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Coal retirement plans increasing despite federal focus on grid reliability

The number of scheduled or completed coal capacity retirements is increasing through 2021 at the same time the U.S. Department of Energy is asking the Federal Energy Regulatory Commission to adopt a new rule that would bolster coal generation.

A DOE proposal to FERC would require operators to "ensure that certain reliability and resiliency attributes of electric generation resources are fully valued," while coal advocates and generators have urged U.S. lawmakers and utilities to take action on coal retirement decisions in the interest of a resilient electric grid. The proposal was aimed broadly at the coal and nuclear sections, but since only certain coal plants are eligible, only a few key producers might benefit from the request.

Paul Bailey, president and CEO of the American Coalition for Clean Coal Electricity, said at an Oct. 3 hearing by the House Energy and Commerce Committee's Subcommittee on Energy that the move would represent "a major step" toward achieving some reforms in wholesale energy markets.

"However, to achieve DOE's goal and prevent more premature coal retirements, these reforms must be adopted quickly," Bailey said.

According to data compiled by S&P Global Market Intelligence, about 49.5 GW of coal capacity is or was scheduled for retirement between 2013 and 2021, an increase from the 44.1 GW scheduled as of March 27 for that period. Forty-five coal units are slated to retire from 2017 to 2021 while 395 units have been retired since 2012, though certain planned retirements without firm dates are not reported in the data.

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Some power companies have said that low-priced natural gas continues to drive decisions to retire coal-fired units at plants. S&P Global Market Intelligence data shows the great majority of coal units undergoing fuel-type conversions have been or will be switched to gas, with a handful of biomass conversions. Only 115 MW is planned to shift to other nonrenewable fuel types.

Public Service Enterprise Group Inc. is in the process of replacing the capacity from its Bridgeport Harbor 3, Hudson 2 and Mercer plants with new natural gas-fired combined-cycle plants, due strictly to cheaper natural gas.

A spokesman for Dynegy Inc., scheduled to retire 2,181 MW of capacity over the next five years, also blamed low-priced natural gas and high maintenance costs for the closing of the Brayton Point 1-3 plant.

Tennessee Valley Authority is scheduled to retire 2,494 MW of coal capacity. The utility's head of coal procurement said recently that Tennessee Valley Authority expects its annual coal burn will remain flat for a period before dropping by as much as a quarter in the coming years.

JEA's and Florida Power & Light Co.'s 1,276-MW St Johns River Power coal-fired facility could retire as early as Jan. 5, 2018. The utility filed a petition in May with the Florida Public Service Commission to close the coal-fired facility as a way to lower expenses for customers and prevent carbon dioxide emissions.

Coal deliveries to power plants went up in the first half of this year despite announced closures, and one utility has reversed plans to retire plants. NRG Energy Inc. withdrew a request Sept. 1 to deactivate its Will County unit 4 coal plant owned by subsidiary Midwest Generation LLC due to changed circumstances that will allow the unit to operate beyond its planned retirement date. Will County's unit 3 was retired April 2015.

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One of the most recent retirement announcements came from Vistra Energy Corp.'s subsidiary Luminant Generation Co. LLC, which announced plans Oct. 6 to retire its 1,800-MW Monticello ST coal-fired plant in Texas by January 2018. Sierra Club said it was the 259th coal plant to retire or announce retirement in the U.S. since 2010, bringing the total announced closures close to half the total U.S. coal fleet since then.

"When this plant retires, Texans and communities all the way to the Eastern Seaboard will be breathing cleaner," said Bruce Nilles, director of Sierra Club's Beyond Coal campaign, in a release.

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A reversal of some planned regulation has helped other plants. The Huntington and Hunter plants, wholly or mostly owned by PacifiCorp, will continue to operate for a while, according to an analyst, after a federal appeals court agreed in September to stay a plan that would have required them to install $700 million in pollution controls.

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To see a list of coal units that retired from 2012 through 2017, click here.

To see a list of planned coal unit retirements from 2017 through 2021, click here.

To see a list of coal unit fuel type conversions, click here.