U.S. Coal-Fired Power Generation: Market Fundamentals as of 2023 and Transitions Ahead
White Paper, 2023
In the third in a series of white papers on coal-fired power generation, Analysis Group Senior Advisor Susan Tierney analyzes the factors leading to the decline of this power source in the US. The report, prepared at the request of the Environmental Defense Fund (EDF), updates Dr. Tierney’s earlier findings on influences that contributed to the decline of coal-fired generation since the first report’s publication in 2012. Those factors included low natural gas prices; flat demand; the addition of natural gas, wind, and solar capacity; the commitments of many states and major companies to rely on renewable power and to reduce greenhouse gas (GHG) emissions; and coal-plant retirements.
Dr. Tierney’s report finds that this trend has intensified since 2012 and will likely accelerate in the decade ahead, in substantial part because of the federal financial incentives for investment in zero-carbon technologies introduced in the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA). “As new generating capacity and storage facilities with no or low variable costs enter service and are dispatched ahead of fossil generating units with higher variable costs,” she writes, “the capacity factor of many fossil plants will continue to deteriorate, rendering many of the now-operating coal plants less economic to maintain and less financially viable in the future.”
Dr. Tierney’s report was included as part of the EDF’s comments on the Environmental Protection Agency’s (EPA’s) rulemaking on GHG-emission regulations for existing power plants.
Read Dr. Tierney’s previous reports on this topic here and here