Background
Coal-generating capacity in the United States has fallen steadily since its peak in 2011. In 2010, coal-fired generation accounted for more than half of electricity produced in the United States. A decade later, that fell to around a quarter of total generation. This shift has been driven primarily by the retirement of existing coal-fired generators. According to the Energy Information Administration (EIA) Form-860 data, 473 generators with a nameplate capacity of nearly 80 gigawatts (GW) retired between 2010 and 2019. This surge in retirements is due to a combination of aging infrastructure, pollution regulations, business and consumer tastes for cleaner generation, and lower natural gas prices resulting from the expansion of fracking in the United States. As a result, 133 plants across the country have replaced retired coal-fired generators with new natural gas generators according to Form-860 data.
About this research
To help communities prepare, we forecast when coal plants that were operational in the United States as of January 2020 (see Figure 1) are likely to retire and which are candidates to switch from coal- to natural gas-fired generation. Our methodology (elaborated on in this working paper) explicitly accounts for future uncertainty in electricity demand and fuel costs as well as hypothetical regulatory outlooks that might change the cost of burning coal in the future. Data for the analysis comes from Form EIA-860, Form EIA-923, and Form EIA-861M.
What we find
The majority of communities around coal plants face imminent retirement (within the next 4 years) and are viable candidates for new investments in natural gas generation. Seventy-five coal plants (61 percent of the active coal plants in our sample) are forecast to retire by 2030. It makes financial sense to convert up to 73 percent of active coal plants to natural gas generation.