As many as 353 coal-fired generators totaling 59 GW — about 18% of the country’s coal-fired generating capacity — should be considered for closure, in addition to 41 GW of coal retirements that have already been announced, according to a report released Monday by the Union of Concerned Scientists (UCS).
Cleaner fuels should take the place of coal in generating that electricity, said the report, “Ripe for Retirement: The Case for Closing America’s Costliest Coal Plants,” but the emphasis should be placed on switching to renewables, rather than natural gas.
“Historically low natural gas prices and a lack of steady federal policy support for renewable energy and energy efficiency could result in natural gas replacing much of the retiring coal capacity,” said UCS. “Simply shifting our reliance on coal to a new reliance on natural gas would be a huge missed opportunity to transition the electric system to truly low- or no-carbon resources that have less impact on the environment and public health.
“Deliberate policy support at the federal, state and regional levels is needed to ensure that renewable energy and energy efficiency are not crowded out by a hasty, risky, uncontained rush to natural gas.”
The plants were recommended for closure based on economic criteria, according to the report.
“For all of the ripe-for-retirement generators identified in this report, the power they produce — after being upgraded with modern pollution controls — is more costly than electricity generated from existing natural gas power plants, and many are more expensive than wind power,” the analysts said. “Our analysis shows that many of these ripe-for-retirement units may already be uneconomic even before considering the cost of pollution controls. Indeed, even without considering the cost of needed pollution controls, 23.4 GW are already more expensive to operate than existing natural gas plants.”
The coal-burning units are an average of 45 years old and operate at an average of just 47% of their generation capacity. Seventy percent “lack at least three of the four major pollution control technologies used to reduce the environmental and health effects of coal-fired power generation.”
The Energy Information Administration (EIA) has estimated that consumption of natural gas in the electric power sector will be 25.4 Bcf/d this year, a 22% increase compared with 2011, “primarily driven by the increased relative cost advantages of natural gas over coal for power generation in some regions” (see Daily GPI, Nov. 7). EIA expects some consumption decline in the electric power sector in 2013.
Gas-to-coal switching will be key to next year’s natural gas prices, with gas ruling in the first half of the year and coal gaining in the second half, according to Raymond James & Associates Inc. (see Daily GPI, Nov. 6). In a recent note to clients, analysts J. Marshall Adkins and James Rollyson said the “single most important change” to the domestic gas market in the past year has been the surge in gas demand to power generation from coal. A “complete reversal” back to coal won’t happen in 2013, according to the analysts, who expect an average of 2.1 Bcf/d of gas demand to switch back to coal next year — about half of the switching to gas that occurred this year.
The UCS report ranked Georgia, Alabama, Tennessee, Florida and Michigan as the states with the most coal-fired generating capacity that should be considered for closure.
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