August 17, 2020 Read More →

Renewables likely to surpass coal for electricity generation in 2020

Bloomberg ($):

Last year, there were 38 days when U.S. utilities got more electricity from hydroelectric, wind and solar generation than from coal, according to the Institute for Energy Economics and Financial Analysis. So far this year, according to the IEEFA and my own crunching of U.S. Energy Information Administration data, it’s already 122 — including every day in the month of April and all but three in May.

In the summer months, higher electricity demand and decreased production from wind turbines and dams give coal a seasonal boost, but expect renewables to start outgenerating it again in the fall. The EIA is now projecting that renewables will produce more electricity than coal for 2020 as a whole — a milestone that as recently as last year it didn’t anticipate coming until 2031. Here’s how things looked through May, the most recent month for which full data are available:

The FERC order and the mercury rule tweak are both quite recent, so it’s a little early to judge their impact, but it would take a great leap of faith to imagine them spurring a coal comeback. Yes, a pandemic-induced recession was responsible for some of the demand destruction this year, and coal use may bounce back a bit in 2021 as the economy does. There will also be some continued demand for U.S. coal from steelmakers and from foreign countries. But by all appearances the coal-fired power plants that burn the vast majority of U.S. coal are just going to keep on closing, and as they do the economics of mining coal in the U.S. will keep getting less and less attractive. The retrenchments and bankruptcies that have become standard for the industry over the past decade may even give way to a death spiral. Writes Seth Feaster, an analyst at the aforementioned IEEFA, a pro-renewables think tank:

The growing probability is that the collapse of U.S. coal mining will be disorderly, resulting in bankruptcies that end in liquidation, abrupt mine closures, the abandonment of cleanup obligations, and possibly the financial collapse of some bonding companies that are supposed to be the backstop for those liabilities. 

[Bloomberg]

More: Coal’s Days May Be Over in the U.S.

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