Morgan Stanley: Coal-Fired Power Off U.S. Grid by 2033

A report from Morgan Stanley, a global wealth management company, said coal-fired power generation is likely to disappear from the U.S. power grid by 2033, largely displaced by renewable energy resources.

The report published Feb. 1 said renewable energy such as solar and wind power will provide nearly 40% of U.S. electricity in 2030, and as much as 55% in 2035. The U.S. Energy Information Administration said coal-fired generation, which supplied about 20% of U.S. electricity last year, will rise slightly this year to provide about 22% of the nation’s power mix, mainly due to higher prices for natural gas. But that jump will be short-lived, with Morgan Stanley saying the 2021 rise in coal use will experience “a constant decline thereafter.”

The Biden administration has made support for cleaner power generation a priority as it moves to re-establish the U.S. as a global leader in the fight against climate change. The new administration, in line with new leadership at the U.S. Environmental Protection Agency (EPA), is expected to toughen standards on greenhouse gas emissions that were rolled back during the Trump administration.

Coal-fired power generation has waned in much of the world and across the U.S. in recent years due to tougher environmental regulations, with hundreds of coal-fired units being retired. The coal industry also has suffered from poor economics, as the cost to run gas-fired and renewable energy facilities has undercut electricity produced from coal.

The most recent announcement of a coal-fired power plant closure came Feb. 2, when Alliant Energy announced the Columbia Energy Center, a two-unit 1,100-MW coal-fired station located in Columbia County, Wisconsin, south of Portage, will be permanently retired by the end of 2024. (Editor’s note: Alliant told POWER in March 2023 that the Columbia facility’s retirement date has changed, and the plant is now expected by close by June 2026.)   

Ending Coal by 2033 ‘Aggressive’

Andrew Bradford, principal of Colorado-based BTU Analytics, on Tuesday told POWER that ending coal-fired generation in the U.S. by 2033 “is aggressive, as coal retirement announcements would need to climb steeply from current levels to hit that target.”

Bradford, whose group tracks several energy sectors, including power generation and oil and gas exploration, said his company’s data shows the U.S. has 236 GW of coal-fired generation capacity in its fleet, across 267 plants, as of the fourth quarter of 2020. Bradford said “102 of those plants have announced retirement formally according to our analysis, summing to 86.2 GW of capacity. “

Analysis from Colorado-based BTU Analytics shows how natural gas-fired generation leads the U.S. energy mix, and also how nuclear power surpassed coal-fired power in 2020. Source: BTU Analytics

Bradford said that across the entire coal fleet in the Lower 48 states, “the average 12-month trailing capacity factor is now down to 24.4%. Plants with a capacity factor below 20% represent 78 GW of capacity.” He noted that coal-fired generation in 2020 fell below U.S. nuclear power generation for the first time; he also said that “wind and solar are going to have to grow faster to meet a 2033 target” to phase out coal.

“Right now we are tracking projects under advanced development [considered those with an interconnection agreement, power purchase agreement, financing in place, or advanced state regulatory filings] of 76.5 GW of solar expected through 2023, and 35.9 GW of wind,” he said.  

Organizations Move Away From Coal

Morgan Stanley is among several financial organizations that already have pledged to end investments in coal. Many energy companies, including General Electric, along with Siemens and Toshiba, also have moved away from supporting coal-fired generation.

A recent report from the Institute for Energy Economics and Financial Analysis said more than 100 global banks and insurance companies “have announced their divestment from coal mining and/or coal-fired power plants.”

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

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