The last
coal-fired plant built in the U.S. went into service in 2013. No one is
proposing to build any new ones but there are calls to delay retirements,
including calls from new Energy Secretary Chris Wright.
“According to Secretary Wright, in an interview with
CNBC, America will not follow the German model, which the Biden administration
appeared to be duplicating. He said, “Germany spent half a trillion dollars,
made their electricity two to three times more expensive, and they produce 20
percent less electricity today than they did 15 years ago. We’re not going to
go down that road. We want affordable, reliable, secure energy and a
reindustrialization of America, not deindustrialization of America.”
Comparison to the
German model only really applies to California. Our situation is much
different than in Germany. We have a massive amount of domestic natural gas.
Germany does not. Germany was set to import inexpensive and lower emissions
natural gas via the Nordstream II pipeline. That was never a good idea as
Russia cannot be trusted. Before they invaded Ukraine, they were regularly manipulating the pricing and availability of gas as a flex of their power. Germany had to give
up that source of gas at the beginning of the invasion and opt instead for LNG
from the U.S. and Qatar which was four times higher in price than the Russian gas
would have been. Thus, it's not accurate to say that Germany’s energy transition
push was the sole reason they were forced to deindustrialize as companies moved
out of the country. The sudden massive increase in gas prices was also a big
factor. There is no doubt that the over-focus on renewables was a factor as
well, just not the only factor.
Wright also noted
and I generally agree (with a few caveats):
“We must … permit and build energy infrastructure and
remove barriers to progress, including federal policies that make it too easy
to stop projects and far too difficult to complete projects,” Wright said.
“Net-zero policies raise energy costs for American families and businesses,
threaten the reliability of our energy system, and undermine our energy and
national security. They have also achieved precious little in reducing global
greenhouse gas emissions.”
Certainly, we
have made progress retiring old coal-fired plants. We should also keep in mind
that many of these old coal plants (and old gas and oil plants) are
underutilized and not operating anywhere near capacity. Peak U.S. coal capacity
was achieved in 2011 at 318 GW before we knew we could extract natural gas with
new technology. Coal powers about 15% of the U.S. grid, down from over 40% around
2011 and over 50% in 2000. Seth Feaster of the Institute of Energy Economics
and Financial Analysis (IEEFA), an advocacy group, thinks that coal can be
dropped to 10% of grid power by 2030 as more plants are retired. However, coal
use still rises during cold weather spells when it is tapped as gas can have delivery
limitations based on pipeline capacity and residential and commercial demand.
The IEEFA coal retirement schedule prediction from April 2023 is shown below.
Power Magazine’s
Darrell Proctor reported in February 2025 that several utilities plan to delay
more coal retirements:
“Several U.S. utilities in recent months have said they
plan to keep coal-fired units in their generation fleets operating past their
scheduled retirement dates, in most cases citing increased demand for
electricity in their service areas. Some also note that the Trump
administration is likely to eschew enforcement of current pollution standards,
and attempt to roll back greenhouse gas emissions regulations put in place by
the Biden administration.”
It should also be
noted that many of the coal plants slated for retirement are already very old
and among the least efficient and most emitting plants. The New York Times article
has two nice graphics that show: 1) the history of coal retirements since 2000
and 2) where coal retirements have been delayed, accelerated, or not announced.
The Energy
Information Administration reports that coal retirements are set for a slight
increase in 2025 as noted below. This is only a slight increase and is still below
the trend in recent years. They explain:
“Electric generators report that they plan to retire 8.1
GW of coal-fired capacity in 2025, or 4.7% of the total U.S. coal fleet that
was in operation at the end of 2024. Coal retirements decreased to 4.0 GW last
year, less than the 9.8 GW of coal capacity retired in each of the last 10
years.”
I think we have
made great progress in reducing the burning of coal resulting in better air
quality, less carbon emissions, and less overall environmental and health
impacts. That should continue, but not at the expense of reliability, where
applicable.
Energy Demand Growth Due to AI and Electrification: Is
it Overestimated?
Most AI developers
say that energy use will be high during the early period of AI development when
models are being trained but then it should level out and as processes are
streamlined further to use less energy the demand should stabilize. It is still
unclear what the total demand increase will be and there is debate about how
significant it will be.
Evan Caron, a
longtime energy and commodities expert, and co-founder and CIO at Montauk
Climate, told Power Magazine:
“The AI [artificial intelligence] revolution and
manufacturing reshoring are creating unprecedented electricity demands. A
single AI data center can require over 1 GW of power—equivalent to a large coal
or nuclear plant. These facilities can’t risk intermittency or
weather-dependent sources for their 24/7 operations.”
He also noted that
coal is attractive for several reasons:
“While coal faces environmental pressures, its ability to
provide reliable, scalable baseload power at a known cost is proving essential
for America’s industrial renaissance. Natural gas price volatility and
transmission constraints for renewables make existing coal infrastructure
increasingly valuable. The plants are paid for, the fuel is domestic, and the
reliability is proven.”
Thus, coal power
is looking good for powering AI and the so-called and as-of-yet unconfirmed re-industrialization
of America. The risks and logistics include dealing with new EPA emissions and
coal ash rules.
Another wildcard
is Trump tariffs, which could cause huge problems for domestic coal production
and exporting. As Power Magazine notes:
“Trump’s actions, meanwhile, could have an impact beyond
just extending the life of coal-fired power plants. Officials in West Virginia
are concerned about the president’s tariffs, particularly a trade war with
China, which put an additional 15% tariff on imports of coal from the U.S. in
response to Trump’s tariffs on goods from that country. West Virginia exports
about 6 million tons of coal to China annually, or about half of all U.S. coal
exports to that country.”
Chris Hamilton, president of the West Virginia Coal
Association, told local media the tariffs “could “have a dramatic impact … they
could evolve to the point where even furloughs of mining operations are
considered.” Hamilton noted several other countries, including Indonesia,
Australia, and South Africa, could replace the coal from West Virginia.”
Some Coal-Fired Plant Retirement Delays Are Due Simply
to Lack of Pipelines or Approvals for Them to Deliver Natural Gas That Will
Replace Coal
Pipeline
cancellations such as the Atlantic Coast Pipeline no doubt resulted in delaying
some coal-fired plant retirements, in that case in the Southeast. The slowness
by FERC in approving pipelines, even short ones to supply gas directly to power
plants also delays coal plant retirements. A case in point is the FERC delay of
a 32-mile pipeline to deliver gas to a proposed TVA natural gas plant in
Tennessee that was set to replace a coal-fired plant. The Sierra Club and other
opposers cited NEPA, as usual. The delay of pipelines based on climate effects
alone is nearly always unwarranted and only serves to prolong the burning of coal instead
of gas. Nonsensical demands to replace baseload coal with renewables instead of
gas are mostly without merit, though groups like the Sierra Club would
disagree. Permit reforms that fast-track common sense planning should be
implemented to prevent delaying or canceling needed and desirable pipelines on
the basis of climate effects alone.
References:
Planned
retirements of U.S. coal-fired electric-generating capacity to increase in 2025.
Energy Information Administration. February 25, 2025. Planned retirements of U.S.
coal-fired electric-generating capacity to increase in 2025 - U.S. Energy
Information Administration (EIA)
US
Should Stop Closure of Coal-Fired Power Plants, Wright Says. Ari Natter,
Bloomberg. February 11, 2025. US Should Stop Closure of Coal-Fired
Power Plants, Wright Says
DOE
Secretary Wright: Coal is Critical to Meeting Energy Demand. Institute for
Energy Research. February 18, 2025. DOE Secretary Wright: Coal is
Critical to Meeting Energy Demand - IER
U.S.
Coal Plants Get Reprieve as Market and Policies Change. Darrell Proctor. Power
Magazine. February 6, 2025. U.S. Coal Plants Get Reprieve as
Market and Policies Change
Global
Coal Plant Tracker. Global Energy Monitor. Global Coal Plant Tracker - Global
Energy Monitor
Nearly
a quarter of the operating U.S. coal-fired fleet scheduled to retire by 2029.
Energy Information Administration. November 7, 2022. Nearly a quarter of the operating
U.S. coal-fired fleet scheduled to retire by 2029 - U.S. Energy Information
Administration (EIA)
U.S.
on track to close half of coal capacity by 2026. Seth Feaster. Institute for
Energy Economics and Financial Analysis. April 3, 2023. U.S. on track to close half of coal
capacity by 2026 | IEEFA
Where
Coal Is Retiring, and Hanging On, in the U.S. Austyn Gaffney and Mira
Rojanasakul. New York Times. February 6, 2025. Which Coal Units Are Retiring, and
Which Plants Will Continue Operating - The New York Times
TVA
may delay 2,470-MW coal plant shutdown over FERC pipeline inaction. Ethan
Howland. Utility Dive. January 4, 2024. TVA may delay 2,470-MW coal plant
shutdown over FERC pipeline inaction | Utility Dive
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