Wind, Natural Gas, and Solar Continue to Nudge Coal to the Curb

The U.S. Energy Information Administration (EIA) released 2015 scheduled capacity additions and retirements on Mar. 10, and the news was not good for the coal industry.

As has been the trend for several years, coal-fired generation accounts for the majority of expected retirements (12.9 GW of the nearly 16 GW total). However, most of the retiring units are smaller and operate at lower capacity factors than the average for the U.S. coal-fired fleet.

The term capacity factor is used to indicate how much electricity a generator actually produces relative to the maximum it could produce at continuous full power operation during the same period. Baseload plants typically run at higher capacity factors than variable sources, such as wind and solar facilities. Therefore, capacity additions do not necessarily reflect the amount of generation that will be provided to the grid. Coal, natural gas, and nuclear plants frequently operate at capacity factors of three to five times those of wind and solar facilities.

The retirements at coal-fired plants are higher this year than would otherwise be expected, due to the implementation of the Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS). Many power plant operators have decided that upgrading older and smaller units to comply with MATS is cost prohibitive, so retirement is the best option.

Over 60% of the retiring units are located in five states—Ohio, West Virginia, Kentucky, Virginia, and Indiana—but those are not the states where most of the new generation is being installed.

Wind is expected to add the most capacity in 2015 (9.8 GW), and most of that is being installed in the country’s midsection—from North Dakota and Minnesota in the north to Texas and New Mexico in the south.

Natural gas additions are spread throughout the U.S., but Texas leads the way, adding 27% of the 6.3-GW total. The Mid-Atlantic region will see some significant additions as well, with four states—New Jersey, Pennsylvania, Delaware, and Maryland—combining to add nearly as much as Texas, the state that was also recently flagged for having the highest power-sector CO2 emissions of any state in the U.S.

Solar is expected to place third in capacity additions in 2015, with 2.2 GW of utility-scale (systems with at least 1 MW of capacity) additions planned. It’s no surprise that most of that will be installed in California (1.2 GW), but it may seem odd to see North Carolina second on the list. Both states have renewable portfolio standards that promote the use of solar power.

Coinciding with the EIA’s 2015 capacity schedule announcement, GTM Research and the Solar Energy Industries Association released the U.S. Solar Market Insight 2014 Year in Review report on Mar. 10. The release noted that the U.S. utility-scale segment broke the GW mark in 2011 and has since grown by nearly 1 GW annually, with 3.9 GW of utility-scale photovoltaic (PV) projects coming on-line in 2014. The report also indicated that 2014 was the first time in history that the three major U.S. market segments—utility, commercial, and residential—each installed more than one GW of PV capacity.

One nuclear unit, Watts Bar 2, is scheduled to come online in 2015. If the Tennessee Valley Authority-owned plant does commence operation this year, it will be the first nuclear addition in the U.S. since Watts Bar Unit 1 entered service in May 1996. Four other nuclear units are currently under construction, two at the V.C. Summer plant in South Carolina and two at Plant Vogtle in Georgia.

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

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