A report from a major environmental group said that coal-fired power generation will continue to play a large role in U.S. electricity production for at least another 10 years.
The Sierra Club report published Jan. 25, based on a review of integrated resource plans (IRPs) from the 50 U.S. utilities most invested in coal-fired and natural gas-fired power plants, said those utilities plan to retire about 25% of their coal capacity over the next decade. The group’s analysis said those companies, which it said account for 43% of U.S. electricity output, do plan to add solar and wind power capacity, with the production from renewables amounting to less than 20% of their current coal- and gas-fired generation.
The Sierra Club said the report shows that even utilities that have made pledges to eliminate carbon from their portfolios “are not retiring their coal and gas plants fast enough to avoid the worst impacts of the climate crisis.” Several U.S. utilities have made promises to decarbonize their operations in the coming years, in part due to emissions regulations but also as economic conditions lead to the retirement of thermal plants. Investors in public utilities also have pressured executives to support cleaner energy resources.
Emily Fisher, senior vice president of clean energy at Edison Electric Institute, the group which represents U.S. investor-owned utilities, said the group’s members are working to decarbonize but there are many facets to the process. “The goals we have are a reflection of our current understanding of technology and economics,” said Fisher in a statement received by POWER.
The U.S. Energy Information Administration (EIA) in its latest Short-Term Energy Outlook (STEO), released Jan. 12, forecasts that generation from coal-fired power plants will jump 14% this year from 2020 levels, after a steep 20% drop last year from 2019. The EIA expects generation from gas-fired power plants will fall about 8% in 2021 from year-ago levels, which would mark the first year-over-year drop in gas-fired generation since 2017. The agency forecasts that generation from renewables, excluding hydropower, will grow by 18% this year, the fastest annual growth rate since 2010.
The EIA in the STEO said the increase in coal-fired output, and the decline in gas-fired generation, primarily will be due to higher prices for natural gas this year.
The Sierra Club report is designed to show the pace at which utilities are decarbonizing, and whether it’s fast enough to meet the Biden administration’s pledge to decarbonize the U.S. power sector by 2035. The environmental group has been leading the push to retire U.S. coal plants; the group Monday said that since 2010, 63% of the nation’s coal plants have been retired or have committed to retire by 2030.
[Editor’s note: Hitachi ABB Power Grids in a recent POWER article outlined steps utilities should take to prepare for a carbon-neutral future.]
Groups that support thermal power generation have said a goal to decarbonize the power sector over the next 15 years threatens the availability of electricity and could increase energy costs. The Institute for Energy Research, a group that advocates for deregulation of utilities and free-market policies, in a commentary about the new president’s executive orders issued last week, said, “the administration’s desire for extensive climate regulations will drive up the cost of energy, but higher energy costs disproportionately harm poor and minority groups. This conflicts with the repeated references to racial justice and inequality throughout the executive orders.” The group added, “The framework spelled out in these executive orders seeks an end to affordable energy supplies. It further proposes injecting a whole range of ideological preferences into the regulatory and cost-benefit processes, with no accounting for the economic damage sure to come from arbitrary ideological regulatory standards and resulting uncertainty.”
A report in the December 2020 issue of the journal Science said that 73% of current, operable U.S. fossil fuel-fired generation capacity would reach the end of its expected, typical life span by 2035. About 96% of the plants operating today would reach the end of their typical lifecycle by 2050, but it would take until 2066 for 100% of today’s fossil fuel-fired units to reach their endpoint. In effect, the data shows that 27% of today’s operating fossil fuel-fired plants would need to close, or be converted away from coal, gas, or oil, ahead of schedule to meet a 2035 decarbonization target.
Group: Retire Coal Plants by 2030
The Sierra Club on Monday said, “Science shows that unless utilities retire all their coal plants by 2030, abandon all plans to build gas plants, and aggressively build out renewable energy resources, we risk destabilizing our livable climate. Despite this pressing deadline, utilities are either not moving fast enough toward these goals, or not moving at all.”
“The ‘Dirty Truth About Utility Climate Pledges’ report bears out what we’ve long suspected of utility executives who use ‘carbon pledges’ to mollify demands for climate action: They are much more talk than actual action,” said Mary Anne Hitt, National Director of Campaigns at the Sierra Club, in a news release. “The infuriating truth is that many utilities are not only protecting their coal plants from retirement, but are also actively planning to build out climate destabilizing gas plants—ignoring climate science, delaying their embrace of renewables, and pushing us further into the crisis. This report and utility tracker website gives customers the transparency they need to hold their utilities accountable now and in the future.”
The U.S. Environmental Protection Agency (EPA) has said the power generation sector contributes about 27% of the nation’s greenhouse gas (GHG) emissions, making it the second-largest GHG source behind transportation.
The Sierra Club in its report said 32 of the companies studied “plan to build new gas plants totaling over 36 gigawatts [of generation capacity] through 2030,” and said that total represents more than 40% of total planned gas-fired capacity additions in the next decade. The group said the companies included in its report plan to add 250 million MWh of new wind and solar energy to the grid between 2020 and 2030, but said, “This is equivalent to only 19 percent of their current coal and gas generation.”
—Darrell Proctor is associate editor for POWER (@POWERmagazine).