Increasingly costly coal plants may be retired early
The beauty of the free market is that it’s ruthless. It’s an ongoing footrace with pushing and shoving and scrambling that rewards whoever’s in the front. The market doesn’t care that you used to be in front. If you’re losing, you’re losing.
Coal is losing. And in the race coal’s in — for cheap, abundant, clean energy — it’s hard to catch back up.
Yesterday, the Union of Concerned Scientists projected the future of coal-generated power in the United States. It’s not expecting to hand out any gold medals.
America’s coal power fleet is facing an increasingly uncertain economic future. Growing competition from cheaper, cleaner alternatives — including natural gas and renewable energy sources such as wind and solar — is making it harder for these generators to produce energy economically.
With appropriate planning, these outdated coal generators can be closed down while still maintaining a reliable electricity system. By ramping up underutilized natural gas plants, increasing renewable energy through existing state policies, and reducing demand through improved energy efficiency, every region in the country could more than replace the electricity currently produced by ripe-for-retirement generators.
One of the main challenges for the plants the UCS expects to close is that they’re dirty, emitting more harmful particulates and other pollutants than is healthy or, in some cases, legal. And as coal grows more expensive relative to other sources (like natural gas), the cost of upgrading facilities to remove those pollutants becomes less and less feasible.
As Bloomberg notes, the UCS’s projections exceed the number of plants previously expected to shutter — again, because coal is less cheap relative to other energy-production methods than it used to be. The UCS anticipates 59 more gigawatts of retirement than previous estimates — some 6 percent of electricity generated in the U.S.
The UCS’s specific projections:
- Up to 353 coal-fired generators in 31 states (out of a national total of 1,169) are ripe for retirement, collectively representing as much as 18 percent of the country’s coal-generating capacity and approximately six percent of the nation’s power.
- Ripe-for-retirement generators are typically older, inefficient, and less utilized than the rest of the nation’s coal fleet. They average 45 years in age, well beyond the 30-year expected life span for a typical coal generator, and operate at an average of just 47 percent of their power generation capacity, compared with 64 percent for the total U.S. coal fleet.
It’s not only coal plants that are reaching the end of their life cycles. The Oyster Creek nuclear facility in New Jersey, last in the news for not melting down during Sandy, may also be retired early. From Bloomberg:
Exelon would accelerate plans to close Oyster Creek in Forked River, New Jersey, if it faced unexpected new capital costs at a time when depressed power prices and cheap renewable energy are squeezing nuclear generation margins, [Exelon CEO Christopher] Crane said in an interview yesterday. …
The Chicago-based company also plans to refuel its Clinton nuclear plant [in Illinois] annually instead of every two years in a bid to boost profitability at the hardest-hit plant in Exelon’s 17-reactor system, he said.
And there you have it, sports fans. Natural gas still in the lead. Coal dropping back. Renewables coming up strong but with a lot of ground to make up. Nuclear barely keeping up.
One caveat on this analogy: When the people who are winning the race in the free market sense that their lead is about to slip, they tend to cheat. So take coal’s numerous yellow jerseys with a large chunk of salt.