US shift from coal intensifying

From IEEFA:

New data from the Energy Information Administration (EIA) indicates that the shift away from coal-fired power generation has accelerated this year in the United States. In August, utilities generated 18 percent less power from coal than in August of last year, marking the sixth month in 2019 with a decline of more than 10 percent. Last year, not a single month had a decline of 10 percent or more. Overall for the year, coal-generated power has fallen by 13.9 percent.

The decline is also happening broadly across the U.S.: in 30 of the 45 states that still burn coal for power, coal-fired generation is down 10 percent this year.

Full-scale retirements alone do not entirely account for this decline. Many utilities are also curtailing the operations of plants that are still active, in favor of operating lower-cost gas and renewable generation. That’s a bad sign for coal producers large and small.

The Southeast reports some of the steepest coal generation drops this year, led by a 62 percent decline in Virginia, where coal’s market share has fallen to 4 percent from nearly 11 percent in 2018. Coal-fired generation is also down enormously in Florida, by 31 percent; in Alabama, by 23 percent and in South Carolina and Tennessee, by 21 percent, all states where the regional trend was first detailed in an IEEFA report published in October, Coal-Fired Power Generation in Freefall Across Southeast U.S.

Midwestern and Ohio River Valley states, many of which have been historically dependent on coal-fired generation, also report significant declines this year. Illinois and Indiana were down 17 percent through August, Ohio and Pennsylvania by about 15 percent each. Even Kentucky and West Virginia, two states among the most reliant on coal mining and coal-fired generation, had declines of 8 percent each. The move away from coal in this region, especially, was one of the reasons cited in last week’s bankruptcy filing by Murray Energy, among the largest U.S. coal-mining companies.

In two Midwestern states, Illinois and Indiana, a sharp increase in wind generation has been a factor. Wind-powered generation is up 22 percent this year in Illinois (to a market share of nearly 8 percent), and 16 percent in Indiana (a 6 percent market share).

To be sure, coal plant retirements are a major part of the power-generation change that is at work. Data compiled by IEEFA shows that 57 coal-fired units with a total capacity of 14 gigawatts will close this year, about 5.8 percent of all remaining coal-fired capacity.

Market forces that favor cheaper forms of generation are at the root of the shift that is undermining American coal as a whole.

This shift will only accelerate.   As costs of wind, solar and storage continue to fall, they will replace coal generation not just in the U.S., but everywhere.  For countries where the coal generation fleet is old, which is true of most developed countries, it's an easy decision: wind and solar are cheaper than new coal, and as coal power stations reach the end of their safe working life, replacing them with "near-firm" renewables is a no-brainer.  For developing countries, where electricity demand is still growing and coal power stations are not yet fully depreciated, it's a harder decision.  But certainly, within perhaps as little as two or three years, no new coal-fired power stations will make economic sense.