EIA Projects Rise in Coal-Fired Power Plant Retirements

on February 25, 2014 at 3:30 PM

A General View of Battersea Power Station

EIA’s Annual Energy Outlook 2014 projects that 90 percent of coal-fired power plant retirements will occur by 2016, the first year of MATS enforcement.

On February 14, 2014, the Energy Information Administration (EIA) released a report showing that more coal-fired power plants are projected to retire by 2016 than previously predicted.  The report draws on the Annual Energy Outlook 2014 (AEO 2014) Reference Case projecting that a total of 60 GW of coal-fired capacity will retire by 2020, with 90 percent of retirements occurring by 2016.  The projected retirements include those reported to EIA by owners and operators.

According to EIA, 2012 coal-fired capacity retirements totaled 10.2 GW representing 3.2 percent of the 2011 capacity.  At the end of 2012, there were 1,308 coal-fired electric generating units accounting for 310 GW of electricity.  The average size of units projected to retire over the next 10 years is 145 MW, approximately 50 percent larger than recently retired units, which had an average size of 97 MW.


Projected Cumulative Retirements of Coal-Fired Generating Capacity, 2012-2040 (EIA)

Low natural gas prices, slow electricity demand growth, and new environmental regulations are placing significant economic pressure on coal-fired plants.  EIA noted that Mercury and Air Toxics Standards (MATS) require coal-fired power plants to significantly reduce emissions of mercury, acid gases, and toxic metals.  Though MATS is scheduled to take effect in April 2015, state environmental permitting agencies are conditionally allowed to extend the deadline by up to one year.  MATS requires coal-fired units to install flue gas desulfurization equipment or dry sorbent injection systems by 2016.  Factors that favor retirement decisions include higher coal prices, lower wholesale electricity prices tied to natural gas prices, and reduced utilization that renders desulfurization investments uneconomical.

February 17, 2014 via Energy Solutions Forum.

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