Coal Will Remain Prominent for Decades Despite Growing Renewable Power Capacity

There are a lot of changes taking place in the world's energy supplies. We seem to read announcements almost every day about coal plant retirements, and solar and wind farm installations. Yet, when you look at power projections put out by the experts, coal-fired generation remains prevalent in the mix beyond 2050, even as renewable resources slowly climb in the rankings.

Growth in Renewables Is Undeniable

In the U.S. Energy Information Administration's (EIA's) Short-Term Energy Outlook (STEO) released in December, it was reported that 14.6 GW of new wind capacity was added in the U.S. in 2020. The EIA expected 2021 to end with 17.2 GW of new wind capacity coming online during the year, and that 7.1 GW would be added in 2022. Utility-scale solar capacity reportedly increased by about 10.4 GW in 2020. Additionally, utility-scale solar capacity was expected to increase 16.2 GW in 2021, and another 20.9 GW in 2022. Small-scale solar capacity (systems less than 1 MW) increased by 4.4 GW in 2020 to a total of 27.6 GW. The EIA said small-scale solar capacity would grow by 5.1 GW in 2021, and by 5.0 GW in 2022.

Yet, while these installations are notable and account for the vast majority of all new power generation capacity added in the U.S., the actual production of electricity from wind and solar power are far less than that produced from coal. Solar power, for example, accounted for only about 3% of U.S. electricity generation from all sources in 2020. The EIA said it would account for about 4% in 2021, and 5% in 2022. Even with the massive buildout that is underway, solar generation is only expected to make up 14% of the U.S. total in 2035, and 20% in 2050.

U.S. Coal Power Output Up in 2021

Coal, meanwhile, accounted for about 20% of U.S. electricity generation from all sources in 2020. Coal generation was expected to increase to about 23% in 2021. The year-over-year increase in coal power production is remarkable when compared to solar output. Specifically, U.S. coal power plants generated 148,030 GWh more energy during the first 10 months of 2021 than they did in the first 10 months of 2020. That was greater than all the energy produced by the U.S. solar sector (143,013 GWh) during the same 10 months, according to EIA data. Although the year-end numbers have not yet been finalized, it's likely the same will hold true for all of 2021.

The bump up in production, which was the first time since 2014 that coal's annual output has increased, was mainly due to higher natural gas prices. The EIA said gas would average $4.99/MMBtu in 2021 compared to $2.40/MMBtu in 2020, which caused a decrease in gas-fired generation production. Coal is expected to supply about 22% of U.S. electricity generation from all sources in 2022, according to the STEO, as natural gas prices are projected to remain relatively high.

No new utility-scale coal power plants have been added to the U.S. fleet since 2013, and none are planned to be added in the future. Still, the number of old facilities that are on the immediate chopping block seems to be dwindling. The EIA has reported that power plant owners and operators plan to retire 59 GW of currently operating coal-fired capacity in the U.S. by 2035. However, that would still leave more than 150 GW of coal capacity online 13 years from now. That equates to six 500-MW units operating in every state, on average, in 2035, which is substantial. Of course, some states have no coal power plants, which means other states could have a dozen or more of these sized units to make up the difference. Circumstances can change quickly, of course, and more coal plant closures are sure to be announced, but the low-hanging fruit (mostly old, small, and inefficient units) has already been picked.

Coal Power Grows in Asia

Worldwide, there are several countries that have already phased coal out of their domestic energy mixes, such as Austria, Belgium, Portugal, and Sweden. Still, there are several others-many in non-Organisation for Economic Co-operation and Development (OECD) countries-adding new coal plants to their fleets, including China and India, which are already the largest and second-largest producers, consumers, and importers of coal, respectively.

A notable takeaway from the EIA's International Energy Outlook 2021, released in October, is that increases in coal-fired generation in Other non-OECD Asia," which includes Indonesia, Vietnam, and Thailand, among other countries, but not China or India, account for more than three-quarters of the world's coal-fired generation increases from 2030 through 2050. While renewable energy sources-primarily wind and solar-account for about 60% of the generation increase in the region during the projection period, coal-fired generation accounts for nearly all of the remaining growth. As coal-fired generation steadily increases through 2050 [in Other non-OECD Asia], coal's share of the generation mix increases from about one-third in 2020 to almost half by the end of the projection period," the report says.

The proverbial 800-pound gorilla, of course, is China. In the International Energy Agency's Coal 2021 analysis and forecast, released in December, it says: China's influence on coal markets is difficult to overstate. China's power generation, including district heating, accounts for one-third of global coal consumption. China's overall coal use is more than half of the global total." The report says China's dominance of coal markets has no parallel with any other country or any other fuel."

According to preliminary estimates, global power generation from coal will set a new all-time high of about 10,350 TWh in 2021, an increase of 9% year over year. Furthermore, production from the world's coal-fired power plants is poised to go even higher this year.

-Aaron Larsonis POWER's executive editor.

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