U.S. Coal Plant Closures Continue, While China Rapidly Builds More

A wave of retirements for U.S. coal-fired power plants continues, with the Energy Information Administration (EIA) reporting almost a quarter of the nation's remaining facilities could be shuttered by the end of 2029.

The EIA in its preliminary monthly electric generator inventory report released Nov. 7 said that 23% of the nearly 201 GW of operating coal-fired capacity is prepared to go offline. The agency said market competition from natural gas-fired electricity production, and from renewable resources such as solar and wind, continues to make coal-fired generation uneconomic.

Notably, though, Monday's news comes a week after a research report from one of the nation's largest coal-mining companies said that as many as 40 U.S. coal-fired power plants scheduled for closure will remain open longer than expected. The report from Consol Energy, part of the company's third-quarter earnings presentation and citing data from IHS McCloskey, said plant operators were delaying retirement plans due to concerns about electricity reliability and supply chain issues impacting the energy sector.

Bloomberg reported that the plants have almost 17 GW of generation capacity. The news service cited an analyst who said some plants could remain open for as long as five years after their scheduled closure date.

China's Coal Expansion

The U.S. retirements also contrast with China's continued construction of new coal-fired units. A report in late summer from the Centre for Research on Energy and Clean Air (CREA), and Global Energy Monitor, said China is planning to build 43 new coal-fired power plants as well as 18 new blast furnaces fueled by coal over the next several years, in large part to support the country's economic development.

China announced the new-builds during the first half of this year, despite the country's pledge to become carbon neutral by 2060. Chinese officials have said they are looking at an emissions peak for the country before 2030.

The CREA group has said China since 2016 has built or is developing more than three times the amount of coal-fired generation capacity as the rest of the world combined, including starting construction of at least 33 GW of new coal-fired generation last year.

Economics Rattle U.S. Operators

The EIA in Monday's report on U.S. generation inventory said, Coal-fired generators, especially older, less-efficient units, face higher operating and maintenance costs, which make them less competitive and more likely to retire." The EIA also noted that plants are likely to be closed due to the additional investment required to comply with the Environmental Protection Agency's regulations on wastewater discharge.

The EIA said 11,778 MW of coal-fired capacity will be retired across 2022 if reported retirements proceed as scheduled through the end of this year. No new coal-fired capacity is being built in the U.S. The EIA on Monday said the last large [greater than 100 MW] coal-fired power plant built in the United States was the 932-MW Sandy Creek Energy Station in Texas, which came online in 2013."

The agency said reported planned retirements affect plants in 24 states, with 42% of those closures in just four states: Tennessee, Texas, Michigan, and Indiana. Monday's report said that between 2012 and 2021, an average of 9,450 MW of U.S. coal-fired capacity was retired each year." The agency said, The pace of planned coal-fired retirements slows down after 2022; the largest amount of capacity retirement we expect over the next seven years is 9,842 MW in 2028."

Shift to Renewables

AES Indiana provides an example of a utility moving away from coal-fired generation and increasing its use of renewable resources. The utility, in its latest 20-year integrated resource plan expected to be filed with state regulators on Dec. 1, is expected to call for adding as much as 1,300 MW of wind, solar, and energy storage by 2025. It also outlined a plan for its portfolio to include 1,450 MW of stand-alone solar power by the middle of the next decade, along with 450 MW of solar combined with storage, and 300 MW of wind capacity.

The utility in an Oct. 31 presentation said that at the end of the 20-year plan, its generation portfolio would be 87% solar, wind, and energy storage. The utility today owns and contracts for just more than 3.6 GW of generation capacity. About half of the utility's current portfolio is coal-fired generation. AES Indiana has closed several coal-fired units in recent years, while converting others to burn natural gas.

The EIA in its Monday report said the type of coal being burned by plants slated for retirement has shifted to mostly subbituminous and refined coal-fueled plants, which account for a combined 68% of planned retirements between 2022 and 2029." The EIA said about 27% of plants running on refined coal, which is made by mixing proprietary additives to feedstock coal, were slated to retire by 2029 after a supporting tax credit expired in early 2022.

Delayed Retirements, and Restarts

Consol CEO Jimmy Brock during the company's earnings call told analysts, Domestically, coal-fired electric generation units are delaying retirements. And internationally, we are seeing countries bring back coal-fired electricity generating units, particularly in Europe."

The International Energy Agency, in its World Energy Outlook released in October, said global coal-fired generation reached a historic high in 2021. In advanced economies, where coal use had been declining, demand increased by nearly 10%," the IEA said in its report. In emerging market and developing economies, which account for just over 80% of global coal use today, demand rose by 5%."

Germany, among the first European countries to call for an exit from coal-fired power, is restarting some units to support its energy supply. European countries, many of which have long relied on energy from Russia, have been facing an energy crisis in the wake of Russia's invasion of Ukraine. German Chancellor Olaf Scholz in late October announced the country was reopening five coal-fired plants. Utility Steag GmbH last month said it would restart at least four plants, with generation capacity of 2.5 GW, prior to winter.

Scholz last month said the restarts are a time-limited but necessary emergency measure," and reiterated that Germany will continue to stand firmly by our climate targets."

-Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).

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