EIA: Reports of Coal’s Death May Have Been Greatly Exaggerated

Electricity generation from existing coal-fired power plants will increase from 2012 levels through 2025, according to the Reference case presented in the U.S. Energy Information Administration’s Annual Energy Outlook 2015, released on April 14.

In addition to the Reference case, five alternative cases—Low and High Economic Growth cases, Low and High Oil Price cases, and High Oil and Gas Resource case—are also considered in the report.

Coal-fired generation remains fairly constant across most of the cases through 2040, except for a large increase in usage in the High Oil Price case and a significant decrease in the High Oil and Gas Resource case. For the most part, potential increases in coal use are limited in the U.S. because many existing stations are already operating at high utilization rates and new coal-fired plant construction is almost non-existent.

The Reference case forecasts a decline in coal’s share of total electricity generation, from 39% in 2013 to 34% in 2040, but even then it still accounts for the largest share of total generation in the U.S.

Although electricity generation from natural gas–fired plants more than doubled from 2000 to 2012 as gas prices fell to relatively low levels, according to the Reference case, generation from natural gas will remain below 2012 levels until after 2025. There is a great deal of variability in the projections based on different scenarios however.

In the High Oil Price case, the share of total electricity generation from natural gas decreases to 23% by 2040, while in the High Oil and Gas Resource case the share of total generation from natural gas in 2040 increases to 42%.

Renewable generation is the big winner under all scenarios, with increases ranging from about 50% to as much as 121%. Nuclear power is on the opposite end of the spectrum, decreasing in total generation under all of the scenarios, as many plants face retirement in the years leading up to 2040. New nuclear plants are held in check under the Reference case due to high construction costs.

Total electricity generation capacity in the U.S. is expected to grow during the next 25 years from 1,065 GW in 2013 to 1,261 GW in 2040. The first 10 years see additions roughly equaling retirements, but as demand increases in the following years, new plants are added at about a 12-GW-per-year average. The types of plants added vary based on scenario assumptions, with the price of natural gas acting as the wild card for the choices.

The overall energy picture in the U.S. looks very promising, according to the report. The nation transitions from being a modest net importer of natural gas to a net exporter by 2017, with further growth thereafter.

Crude oil and natural gas production are projected to increase with minimal demand growth, resulting in less reliance on imported energy supplies. Energy imports and exports reach equilibrium within this decade in some scenarios; even the Reference case sees a balance by 2028, with natural gas expected to dominate exports, while liquid fuels continue being imported.

Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)

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