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Report: 21% of US coal fleet 'uneconomic,' could face retirements, conversions

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Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

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Report: 21% of US coal fleet 'uneconomic,' could face retirements, conversions

A recent energy analysis determined that more than 20% of the nation's coal-generating capacity in 2016 is uneconomic and could face retirement or conversion to other energy sources.

The Union of Concerned Scientists, a member-funded nonprofit advocacy group that promotes clean energy, said in its report that much of the remaining coal fleet "faces significant economic uncertainty" due to competition from cheap natural gas and renewable energy.

Comparing the cost of electricity generated by coal units and an existing natural gas combined-cycle unit, the report found that 57 GW, or nearly 21% of the country's roughly 285-GW coal-generating capacity in 2016, are "uncompetitive," on top of the 18% already scheduled for retirement or conversion.

Using S&P Global Market Intelligence data, the report's authors identified dozens of plants that failed their "economic stress test," primarily in the southeastern U.S. Florida had the highest number at 16 followed by Georgia with 15 and Virginia with 13.

SNL Image

SNL Image

A recent S&P report shows that 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. 45 coal units are slated to retire from 2017 to 2021, while 395 units have been retired since 2012.

Some power companies have said low-priced natural gas continues to drive decisions to retire coal-fired units at plants.

However, the Union of Concerned Scientists warned that the increased reliance on gas threatens to undermine the gains in CO2 reductions and called for new and strengthened policies promoting renewable energy.

It further recommended programs and funding targeted toward communities facing coal plant retirements.

"Coal miners and coal-dependent communities need real action; attempts to roll back public health and environmental safeguards are not likely to change market factors driving out coal," it said.