Energize Weekly, May 1, 2019
The battle over coal-fired power plants and renewable energy is moving west, according to analyses by BTU Analytics, a Lakewood, Colo.-based energy consultant.
About 81 gigawatts of coal-fired capacity has been closed at 696 units at 360 plants since 2008. In the early years, most of the closures were in the East.
“Those retirements were driven by a combination of factors including competition from natural gas and renewables, as well as federal emission regulation,” Andrew Bradford, BTU Analytics, wrote in a commentary. “Coal plant retirements have been a market opportunity for natural gas producers.”
One element driving the closures were regulation actions: the federal Environmental Protection Agency’s Mercury and Air Toxics Standard, requiring the addition of expensive pollution control technology and the Clean Power Plan to reduce carbon emissions.
The development of low-cost shale gas and wind and solar generation also contributed to the closures.
Appalachian gas, for example, has grown to more than 30 billion cubic feet a day from 2 billion cubic feet a day in 2009, leading to many coal plants being shuttered in that region.
Ohio and Pennsylvania lead all states in coal-fired plant closures with Ohio losing 43 percent of its coal-fired capacity and Pennsylvania’s capacity dropping 28 percent since 2009.
Even in Kentucky, where coal mining is a key sector, coal-fired capacity’s market share has dropped 19 percent in the past five years.
“Low cost shale gas drove the operating cost down for existing gas plants and also brought a wave of combined-cycle gas plant development across the U.S.,” Bradford said.
Coal still accounted for the largest generation share in 18 states in 2017, according to the federal Energy Information Administration.
Now the trend in closures is moving west, and BTU Analytics notes that there are at least eight planned western retirements between 2019 to 2027 scattered from Texas to Utah to Montana to Oregon.
A total of 19.3 gigawatts of coal plant retirements have been announced through 2027 with more than half the capacity in the West.
The dynamic out West, however, will be different than it was in the East, according to BTU Analytics.
“As coal retirements have migrated west over time, strong renewables development in the West will erode much of the potential future benefit of coal retirements for natural gas producers,” Bradford said.
The stronger performance of renewables is linked to the better wind and solar resources, according to another BTU Analytics commentary “The Great Renewables Divide.”
“A divide has developed between the West, where wind and solar have been the predominant gainers of market share, and the East, where natural gas generation has become more ubiquitous,” Matthew Hoza, BTU Analytics manager of energy analysis, wrote.
The dividing lines stretches from North Dakota to Texas encompassing “the fertile wind country in the Midcontinent and the sunny skies in California and the Southwest.” East of the dividing line, conditions are less favorable to renewable generation, Hoza said.
“Even though the eastern portion of the U.S. is generally less conducive to renewables, the divide will likely start pushing its way east in the coming years,” Hoza said.
