EIA: Coal dominated capacity retirements in 2015
- Cheap natural gas and stricter environmental rules on power generators made 2015 a rough year for the coal industry, and new data from the U.S. Energy Information Administration illustrates just how it happened. Coal-fired generation made up 80% of all retirements last year, the bulk of that consisting of conventional steam units.
- EIA said smaller, older units were more likely to be mothballed, and that the overall 18 GW pulled offline last year was a "relatively high amount compared with recent years."
- About 30% of the coal capacity that retired last year was pulled offline in April, when the U.S. Environmental Protection Agency's Mercury and Air Toxics Standards rule went into effect.
The EIA yesterday released data showing just how much pressure the coal industry is under, and helping to explain which plants are most at risk for closing.
According to the agency, coal units that retired in 2015 were mainly built between 1950 and 1970, and the average age of those retired units was 54 years. "The rest of the coal fleet that continues to operate is relatively younger, with an average age of 38 years," EIA noted.
Units retired last year also tended to be smaller than the rest of the coal fleet: net summer capacity of the average retired coal unit was 133 MW, compared with 278 MW for coal units still operating.
And, EIA said nearly half of the 2015 retired coal capacity was located in three states — Ohio, Georgia, and Kentucky — and those states each retired at least 10% of their coal capacity in 2015. "Other states that traditionally have had high levels of coal-fired electricity generation, such as Indiana, West Virginia, and Virginia, each retired at least one GW of coal capacity in 2015," EIA noted.
EIA said about 3 GW of natural gas-fired generation was also retired last year, along with 1 GW of petroleum liquids capacity. The bulk, almost 14 GW of capacity, was coal-fired, however. EIA said last year it expected more than 12 GW of coal-fired generation will be taken offline in 2015 as a direct result of the MATS rule, but the new data does not indicate what portion of retirements resulted from tight markets and competition with coal.
Gas generation exceeded coal's share in seven months last year, according to EIA data, as low gas prices helped the commodity force out coal plants. Coal-to-gas switching is typically seen in the spring and fall — a shoulder season phenomenon — but gas prices have remained the $2/MMBtu threshold where switching occurs.
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