EIA: 13 Gigawatts of Coal Capacity to Retire in 2015 Due to EPA Regulation

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EPAFrom data reports pro­vid­ed to the Ener­gy Infor­ma­tion Admin­is­tra­tion (EIA), about 16 gigawatts of gen­er­at­ing capac­i­ty will be retired in 2015, of which near­ly 13 gigawatts is coal-fired. The coal-fired capac­i­ty will be retired pri­mar­i­ly because of EPA’s Mer­cury and Air Tox­i­cs Stan­dards (MATS), which requires coal- and oil-fired elec­tric gen­er­a­tors to meet stricter emis­sions stan­dards by incor­po­rat­ing emis­sions con­trol tech­nolo­gies or retire the gen­er­a­tors. Most of the retir­ing coal capac­i­ty (8 gigawatts) is in the Appalachi­an region–Ohio, West Vir­ginia, Ken­tucky, Vir­ginia, and Indiana—where job loss­es have already occurred. [ i ]

Elec­tric gen­er­at­ing com­pa­nies report­ed that they will add over 20 gigawatts of util­i­ty-scale gen­er­at­ing capac­i­ty to the pow­er grid, but only about 6 gigawatts of these new capac­i­ty addi­tions are reli­able (i.e. dis­patch­able) sources of elec­tric­i­ty gen­er­a­tion need­ed to counter bal­ance the clo­sure of coal and petro­le­um gen­er­a­tors. Twelve gigawatts of unre­li­able (i.e. non-dis­patch­able) wind and solar will be added to the elec­tric grid.

Because of vary­ing capac­i­ty fac­tors for the dif­fer­ent gen­er­at­ing tech­nolo­gies that are being added to the grid, the capac­i­ty mea­sure is not equiv­a­lent to the amount of gen­er­a­tion that can be expect­ed. For exam­ple, 1 gigawatt of nuclear capac­i­ty will pro­duce over 3 times the amount of gen­er­a­tion that 1 gigawatt of wind capac­i­ty can pro­duce. Fur­ther­more, unlike wind which obvi­ous­ly depends on the vagaries of weath­er, nuclear gen­er­a­tion is reli­able.

Elec­tric gen­er­at­ing com­pa­nies report­ed that they will add over 20 gigawatts of util­i­ty-scale gen­er­at­ing capac­i­ty to the pow­er grid, but only about 6 gigawatts of these new capac­i­ty addi­tions are reli­able (i.e. dis­patch­able) sources of elec­tric­i­ty gen­er­a­tion need­ed to counter bal­ance the clo­sure of coal and petro­le­um gen­er­a­tors. Twelve gigawatts of unre­li­able (i.e. non-dis­patch­able) wind and solar will be added to the elec­tric grid.

Because of vary­ing capac­i­ty fac­tors for the dif­fer­ent gen­er­at­ing tech­nolo­gies that are being added to the grid, the capac­i­ty mea­sure is not equiv­a­lent to the amount of gen­er­a­tion that can be expect­ed. For exam­ple, 1 gigawatt of nuclear capac­i­ty will pro­duce over 3 times the amount of gen­er­a­tion that 1 gigawatt of wind capac­i­ty can pro­duce. Fur­ther­more, unlike wind which obvi­ous­ly depends on the vagaries of weath­er, nuclear gen­er­a­tion is reli­able.

Note that the capac­i­ty val­ues in this graph are net changes, i.e. capac­i­ty addi­tions minus retire­ments.

Source: EIA,

Source: EIA,

Gen­er­at­ing Capac­i­ty Addi­tions in 2015

The addi­tions report­ed by elec­tric gen­er­at­ing com­pa­nies to EIA fol­low­ing the trend of recent years are dom­i­nat­ed by wind (9.8 gigawatts), nat­ur­al gas (6.3 gigawatts), and solar (2.2 gigawatts). The wind capac­i­ty addi­tions are most­ly in the Plains states, with almost 8.4 gigawatts (85 per­cent) of total wind addi­tions locat­ed between North Dako­ta and Min­neso­ta in the north, to Texas and New Mex­i­co in the south. Solar capac­i­ty addi­tions larg­er than one megawatt are most­ly locat­ed in Cal­i­for­nia total­ing 1.2 gigawatts. Cal­i­for­nia and 28 oth­er states have a renew­able port­fo­lio stan­dard (RPS) requir­ing a spec­i­fied amount of qual­i­fied renew­able gen­er­a­tion. These solar fig­ures do not include small-scale instal­la­tions such as res­i­den­tial rooftop solar pho­to­volta­ic sys­tems.

Nat­ur­al gas capac­i­ty addi­tions are locat­ed through­out the Unit­ed States, with Texas adding more than dou­ble any oth­er state (1.7 gigawatts or 27 per­cent of total nat­ur­al gas addi­tions) in 2015. The Ten­nessee Val­ley Authority’s Watts Bar 2 nuclear facil­i­ty (1.1 gigawatts) in south­east­ern Ten­nessee is expect­ed to come on line in Decem­ber 2015. It will be the first new nuclear reac­tor brought online in the Unit­ed States in near­ly 20 years.

Coal Retire­ments in 2015

Near­ly 16 gigawatts of gen­er­at­ing capac­i­ty is expect­ed to retire in 2015 of which 12.9 gigawatts is coal-fired—10.2 gigawatts of bitu­mi­nous coal and 2.8 gigawatts of sub­bitu­mi­nous coal. The 85 coal-fired gen­er­a­tors retir­ing this year are small­er than the aver­age coal-fired units in the Unit­ed States with an aver­age capac­i­ty of 158 megawatts com­pared to 261 megawatts for the oth­er coal-fired units. Most of this retir­ing coal capac­i­ty is found in the Appalachi­an region where coal-fired capac­i­ty has already been shut­tered due to EPA reg­u­la­tions.

The capac­i­ty of the coal-fired units retir­ing this year is over 3 times the amount that retired last year because EPA’s MATS requires that they add emis­sions con­trol tech­nolo­gies this year, although some units have been grant­ed exten­sions to oper­ate through April 2016. EIA expects an addi­tion­al 5.2 gigawatts of coal retire­ments in 2016.[ii] If adding emis­sions con­trol tech­nolo­gies is cost-pro­hib­i­tive, oper­a­tors of gen­er­at­ing units will retire their units instead. MATS require sig­nif­i­cant reduc­tions in emis­sions of mer­cury, acid gas­es, and tox­ic metals.[iii] It should be not­ed that, accord­ing to EPA, the ben­e­fits of reduc­ing mer­cury and air tox­i­cs total $500,000 a year, but the rule costs $9.6 bil­lion a year. [iv]

The 12.9 gigawatts of coal-fired capac­i­ty report­ed to be retired by elec­tric util­i­ty oper­a­tors in 2015 is also 3 gigawatts larg­er than EIA expect­ed in July of 2012 when the agency report­ed 27 gigawatts of coal-fired capac­i­ty to retire between 2012 and 2016, with 9.9 gigawatts of coal-fired retire­ments in 2015.[v]

Despite the 21 gigawatts of coal-fired retire­ments between 2009 and 2014 that EIA has record­ed, coal remains the num­ber 1 gen­er­at­ing source in the Unit­ed States with a 39 per­cent share, fol­lowed by nat­ur­al gas and nuclear. (See graph below.)

Source: EIA,

Source: EIA,

Con­clu­sion

Pres­i­dent Oba­ma and his EPA are liv­ing up to the President’s procla­ma­tion in 2008, “So, if some­body wants to build a coal plant, they can – it’s just that it will bank­rupt them.”[vi]  But the EPA is not just deal­ing with new coal-fired pow­er plants, but exist­ing coal-fired plants as well. The MATS reg­u­la­tion is just the begin­ning with over 39 gigawatts of coal-fired plants being retired.

EPA released its pro­posed rule man­dat­ing car­bon diox­ide emis­sion cuts for exist­ing pow­er plants on June 2, 2014. This rule is designed to com­ply with the president’s plan to make elec­tric­i­ty rates “nec­es­sar­i­ly sky­rock­et” by reduc­ing the use of coal-fired elec­tric­i­ty gen­er­a­tion from exist­ing pow­er plants—one of the cheap­est sources of elec­tric­i­ty gen­er­a­tion. EPA is man­dat­ing the reduc­tion of car­bon diox­ide emis­sions from the pow­er sec­tor by 30 per­cent from a “2005 base­line” by 2030. The pro­posed rule pro­vides each state with a tar­get and a set of options that EPA has deter­mined will allow them to reach their assigned require­ments. While the rule will result in increas­ing elec­tric­i­ty rates, the rule will not have any mate­r­i­al cli­mate ben­e­fit despite the fact that the cli­mate is the jus­ti­fi­ca­tion for the rule. EPA’s cli­mate mod­el cal­cu­lates that the tem­per­a­ture reduc­tion from the pro­posed rule to be a mere 0.018 degrees Centi­grade by 2100.[vii]

EPA also issued a pro­posed rule lim­it­ing car­bon emis­sions on new pow­er plants. The rule lim­its car­bon diox­ide emis­sions from new coal plants to 1,100 pounds per megawatt-hour, although the aver­age cur­rent coal-fired pow­er plant emits close to 1,800 pounds. The EPA jus­ti­fies these num­bers by sug­gest­ing that new coal-fired plants can meet the lim­it by installing car­bon cap­ture and seques­tra­tion tech­nol­o­gy. How­ev­er, that tech­nol­o­gy is not com­mer­cial­ly avail­able, mean­ing no new coal-fired plants will be built.[viii]

As we see from the EIA data above, coal-fired pow­er plants are the back­bone of our elec­tric gen­er­at­ing sec­tor and should be encour­aged to con­tin­ue to pro­vide low cost elec­tric gen­er­a­tion rather than be forced to retire when the elec­tric gen­er­a­tion sec­tor has already done a yeoman’s job at reduc­ing cri­te­ria pol­lu­tants and car­bon diox­ide emis­sions from its pow­er plants.
[ i ] Ener­gy Infor­ma­tion Admin­is­tra­tion, Sched­uled 2015 capac­i­ty addi­tions most­ly wind and nat­ur­al gas; retire­ments most­ly coal, March 10, 2015,

[ii] Dai­ly Caller, EPA Rules To Force 85 Coal-Fired Gen­er­a­tors To Close By The End of This Year, March 10, 2015, [iii] EPA, [iv] Fed­er­al Reg­is­ter, Feb­ru­ary 16, 2012, [v] Ener­gy Infor­ma­tion Admin­is­tra­tion, 27 gigawatts of coal-fired capac­i­ty to retire over the next 5 years, July 27, 2012, [vi] Wash­ing­ton Times, Chance to block Obama’s war on coal, June 19, 2012, [vii] Cato Insti­tute, 0.020C Tem­per­a­ture Rise Avert­ed: The Vital Num­ber Miss­ing from the EPA’s “By the Num­bers”  Fact Sheet, June 11, 2014, [viii] Wall Street Jour­nal, How to Fight the Uni­lat­er­al Pres­i­dent, Feb­ru­ary 17, 2014