COVID-19 deepens coal's decline as US power emissions plummet: Moody's
Coal's declining share of power generation is accelerating
Some 9 GW of coal-fired generation to retire in 2019
Reduced US power demand amid the global coronavirus crisis will slash the country's electric sector emissions by 175 million to 320 million metric tons in 2020, equal to a 10% to 20% drop from 2019, Moody's estimated in a June 30 report. Most of that will come from already beleaguered coal generators.Not registered?
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Register Now"We project most reduced electric demand in 2020 will come from coal generation with minimal future recovery," Moody's analysts said.The credit ratings agency's prior forecast that coal would fall to 11% of the U.S. power mix by 2030 "seems to be accelerating," the report said. Coal's share will fall to 17% or below in 2020 from 23.5% in 2019 and 27.5% in 2018. As of April 30, coal had already crashed to 17.2% of US generation, down from 24.8% in the first four months of 2019, as wind, solar and natural gas continued to expand, according to data from the US Energy Information Administration.Moody's expects the pandemic's impact on power demand, coal generation and carbon emissions to continue through 2020 and likely into 2021. When demand does recover, coal probably will not, Moody's analysts said, citing "sustained low natural gas prices" that will likely trigger "accelerated retirements of out-of-the-money coal-fired power plants" along with increasingly cost-competitive power from wind and solar plants.Those expectations align with S&P Global Market Intelligence's recent assessment that the economic downturn sparked by COVID-19 would combine with previous economic trends to speed up already planned retirements of coal-fired generation. As of April 17, more than 9,000 MW of coal-fired capacity was scheduled for retirement in 2020, while another 23,010 MW of coal capacity was set to close down between 2021 and the end of 2025, according to a separate S&P Global Market Intelligence analysis.Since then, several utilities have announced additional coal retirements, including Vectren affiliate Southern Indiana Gas and Electric, which unveiled a plan in June to shutter 730 MW of coal and add at least 1,000 MW of renewables. Also in June, Tucson Electric Power, a utility subsidiary of Fortis, said it would eliminate all coal from its power portfolio by 2031 while dramatically expanding wind, solar and energy storage resources.Regional variationsDeclines in annual power demand, generation and emissions will vary by region, according to Moody's."Carbon emission reductions are likely to be uneven across the US, depending on both regional demand and regulations," Moody's analyst Jose Mendez said in a statement. "Variations in demand decline are partially attributable to regional differences in the length and severity of governmental restrictions on economic activity."Moody's expects larger carbon reductions across the US West, Florida, Texas and states that are members of the Southwest Power Pool, where coal is not replaced by natural gas "either because of an uptick in renewable generation or because coal generation declines are absorbing the reduced electric loads, so more natural gas generation is not needed."