (MWh) to $40/MWh. Conversely, the lowest cost group operated at $20/MWh to $26/MWh. In addition, a middle group operated near the fleet average, ranging from $26/MWh to $28/MWh from 2008 through 2017. The number of operating coal plants in the highest operating cost group fell from 75 percent in 2008 to 47 percent in 2017.

EIA expects more coal-fired generators to retire in the next decade. Between 2019 and 2030, EIA projects that almost 90 GW of coal-fired capacity will retire. This is primarily due to the more competitive natural gas prices.

EIA concludes that coal units with higher operating and maintenance costs are more likely to retire in the next decade. Specifically, 6 percent of the units in the highest operating cost group will retire between 2019 and 2030, compared with 36 percent in the lowest cost group.