August 16, 2018 Read More →

Rhodium Group: More coal plant retirements looming

Greentech Media:

The U.S. coal power plant fleet has been shrinking for years, with the official tally of coal plants closed exceeding those still open as of late last year. Another 43 gigawatts, or about 18 percent of the remaining 249 gigawatts of capacity, is expected to close by 2030.  

Absent “market interventions at a grand scale” — such as the Trump administration’s plan to force utilities to buy uncompetitive coal-fired power under the mandate of national security — the same trends are accelerating beyond current estimates, and could lead to the country’s coal fleet being nearly halved again by 2030. 

These are some of the conclusions of a note released this week by the research firm Rhodium Group. According to its analysis, while “the Department of Energy contemplates action to prop up ailing coal and nuclear plants, low natural gas prices and cheap renewables have the potential to drive far more coal off the grid.” Rhodium Group’s new projections, based on data collected for its Taking Stock 2018 report released in June, use a range of scenarios to project both retirements of coal capacity and reductions in total electricity generated by coal.

Under the “most favorable market dynamics for coal “we project at least 71 [gigawatts] of retirements by 2030, roughly 65% more than currently planned,” the firm wrote. That’s a higher rate of retirement than the 65 gigawatts by 2030 projected by the U.S. Energy Information Administration’s reference case. And it would require natural gas prices rising to $4 per one million British Thermal Units (MMBtu), along with more rapid than expected economic growth.

Under the Rhodium Group’s “central” scenario, coal retirements reach 92 gigawatts by 2030, with generation falling nearly as much as capacity. “The cliff for coal gets much more treacherous if renewable energy costs decline moderately and natural gas prices are in the $3/MMBtu range,” it notes.

“Stopping or slowing the next wave of retirements would require market interventions at a grand scale — with costs and market distortions that may make such actions a hard sell,” the firm wrote. 

More: Report: Cheap Natural Gas and Renewables Could Close Half of U.S. Coal Fleet by 2030

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